8I Holdings
Annual Report 2021

Plain-text annual report

8I Holdings Limited FY2021 Annual Report SYNERGIES FOR A SMARTER FUTURE Our Mission We Empower People to Create Sustainable Wealth 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-concious (for the price paid) We keep our hearts & minds open We make it simple Contents Prelude About 8I Holdings Limited 8I Ecosystem Chairman’s Message Operating and Financial Review Corporate Structure Board of Directors Key Management Engaging Our Team Members Playing Our Part For Communities Corporate Governance Statement 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 1 2 3 4 – 6 7 – 12 13 14 – 15 16 17 18 19 - 28 29 - 31 32 - 35 36 - 40 41 42 43 44 - 45 46 - 47 48 - 88 89 - 90 PRELUDE 8I Holdings’ twin growth engines – Financial Education Technology and Financial Asset Management – have been working closely to bring deeper synergies in the area of value investing. With deeper, broader strategies and stronger digital inroads into the markets where we operate, and by incorporating automation in our operational processes with the application of data analytics, our FinEduTech business’ performance improved exponentially with record-high profitability. On the Financial Asset Management front, we adopt a ‘quantamental’ approach to investing to deliver enhanced value to our stakeholders. Leveraging AI, big data, and machine learning, 8I Holdings combines quantitative and fundamental approaches to investing with a human touch, with the aim of improving returns. As we continue to sharpen our competitive edge fuelled by constant innovation, both our businesses are well on track to power a brighter future together, while empowering our growing community to make smart investment decisions. 1 ABOUT 8I HOLDINGS LIMITED 8I Holdings Limited (“the Group”) is an Australian-listed investment holding company engaged in the businesses of Financial Education Technology (“FinEduTech”) and Financial Asset Management. Through 8VI Holdings Limited (“8VI”), the Group operates under the VI brand within the FinTech and Financial Education space. With offices in Singapore, Malaysia, Taiwan and Shanghai, VI is the region’s leading FinEduTech provider supporting a community of value investors from 29 cities globally. The VI App is a smart stock analysis and screening tool infused with a social networking element to enable users to invest smarter, faster and easier. Through Hidden Champions Capital Management Pte Ltd (“HCCM”), the Group operates a registered fund management business in Singapore, investing in public listed equities in the United States and Asia-Pacific region. HCCM’s focused strategy involves 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. 2 8I ECOSYSTEM FINANCIAL EDUCATION TECHNOLOGY FinEduTech arm of the Group operating under the brand name VI. VI makes investments smarter, faster and easier with results-oriented and process-driven analysis powered by technology, and promotes investor education and knowledge exchange on a single platform. FINANCIAL ASSET MANAGEMENT Powered by research-driven fundamental stock selection process and methodology, the fund management arm of the Group invests in public listed equities in the United States and Asia-Pacific region which are value-adding, nimble and growing “Hidden Champions” that are typically at the forefront of their markets. At 8I, we continue to strengthen our business ecosystem on a single platform – leveraging the power of AI, big data and machine learning that sharpens our competitive edge, sharing value investing knowledge and empowering our growing community to make smart investment decisions by applying the principles of value investing. 3 CHAIRMAN’S MESSAGE “ We remain true to our mission of empowering more people to create sustainable wealth in the long run through smarter investing. Our dual engines of growth are engineered to propel us further ahead in the coming years and we intend to keep up the momentum that we have garnered. ” Ken Chee Executive Chairman 8I Holdings Limited Dear Valued Partners, In the last twelve months, our twin engines of business – FinEduTech and Financial Asset Management – continued to generate positive results. FY2021 has been a landmark year for our Group as both our businesses performed strongly following the completion of our transformation efforts to maximise the value of our strategic investments. Founded on the unique ecosystem model that we have built with education, FinTech and community as core, the Group has enjoyed solid synergies that signal a brighter future ahead. In our FinEduTech segment, 8VI’s business continues to make healthy headway through our proprietary stock analysis tool, VI App. Buoyed by the digital framework we have put in place, 8VI set new records across operations and earnings alike. With regulatory clearance granted by the Monetary Authority of Singapore as an approved Licensed Financial Adviser, our FinTech unit is now licensed to provide financial advice on securities and units in collective investment schemes through research analyses and research reports via VI App. The license is significant, as it enables us to demonstrate more conviction on our research and development and put forward detailed recommendations based on VI Analysis, our proprietary analysis and rating system. At the same time, 8VI has broadened and deepened its acquisition, retention and technology development strategies that it set out in the last few years. Bolstered by new and improved features, a wider variety of VI College programmes and deeper levels of localised engagement with the VI Community members in Singapore, Malaysia and Taiwan, 8VI’s improved exponentially this year and saw record-high levels of profitability. For more details on our strategic growth plans, shareholders can refer to our 8VI Holdings Annual Report. financial performance 4 CHAIRMAN’S MESSAGE (Cont’d) On the Financial Asset Management front, we have evolved our strategies for our fund management arm, Hidden Champions Capital Management (“HCCM”), in FY2021 given the volatility of global markets. In the face of ‘lower-for-longer’ interest rates and the market’s quest for higher yield, we demonstrated our agility and have since channelled our efforts towards the development, refinement, and testing of different stock picking and portfolio management strategies. “ In terms of net asset value, we have outperformed the market this year although the correction in the equities market in March 2021 tapered our returns. Our Financial Asset Management division registered S$6.4 million in investment gains in FY2021, from an investment loss of S$2.5 million in the previous financial year. As our financial resources available for investment are parked into multiple portfolios, the segment has performed well as a whole. However, the outlook will continue to be challenging and our returns will be dependent on overall market performance – particularly key equity stocks in our Technology and Consumer portfolio, as global economies are expected to see uneven re-openings amidst renewed concerns on rising inflation and a resulting hike in interest rates. Meanwhile, we will continue to look for ways to create value for HCCM through the launch of new funds, and by increasing upside alpha and reducing downside beta for our investors, with an eye towards outperforming the index benchmarks. In light of the abovementioned, the Group recorded a revenue of S$32.6 million as compared to S$11.9 million in the same period a year ago. Our profit before tax stood at S$10.0 million compared to a total comprehensive loss attributable to owners of the Company of S$3.6 million in FY2020. Thriving in a digitalised environment With the fast-tracked digitalisation of our segments since late 2019, our digital transformation is complete. Our Group now thrives in our new digitalised environment and having converted majority of our offerings to a digital online platform and by incorporating automation in our operational processes and application of data analytics, we have significantly improved on our business results as well. With work-from-home (“WFH”) practices here to stay, we have equipped our employees with the right infrastructure, hardware and software setups to ensure we are ready to tackle hybrid working arrangements. In the coming year, we will be looking to invest in a new space for our talents to come together to build a stronger brand and culture for While the pandemic situation continues to evolve globally, we are deeply appreciative of the unrelentless efforts of our team during these challenging times to transform their own mindsets and approaches to an entirely new way of working. ” the Group and team, ensuring that we are on the front foot and ready to face any challenges at any given time. Playing our part for communities With our origins in financial education since 2008, we have singled out education as a material, guiding pillar for our social impact initiatives; as well as fintech, since we believe technology is an important part of our future. Our aim is to empower and encourage financial literacy amongst young adults in particular. With that in mind, we have established the “VI Club for Youth” in Malaysia – a financial education platform that is freely accessible for students. We have also set up the VI College NTU Bursary Fund for the School of Computer Science and Engineering in conjunction with Nanyang Technological University of Singapore, and participated in the Singapore FinTech Association’s fundraising efforts to assist lower-income families. Looking ahead to a brighter future We remain true to our mission of empowering more people to create sustainable wealth in the long run through smarter investing. Our dual engines of growth are engineered to propel us further ahead in the coming years and we intend to keep up the momentum that we have garnered. 8VI’s strategy towards a smarter future will see us investing heavily in digitalisation and talent, expanding our total addressable market, and positioning ourselves to offer new products in the regulated space in the coming years. More of our programmes and how we operate in terms of process workflows will be digitalised going forward, while also ensuring we have the right infrastructure in place to work effectively in a digital environment. 5 CHAIRMAN’S MESSAGE (Cont’d) As we look at the total addressable market (“TAM”) for asset and wealth management in the coming years, there is immense potential to be tapped, particularly in the ‘Do It With Me’ segment. Essentially, these savvy individuals are keen to learn about investing and will use a paid service to assist them in making the right investment decisions. At the same time, we will work to attract more potential VI App users who are avid, mass-market investors. We will also look at ways to expand VI College’s business model laterally with new offerings to extend the value chain for our existing and new customer base. With the license at 8BIT Global, we also have plans to integrate other potential regulated, complementary financial services on our VI App platform where we see synergies. To achieve our goals, we will also be investing a significant amount of our resources and costs into finding and building the right talent and skill sets to further our exciting growth journey. HCCM’s growth path, on the other hand, will come from channelling our expertise to 3 pillar funds to grow our business: the HCF Asia fund, the new HCF U.S. fund, as well as our proprietary VIQuant U.S. Growth Fund which is founded on our quant-based methodology used in VI App. Moving forward, we also intend to look at ways to diversify our Board composition as part of our effort to continue to upkeep the highest levels of corporate governance. This move will also help ensure that our Group maintains the latest pulse on industry best practices and standards. While the pandemic situation continues to evolve globally, we are deeply appreciative of the unrelentless efforts of our team during these challenging times to transform their own mindsets and approaches to an entirely new way of working. By rooting ourselves in a strong foundation, we believe that we will weather future storms successfully with our passion for our craft and our resilient team spirit. In addition, the steady and consistent leadership of our Executive Director, Mr Clive Tan, continues to be our guiding force at 8I Holdings. We are grateful for our shareholders’ belief and support in our long-term strategy and we look forward to seeing you again soon at our upcoming Annual General Meeting. The HCF Asia fund has shown promising results since we restructured it in October 2018, and we will be actively seeking to scale this business by raising funds to increase our assets under management (“AUM”). Ken Chee Executive Chairman 8I Holdings Limited We have achieved above average results for our stock selection with the HCF U.S. Fund with companies that are mostly mid-large cap with stronger business fundamentals and better corporate governance, and we will continue to build this portfolio over the coming months. While the portfolio under our VIQuant U.S. Growth Fund has shown promising results and it has shown itself to be resilient, we will be further testing the processes and rules more rigorously going forward. In all, we intend to take a “quantamental” approach to investing by combining quantitative and fundamental investing, where we will leverage AI, big data, and machine learning with a human touch. As our FinEduTech and Financial Asset Management segments work seamlessly together to focus on value creation, we are confident that by bringing these two complementary business units together, the Group can benefit from the mutual synergies created from our unique ecosystem. 6 OPERATING AND FINANCIAL REVIEW “ We have made conscious efforts to restructure and refine our business operations through a number of initiatives, including cost management and a digitalisation strategy – resulting in our recovery to a position of profitability in FY2021. ” Clive Tan Executive Director 8I Holdings Limited FY2021 started with significant headwinds and brought about a challenging operating landscape amidst the global pandemic, a slide in the global economy, and uncertainty in the macro-economic and geopolitical environment around the world. Since the previous financial year, the Group has made conscious efforts to restructure and refine our business operations through a number of initiatives, including a digitalisation strategy which was further expedited with the COVID-19 pandemic and sound financial management. As a result, 8I Holdings has recovered to a position of profitability in FY2021. Overview In FY2021, the Group recorded a revenue and investment gain of S$32.5 million, representing a growth of 246.1% as compared to S$9.4 million in FY2020. Net profit for the same period was recorded at S$7.9 million, a significant reversal to the net loss of S$3.7 million in the previous corresponding period. The improvement in our revenue and investment gain is mainly attributable to the strong growth of our FinEduTech division while contending with the various lockdowns and movement restrictions that arose due to the COVID-19 pandemic, as well as the improved performance of the restructured Hidden Champions Fund and portfolios. Our FinEduTech division registered a 139.1% increase in revenue from S$10.9 million in the previous financial year to S$26.0 million in the current financial period while the Financial Asset Management division registered S$6.4 million in investment gains in FY2021, from an investment loss of S$2.5 million in the previous year. Financial Position in FY2021, we Apart from a return to profitability maintained a healthy financial position. As of 31 March 2021, we improved our cash position with cash and cash equivalents of S$26.8 million, up from S$18.4 million last year. We also improved our cash flows from operating activities, recording net cash inflow provided by operating activities of S$10.2 million, as compared to the net cash inflow by operating activities of S$5.7 million last year. Key corporate developments in FY2021 In the last year, the Group has also witnessed several key corporate developments. 7 OPERATING AND FINANCIAL REVIEW (Cont’d) Revenue (S$’m) Net Profit After Tax Attributable to Equity Holders of the Company (S$’m) Earning Per Share (Singapore cents) 40 30 20 10 0 32.5 25.3 11.9 FY2019 FY2020 FY2021 10 5 0 -5 -10 -15 7.9 FY2019 FY2020 FY2021 -3.7 -10.2 3 2 1 0 -1 -2 -3 2.21 FY2019 FY2020 FY2021 -1.02 -2.80 Cash and Cash Equivalents (S$’m) Operating Cash Flow (S$’m) Free Cash Flow (S$’m) 30 20 10 0 26.8 18.4 12.4 FY2019 FY2020 FY2021 10.2 5.7 FY2020 FY2021 15 10 5 0 -5 -10 FY2019 -6.3 8.9 5.1 FY2020 FY2021 10 5 0 -5 -10 FY2019 -6.9 In March and April 2020, we had to accelerate the move of our Singapore and Malaysia operations online due to Malaysia’s “Movement Control Order” and Singapore’s “Circuit Breaker” periods amidst the first wave of the COVID-19 pandemic. Undaunted, we set up four portfolio funds in March 2020 – the HCF U.S. Stocks Active Fund, the VIQuant U.S. Growth Fund, the Crisis Opportunities Equity Fund, as well as an Option Fund. In November 2020, we made a significant breakthrough with VI App, developed through 8BIT Global Pte Ltd (“8BIT Global”), by garnering regulatory clearance as a Licensed Financial Adviser approved by the Monetary Authority of Singapore. This means that we can provide financial advice on securities and units in collective investment schemes through research analyses and research reports via VI App. The license enables us to demonstrate more conviction on our research and development and put forward detailed recommendations based on VI Analysis, our proprietary analysis and rating system, which we believe will ultimately aid overall investor confidence in making smarter, faster and easier investment decisions. We held our 10th VI Summit in January 2021 (“VIS2021”) on a fully virtual platform for the first time, and managed to draw a record number of more than 3,500 attendees from the investing community across the Asia-Pacific region. Held under the theme of “Gearing Up for Exponential Growth”, key speakers at VIS2021 included renowned investors, fund managers and key VI Community leaders and trainers. In the same month, we also continued with our efforts to engage and reward our team members, with the issue of shares to 8VI Holdings employees under our Employee Securities Incentive Plan (“ESIP”). Our ESIP is designed to assist in the reward, retention and motivation of our employees, and allow our employees to receive equity interest in the Group in the form of securities, and we intend to continue with our ESIP initiatives going forward as well. During the year, the Group also incorporated an 8IH Variable Capital Company (“VCC”) under the VCC framework – a new corporate structure for investment funds which is designed to offer greater operational flexibility and better corporate governance. After March 2021, we have also set up 2 sub-funds under the 8IH VCC, namely the VIQuant U.S. Sub-Fund and the VI U.S. Sub-Fund. BUSINESS SEGMENT REPORT FinEduTech – 8VI Holdings Limited Over the past year, 8VI Holdings Limited (“8VI”) has performed strongly as a result of our digital transformation and our robust acquisition, retention and technology development strategies, as well as the unwavering efforts of the entire team. 8 OPERATING AND FINANCIAL REVIEW (Cont’d) As part of the Group’s business model refinement, the original financial technology and financial education businesses have been enhanced and incorporated under the VI brand in January 2020, representing our strategic shift into FinEduTech. Following shareholders’ approval at the Annual General Meeting in July 2020, we have also changed our name to “8VI Holdings Limited” to reflect the alignment of our brand and position with effect from 27 July 2020. The strong building blocks that 8VI has been working relentlessly to put in place last year by devoting 100% of our effort and energy into our digital transformation strategy, are now firmly in place. 8VI started operations in FY2021 with a rapid shift and expansion of its operations and services online amidst the rise and spread of COVID-19. This successful transition was executed speedily as part of our long-term business plan and strategy. With the seamless integration of acquisition, retention and technology capabilities on the VI platform, the Group continued with the sale and subscription of our proprietary smart investing analysis tool, VI App, and our range of VI College financial educational programmes and activities online. As such, we were able to efficiently deliver our products and services beyond geographical boundaries, despite the global pandemic, and generate high-quality revenue, positive cashflow and healthy cash receipts as a result. Continuing with strategies outlined by 8VI in our FY2020 annual report; Acquisition, Retention and Technology Development remain the core focus while broadening and deepening these pillars with meaningful, localised content, programmes and features was our key focus this year. By expanding the range of financial education programmes and training as well as integrating the community support fully within VI App to reach a wider audience and meet evolving consumer habits through digitalisation, we intend to continue to grow our customer base as VI Community members tap into our platform and products for life-long, repeat learning opportunities. We have plans to invest heavily in digitalisation and talent – both in terms of our programmes, and acquiring the right skill sets – while also putting in place the right infrastructure, hardware and software to handle hybrid working requirements. The total addressable market (“TAM”) for asset and wealth management in coming years offers immense potential, and we are targeting the ‘Do It With Me’ segment in particular, where savvy investing individuals are willing to use a paid service to make the right investment decisions. We will also work to attract more mass-market VI App users, as well as ways to expand VI College’s business model laterally with new offerings for our existing and new customer base. 9 OPERATING AND FINANCIAL REVIEW (Cont’d) HCF Class 1 Index Chart Revenue x e d n I 150 140 130 120 110 100 90 80 70 8 1 - t c O 8 1 - v o N 8 1 - c e D 9 1 - n a J 9 1 - b e F 9 1 - r a M 9 1 - r p A 9 1 - y a M 9 1 - n u J 9 1 - l u J 9 1 - g u A 9 1 - p e S 9 1 - t c O 9 1 - v o N 9 1 - c e D 0 2 - n a J 0 2 - b e F Cash % HCF A sia MSCI Asia Pac 0 2 - r a M 0 2 - r p A STI 0 2 - y a M 0 2 - n u J 0 2 - l u J 0 2 - g u A 0 2 - p e S KLCI 60% 50% 40% 30% 20% 10% 0% 1 2 - n a J 1 2 - b e F 1 2 - r a M 0 2 - c e D 0 2 - t c O 0 2 - v o N Hang Seng At the same time, given our license at 8BIT Global, we have plans to integrate other potential regulated, complementary financial services on our VI App platform where we see synergies. To ensure we achieve our goals, we will also be investing heavily in human resources; in finding and investing in the right talent to join our team. With the right people, we can take our exciting growth journey to even greater heights. For more details on the FinEduTech segment, please refer to the Annual Report for 8VI Holdings Limited. Financial Asset Management – Hidden Champions Capital Management Pte Ltd Our Financial Asset Management division, Hidden Champions Capital Management (“HCCM”), registered S$6.4 million in investment gains in FY2021, from an investment loss of S$2.5 million in the previous financial year. We will share more below on the progress made for Hidden Champions Fund (Asia) (“HCF Asia”) and also highlight the next engine of growth for HCCM leveraging on VIQuant Fund. It has been an eventful two years since we started with ground zero to restructure HCF Asia. While we made many mistakes along the way, we also took a hard look at what went wrong and analysed how we could have done better. After each learning experience, we found ourselves to be more mindful of our selection in the next round. As it was intentional that we did not deploy all the funds but to hold more cash in the first year, the results were flattish in FY2020. The second year saw us going against all odds when COVID-19 hit unexpectedly, yet it was also the time that we finally reaped the fruits of our labour. With the pandemic outbreak and crash of the global equities in late March 2020, we jumped at the opportunity to invest in the companies already shortlisted, at a discount. These companies went through a vigorous selection process prior and most turned out to be COVID-19 resilient. As a result, they were not only able to withstand the impact of COVID-19 but also thrive during the crisis. For FY2021, we are pleased to announce that the listed securities under HCF Asia registered an unrealised fair value profit of S$2.6 million, representing a yearly return of about 30% in FY2021. • Where we have performed well Of the 15 companies in our portfolio, 6 out of the 7 companies that announced their September quarter results performed well with strong revenue and earnings growth. For the one that experienced negative growth, we assessed the reasons and opined it temporary rather than a long-term outcome. In fact, we took the chance to average in our position on that particular investment and will continue to monitor the situation closely. Furthermore, we have adopted an increasingly defensive stance and reduced our positions in the market to hold more cash. This will allow us to deploy it at an opportune time should global equities continue to worsen. 10 OPERATING AND FINANCIAL REVIEW (Cont’d) • Areas to improve on moving forward • VIQuant U.S. Growth Fund From June to September 2020, the portfolio’s returns have hovered at around 30% since its inception in October 2018. The team’s analysis attributed the stagnant results to the underperformance of our top two holdings. As the top 2 positions were built in the early stages of our fund, we would have approached that investment in a different manner based on the current situation. We will be looking to make some adjustments to our allocation of these two holdings to reposition the portfolio and optimise it for growth. The returns from our investments will tend to be lumpy in nature which is typical in our business, since our performance depends on our stock picks, portfolio allocation, the overall market conditions and macro- economic business landscape. • Forging HCCM’s future growth path Moving forward, we will focus on channelling our expertise to 3 pillar funds to grow our business. Firstly, with the HCF Asia fund showing promising results, we will be actively seeking to scale this business by raising funds to increase our assets under management (“AUM”). This fund has shown itself to be resilient and positive in its returns since we restructured it in October 2018, and we believe that it has a solid foundation to build its future returns on. The second pillar of growth would be our new HCF U.S. fund which is currently under research, development and testing. Since April 2020, we started replicating the processes from our Asia portfolio and applied similar investment methodologies to our U.S. portfolio, which we are currently seeding. The transition from Asia to U.S. has been more manageable than we thought, thanks to the nature of the companies that are mostly mid-large cap with stronger business fundamentals and better corporate governance. So far, we have achieved above average results for our stock selection and will be looking to build this portfolio over the coming months. The third pillar of growth is built on the foundation that we have built VI App upon. Based on our R&D efforts, we are currently testing our Quant-based methodology with our proprietary funds, currently known as VIQuant U.S. Growth Fund. This portfolio has shown promising results and we are looking to launch this to Accredited Investors very soon. As this portfolio fund is rule- based with only human interventions for refinement, it has taken care of a major issue of investing: that of removing human psychology. We look forward to further testing the processes and rules rigorously so that we can ensure this fund will be positioned to provide long-term positive returns to our investors. The VIQuant U.S. Growth Fund was started during the COVID-19 correction in March 2020. At that point, many believed that this could be the catalyst to trigger the next 10-year market downcycle since the 2008 global financial crisis and attempted to time the market by holding cash. What happened over the next few months thereafter was one of the largest tech sector rallies which left many traditional investors who shored up cash crying foul from the quantitative easing. The VIQuant U.S. Growth Fund is a quantamental fund that started with the sole aim of removing investing behavioural biases while automating the time-tested fundamental investing process, and sharpening factor- based financials with alternative data. Over the same period that the S&P500 managed to pull off a 1-year return of 62% starting from 1 April 2020, the VIQuant U.S. Growth Fund managed a 124% return by systematically and emotionlessly eliminating companies with weakening fundamentals while adding and holding on to fundamentally strong companies which withstood these very trying times. From a quantitative finance business operations viewpoint, we have fully automated the stock selection and ranking process, along with an in-house direct brokerage execution module where the trade instructions go straight to the brokers. What remains are the portfolio monitoring tools that we are currently developing over the next few months, the ongoing alpha research, and rigorous strategy back-testing. Giving back to our communities through social initiatives Our roots are in the financial education sector. As the origin from which we have built our business since 2008, we therefore identified education as a material, guiding pillar where we want to contribute and share our knowledge on finance and investing within the communities where we operate. We also see FinTech as an important pillar for social initiatives since technology represents the way forward for our Group and this drives us to do our part for advancing technology for the future. With an aim to empower and encourage financial literacy among young adults, we established the “VI Club for Youth” in Malaysia - a financial education platform that is freely accessible for students between 16-24 years old. Designed to ultimately equip young adults across the globe with proper financial knowledge, our current initiatives in the Malaysian pipeline include a series of talks, both online and offline engagement activities and partnerships with local universities, amongst others. 11 OPERATING AND FINANCIAL REVIEW (Cont’d) VIQuant U.S. Growth SF performance since Mar 2020 CAGR growth rate +129% +106% versus S&P500 +61% versus S&P500 +52% 250 220 190 160 130 100 40% 30% 20% 10% 0% -10% -20% Cumulative NAV Taken on 15 Apr 2021 Portfolio S&P500 229 161 Monthly Performance 29% 16% 13% 5% 6% 2% 8% 6% 7%7% 16% 11% 12% 4% 3% 3% 1% 8% 4% 5% -2% -4% -1% -3% -1% A pr’2 0 M ay’2 0 Ju n’2 0 Jul’2 0 A u g’2 0 S e p’2 0 O ct’2 0 N ov’2 0 D ec’2 0 Jan’2 0 Fe b’2 0 -12% M ar’2 0 A pr’2 0 The chart above shows the performance of the VIQuant U.S. Growth SF as compared to the S&P500 from 1 April 2020 to 15 April 2021. In partnership with Nanyang Technological University (“NTU”) of Singapore, we have also established the VI College NTU Bursary Fund for the School of Computer Science and Engineering, in support of NTU’s vision of ensuring that every deserving student has access to quality education while also remaining true to our aim of advancing technology by supporting education. In December 2020, we contributed to the Singapore FinTech Association’s efforts to raise S$100,000 for the NTUC-U Care Fund under the “FinTech for Good initiative” to provide financial assistance to lower-income union members and families. Acknowledgement At the same time, we wish to express our heartfelt appreciation to all our shareholders for their unceasing trust, patience and support towards the team during these challenging times. In the year ahead, we are committed to stay focused in executing our growth strategies with the aim of realising even greater synergies towards a smarter future, and one where we can bring even greater value to our shareholders. It has been a couple of challenging years and we want to acknowledge the resilience and hard work of every team member whose individual contribution has been critical for the small wins we celebrate collectively today. Clive Tan Executive Director 8I Holdings Limited 12 CORPORATE STRUCTURE 8I Holdings Limited Corporate 8 Investment Pte. Ltd. (100%) FinEduTech 8VI Holdings Limited (79%) Financial Asset Management Financial Education Financial Technology Registered Fund Management Company Investment Fund (51%) (42%) 8VI Global Pte. Ltd. (100%) 8BIT Global Pte. Ltd. (93%) Hidden Champions Capital Management Pte. Ltd. (100%) 8IH Global Limited (100%) 8VI Malaysia Sdn. Bhd. (100%) 8VI Taiwan Co. Ltd. (70%) 8VI China Pte. Ltd. (65%) Hidden Champions Fund (100%) 8VIC JooY Media Sdn. Bhd. (100%) 8VI China (Shanghai) Co. Ltd. (100%) 13 BOARD OF DIRECTORS KEN CHEE Executive Chairman CLIVE TAN Executive Director Ken Chee is the co-founder and Executive Chairman of 8I Holdings Limited and is based in Singapore. Appointed to the board in May 2014, Ken advises on strategic planning and partnerships development, and is involved in driving the all-round growth of the Group’s FinEduTech businesses and smart investing technology platform, VI. 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. 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 8VI Holdings Limited and is also a Young Presidents’ Organisation member under the Singapore Chapter. Ken graduated from the Singapore Polytechnic with a Diploma in Banking and Financial Services, and the University of Queensland with a Bachelors’ Degree in Business Administration. He also attended Columbia Business School in New York for its Executive Program in Value Investing. Clive Tan is the co-founder and Executive Director of 8I Holdings Limited and is based in Singapore. Within the 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. Clive also chairs the board of Australian- listed 8VI Holdings Limited. He began his professional career in the public education sector 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. 14 BOARD OF DIRECTORS (Cont’d) CHARLES MAC Non-Executive Director Charles Mac was appointed Non-Executive Director in April 2016. Charles has more than 18 years of IT corporate experience, of which 15 years was spent 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. Charles currently serves on the Board of ASX-listed companies, 8I Holdings Limited and 8VI Holdings Limited as Non-Executive Director. Charles is an Australian citizen and holds a Bachelor of Computing (Information System) from Monash University. CHAY YIOWMIN Non-Executive Director Chay 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 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 currently sits on the Singapore steering committee of the Professional Risk Managers’ International Association (PRMIA), and the Standards and Technical Committee of IVAS, the latter of which Yiowmin is also a programme instructor. Yiowmin is also an associate lecturer with the Singapore University of Social Sciences (SUSS) teaching financial statements analysis and valuation. Yiowmin is an active Grassroots Leader, serving as the treasurer of the Fernvale Citizens Consultative Committee, the assistant treasurer of the Kebun Baru Citizens Consultative Committees, and the Chairman of the Fernvale Community Development and Welfare Fund. 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. 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) and a Chartered Valuer and Appraiser (CVA) of the Institute of Valuers and Appraisers of Singapore (IVAS). 15 KEY MANAGEMENT LOUIS CHUA Chief Financial Officer LOW MING LI Chief Operating Officer Louis Chua joined 8I Holdings in April 2015 as the Company’s Chief Financial Officer and is based in Singapore. 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. Louis is based in Singapore and has more than 20 years of assurance, 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). Louis graduated from University of Queensland with a Bachelor of Commerce (Finance). He is a fellow member (FCCA) of The Association of Chartered Certified Accountants, a fellow member (FCA Singapore) of the Institute of Singapore Chartered Accountants and a member (CPA) of CPA Australia. Low Ming Li is the Chief Operating Officer 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 and is also deeply involved in the development of corporate policies and management of the Group’s Human Capital. She was previously with PricewaterhouseCoopers Singapore for over 13 years, where she held the position of Associate Director (Assurance) and was in charge of strategising and rolling out new business development initiatives, coordinating audit assignments as well as training and development. Her past clients include Singapore Exchange Limited, the Government Investment Corporation of Singapore and Singapore Press Holdings. Ming Li graduated with a Bachelor in Accountancy and a minor in Banking and Finance (Second Class Upper) from Nanyang Technological University. She is also a Chartered Financial Analyst (CFA) Charterholder, and a member of the Institute of Singapore Chartered Accountants (ISCA). 16 ENGAGING OUR TEAM MEMBERS We have put in place several initiatives to continuously engage with our team members, particularly in this ‘new normal’ age. brand and culture for the Group and team, ensuring that we are on the front foot and ready to face any challenges at any given time. As work-from-home (“WFH”) becomes a cultural mainstay in our everyday lives, our employees are equipped with the right infrastructure, hardware and software setups to ensure they are ready to tackle hybrid working arrangements. In addition to expanding our training and development budget so that our team members can benefit from continuous learning and upgrading of their skill sets, we will be looking to invest in a new space for our talented team of individuals to come together to build a stronger Apart from just focusing on their operational efficacies and core competencies, the Group also places great emphasis on cultivating a strong team bond amongst our supportive team members and establishing a supportive, conducive and collaborative working environment for our team members to grow alongside the organisation. We do so through virtual events such as birthday and life milestone celebrations for our team, regional anniversary events, as well as festive occasions. 17 PLAYING OUR PART FOR COMMUNITIES With FinTech and financial education in our DNA, we look to contribute and share our knowledge on finance and investing within the communities where we operate and in turn, give back to our communities through meaningful social initiatives in these sectors. Education will be a material, guiding pillar as we embark on corporate citizenry, and as the origin from which we built our business since 2008. FinTech will also be a key area since we view technology as the way forward and an important part of our future which drives us to stay vested and do our part for advancing technology. This year, we established the “VI Club for Youth” in Malaysia - a financial education platform that is freely accessible for students between 16-24 years old. With an aim to empower and encourage financial literacy among young adults, we wanted to equip young adults across the globe with proper financial knowledge, and our initiatives in the pipeline include a series of talks, both online and offline engagement activities and partnerships with universities, amongst others. In partnership with Nanyang Technological University (“NTU”) of Singapore, we have also established the VI College NTU Bursary Fund for the School of Computer Science and Engineering, in support of NTU’s vision of ensuring that every deserving student has access to quality education while also remaining true to our aim of advancing technology by supporting education. 18 In December 2020, we also contributed to the Singapore FinTech Association’s efforts to raise S$100,000 for the NTUC-U Care Fund under the “FinTech for Good initiative” to provide financial assistance to lower-income union members and families. We are heartened that our vision of empowering growth and transforming lives through VI College and VI App now extends across our community efforts, and will endeavour to give back in more meaningful ways going forward. CORPORATE GOVERNANCE STATEMENT March 31, 2021 Introduction 8I Holdings Limited (the “Company”) and its Board has adopted comprehensive systems of control and accountability as the basis for the administration of corporate governance, which are in effect as of the June 30, 2020. The Board is committed to administering the Company’s policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with the Company’s needs. To the extent applicable, the Company has adopted the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (Recommendations). In light of the Company’s size and nature, the Board considers that the current Board is a cost effective and practical method of directing and managing the Company. As the Company’s activities develop in size, nature and scope, the size of the Board and the implementation of additional corporate governance policies and structures will be reviewed. The Company’s main corporate governance policies and practices as at the date of this report are detailed below. The Company’s full Corporate Governance Plan is available in a dedicated corporate governance information section of the Company’s website at www.8iholdings.com. Principle 1: Lay solid foundations for management and oversight Recommendation 1.1 A listed entity should disclose: (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management. The Company has adopted a Board Charter. The Board Charter sets out the specific responsibilities of the Board, requirements as to the Boards composition, the roles and responsibilities of the Chairman and Company Secretary, the establishment, operation and management of Board Committees, Directors access to information, details of the Board’s company records and relationship with management, details of the Board’s performance review and details of the Board’s disclosure policy. A copy of the Company’s Board Charter is available on the Company’s website The Board is responsible for the corporate governance of the Company. The Board develops strategies for the Company, reviews strategic objectives and monitors performance against those objectives. the division of Clearly articulating responsibilities between the Board and management will help manage expectations and avoid misunderstandings about their respective roles and accountabilities. In general, the Board assumes (amongst others) the following responsibilities: (i) providing leadership and setting the strategic objectives of the Company; (ii) appointing and when necessary replacing the Executive Directors; (iii) approving the appointment and when necessary replacement, of other senior executives; (iv) undertaking appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; (v) overseeing management’s implementation the of its performance Company’s strategic objectives and generally; (vi) approving operating budgets and major capital expenditure and investment; (vii) overseeing the integrity of the company’s accounting and corporate reporting systems including the external audit; (viii) overseeing the company’s process for making timely and balanced disclosure of all material information concerning the Company that a reasonable person would expect to have a material effect on the price or value of the Company’s securities; (ix) ensuring that the Company has in place an appropriate risk management framework and setting the risk appetite within which the board expects management to operate; and (x) monitoring the effectiveness of the Company’s governance practices. 19 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 CORPORATE GOVERNANCE STATEMENT March 31 2021 Principle 1: Lay solid foundations for management and oversight (continued) The Company is committed to ensuring that appropriate checks are undertaken before the appointment of a Director and has in place written agreements with each Director which detail the terms of their appointment. The Board Charter outlines the roles, responsibility and accountability of the Company Secretary. The Company Secretary is accountable directly to the board, through the chair, on all matters to do with the proper functioning of the Board. Recommendation 1.2 Recommendation 1.5 A listed entity should: (a) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and (b) provide security holders with all material information relevant to a decision on whether or not to elect or re-elect a director. Election of Board members is substantially the province of the Shareholders in general meeting. The Board currently consists of the two Executive Directors (each of whom is a significant Shareholder) and two Non-Executive Directors (each of whom is independent). As the Company’s activities develop in size, nature and scope, the composition of the Board and the implementation of additional corporate governance policies and structures will be reviewed. Nominations of new Directors are considered by the full Board. If any vacancies arise on the Board, all directors are involved in the search and recruitment of a replacement. The Board has taken a view that the full Board will hold special meetings or sessions as required. The Board is confident that this process for selection, including undertaking appropriate checks before appointing a person, or putting forward to security holders a candidate for election, and review is stringent and full details of all Directors will be provided to Shareholders in the annual report and on the Company’s website. All material information relevant to a decision on whether or not to elect or re-elect a Director will be provided to security holders in Section 3 of the Prospectus or a Notice of Meeting pursuant to which the resolution to elect or re-elect a Director will be voted on. Recommendation 1.3 A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment. The Company has entered into Executive Service Agreements with executive directors and Letters of Appointment with each Non-Executive Director. Recommendation 1.4 The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board. 20 A listed entity should: (a) have and disclose a diversity policy; (b) through its board or a committee of the board set measurable objectives for achieving gender diversity in the composition of its board, senior executives and workforce generally; and (c) disclose in relation to each reporting period: (1) the measurable objectives set for that period to achieve gender diversity; (2) the entity’s progress towards achieving those objectives; and (3) either: (A) the respective proportions of men and women on the board, in senior executive positions and across the whole organisation (including how the entity has defined “senior executive” for these purposes); or (B) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under that Act. The Company has adopted a Diversity Policy. The Board values diversity and recognises the benefits it can bring to the organisation’s ability to achieve its goals. Accordingly, the Company has set in place a diversity policy. This policy outlines the Company’s diversity objectives in relation to gender, age, cultural background and ethnicity. It includes requirements for the Board to establish measurable objectives for achieving diversity, and for the Board to assess annually both the objectives, and the Company’s progress in achieving them. The Diversity Policy provides a framework for the Company to achieve a list of measurable objectives that encompass gender equality. The Diversity Policy provides for the monitoring and evaluation of the scope and currency of the Diversity Policy. The company implementing, monitoring and reporting on the measurable objectives. The Diversity Policy is available on the Corporate Governance Plan on the Company’s website. is responsible for The Company does not discriminate on the basis of gender. The Company is not of a relevant size to consider setting measurable objectives for achieving gender diversity. As such the board has not set any measurable objectives for achieving gender diversity. Category 31 March 2021 Board of Directors Senior Management Company wide Male 4 1 60 Female - 1 52 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 CORPORATE GOVERNANCE STATEMENT March 31, 2021 Principle 1: Lay solid foundations for management and oversight (continued) The Senior Management refer to those persons having authority and responsibility for planning, directing, controlling the activities indirectly, of the of the consolidated entity, directly or consolidated entity. Recommendation 1.6 A listed entity should: (a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and (b) disclose in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process. The Company is not of a relevant size to consider formation of a Nomination Committee. The responsibilities of the Nomination Committee are currently carried out by the board and evaluating the performance of the Board, any committees and individual directors on an annual basis. The Board may do so with the aid of an independent advisor. The process for this can be found in Schedule 5 of the Company’s Corporate Governance Plan. The Company has established the Nomination Committee Charter, which requires disclosure as to whether or not performance evaluations were conducted during the relevant reporting period. During the year a performance evaluation of the Executive Chairman and Executive Director was undertake by the non- its executive directors. The performance of the board, committees and the individual directors is assessed on an on- going basis by the Chairman of the Board. Recommendation 1.7 A listed entity should: (a) have and disclose a process for periodically evaluating the performance of its senior executives at least once every reporting period; and (b) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period. The responsibilities of the Nomination Committee are currently carried out by the board, which includes periodically evaluating the performance of senior executives. The process is disclosed in Schedule 6 of the Corporate Governance Plan. During March 2021, over a series of informal discussions, the executive directors reviewed each senior executive. All senior executives’ performances met performance criteria. Principle 2: Structure the board to add value Recommendation 2.1 The board of a listed entity should: (a) have a nomination committee which: (i) has at least three members, a majority of whom are independent directors; and (ii) is chaired by an independent director, and disclose: (iii) the charter of the committee; (iv) the members of the committee; and (v) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, experience, independence and knowledge of the entity to enable its duties and responsibilities effectively. it to discharge The Company does not comply with Principle 2.1. The Company is not of a relevant size to consider formation of a nomination committee to deal with the selection and appointment of new Directors and as such a nomination committee has not been formed. Nominations of new Directors are considered by the full Board. If any vacancies arise on the Board, all directors are involved in the search and recruitment of a replacement. The Board has taken a view that the full Board will hold special meetings or sessions as required. The Board is confident that this process for selection, including undertaking appropriate checks before appointing a person, or putting forward to security holders a candidate for election, and review is stringent and full details of all Directors will be provided to Shareholders in the annual report and on the Company’s website. Recommendation 2.2 A listed entity should have and disclose a board skill matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership. The Company identifies the following as the main areas of skills required by the board to successfully service the Company. The directors have been measured to these areas in the skills matrix: Number of Directors that meet the skill Executive and Non-Executive experience Industry experience and knowledge Leadership Corporate governance & Risk Management Strategic thinking Desired behavioural competencies 4 4 4 4 4 4 21 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 CORPORATE GOVERNANCE STATEMENT March 31 2021 Principle 2: Structure the board to add value (continued) Recommendation 2.4 Geographic experience Capital Markets experience Subject matter expertise - accounting - capital management - corporate financing - industry taxation - risk management - legal - IT expertise Number of Directors that meet the skill 4 3 3 3 3 1 4 3 1 The Board Charter requires the disclosure of each board member’s qualifications and expertise as set out in the Company’s Board skills matrix. Full details as to each director and senior executive’s relevant skills and experience are available in the Annual Report and the Company’s Website. Recommendation 2.3 A listed entity should disclose: (a) the names of the directors considered by the board to be independent directors; (b) if a director has an interest, position, association or relationship of the type described in Box 2.3 of the ASX Corporate Governance Principles and Recommendation (3rd Edition), but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the board is of that opinion; and (c) the length of service of each director The Board Charter provides for the disclosure of the names of Directors considered by the board to be independent. Currently two members of the Board are considered independent being Mr Yiowmin Chay and Mr Charles Mac; The Board Charter requires Directors to disclose their interest, positions, associations and relationships and requires that the independence of Directors is regularly assessed by the board in light of the interests disclosed by Directors. Details of the Directors interests, positions associations and relationships are provided in the Annual Report; and The Board Charter provides for the determination of the Directors’ terms and requires the length of service of each Director to be disclosed. The length of service of each Director is as follows: • Mr Ken Chee appointed on 17 May 2014 • Mr Clive Tan appointed on 17 May 2014 • Mr Yiowmin Chay appointed on 22 Sep 2014 • Mr Charles Mac appointed on 26 Apr 2016 22 A majority of the board of a listed entity should be independent directors. The Board considers that only two out of the four Directors are independent directors in accordance with the ASX Corporate Governance Council’s definition of independence: • Mr. Chay Yiowmin (Independent Non-Executive Director) • Mr. Charles Mac (Independent Non-Executive Director) The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the expense of the appointment of additional independent non-executive Directors. The Board believes that the individuals on the Board can make, and do make, quality and independent judgements in the best interests of the Company on all relevant issues. Directors having a conflict of interest in relation to a particular item of business must absent themselves from the Board meeting before commencement of discussion on the topic. Recommendation 2.5 The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity. Mr. Chee currently holds the position of Executive Chairman which does not comply with the ASX Corporate Governance Council’s recommendations. While the Board considers the importance of a division of responsibility and independence at the head of the Company, the existing structure is considered appropriate and provides a unified leadership structure. Mr. Chee has been the major force behind the establishment of the 8I Group and its current growth and direction. The Board considers that, at this stage of the Company’s development, he is able to bring quality and independent judgement to all relevant issues, and the Company benefits from his long standing experience of its operations and business relationships. Recommendation 2.6 providing A listed entity should have a program for inducting new directors and development opportunities for continuing directors to develop and maintain the skills and knowledge needed to perform their role as a director effectively. professional appropriate The Board Charter states that a specific responsibility of the Board is to procure appropriate professional development opportunities for Directors. The Remuneration Committee is responsible for the approval and review of induction and continuing professional development programs and procedures for Directors to ensure that they can effectively discharge their responsibilities. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 CORPORATE GOVERNANCE STATEMENT March 31, 2021 Principle 3: Act ethically and responsibly Recommendation 3.1 Principle 4: Safeguard integrity in financial reporting A listed entity should articulate and disclose its values The Company has statement of values which can be viewed on its website. Recommendation 3.2 A listed entity should: (a) have and disclose a code of conduct for its directors, senior executives and employees; and (b) ensure that the board or a committee of the board is informed of any material breaches of that code The Board is committed to the establishment and maintenance of appropriate ethical standards. The Corporate Code of Conduct applies to the Company’s directors, senior executives and employees. The Company’s Corporate Code of Conduct in the Corporate Governance plan which is on the Company’s website. is available Recommendation 3.3 A listed entity should: (a) have and disclose a whistleblower policy; and (b) ensure that the board or a committee of the board is informed of any material incidents reported under that policy. The Company has implemented a whistleblower policy which can be viewed on its website and the Board is informed when any material incidents are reported under the policy. Recommendation 3.4 A listed entity should: (a) have and disclose an anti-bribery and corruption policy; and (b) ensure that the board or a committee of the board is informed of any material breaches of that policy The Company has implemented an anti-bribery and corruption policy which can be viewed on its website and the Board is informed when any material incidents are reported under the policy. Recommendation 4.1 The board of a listed entity should: (a) have an audit committee which: (i) has at least three members, all of whom are non- executive directors and a majority of whom are independent directors; and (ii) is chaired by an independent director, who is not the chair of the board, and disclose: (iii) the charter of the committee; (iv) the relevant qualifications and experience of the members of the committee; and (v) in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its financial reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner. The Company has established an Audit and Risk Committee comprised of three members and chaired by an independent director. The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the expense of the appointment of additional non-executive Director to satisfy Recommendation 4.1 in full. The Company has adopted the Audit and Risk Committee Charter and the Board believes that the individuals on the Audit and Risk Committee can make, and do make, quality and informed judgements in the best interests of the Company on all relevant issues. Audit and Risk Committee members Details of attendance at meetings up to 31 March 2021 are set out below. Director Name Chay Yiowmin (Chair) Clive Tan Che Koon Charles Mac Held 2 2 2 Attended 2 2 2 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 23 CORPORATE GOVERNANCE STATEMENT March 31 2021 Principle 4: Safeguard integrity in financial reporting (continued) Recommendation 4.2 The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. The Audit and Risk Committee Charter states that a duty and responsibility of the Committee is to ensure that before the Board approves the entity’s financial statements for a financial period, the Executive Chairman and CFO have declared that in their opinion the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. Recommendation 4.3 A listed entity should disclose its process to verify the integrity of any periodic corporate report it releases to the market that is not audited or reviewed by an external auditor. Any periodic corporate reports are prepared by the accountant, reviewed by the CFO and presented to the Board for sign off prior to release to the market. Principle 5: Make timely and balanced disclosure Recommendation 5.1 A listed entity should have and disclose a written policy for complying with its continuous disclosure obligations under listing rule 3.1. The Board Charter provides details of the Company’s disclosure policy. In addition, Schedule 7 of the Corporate Governance Plan is entitled ‘Disclosure-Continuous Disclosure’ and details the Company’s disclosure requirements as required by the ASX Listing Rules and other relevant legislation. The Board Charter and Schedule 7 of the Corporate Governance Plan which is available at the Company’s website. Recommendation 5.2 A listed entity should ensure that its board receives copies of all material market announcements promptly after they have been made. All material market announcements are circulated to the board via email. Recommendation 5.3 A listed entity that gives a new and substantive investor or analyst presentation should release a copy of the presentation materials on the ASX Market Announcements Platform ahead of the presentation. Results, presentations and transcripts of the Chairman’s address at annual general meetings are released on the ASX Market Announcements Platform as soon as practically possible after the conclusion of the general meeting. Other presentations to new or substantive shareholders or investor analysts are released on the ASX Market Announcements Platform prior to the presentation. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 24 CORPORATE GOVERNANCE STATEMENT March 31, 2021 Principle 6: Respect the rights of security holders Principle 7: Recognise and manage risk Recommendation 6.1 Recommendation 7.1 A listed entity should provide information about itself and its governance to investors via its website. The board of a listed entity should: (a) have a committee or committees to oversee risk, each of found at The Company has a comprehensive website www.8iholdings.com, where there are links to directors, corporate governance, plans and policies. Also included are links to all financial reports, announcements, notice of meetings and presentations and any external media commentary made on the Company Recommendation 6.2 A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors. The Company has adopted a Shareholder Communications Strategy which aims to promote and facilitate effective two-way communication with investors. The Strategy outlines a range of ways in which information is communicated to shareholders. The Shareholder Communications Strategy can be found in the Corporate Governance plan under schedule 11 which is available at the Company’s website. Recommendation 6.3 A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders. The Shareholder Communication Strategy, which can be found in schedule 11 of the Corporate Governance Plan which is available on the Company’s website. Recommendation 6.4 A listed entity should ensure that all substantive resolutions at a meeting of security holders are decided by a poll rather than by a show of hands. The company decides all resolutions at a meeting of security holders by a poll. Recommendation 6.5 A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically. Security holders can register with the Company to receive email notifications when an announcement is made by the Company to the ASX. Shareholders queries should be referred to the Company Secretary at first instance. which: (i) has at least three members, a majority of whom are independent directors; and (ii) is chaired by an independent director, and disclose: (iii) the charter of the committee; (iv) the members of the committee; and (v) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the process it employs for overseeing the entity’s risk management framework. The Board has established an Audit and Risk Committee that has assumed the role of a separate Risk Management Committee and which operates under the Audit and Risk Committee Charter approved by the Board. The Board is ultimately responsible for risk oversight and risk management. Discussions on the recognition and management of risks were also considered by the Board. Further details of the committee’s activities are provided in the Company’s Annual Report. Recommendation 7.2 The board or a committee of the board should: (a) review the entity’s risk management framework with management at least annually to satisfy itself that it continues to be sound, to determine whether there have been any changes in the material business risks the entity faces and to ensure that they remain within the risk appetite set by the board; and (b) disclose in relation to each reporting period, whether such a review has taken place. internal The Company process for risk management and compliance includes a requirement to identify and measure risk, monitor the environment for emerging factors and trends that affect these risks, formulate risk management strategies and monitor the performance of risk management systems. Schedule 8 of the Corporate Governance Plan, which can be found on the Company’s website, is entitled ‘Disclosure - Risk Management’ and details the Company’s disclosure requirements with respect to the risk management review procedure and internal compliance and controls. The Board Charter requires in relation to the reporting period relevant to that Committee, to disclose the number of times that Committee met throughout the period, and the individual attendances of the members at those Committee meetings. Details of the Committee meetings are provided in the Company’s Annual Report. 25 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 CORPORATE GOVERNANCE STATEMENT March 31 2021 Principle 7: Recognise and manage risk (continued) Recommendation 7.3 Principle 8: Remunerate fairly and responsibly Recommendation 8.1 A listed entity should disclose: (a) if it has an internal audit function, how the function is The board of a listed entity should: (a) have a remuneration committee which: (i) has at least three members, a majority of whom are structured and what role it performs; or independent directors; and (b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes. The Company does not currently have an internal audit function. Given the size of the Company, no internal audit function is currently considered necessary. The Company’s Management periodically undertakes an internal review of financial systems and processes and where systems are considered to require improvement these systems are developed. The Board also considers external reviews of specific areas and monitors the implementation of system improvements. Recommendation 7.4 A listed entity should disclose whether, it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks. The Audit and Risk Committee Charter details the Company’s risk management systems which assist in identifying and managing potential or apparent business, economic, environmental and social sustainability risks (if appropriate). Review of the Company’s risk management framework is conducted at least annually and reports are continually created by management on the efficiency and effectiveness of the Company’s risk management framework and associated internal compliance and control procedures. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 26 (ii) is chaired by an independent director, and disclose: (iii) the charter of the committee; (iv) the members of the committee; and (v) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior is executives and ensuring appropriate and not excessive. remuneration that such The Company has a Remuneration Committee which is made up by Mr Charles Mac as Chairman, Mr Yiowmin Chay and Mr Clive Tan. The committee is made up of a majority of independent directors and is chaired by one of the independent directors and is therefore compliant with recommendation 8.1 (a)(i) and(ii). The Company has adopted The Remuneration Committee Charter. The Remuneration Committee Charter outlines the roles and responsibilities of the Remuneration Committee and provides that: (i) The Remuneration Committee comprises of at least three Directors, the majority of whom are independent non- executive Directors; (ii) The Remuneration Committee must be chaired by an independent Director who is appointed by the Board. (iii) The Remuneration Committee Charter is available in the is available on the Corporate Governance Plan which Company’s website; (iv) The Board Charter requires disclosure of the members of the Committee. Details of the current members are provided in the Annual Report; and (v) The Board Charter requires each Committee in relation to the reporting period relevant to that Committee, to disclose the number of times that Committee met throughout the period, and the individual attendances of the members at those Committee meetings. Details of the Committee meetings will be provided in the Company’s Annual Report. Remuneration Committee members Details of attendance at meetings up to 31 March 2021 are set out below. Director Name Charles Mac (Chair) Clive Tan Che Koon Chay Yiowmin Held 1 1 1 Attended 1 1 1 CORPORATE GOVERNANCE STATEMENT March 31, 2021 Principle 8: Remunerate fairly and responsibly (continued) Recommendation 8.2 Recommendation 8.3 A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives. The Remuneration Committee Charter outlines the Company’s policies and practices regarding the remuneration of non- executive, executive and other senior directors. A listed entity which has an equity-based remuneration scheme should: (a) have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and (b) disclose that policy or a summary of it. The remuneration of any Executive Director will be decided by the Board following the recommendation of the Remuneration Committee, without the affected Executive Director participating in that decision-making process. The Company had obtained its shareholders’ approval on the creation of an equity-based remuneration scheme. The Company’s full Employee Share Plan is available in the Company’s website at www.8iholdings.com The Board has adopted a policy that sets out the guidelines on the sale and purchase of securities in the Company by its key management personnel (i.e. Directors and, if applicable, any employees reporting directly to the Executive Directors). The policy generally provides that the written acknowledgement of the Executive Chairman (or the Board in the case of the Executive Chairman) must be obtained prior to trading. The Constitutions provide that the Non-Executive Directors will be paid by way of remuneration for their services as Directors a sum not exceeding such fixed sum per annum pursuant to a resolution passed at a general meeting of the Company. Until a different amount is determined, the amount of the remuneration is S$200,000 per annum. In addition, subject to any necessary Shareholder approval, a Director may be paid fees or other amounts as the Directors determine where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director (e.g. non-cash performance incentives such as options). Directors are also entitled to be paid reasonable travel and other expenses incurred by them in the course of the performance of their duties as Directors. The Remuneration Committee reviews and approves the Company’s remuneration policy in order to ensure that the Company is able to attract and retain executives and Directors who will create value for Shareholders, having regard to the amount considered to be commensurate for an entity of the Company’s size and level of activity as well as the relevant Directors’ time, commitment and responsibility. The Board is also responsible for reviewing any employee incentive and equity-based plans including the appropriateness of performance hurdles and total payments proposed. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 27 CORPORATE GOVERNANCE STATEMENT March 31 2021 Principle 9: Additional Recommendations that apply only in certain cases Recommendation 9.1 A listed entity with a director who does not speak the language in which board or security holder meetings are held or key corporate documents are written should disclose the processes it has in place to ensure the director understands and can contribute to the discussions at those meetings and understands and can discharge their obligations in relation to those documents. Not Applicable Recommendation 9.2 A listed entity established outside Australia should ensure that meetings of security holders are held at a reasonable place and time. Meetings of security holders are held at the Company’s head office in Singapore. In addition, where possible the Company provide security holders with the option to attend the meeting via electronic/online facilities. Recommendation 9.3 A listed entity established outside Australia, and an externally managed listed entity that has an AGM, should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit. The Company ensures that its auditor attends each AGM and is available to answer questions from security holders relevant to the audit. 28 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 REMUNERATION REPORT For the financial year ended 31 March 2021 This remuneration report set out information about the remuneration of 8I Holdings Limited’s key management personnel for the financial year ended 31 March 2021. 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. Executive remuneration for executives in employment Remuneration agreements. Details of the employment agreement with Executive Directors are provided below. is set out performance-related Executive Directors may compensation but do not receive any retirement benefits, other than statutory Central Provident Fund (CPF) contribution. receive Remuneration Policy Assessing performance 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 Louis Chua Chun Woei Executive Chairman Executive Director Non-Executive Director Non-Executive Director Head of Corporate Affairs Chief Financial Officer; Chief Risk Officer; and Company Secretary (Australia) Non-Executive Directors’ remuneration The Constitution and the ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from time to time by shareholders in general meeting. Total remuneration for all Non-Executive Directors, last voted upon by shareholders in 2020, is not to exceed $200,000 per annum. Directors’ fees cover all main board activities and membership of committees if applicable. Non-Executive Directors do not receive any retirement benefits. The Board is responsible for assessing performance against Key Performance Indicators (KPIs) and determining the Short-term Incentives (STI) and Long-term Incentive (LTI) to be paid. To assist in this assessment, the Board may request detailed reports on performance from management and market share. The Group does not have any formal bonus scheme in place. The Group does not have any ongoing commitment to pay bonuses. Long-term incentive Long-term Incentives (LTI) may be provided to key management personnel in the form of Share Plans over ordinary shares of the Company. LTI are considered to promote continuity of employment and provide additional incentive to recipients to increase shareholder wealth. Share Plans may only be issued to Directors subject to approval by shareholders in general meeting. 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$168,000 p.a. S$192,000 p.a.(2) S$252,000 p.a. S$nil S$nil Fees S$nil S$43,200 p.a.(3) S$48,000 p.a. S$48,000 p.a. S$42,000 p.a.(3) * There are no fixed term nor notice period in the Directors’ service agreements (1) Excluding employer’s Central Provident Fund (CPF) contribution (2) Executive director remuneration of a subsidiary (3) Non-executive director fee of a subsidiary 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 29 REMUNERATION REPORT For the financial year ended 31 March 2021 Details of Remuneration A breakdown showing the level and mix of each Director’s and Key Management Personnel’s remuneration for the financial year ended 31 March 2021 is set out below: Name of Directors Executive Directors Chee Kuan Tat, Ken Remuneration of Company Remuneration of a subsidiary Clive Tan Che Koon Remuneration of Company Remuneration of a subsidiary Non-executive Directors Chay Yiowmin Remuneration of Company Charles Mac Remuneration of Company Remuneration of a subsidiary Short-term Bonus/ Profit- sharing S$’000 Salary S$’000 Post- employment Share-based Payments Directors’ Fee S$’000 CPF Contribution S$’000 Share Plan S$’000 Total S$’000 168 192 252 - - - - 14 369 37 - - - - - - - 43 42 42 21 15 17 16 - - - - - 307 - 153 - - 37 197 885 305 196 42 42 58 Name of Key Management Personnel Designation Salary % Bonus % Short-term Post- employment CPF Contribution % Share-based Payments Share Plan % Total % S$100,000 to below S$250,000 Low Ming Li Chief Operating Officer Louis Chua Chun Woei Chief Financial Officer; Chief Risk Officer; and Company Secretary (Australia) 80 81 12 12 8 7 - - 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. The total remuneration of the top five key executives (who are not directors of the Company) is S$1,273,798 for the financial year ended 31 March 2021 (2020: S$855,016). 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 2021. 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 2021. The Company also reimburses validly incurred business expenses of Directors and Key Management Personnel. Share-based remuneration No options over ordinary shares in the Company were granted as compensation to each key management person during the reporting period. 30 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 REMUNERATION REPORT For the financial year ended 31 March 2021 Other Information Environmental Issues The Company’s operations relevant environmental laws and regulations, and have not been subject to any actions by environmental regulators. comply with all 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' MEETINGS DIRECTORS ELIGIBLE TO ATTEND ATTENDED Chee Kuan Tat, Ken Clive Tan Che Koon Chay Yiowmin Charles Mac 4 4 4 4 4 4 4 4 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 31 DIRECTORS’ STATEMENT For the financial year ended 31 March 2021 The directors present their statement to the members together with the audited financial statements of the Group for the financial year ended 31 March 2021 and the statement of financial position of the Company as at 31 March 2021. In the opinion of the directors, (a) the statement of financial position of the Company and the consolidated financial statements of the Group 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 2021 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, other than as disclosed under “Subsidiary’s Rights and Share Options” in this statement. Directors’ interests in shares or debentures (a) 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: Holdings registered in name of director or nominee At 31.3.2021 At 1.4.2020 86,885,009 65,140,000 86,684,792 65,140,000 8I Holdings Limited (No. of ordinary shares) Mr Chee Kuan Tat, Ken Mr Clive Tan Che Koon 32 Holdings registered in name of director or nominee At 31.3.2021 At 1.4.2020 400,000 200,000 - - 8VI Holdings Limited (No. of ordinary shares) Mr Chee Kuan Tat, Ken Mr Clive Tan Che Koon (b) According to the register of directors’ shareholdings, certain directors holding office at the end of the financial year had interests in performance rights and options to subscribe for ordinary shares of a Company’s subsidiary, 8VI Holdings Limited (“8VI”), granted pursuant to the 8VI’s Employee Securities Incentive Plan as set out below and under “Subsidiary’s Rights and Share Options” below: No. of unissued ordinary shares under performance rights and options At 31.3.2021 At 1.4.2020 8VI Holdings Limited Mr Chee Kuan Tat, Ken Class C Performance Rights Class D Performance Rights Class C Performance Rights Class D Performance Rights Options Mr Clive Tan Che Koon Class C Performance Rights Class D Performance Rights Class C Performance Rights Class D Performance Rights Options 200,000 200,000 250,000 250,000 1,000,000 100,000 100,000 125,000 125,000 500,000 - - - - - - - - - - (c) Mr Chee Kuan Tat, Ken, who by virtue of his interest of not less than 20% of the issued capital of the Company, is deemed to have an interest in the share capital of the Company’s subsidiaries. (d) The directors’ interests in the ordinary shares and convertible securities of the Company as at 21 April 2021 were the same as those as at 31 March 2021. Subsidiary’s rights and share options (a) 8VI Employee Securities Incentive Plan The 8VI’s Employee Securities Incentive Plan (“Share Plan”) for key directors and employees of the Group was approved by members of 8VI at its annual general meeting on 23 July 2020. The Share Plan provides a means to attract, motivate and retain key directors and employees and provide them with the opportunity to participate in the future growth of 8VI. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 DIRECTORS’ STATEMENT For the financial year ended 31 March 2021 Subsidiary’s rights and share options (continued) (a) 8VI Employee Securities Incentive Plan (continued) Under the Share Plan, the 8VI’s board of directors may from time to time determine that a director of the companies of the Group, subject to its members’ approval, or an employee may participate in the Share Plan to apply for securities on such terms and conditions as the 8VI’s board of directors decides. The persons to whom the rights and options have been issued have no right to participate by virtue of the options in any share issue of any other companies of the Group. The Group has no legal or constructive obligation to repurchase or settle the securities in cash. During the financial year, pursuant to 8VI members’ approval at its annual general meeting on 23 July 2020, 8VI granted its directors options to subscribe for 2,000,000 ordinary shares of 8VI at exercise price of AUD 0.45 per share (“Options”) and performance rights to be converted into 2,600,000 ordinary shares of 8VI upon meeting the vesting conditions (“Performance Rights”). The Options are exercisable from 21 August 2020 and expire on 30 June 2025. The vesting condition for the Options is that the holder being a director of 8VI when the Options are exercised. The total fair value of the Options granted was estimated to be AUD 955,600 using the Hoadleys Employee Stock Option Model. Details of the Options granted to directors of the Company are as follows: No. of unissued ordinary shares of 8VI under Options Granted in financial year ended 31.03.2021 Aggregated granted since commencement of scheme to 31.3.2021 Aggregate exercised since commencement of scheme to 31.3.2021 Aggregate outstanding as at 31.03.2021 1,000,000 500,000 1,000,000 500,000 - - 1,000,000 500,000 Name of director Mr Chee Kuan Tat, Ken Mr Clive Tan Che Koon The Performance Rights will not have consideration on satisfaction of the vesting conditions. The vesting conditions for the Performance Rights are: - - The holder being a director of 8VI as at the relevant vesting determination dates specified in the table below; and The relevant volume weighted average price (VWAP) of 8VI’s shares traded on ASX over any 20-day period exceeds the prices specified in the table below. Performance Rights granted Vesting conditions Number 400,000 400,000 400,000 400,000 500,000 500,000 Effective grant date 23.07.2020 23.07.2020 23.07.2020 23.07.2020 23.07.2020 23.07.2020 Fair value per right at effective grant date (AUD) Earliest vesting determination date VWAP Share Price condition (AUD) 0.4675 0.3813 0.4037 0.2016 0.2570 0.1389 21.08.2020 21.08.2020 01.04.2021 01.04.2021 01.04.2022 01.04.2022 0.45 0.60 0.70 2.00 2.30 5.00 Expiry date 30.04.2021 30.04.2021 30.04.2022 30.04.2022 30.04.2023 30.04.2023 Class A Performance Rights Class B Performance Rights Class C Performance Rights Class D Performance Rights Class E Performance Rights Class F Performance Rights 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 33 DIRECTORS’ STATEMENT For the financial year ended 31 March 2021 Subsidiary’s rights and share options (continued) (a) 8VI Employee Securities Incentive Plan (continued) The total fair value of the Performance Rights granted was estimated to be AUD 779,590 using the Hoadleys Hybrid ESO Model (a Monte Carlo simulation model). Details of the Performance Rights granted to directors of the Company are as follows: No. of unissued ordinary shares of 8VI under Performance Rights Granted in financial year ended 31.3.2021 Aggregated granted since commencement of scheme to 31.3.2021 Aggregate exercised since commencement of scheme to 31.3.2021 Aggregate outstanding as at 31.03.2021 1,300,000 650,000 1,300,000 650,000 400,000 200,000 900,000 450,000 Name of director Mr Chee Kuan Tat, Ken Mr Clive Tan Che Koon During the financial year, the vesting conditions of the Class A Performance Rights and Class B Performance Rights were satisfied and both classes of Performance Rights were converted into 8VI ordinary shares. Mr Chee and Mr Tan received 400,000 ordinary shares and 200,000 ordinary shares respectively from the exercising of their Class A Performance Rights and Class B Performance Rights. (b) Performance Rights and Options of 8VI outstanding The number of unissued shares of 8VI under Performance Rights and Options in relation to the Share Plan outstanding at the end of the financial year was as follows: No of unissued ordinary shares of 8VI under the rights and options at 31.3.2021 Exercise price Exercise period 400,000 400,000 500,000 500,000 2,000,000 - - - - AUD 0.45 1.04.2021 to 30.04.2022 1.04.2021 to 30.04.2022 1.04.2022 to 30.04.2023 1.04.2022 to 30.04.2023 21.08.2020 to 30.06.2025 Class C Performance Rights Class D Performance Rights Class E Performance Rights Class F Performance Rights Options 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 2021 before their submission to the Board of Directors. The Audit Committee has recommended to the Board that the independent auditor, KLP LLP, be nominated for re-appointment at the forthcoming Annual General Meeting of the Company. 34 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 DIRECTORS’ STATEMENT For the financial year ended 31 March 2021 Independent Auditor The independent auditor, KLP LLP, has expressed its willingness to accept re-appointment. On behalf of the directors Chee Kuan Tat, Ken Director 29 May 2021 Clive Tan Che Koon Director 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 35 KLP LLP 13A MacKenzie Road Singapore 228676 Tel: (65) 6227 4180 klp@klp.com.sg www.klp.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 2021, 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 2021 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. 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 for the financial year ended 31 March 2021. 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 matters 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. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 36 KLP LLP 13A MacKenzie Road Singapore 228676 Tel: (65) 6227 4180 klp@klp.com.sg www.klp.com.sg INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued) Key Audit Matters (continued) Key Audit Matter How our audit addressed the Key Audit Matter Valuation and impairment of investment in subsidiaries (Refer to Note 14 to the financial statements) We assessed the appropriateness of management’s process by which indicators of impairment were identified. The Company carries its investment in subsidiaries at cost adjusted for impairment losses. As at 31 March 2021, the carrying amount of investment in subsidiaries amounted to S$22,351,126. During the financial year, the Company recognised net write back of impairment losses of S$4,744,171 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 to the Company. Moreover, the identification of impairment indicators or events, the estimation of recoverable amount and the determination of impairment judgements and assumptions by management. loss requires the use of significant Valuation of financial instruments held at fair value (Refer to Note 3,11,16 and 24 to the financial statements) Financial instruments held by the Group at fair value include equity securities designated at fair value. The Group’s financial instruments are predominantly valued using quoted market prices (‘Level 1’). The valuations of ‘Level 3’ financial instruments rely on significant unobservable inputs. We considered the overall valuation of financial instruments (Level 1 and 3) to be a key audit matter given the financial significance to the Group, the nature of the underlying financial instruments and the estimation involved to determine fair value. Where impairment had been identified, for samples of investment in subsidiaries, our work included: • and position financial considering the latest developments in relation to the subsidiaries’ financial performance, especially the impact from COVID-19 pandemic; examining the recoverable amounts determined by management, including the appropriateness of the method and key assumptions used; challenging management’s assumptions; testing the adequacy of impairment loss; and considered the adequacy of disclosures in the financial statements in respect to the impairment. • • • • Based on procedures performed, we have assessed that the aggregate provision for impairment loss is appropriate. independent to determine 1. Obtain quoted market prices of listed equity securities an source from independent estimate of fair value for samples of the Group's Level 1 financial instruments. We compared these to the Group’s calculations of fair value to assess individual material valuation differences or systemic bias; assessed the reasonableness of the methodologies used and the assumptions made for samples of instruments valuations with significant financial inputs (Level 3 financial unobservable valuation instruments); and 2. 3. performed tests of the methodology over fair value adjustments, in light of available market data and industry trends. inputs and assessed Overall, we considered that the valuation of financial instruments held at fair value was within a reasonable range of outcomes. We also found the fair value disclosures in the financial statements to be adequate. 37 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 KLP LLP 13A MacKenzie Road Singapore 228676 Tel: (65) 6227 4180 klp@klp.com.sg www.klp.com.sg INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued) Key Audit Matters (continued) Key Audit Matter How our audit addressed the Key Audit Matter Intangible assets recognition and measurement (Refer to Note 2.7, 3 and 15 to the financial statements) Our procedures in relation to the Group’s recognition and measurement of development of software, we: As at 31 March 2021, the Group’s intangible assets includes development of software with carrying amount of S$790,401. During the year, the Group conducted a continuous update on the mobile application for VI App. Management applied judgement in identifying which functions need updates and expenditure attributable to the updates that met the criteria for capitalisation under the requirements of accounting standards. Factors considered by management included the Group’s intention, availability of technical, financial and other resources and technical ability to complete the updates, the likelihood of generating sufficient future economic benefits to the Group and its ability to measure the expenditure incurred. We considered such to be a key audit matter because of the significance of the costs capitalised and the judgement involved in assessing whether the capitalisation criteria have been met. Other Information 1. Obtained an understanding and assessing the design of the controls in relation to how management determined and measured costs that are directly attributable to the development activities; 2. Evaluate the nature of the development costs incurred that are capitalised into intangible assets; 3. Assessing the reasonableness of the capitalisation based on our knowledge of the business and industry; 4. Evaluating the appropriateness of expenses capitalised on a sample basis by agreeing the costs to internal timesheet and payroll records. Based on the procedure performed above, we consider the costs capitalised to be supportable by available evidence. 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 this 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. When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate actions in accordance with SSAs. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 38 KLP LLP 13A MacKenzie Road Singapore 228676 Tel: (65) 6227 4180 klp@klp.com.sg www.klp.com.sg INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued) Responsibilities of Management and Directors for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Act and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets. In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. The directors’ responsibilities include overseeing the Group’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 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. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 39 KLP LLP 13A MacKenzie Road Singapore 228676 Tel: (65) 6227 4180 klp@klp.com.sg www.klp.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) We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the 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. KLP LLP Public Accountants and Chartered Accountants Singapore, 29 May 2021 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 40 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the financial year ended 31 March 2021 Revenue Investment gains/(losses) Cost of sales and services Gross profit Other gains Other income Expenses - Administrative expenses - Marketing and other operating expenses - Finance costs Share of (profit)/loss attributable to the unit holders of redeemable participating shares Share of loss of an associated company Profit/(loss) before income tax Income tax expense Profit/(loss) for the year Other comprehensive (loss)/income: Items that may be reclassified subsequently to profit or loss: - Currency translation differences arising from consolidation Items that will not be reclassified subsequently to profit or loss: - Fair value gains/(losses) - financial assets, at FVOCI Other comprehensive (loss)/income, net of tax Total comprehensive income/(loss) for the year Profit/(loss) attributable to: - Owners of the Company - Non-controlling interests Total comprehensive income/(loss) attributable to: - Owners of the Company - Non-controlling interests Note 2021 S$ 2020 S$ 4 4 6 5 5 6 6 20 8 16 25,965,015 6,565,281 (6,147,303) 11,864,905 (2,466,598) (3,381,525) 26,382,993 6,016,782 107,486 1,208,000 73,980 503,151 (8,877,473) (7,645,974) (33,770) (7,044,851) (3,993,417) (81,577) (1,062,173) - 10,079,089 (1,037,177) 9,041,912 719,846 (29,652) (3,835,738) (151,190) (3,986,928) (653,526) 478,393 795 (652,731) (317,570) 160,823 8,389,181 (3,826,105) 7,946,616 1,095,296 9,041,912 (3,679,184) (307,744) (3,986,928) 7,328,073 1,061,108 8,389,181 (3,639,021) (187,084) (3,826,105) Profit/(loss) per share attributable to equity holders of the Company (S$ cent per share) - Basic earnings - Diluted earnings 9 9 2.21 2.21 (1.02) (1.02) The accompanying notes form an integral part of these financial statements. 41 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 March 2021 Note 31 March 2021 S$ 2020 S$ 10 11 12 8 12 13 15 16 21 17 18 8 19 20 18 19 21 22 23 26,819,650 24,868,213 2,153,261 - 53,841,124 351,900 1,450,709 790,401 1,275,182 296,355 4,164,547 18,442,385 14,358,481 2,527,868 129,122 35,457,856 1,242,921 1,597,993 430,439 1,266,261 264,331 4,801,945 58,005,671 40,259,801 3,852,696 798,089 465,036 9,521,393 5,359,489 19,996,703 73,625 233,789 4,000 311,414 1,767,983 1,146,938 - 3,969,752 3,927,686 10,812,359 67,574 - 4,000 71,574 20,308,117 37,697,554 10,883,933 29,375,868 33,972,254 (14,122,248) 15,562,255 35,412,261 2,285,293 34,455,641 (13,753,947) 7,615,639 28,317,333 1,058,535 37,697,554 29,375,868 ASSETS Current assets Cash and cash equivalents Financial assets, at FVPL Trade and other receivables Current income tax asset Non-current assets Other receivables Property, plant and equipment Development of software Financial assets, at FVOCI Deferred income tax assets Total assets LIABILITIES Current liabilities Trade and other payables Lease liabilities Current income tax liabilities Unearned revenue Redeemable participating shares Non-current liabilities Lease liabilities Unearned revenue Deferred income tax liabilities 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 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 The accompanying notes form an integral part of these financial statements. 42 STATEMENT OF FINANCIAL POSITION - COMPANY As at 31 March 2021 ASSETS Current assets Cash and cash equivalents Financial assets, at FVPL Trade and other receivables Non-current assets Other receivables Investments in subsidiaries Financial assets, at FVOCI Total assets LIABILITIES Current liabilities Trade and other payables Unearned revenue Total liabilities NET ASSETS EQUITY Capital and reserves attributable to owners of the Company Share capital Other reserves Accumulated profits/(losses) Total equity Note 31 March 2021 S$ 2020 S$ 10 11 12 12 14 16 17 19 22 23 1,364,463 9,494,024 169,529 11,028,016 351,900 22,351,126 1,267,761 23,970,787 34,998,803 8,100,084 32,041 4,905,819 13,037,944 1,242,921 15,678,762 1,077,479 17,999,162 31,037,106 316,457 - 316,457 137,455 24,150 161,605 34,682,346 30,875,501 33,972,254 (2,087,255) 2,797,347 34,682,346 34,455,641 (2,062,917) (1,517,223) 30,875,501 The accompanying notes form an integral part of these financial statements. 43 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the financial year ended 31 March 2021 Attributable to owners of the Company Share capital S$ Fair value reserve S$ Currency translation reserve S$ Capital reserve S$ Employee share plan reserve S$ Retained profits S$ Total S$ Non- controlling interests S$ Total equity S$ 2021 Beginning of financial year 34,455,641 (11,395,788) (47,644) (2,310,515) Profit for the year Other comprehensive income/(loss) for the year Total comprehensive income/(loss) for the year - - - - 795 795 - (619,338) (619,338) - - - - - - - 7,615,639 28,317,333 1,058,535 29,375,868 7,946,616 - 7,946,616 7,946,616 (618,543) 7,328,073 1,095,296 (34,188) 1,061,108 9,041,912 (652,731) 8,389,181 Shares buy-back (Note 22) Value of employee services Performance rights exercised Dilution of subsidiaries without change in control Total transactions with owners of the Company, recognised directly in equity End of financial year (483,387) - - - (483,387) - - - - - - - - - - - - 201,702 (230,210) - 613,958 (335,208) - (28,508) 278,750 - - - - - (483,387) 613,958 (133,506) (230,210) - - 133,506 32,144 (483,387) 613,958 - (198,066) (233,145) 165,650 (67,495) 33,972,254 (11,394,993) (666,982) (2,339,023) 278,750 15,562,255 35,412,261 2,285,293 37,697,554 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 The accompanying notes form an integral part of these financial statements. 44 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued) For the financial year ended 31 March 2021 2020 Beginning of financial year Loss for the year Other comprehensive income/(loss) for the year Total comprehensive income/(loss) for the year Attributable to owners of the Company Share capital S$ Fair value reserve S$ Currency translation reserve S$ Capital reserve S$ Retained profits S$ Total S$ Non- controlling interests S$ Total equity S$ 34,491,447 (11,078,218) (405,377) (2,309,547) 10,874,431 31,572,736 756,702 32,329,438 - - - - (317,570) (317,570) - 357,733 357,733 - - - (3,679,184) - (3,679,184) (3,679,184) 40,163 (3,639,021) (307,744) 120,660 (187,084) (3,986,928) 160,823 (3,826,105) Shares buy-back (Note 22) Disposal of a subsidiary Dilution of subsidiary without change in control Total transactions with owners of the Company, recognised directly in equity (35,806) - - (35,806) - - - - - - - - - (420,392) 419,424 (968) - 420,392 - 420,392 (35,806) - 419,424 383,618 - (123,293) 612,210 488,917 (35,806) (123,293) 1,031,634 872,535 End of financial year 34,455,641 (11,395,788) (47,644) (2,310,515) 7,615,639 28,317,333 1,058,535 29,375,868 The accompanying notes form an integral part of these financial statements. 45 CONSOLIDATED STATEMENT OF CASH FLOWS For the financial year ended 31 March 2021 Cash flows from operating activities Profit/(loss) before income tax Adjustments for: - Net gain on disposal of subsidiaries - Net gain on disposal of an associated company - Net fair value (gain)/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 - Dividend income - Interest income - Gain on disposal of property, plant and equipment - Rent concessions - Depreciation of property, plant and equipment - Amortisation of development of software - Property, plant and equipment written off - Bad debt written off - Credit loss allowance - Finance costs - Employee share plan expense - Share of loss of an associated company - Share of profit/(loss) attributable to the unit holders of redeemable participating shares - Exchange differences Change in working capital, net of effects from disposal of subsidiaries: - Trade and other receivables - Financial assets, at FVPL - Trade and other payables - Unearned revenue Cash generated from operations Interest received Dividend received Income tax paid Net cash provided by operating activities Cash flows from investing activities Acquisition of non-controlling interest without a change in control Proceeds from sale of property, plant and equipment Proceeds from sale of non-controlling interest without a change in control Proceeds from sale of subsidiary, net of cash disposed Proceeds from sale of an associated company Net proceeds from loan to non-related parties Additions to property, plant and equipment Additions to development of software (Additions)/disposal of financial assets through other comprehensive income Net cash (used in)/provided by investing activities Note 2021 S$ 2020 S$ 10,079,089 (3,835,738) 4 4 4 4 4 5 5 5 6 6 6 6 6 7 20 8(b) 13 15 16 - - (1,548,546) (4,591,388) (425,347) (70,631) (1,710) (65,191) 1,659,719 313,134 36,789 198,749 136,263 33,770 665,840 - 1,062,173 (658,242) 6,824,471 (145,385) (4,369,799) 2,084,713 5,785,430 10,179,430 70,631 425,347 (480,791) 10,194,617 (368,474) 5,995 - - - 1,076,000 (587,434) (673,096) (8,126) (555,135) (51,977) (5,320) 3,334,810 (162,778) (648,137) (207,524) - - 1,737,126 158,481 - 2,265 112,783 81,577 - 29,652 (719,846) 396,648 222,022 (69,072) 2,844,643 239,596 1,846,482 5,083,671 207,524 648,137 (249,843) 5,689,489 (68,079) - 1,138,147 (38,486) 200,000 2,046,978 (198,630) (405,782) 115,049 2,789,197 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 The accompanying notes form an integral part of these financial statements. 46 CONSOLIDATED STATEMENT OF CASH FLOWS (continued) For the financial year ended 31 March 2021 Cash flows from financing activities Shares buy-back Payment of principal portion of lease liabilities Finance cost paid Net proceed from/(payment to) fund’s non-controlling unit holders Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents Beginning of financial year Effects of currency translation on cash and cash equivalents End of financial year Note 2021 S$ 2020 S$ 22 20 (483,387) (1,219,403) (33,730) 638,419 (1,098,101) (35,806) (1,392,434) (81,574) (1,180,311) (2,690,125) 8,541,381 5,788,561 18,442,385 (164,116) 26,819,650 12,382,781 271,043 18,442,385 The accompanying notes form an integral part of these financial statements. 47 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 These notes form an integral part of and should be read in conjunction with the accompanying financial statements. 2. Significant accounting policies 1. General information 2.1 Basis of preparation 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 activity of the Company is management consultancy services. The principal activities of its subsidiaries are disclosed in Note 14 to the financial statements. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 48 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. Interpretations and amendments to published standards effective in 2020 On 1 April 2020, the Group has adopted the new or amended FRSs and Interpretations of FRSs (“INT FRSs”) that are mandatory for application for the financial year. Changes to the Group’s accounting policies have been made as required, in accordance with the transitional provisions in the respective FRSs and INT FRSs. The adoption of these new or amended FRSs and INT FRSs did not result in substantial changes to the Group’s accounting policies and had no material effect on the amounts reported for the current or prior financial years except for the early adoption of to FRS 116 Leases: Covid-19-Related Rent amendment Concessions: Early adoption of amendment to FRS 116 Leases: Covid-19- Related Rent Concessions The Group has elected to early adopt the amendment to FRS 116 which introduced a practical expedient for a lessee to elect not to assess whether a rent concession is a lease modification, if all the following conditions are met: (a) the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change; (b) any reduction in lease payments affects only payments originally due on or before 30 June 2021; and (c) there is no substantive change to other terms and conditions of the lease. The Group has elected to apply this practical expedient to all property leases. As a result of applying the practical expedient, in rent concessions of S$65,191 (Note 5) was “Government grants” presented under “Other income” in the profit or loss during the year. included NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Significant accounting policies (continued) 2.2 Revenue recognition 2.4 Borrowing costs 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. All borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss in the period in which they are incurred. 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) (b) (c) Programme fees The Group provides financial education and training services. Revenue is recognised when the participants attended first day of training. The Company will record contractual liabilities for advance payment made for the training. Subscription income Subscription income is recognised over the subscription period. Commission income Commission income is recognised when the corresponding service is provided. (d) Rendering of services The Group provide digital production and advertising income. Revenue is recognised when the services have been performed and rendered. (e) Dividend income Dividend income is recognised when the right to receive payment is established. It is probable that the economic benefits associated with the dividend will flow to the Group, and the amount of the dividend can be reliably measured. (f) Interest income Interest income is recognised using the effective interest method. (g) Rental income Rental income from events site is accounted for on a straight-line basis over the period of the rent. 2.3 Government grants Grants from the government are recognised as a receivable at their fair value when there is reasonable assurance that the grant will be received and the Group will comply with all the attached conditions. Government grants 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. 2.5 Group accounting (a) Subsidiaries (i) Consolidation (including structured Subsidiaries are all entities 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 transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. indicator of the shown 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 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. separately in (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 issued by the Group. The consideration interests 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. 49 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Significant accounting policies (continued) 2.5 Group accounting (continued) (c) Associated companies (a) Subsidiaries (continued) (ii) Acquisitions (continued) Acquisition-related costs are expensed as incurred. liabilities and Identifiable assets acquired 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. (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. in Please refer to the paragraph “Investments the subsidiaries and associated companies” accounting policy on investments in subsidiaries in the separate financial statements of the Company. for (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. 50 Associated companies are entities over which the Group has significant generally accompanied by a shareholding giving rise to voting rights of 20% and above but not exceeding 50%. influence, but not control, 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 is initially in associated companies Investments 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 from the equity method of accounting, Under 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 received or income. Dividends receivable 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. interest Unrealised gains on transactions between the Group and its associated companies are eliminated to the extent of the Group's 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. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Significant accounting policies (continued) 2.5 Group accounting (continued) (c) Subsequent expenditure (c) Associated companies (continued) (iii) Disposals interest Investments in associated companies is derecognised when the Group loses significant influence. If the in the former associated retained equity 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. in Please refer to the paragraph “Investments the for subsidiaries and associated companies” accounting policy on in associated companies in the separate financial statements of the Company. investments 2.6 Property, plant and equipment (a) Measurement (i) Property, plant and equipment Property, plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated depreciation accumulated impairment losses. and (ii) Components of costs The cost of an item of property, 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. Subsequent expenditure relating to property, 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 property, plant and equipment, the difference between the disposal proceeds and its carrying amount is recognised in profit or loss within “other gains”. 2.7 Intangible assets Development of software Research costs are recognised as an expense when incurred. Costs directly attributable to the development of VI App and CRM system are capitalised as intangible assets only when technical feasibility of the project is demonstrated, the Group has an intention and ability to complete and use the software and the costs can be measured reliably. Such costs include purchases of materials and services and payroll-related costs of employees directly involved in the project and are amortised over their estimated useful lives of 2 years. 2.8 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. (b) Depreciation Depreciation of property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows: 2.9 Impairment of non-financial assets Intangible assets – Development of software Property, plant and equipment Right-of-use assets Investments in subsidiaries and associated companies Office premises Office equipment Furniture and fittings Motor vehicles Useful lives 1 to 3 years 1 to 3 years 3 years 5 years Intangible assets, property, plant and equipment, right-of-use assets 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. The residual values, estimated useful lives and depreciation method of property, 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. 51 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Significant accounting policies (continued) 2.9 Impairment of non-financial assets (continued) At initial recognition 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. 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. 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. At subsequent measurement (i) Debt instruments The difference between the carrying amount and recoverable amount is recognised as an impairment loss in profit or loss. Debt instruments mainly comprise of cash and cash equivalents and trade and other receivables. An impairment loss for an asset other than goodwill is reversed only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of this asset is increased to its revised 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, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense, a reversal of that impairment is also recognised in profit or loss. 2.10 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. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 52 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 other income and presented as interest 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 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 and(losses)”. Interest is recognised using the effective interest rate method and presented in “interest income”. income from these financial assets for • 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 and(losses)”. NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Significant accounting policies (continued) 2.10 Financial assets (continued) (a) Classification and measurement (continued) At subsequent measurement (continued) (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 and 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 30 days past due. The Group considers a financial asset in default when contractual payments are 60-365 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 substantially all risks and rewards of ownership. the Group has transferred and 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. investment, the difference On disposal of an equity is between the carrying amount and sales proceed 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. 53 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Significant accounting policies (continued) 2.11 Offsetting of financial instruments Financial assets and liabilities are offset and the net amount reported in the consolidated statement of financial position when there is a legally enforceable right to offset and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. 2.12 Trade and other payables Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. They are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). Otherwise, they are presented as non-current liabilities. Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using the effective interest method. 2.13 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. 2.14 Leases (a) When the Group is the lessee: At the inception of the contract, the Group assesses if the contract contains a lease. A contract contains a lease if the contract convey the right to control the use of an identified asset for a period of time in exchange for consideration. is only required when the terms and Reassessment conditions of the contract are changed. • Right-of-use assets The Group recognised a right-of-use asset and lease liability at the date which the underlying asset is available for use. Right-of-use assets are measured at cost which comprises the initial measurement of lease 54 liabilities adjusted for any lease payments made at or before the commencement date and lease incentive received. Any initial direct costs that would not have been incurred if the lease had not been obtained are added to the carrying amount of the right-of-use assets. the These right-of-use asset is subsequently depreciated using the straight-line method commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. from Right-of-use assets (except for those which meets the definition of an investment property) are presented within “Property, plant and equipment”. • Lease liabilities The initial measurement of lease liability is measured at the present value of the lease payments discounted using the implicit rate in the lease, if the rate can be readily determined. If that rate cannot be readily incremental determined, the Group shall use borrowing rate. its Lease payments include the following: - Fixed payment (including payments), less any lease incentives receivables; in-substance fixed - Variable lease payment that are based on an index or rate, initially measured using the index or rate as at the commencement date; - Amount expected to be payable under residual value guarantees ; - The exercise price of a purchase option if is reasonably certain to exercise the option; and - Payment of penalties for terminating the lease, if the lease term reflects the Group exercising that option. For contract that contain both lease and non-lease components, the Group allocates the consideration to each lease component on the basis of the relative stand- alone price of the lease and non-lease component. The Group has elected to not separate lease and non lease component for property leases and account these as one single lease component. Lease liability is measured at amortised cost using the effective liability shall be remeasured when: interest method. Lease - There is a change in future lease payments arising from changes in an index or rate; 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Significant accounting policies (continued) 2.14 Leases (continued) (a) When the Group is the lessee: (continued) • Lease liabilities (continued) - There is a changes in the Group’s assessment of whether it will exercise an extension option; or - There are modification in the scope or the consideration of the lease that was not part of the original term. Lease liability is remeasured with a corresponding adjustment to the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. • Short term and low value leases The Group has elected to not recognised right-of-use assets and lease liabilities for short-term leases that have lease terms of 12 months or less and leases of low value leases, except for sublease arrangements. Lease payments relating to these leases are expensed to profit or loss on a straight-line basis over the lease term. • Early adoption of amendment to FRS 116 Leases: Covid-19-Related Rent Concessions The Group has applied the amendment to FRS 116 Leases: Covid-19-Related Rent Concessions. The Group applies the practical expedient allowing it not to assess whether a rent concession related to COVID-19 is a lease modification. The Group applies the practical expedient consistently to contracts with similar characteristics and in similar circumstances. For rent concessions in leases to which the Group chooses not to apply the practical expedient, or that do not qualify for the practical expedient, the Group assesses whether there is a lease modification. (b) When the Group is the lessor: The accounting policy applicable to the Group as a lessor in the comparative period were the same under FRS 16 except when the Group is an intermediate lessor. In classifying a sublease, the Group as an intermediate lessor classifies the sublease as a finance or an operating lease with reference to the right of-use asset arising from the head lease, rather than the underlying asset. When the sublease is assessed as a finance lease, the Group derecognises the right-of-use asset relating to the head lease that it transfers to the sublessee and recognised the net investment in the sublease within “Trade and other receivables”. Any differences between the right-of-use asset derecognised and the net investment in sublease is recognised in profit or loss. Lease liability relating to the head lease is retains in the balance sheet, which represents the lease payments owed to the head lessor. When the sublease is assessed as an operating lease, the Group recognise lease income from sublease in profit or loss within “Other income”. The right-of-use asset relating to the head lease is not derecognised. For contract which contains lease and non-lease components, the Group allocates the consideration based on a relative stand-alone selling price basis. 2.15 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. Management periodically evaluates positions taken in tax returns with respect to stiuations in which applicable tax regulation is It establishes provisions, where subject to appropriate, on the basis of amounts expected to be paid to the tax authorities. interpretation. 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) 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 (ii) 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. 55 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Significant accounting policies (continued) 2.15 Income taxes (continued) 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. 2.16 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 cost. Changes in the estimated timing or amount of the expenditure or discount rate are recognised in profit or loss when the changes arise. included in the estimation of the number of shares under options that are expected to become exercisable on the vesting date. At each balance sheet date, the Group revises its estimates of the number of shares under options that are expected to become exercisable on the vesting date and recognises the impact of the revision of the estimates in profit or loss, with a corresponding adjustment to the employee share plan reserve over the remaining vesting period. When the options are exercised, the proceeds received (net of transaction costs) and the related balance previously recognised in the employee share plan reserve are credited to the share capital account, when new ordinary shares are issued, or to the “treasury shares” account, when treasury shares are re-issued to the employees. 2.18 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. 2.17 Employee compensation (b) Transactions and balances 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 operates an equity-settled, share-based compensation plan. The value of the employee services received in exchange for the grant of options is recognised as an expense with a corresponding increase in the employee share plan reserve over the vesting period. The total amount to be recognised over the vesting period is determined by reference to the fair value of the options granted on grant date. Non-market vesting conditions are 56 Transactions in a currency other than the functional into the currency (“foreign currency”) are translated 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 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Significant accounting policies (continued) 2.18 Currency translation (continued) (c) Translation of Group entities’ (continued) financial statements (iii) all resulting currency translation differences are recognised income and in other comprehensive 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. 2.19 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. 2.20 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. 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. 2.21 Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account. 2.22 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 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. in the 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. Critical accounting policies judgements in applying the entity’s a. Determination of lease term of contracts with extension options As at 31 March 2021, the Group’s lease liabilities, which are measured with reference to an estimate of the lease term, amounted to S$871,714, of which none arose from extension options. Extension option is included in the lease term if the lease is reasonably certain to be extended. In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise the extension option. For leases of office premises, the following factors are considered to be most relevant: • If any leasehold improvements are expected to have a significant remaining value, the Group typically includes the extension option in lease liabilities; • Otherwise, the Group considers other factors including its costs required to obtain replacement assets, and business disruptions. As at 31 March 2021, the Group did not include the extension option in the lease term for leases of office premises as it is not certain that the extension options will be exercised. b. Leases – estimating the incremental borrowing rate The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate to measure lease liabilities. The incremental borrowing rate is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The incremental borrowing rate therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the incremental borrowing rate using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates. lease. The Group estimates the 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 57 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 3. Critical accounting estimates, assumptions 4. Revenue and investment gains/(losses) and judgements (continued) c. Fair value of financial instruments The majority of the Group’s financial instruments reported at fair value are based on quoted and observable market prices or valuation techniques that are based on independently sourced or verified market parameters. instruments without an The fair value of financial observable market price in an active market may be determined using valuation techniques. The choice of valuation techniques and assumptions that are based on judgement for market conditions requires significant investment in unquoted equities. Please refer to Note 24(e) for further details on fair valuation and fair value hierarchy of the Group’s financial instruments measured at fair value. d. Income taxes is involved judgement The Group has exposure to income taxes in numerous jurisdictions. Significant in determining the Group’s provision for income taxes. The Group recognises liabilities for expected tax issues based on reasonable estimates of whether additional taxes will be due. Where uncertainty exists around the Group’s tax position including resolution of any related appeals or litigation processes, appropriate provisions are provided based on technical merits of the positions with the same tax authority. Note 21 provides details of the Group’s deferred tax assets/liabilities. In general, determination of the value of assets/liabilities relating to carry forward tax losses requires judgement. e. Development of software Revenue Type of good or service - Financial education program sales - Subscription income - Commission income - Rendering of services - Dividend income - Others Total revenue Timing of transfer of good or service At a point in time Over time Investment gains/(losses) from public markets Fair value gain/(loss) on investment securities Gain on sale of investment securities Dividend income Investment gains from private markets Net gain on disposal of subsidiaries Net gain on disposal of an associated company Group 2021 S$ 2020 S$ 20,385,945 10,087,758 1,464,798 128,088 149,952 1,235 33,074 25,965,015 11,864,905 5,212,642 277,138 84,957 1,453 2,880 20,745,148 10,909,106 955,799 25,965,015 11,864,905 5,219,867 1,548,546 4,591,388 425,347 6,565,281 (3,334,810) 162,778 648,137 (2,523,895) - - 51,977 5,320 Total investment gains/(losses) 6,565,281 (2,466,598) The Group estimates the useful lives to amortise the development of software based on the future performance of the assets acquired and management’s judgement of the period over which economic benefits will be derived from the assets. The estimated useful lives of the development of software into consideration factors such as changes in technology. The amount and timing of recorded expenses for any period would be affected by changes in the estimates. A reduction in the estimated useful lives of the development of software would increase the recorded expenses and decrease the non-current assets. periodically, reviewed taking are The cost of development of software is amortised on a straight-line basis over the asset’s useful lives. The management estimates the useful lives of these intangible assets to be 2 years. 58 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 5. Other gains and other income 6. Expenses by nature Other gains Gain on foreign exchange - net Gain on disposal of property, plant and equipment Other income Interest income Government grants Rental income Others Group 2021 S$ 2020 S$ 105,776 73,980 1,710 107,486 - 73,980 70,631 1,031,053 58,125 48,191 1,208,000 207,524 75,299 154,783 65,545 503,151 Included within Government grants are COVID-19 related rent concessions received from lessors of S$65,191 to which the Group applied the practical expedient as disclosed in Note 2.1. Group 2021 S$ 2020 S$ 97,169 41,864 18,190 - 1,659,719 9,390,901 22,077 347,551 461,245 137,949 5,258,604 1,120,270 1,038,894 12,253 27,784 207,153 75,730 236,368 - 83,427 157,782 174,665 111,067 36,981 14,558 - 1,737,126 5,181,746 87,757 420,762 279,333 210,956 2,715,998 543,391 206,435 172,179 204,782 274,025 158,152 189,140 174,822 63,140 117,556 206,458 313,134 808,139 158,481 472,637 36,789 198,749 (32,887) 169,150 47,264 195,707 365,110 - 2,265 62,635 50,148 112 148,198 418,953 Audit fees paid to: - Auditors of the Company - Other auditors Non-audit fees paid to: - Auditors of the Company - Other auditors Depreciation of property, plant and equipment (Note 13) Employee compensation (Note 7) Rental expense on operating leases Travelling expense Professional fees Commission 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 and listing expenses Office expenses Amortisation of development of software (Note 15) Information technology cost Property, plant and equipment written off Bad debt written off Credit loss allowance (Note 24(b)) - Trade receivables - Other receivables Donation Witholding tax expense Other expenses Total cost of sales and services, administrative expenses, marketing and other operating expenses 22,670,750 14,419,793 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 59 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 7. Employee compensation Group 2021 S$ 2020 S$ 8. Income taxes (a) Income tax expense Wages and salaries Employer’s contribution to defined contribution plans Other short-term benefits Employee share plan 7,440,398 4,354,538 Tax expense attributable to profit is 739,855 544,808 665,840 9,390,901 531,612 295,596 - 5,181,746 made up of: - Profit/loss for the financial year: Current income tax - Singapore - Foreign Deferred income tax (Note 21) - Under/(over) provision in prior financial years: Current income tax Deferred income tax (Note 21) Group 2021 S$ 2020 S$ 2,148 1,044,058 1,046,206 (37,772) 1,008,434 - 233,019 233,019 (86,058) 146,961 28,743 - 1,037,177 (5,358) 9,587 151,190 The tax on the Group’s profit/(loss) before income tax differs from the theoretical amount that would arise using the Singapore standard rate of income tax as follows: Profit/(loss) before income tax Share of loss of an associated company, net of tax Profit/(loss) before income tax and share of loss of an associated company Tax calculated at tax rate of 17% (2020: 17%) Effects of: - different tax rates in other countries - income not subject to tax - expenses not deductible for tax purposes - deferred tax assets not recognised - utilisation of previously unrecognised tax losses - others - Under provision of tax in prior financial years Tax charge Group 2021 S$ 2020 S$ 10,079,089 (3,835,738) - 63,836 10,079,089 (3,771,902) 1,713,445 (641,223) 682,383 (860,153) 116,738 157,370 - 376,918 - 186,124 (643,979) - - 67,772 28,743 1,037,177 4,229 151,190 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 60 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 8. Income taxes (continued) 9. Earnings per share (b) Movement in current income tax (liabilities)/assets: 2021 2020 Beginning of financial year Income tax paid Tax expense (Under)/over provision in prior financial years End of financial year Current income tax asset Current income tax liabilities Group 2021 S$ 2020 S$ 129,122 480,791 (1,046,206) 106,940 249,843 (233,019) Net profit/(loss) attributable to equity holders of the Company (S$) 7,946,616 (3,679,184) Weighted average number of ordinary shares outstanding for basic earnings per share 360,221,027 361,898,001 (28,743) (465,036) 5,358 129,122 share) Basic earnings per share (S$ cent per 2.21 (1.02) Group 2021 S$ 2020 S$ - (465,036) (465,036) 129,122 - 129,122 Company 2021 S$ 2020 S$ Beginning of financial year Under provision in prior financial years End of financial year - - - 3,959 (3,959) - 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 61 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 10. Cash and cash equivalents 11. Financial assets, at FVPL Cash at bank and on hand Short-term bank deposits Group 2021 S$ 2020 S$ 22,798,937 4,020,713 26,819,650 15,432,385 3,010,000 18,442,385 Company 2021 S$ 2020 S$ Cash at bank and on hand 1,364,463 8,100,084 Fair value through profit or loss: Listed securities - Equity securities - Australia - Equity securities - India - Equity securities - China - Equity securities - Hong Kong - Equity securities - America - Equity securities - Malaysia - Equity securities - Singapore - Equity securities - Canada - Equity securities - Taiwan - Equity securities - Japan Fair value through profit or loss: Listed securities - Equity securities - America - Equity securities - Canada - Equity securities - Japan - Equity securities - Hong Kong Group 2021 S$ 2020 S$ 1,681,473 1,881,376 3,901,156 3,145,684 12,656,028 248,480 1,265,965 88,051 - - 24,868,213 528,468 1,012,069 1,408,367 4,457,406 214,609 187,696 604,344 - 5,395,630 549,892 14,358,481 Company 2021 S$ 2020 S$ 9,405,973 88,051 - - 9,494,024 - - 26,751 5,290 32,041 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 62 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 12. Trade and other receivables Current Trade receivables Group 2021 S$ 2020 S$ (a) Trade receivables are non-interest bearing and are generally on 30 to 60 days’ (2020: 30 to 60 days’) terms. There is no other class of financial assets that is past due and/or impaired except for trade receivables. - Non-related parties (a) 387,505 455,836 Other receivables - Non-related parties (b) - Others Deposits Prepayments Credit loss allowance (Note 24(b)) Non-current Other receivables (c) Credit loss allowance (Note 24(b)) Current Other receivables - Non-related parties (b) - Subsidiaries (d) - Others Prepayments Credit loss allowance (Note 24(b)) Non-current Other receivables (c) Credit loss allowance (Note 24(b)) 281,187 399,575 618,237 708,564 657,054 589,002 (161,062) 2,153,261 736,981 202,199 (193,949) 2,527,868 521,050 (169,150) 351,900 1,242,921 - 1,242,921 Company 2021 S$ 2020 S$ 56,412 1,215,532 4,140 618,237 4,274,318 24,150 51,665 (1,158,220) 169,529 45,526 (56,412) 4,905,819 521,050 (169,150) 351,900 1,242,921 - 1,242,921 Receivables that were past due but not impaired The Group has trade receivables amounting to S$4,334 as at 31 March 2021 and S$25,816 as at 1 April 2020 that are past due but not impaired. These receivables are unsecured and the analysis of their aging at the end of the reporting period is as follows: Trade receivables past due but not impaired: Lesser than 30 days 31-60 days Group 2021 S$ 2020 S$ 4,049 285 4,334 12,977 12,839 25,816 Receivable that were past due and impaired There were no receivable that were past due and impaired. 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 (Write back)/charge for the year At 31 March Group 2021 S$ 2020 S$ 137,537 (32,887) 104,650 74,902 62,635 137,537 (b) Included in the current other receivable in prior year is a loan made to a non-related developer amounting to S$561,825. The loan is secured by guarantee, bears interest at 6% per annum. The loan has been partially repaid and reclassed to non-current other receivables in current year. (c) Non-current other receivables fair value approximates carrying amount. in the non-current other receivables are loans to third parties of S$351,900 (2020: S$1,242,921). The loans bear interest at 4.5% to 6% per annum. Included (d) Transactions with subsidiaries were made on normal commercial terms and conditions. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 63 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 13. Property, plant and equipment Group 2021 Cost Beginning of financial year Currency translation differences Additions Disposal Written off End of financial year Accumulated depreciation Beginning of financial year Currency translation differences Depreciation charge (Note 6) Disposal Written off End of financial year Net book value End of financial year 2020 Cost Beginning of financial year Adoption of FRS 116 Currency translation differences Disposal of subsidiaries Additions End of financial year Accumulated depreciation Beginning of financial year Adoption of FRS 116 Currency translation differences Disposal of subsidiaries Depreciation charge (Note 6) End of financial year Net book value End of financial year Office premises S$ Office equipment S$ Furniture and fittings S$ Motor vehicles S$ Total S$ 2,576,778 (7,424) 969,403 - (2,189,602) 1,349,155 592,597 (3,514) 438,731 (4,527) (12,152) 1,011,135 1,320,682 (2,280) 148,703 (1,471) (215,585) 1,250,049 103,783 (2,257) - - - 101,526 4,593,840 (15,475) 1,556,837 (5,998) (2,417,339) 3,711,865 1,387,447 (4,399) 1,263,914 - (2,165,814) 481,148 492,008 (4,916) 153,403 (1,509) (11,198) 627,788 1,028,176 (774) 227,034 (204) (203,538) 1,050,694 88,216 (2,058) 15,368 - - 101,526 2,995,847 (12,147) 1,659,719 (1,713) (2,380,550) 2,261,156 868,007 383,347 199,355 - 1,450,709 - 2,497,157 2,497,157 8,693 - 70,928 2,576,778 - - - 6,256 - 1,381,191 1,387,447 563,158 - 563,158 (1,829) (64,397) 95,665 592,597 454,278 - 454,278 (1,239) (38,663) 77,632 492,008 1,282,626 - 1,282,626 104,128 - 104,128 1,949,912 2,497,157 4,447,069 484 (65,393) 102,965 1,320,682 (345) - - 103,783 7,003 (129,790) 269,558 4,593,840 802,026 - 802,026 (1,274) (30,230) 257,654 1,028,176 67,683 - 67,683 (116) - 20,649 88,216 1,323,987 - 1,323,987 3,627 (68,893) 1,737,126 2,995,847 1,189,331 100,589 292,506 15,567 1,597,993 Right-of-use of assets acquired under leasing arrangements are presented together with the owned assets of the same class. Details of such leased assets are disclosed in Note 18(a). 64 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 14. Investments in subsidiaries Equity investments Cost Beginning of financial year Increase in investment End of financial year Company 2021 S$ 2020 S$ During the year, the Company wrote back net provision for impairment in the investment in subsidiaries of S$4,744,171 representing the increase in the carrying value of the subsidiaries due to the recovery of the recoverable amount of the subsidiaries. 32,975,149 32,774,496 200,653 34,903,342 32,975,149 1,928,193 In prior year, the Company had provided an impairment loss of S$2,647,688 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. Provision for impairment Beginning of financial year (Write back)/charge for the year End of financial year 17,296,387 14,648,699 (4,744,171) 2,647,688 12,552,216 17,296,387 Net carrying value End of financial year 22,351,126 15,678,762 The Group has the following subsidiaries as at 31 March 2021 and 2020: Name Principal activities Country of business/ incorporation Proportion of ordinary shares directly held by parent 2021 % 2020 % Proportion of ordinary shares held by the Group 2020 2021 % % Proportion of ordinary shares held by non- controlling interests 2021 % 2020 % - - - - - - Held by the Company: 8 Investment Pte. Ltd. Business management consultancy Singapore 100 100 100 100 Hidden Champions Capital Management Pte. Ltd. Registered fund management company Singapore 100 100 100 100 8IH Global Limited Investment trading Mauritius 100 100 100 100 8VI Holdings Limited (formerly known as 8VIC Holdings Limited) Investment holding and management consultancy services Singapore 79.5 79.9 79.5 79.9 20.5 20.1 8Bit Global Pte. Ltd. Computer programming and data processing and hosting Singapore 42.0 42.0 82.6 82.8 17.4 17.2 8 Business Pte. Ltd. Business management consultancy Singapore 100 100 100 100 - - Held through 8VI Holdings Limited 8VI Global Pte. Ltd. Seminar and programs organiser Singapore Held through 8VI Global Pte. Ltd 8VI Malaysia Sdn. Bhd. (formerly known as 8VIC Malaysia Sdn. Bhd.) Seminar and programs organiser Malaysia 8VI Taiwan Co., Ltd (formerly Seminar and programs organiser Taiwan known as 8VIC Taiwan Co., Ltd) 8VIC (Thailand) Company Limited Dormant Thailand 8VI China Pte. Ltd. Business management consultancy Singapore 8VIC (Australia) Pty Ltd Struck off Australia - - - - - - - - - - - - 79.5 79.9 20.5 20.1 79.5 79.9 20.5 20.1 55.7 55.9 44.3 44.1 72.1 72.3 28.0 27.7 51.7 52.0 48.3 48.0 - 79.9 - 20.1 65 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 14. Investments in subsidiaries (continued) The Group has the following subsidiaries as at 31 March 2021 and 2020: (continued) Name Principal activities 8VIC Singapore Pte. Ltd. Dormant Value Investing College Pte. Ltd. Dormant Held through 8VI Malaysia Sdn. Bhd. 8VIC JooY Media Sdn. Bhd. Agency and media Held through 8VI China Pte. Ltd. 8VI China (Shanghai) Co. Ltd 信益安（上海）实业有限公司 Business and management consultancy services Held through 8VI China (Shanghai) Co. Ltd. Shanghai Ba Tou Culture Media Seminar and programs organiser Co. Ltd 上海巴投文化传媒有限公司工 Held through 8 Investment Pte. Ltd. Vue at Red Hill Pte. Ltd. Dormant Country of business/ incorporation Singapore Singapore Malaysia People’s Republic of China People’s Republic of China Singapore Held through 8IH Global Limited Hidden Champions Fund Investment trading Mauritius Proportion of ordinary shares directly held by parent 2021 % - 2020 % - Proportion of ordinary shares held by the Group 2020 2021 % % 79.9 79.5 Proportion of ordinary shares held by non- controlling interests 2021 % 20.5 2020 % 20.1 - - - - - - - - - 79.5 79.9 20.5 20.1 79.5 55.9 20.5 44.1 51.7 52.0 48.3 48.0 - 51.7 - 48.3 - - - 100 100 100 100 - - - - Significant restrictions Summarised statement of financial position Cash and short-term deposits of S$297,811 (2020: S$130,608) are held in the People’s Republic of China and are subject to local exchange control regulations. These local exchange control regulations provide for restrictions on exporting capital from the country, other than through normal dividends. Carrying value of non-controlling interests 8VI Holdings Limited and its subsidiaries 2021 S$ 2020 S$ 2,285,293 1,058,535 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. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 66 8VI Holdings Limited and its subsidiaries 31 March 2021 S$ 8VI Holdings Limited and its subsidiaries 31 March 2020 S$ 24,413,161 (14,357,950) 10,055,211 9,691,674 (6,757,125) 2,934,549 2,544,350 (311,414) 2,232,936 2,284,393 (71,574) 2,212,819 Current Assets Liabilities Total current net assets Non-current Assets Liabilities Total non-current net assets Net assets 12,288,147 5,147,368 Non-controlling interests 876,848 243,255 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 14. Investments in subsidiaries (continued) 15. Development of software Summarised statement of comprehensive income 8VI Holdings Limited and its subsidiaries For year ended 31 March 2021 S$ 8VI Holdings Limited and its subsidiaries For year ended 31 March 2020 S$ 25,960,661 10,859,351 868,751 (89,330) 779,421 7,532,774 (1,037,169) 6,495,605 Revenue Profit before tax Income tax expense Profit for the year Total comprehensive income/(loss) allocated to non-controlling interests 645,735 (256,760) Cost Beginning of financial year Additions End of financial year Accumulated amortisation Beginning of financial year Amortisation charge End of financial year Group 2021 S$ 2020 S$ 649,965 673,096 1,323,061 244,183 405,782 649,965 219,526 313,134 532,660 61,045 158,481 219,526 Net book value 790,401 430,439 Amortisation expense the comprehensive income is analysed as follows: included in statement of Group 2021 S$ 2020 S$ Summarised statement of cash flows Administrative expenses 313,134 158,481 8VI Holdings Limited and its subsidiaries 31 March 2021 S$ 8VI Holdings Limited and its subsidiaries 31 March 2020 S$ 17,285,587 37,504 9,581 (579,129) 4,101,416 12,704 6,511 (191,061) Cash flows from operating activities Cash provided by operations Interest income received Dividend received Income tax paid Net cash provided by operating activities 16,753,543 3,929,570 Net cash (used in)/provided by investing activities (4,227,311) 274,307 Net cash used in financing activities (1,253,096) (1,474,008) Net increase in cash and cash equivalents 11,273,136 2,729,869 Cash and cash equivalents at beginning of year Effect of currency translation on cash 7,433,590 4,702,031 and cash equivalents (77,497) 1,690 Cash and cash equivalents at end of year 18,629,229 7,433,590 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 67 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 16. Financial assets, at FVOCI 17. Trade and other payables Current Trade payables – non-related parties Accruals for operating expenses GST payable Other payables Total trade and other payables Current Trade payables – non-related parties Accruals for operating expenses Amount due to a subsidiary Other payables Total trade and other payables Group 2021 S$ 2020 S$ 732,735 2,694,221 83,973 341,767 3,852,696 297,310 915,422 130,684 424,567 1,767,983 Company 2021 S$ 2020 S$ 41,660 184,931 16,800 73,066 316,457 7,019 57,121 - 73,315 137,455 Trade payables are non-interest bearing and are normally settled on 30-day (2020: 30 day) terms. 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 Fair value gains/(losses) recognised in other comprehensive income (Note 23(i)) End of financial year Group 2021 S$ 2020 S$ 1,266,261 8,126 - 1,698,880 - (115,049) 795 1,275,182 (317,570) 1,266,261 Company 2021 S$ 2020 S$ Beginning of financial year Additions Fair value losses recognised in other comprehensive income (Note 23) End of financial year 1,077,479 214,620 1,033,529 43,950 (24,338) 1,267,761 - 1,077,479 Financial assets at FVOCI are analysed as follows: Listed securities Unlisted securities Total Listed securities Unlisted securities Total Group 2021 S$ 2020 S$ 222,041 1,053,141 1,275,182 174,903 1,091,358 1,266,261 Company 2021 S$ 2020 S$ 214,620 1,053,141 1,267,761 - 1,077,479 1,077,479 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. 68 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 18. Leases The Group as a lessee Current Non-current Total Group 2021 S$ 798,089 73,625 871,714 2020 S$ 1,146,938 67,574 1,214,512 Nature of the Group’s leasing activities The Group leases office premises for the purpose of running financial education programmes and back office operations. (a) Carrying amounts ROU assets classified within Property, plant and equipment 31 March 2021 S$ 1 April 2020 S$ Office premises 868,007 1,189,331 (b) Depreciation charged during the year 2021 S$ 2020 S$ Office premises 1,263,914 1,381,191 (i) Reconciliation of lease liabilities arising from financing activities Group 2021 S$ 2020 S$ 1,214,512 (1,253,096) 36,423 (1,474,008) - 969,403 (65,191) 33,693 (23,788) (3,819) 871,714 2,497,157 70,928 - 81,574 - 2,438 1,214,512 Beginning of financial year Principal and interest payments Non-cash changes - Adoption of FRS 116 - Addition during the year - Rent concessions - Interest expense - Written off - Foreign exchange movement End of financial year The Group as an intermediate lessor Nature of the Group’s leasing activities Subleases – classified as operating leases The Group acts as an intermediate lessor under arrangement in which it subleases out office premises to a third party for monthly lease payments. The sublease periods do not form a major part of the remaining lease terms under the head leases and accordingly, the sub-leases are classified as operating leases. Income from subleasing the office premises recognised during the financial year 2021 was S$58,125 (2020: S$154,783). The Group is no longer lessor as at balance sheet date. (c) Interest expense Interest expense on lease liabilities 33,693 80,429 Maturity analysis of lease payments The table below discloses the undiscounted lease payments to be received by the Group for its leases and sub-leases after the reporting date as follows: Group 2021 S$ 2020 S$ Less than one year - 58,125 (d) Lease expense not capitalised in lease liabilities Lease expense – low-value leases 22,077 87,757 (e) (f) Total income for subleasing ROU assets in the financial year 2021 was S$58,125 (2020:S$154,783). Total cash outflow for all the leases in the financial year 2021 was S$1,253,096 (2020:S$1,474,008). (g) Addition of ROU assets during the financial year 2021 was S$969,403 (2020:S$70,928). (h) There are no future cash outflow which are not capitalised in lease liabilities. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 69 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 19. Unearned revenue 20. Redeemable participating shares Current Advances from customer Deferred grant income Non-current Advances from customer Group 2021 S$ 2020 S$ 9,521,393 - 9,521,393 3,696,702 273,050 3,969,752 233,789 9,755,182 - 3,969,752 Company 2021 S$ 2020 S$ Deferred grant income - 24,150 Advances from customer represent revenue received from customers but not yet recognised to the profit or loss as service has yet to be rendered as at reporting date. Group 2021 S$ 2020 S$ As at beginning of year Proceeds received from fund’s non- 3,927,686 5,582,278 controlling unit holders 1,755,829 - Payment to fund’s non-controlling unit holders (1,117,410) (1,180,311) Share of profit/(loss) attributable to the unit holders of redeemable participating shares Currency translation differences As at end of year 1,062,173 (268,789) 5,359,489 (719,846) 245,565 3,927,686 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. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 70 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 21. 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 2021 S$ 2020 S$ 296,355 264,331 (4,000) (4,000) Movement in deferred income tax account is as follows: Beginning of financial year Currency translation differences Tax credited to - profit or loss (Note 8(a)) End of financial year Group 2021 S$ 2020 S$ 260,331 (5,748) 174,865 8,995 37,772 292,355 76,471 260,331 Deferred income tax assets are recognised for tax losses and capital allowances carried forward to the extent that realisation of the related tax benefits through future taxable profits is probable. The Group has unrecognised tax losses of S$5,651,888 (2020: S$9,440,000) at the reporting date which can be carried forward and used to offset against future taxable income subject to meeting certain statutory requirements by those companies with unrecognised tax losses and capital allowances in their respective countries of incorporation. The movement in deferred income tax assets/(liabilities) (prior to offsetting of balances within the same tax jurisdiction) is as follows: Group Deferred income tax liabilities Accelerated tax depreciation S$ Fair value gains - net S$ Total S$ (4,000) - (4,000) (4,000) - (4,000) Accelerated tax depreciation S$ Unearned Revenue S$ Total S$ 2,373 261,958 264,331 (52) (5,696) (5,748) - 2,321 37,772 294,034 37,772 296,355 5,528 173,337 178,865 278 8,717 8,995 (3,433) 2,373 79,904 261,958 76,471 264,331 2021 Beginning and end of financial year 2020 Beginning and end of financial year Deferred income tax assets 2021 Beginning of financial year Currency translation differences Credited/(charged) to profit or loss End of financial year 2020 Beginning of financial year Currency translation differences Credited/(charged) to profit or loss End of financial year 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 71 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 22. Share capital 23. Other reserves Group and Company 2021 Beginning of financial year Shares buy-back End of financial year 2020 Beginning of financial year Shares buy-back End of financial year Number of shares Amount S$ 361,759,095 34,455,641 (2,766,650) (483,387) 358,992,445 33,972,254 362,388,157 34,491,447 (35,806) 361,759,095 34,455,641 (629,062) 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. The Company acquired 2,766,650 (2020: 629,062) shares in the Company in the open market during the financial year. The total amount paid to acquire the shares was S$483,387 (2020: S$35,806). Group 2021 S$ 2020 S$ (11,394,993) (11,395,788) (47,644) (2,310,515) - (14,122,248) (13,753,947) (666,982) (2,339,023) 278,750 (11,395,788) (11,078,218) 795 (317,570) (11,394,993) (11,395,788) (47,644) (405,377) (619,338) (666,982) 357,733 (47,644) Composition: Fair value reserve Currency translation reserve Capital reserve Employee share plan reserve Movements: (i) Fair value reserve Beginning of financial year Financial assets through other comprehensive income - Fair value gains/(losses) from financial assets at FVOCI (Note 16) End of financial year (ii) Currency translation reserve Beginning of financial year Net currency translation differences of financial statements of foreign subsidiaries and associated companies End of financial year (iii) Capital reserve Beginning of financial year Disposal of subsidiaries Movement in equity attributable to non-controlling interest End of financial year (2,310,515) - (2,309,547) (420,392) (28,508) (2,339,023) 419,424 (2,310,515) (iv) Employee share plan reserve Beginning of financial year Value of employee services (Note 7) Performance rights exercised End of financial year - 613,958 (335,208) 278,750 - - - - Composition: Fair value reserve Capital reserve Company 2021 S$ 2020 S$ (448,409) (1,638,846) (2,087,255) (424,071) (1,638,846) (2,062,917) 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 72 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 23. Other reserves (continued) Movements: Fair value reserve Beginning of financial year Financial assets through other comprehensive income - Fair value losses from financial assets at FVOCI (Note 16) Company 2021 S$ 2020 S$ (424,071) (424,071) (24,338) - End of financial year (448,409) (424,071) Employee share plan Performance rights and share options of a subsidiary, 8VI Holdings Limited (“8VI”), were granted to key management personnel pursuant to 8VI’s Employee Securities Incentive Plan (“Share Plan”) approved by members of 8VI at its annual general meeting on 23 July 2020. The Share Plan provides a means to attract, motivate and retain key directors and employees and provide them with the opportunity to participate in the future growth of 8VI. Under the Share Plan, the 8VI’s board of directors may from time to time determine that a director of the companies of the Group, subject to its members’ approval, or an employee may participate in the Share Plan to apply for securities on such terms and conditions as the 8VI’s board of directors decides. The persons to whom the rights and options have been issued have no right to participate by virtue of the options in any share issue of any other companies of the Group. The Group has no legal or constructive obligation to repurchase or settle the securities in cash. During the financial year, pursuant to 8VI members’ approval at its annual general meeting on 23 July 2020, 8VI granted its directors options to subscribe for 2,000,000 ordinary shares of 8VI at exercise price of AUD 0.45 per share (“Options”) and performance rights to be converted into 2,600,000 ordinary shares of 8VI upon meeting the vesting conditions (“Performance Rights”). The Options are exercisable from 21 August 2020 and expire on 30 June 2025. The vesting condition for the Options is that the holder being a director of 8VI when the Options are exercised. The total fair value of the Options granted was estimated to be AUD 955,600 using the Hoadleys Employee Stock Option Model. The Performance Rights will not have consideration on satisfaction of the vesting conditions. The vesting conditions for the Performance Rights are: - - The holder being a director of 8VI as at the relevant vesting determination dates specified in the table below; and The relevant volume weighted average price (VWAP) of 8VI’s shares traded on ASX over any 20-day period exceeds the prices specified in the table below. Performance Rights granted Vesting conditions Number 400,000 400,000 400,000 400,000 500,000 500,000 Effective grant date 23.07.2020 23.07.2020 23.07.2020 23.07.2020 23.07.2020 23.07.2020 Fair value per right at effective grant date (AUD) Earliest vesting determination date VWAP Share Price condition (AUD) 0.4675 0.3813 0.4037 0.2016 0.2570 0.1389 21.08.2020 21.08.2020 01.04.2021 01.04.2021 01.04.2022 01.04.2022 0.45 0.60 0.70 2.00 2.30 5.00 Expiry date 30.04.2021 30.04.2021 30.04.2022 30.04.2022 30.04.2023 30.04.2023 Class A Performance Rights Class B Performance Rights Class C Performance Rights Class D Performance Rights Class E Performance Rights Class F Performance Rights The total fair value of the Performance Rights granted was estimated to be AUD 779,590 using the Hoadleys Hybrid ESO Model (a Monte Carlo simulation model). 73 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 23. Other reserves (continued) Employee share plan (continued) Movements in the number of unissued ordinary shares of 8VI under the Share Plan and their exercise prices are as follows: 8VI Holdings Limited 2021 Class A Performance Rights Class B Performance Rights Class C Performance Rights Class D Performance Rights Class E Performance Rights Class F Performance Rights Options No. of unissued ordinary shares of 8VI under Share Plan Beginning of financial year Granted during financial year Exercised during financial year End of financial year Exercise price Exercise period - - - - - - - - 400,000 (400,000) 400,000 (400,000) 400,000 400,000 500,000 500,000 2,000,000 - - - - - - - 400,000 400,000 500,000 500,000 - - - - - - 2,000,000 AUD 0.45 4,600,000 (800,000) 3,800,000 21.08.2020 to 30.04.2021 21.08.2020 to 30.04.2021 1.04.2021 to 30.04.2022 1.04.2021 to 30.04.2022 1.04.2022 to 30.04.2023 1.04.2022 to 30.04.2023 21.08.2020 to 30.06.2025 There were no unissued ordinary shares of 8VI under Share Plan in financial year 2020. During the financial year, the vesting conditions of the Class A Performance Rights and Class B Performance Rights were satisfied and both classes of Performance Rights were exercised. 800,000 ordinary shares of 8VI were issued to the holders of Class A Performance Rights and Class B Performance Rights. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 74 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 24. 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”), Hong Kong Dollar (“HKD”), Japanese Yen (“JPY”), New Taiwan Dollar (“NTD”), Indian Rupee (“INR”) and Canadian Dollar (“CAN”). 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. The Group’s currency exposure based on the information provided to key management is as follows: MYR S$ AUD S$ USD S$ RMB S$ HKD S$ JPY S$ NTD S$ INR S$ CAN S$ At 31 March 2021 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 Lease liabilities Redeemable participating shares 6,883,660 1,951,779 19,625,872 4,198,967 3,145,684 454,391 - 7,338,051 1,951,779 19,661,742 4,239,795 3,145,684 40,828 35,870 - (869,163) (97,946) (10,919) - (55,157) - (4,799) - - (967,109) - (5,359,489) (10,919) (5,414,646) - (4,799) - - - - Net financial assets 6,370,942 1,940,860 14,247,096 4,234,996 3,145,684 Currency exposure of financial assets net of those denominated in the respective entities’ functional currencies 61,012 1,940,860 13,748,995 3,896,993 3,145,684 - - - - - - - - - 310,161 1,881,376 88,051 706,292 - 1,016,453 1,881,376 - 88,051 - (199,161) - (199,161) - - - - - - - - 817,292 1,881,376 88,051 - 1,881,376 88,051 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 75 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 24. Financial risk management (continued) (a) Market risk (continued) (i) Currency risk (continued) At 31 March 2020 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 Lease liabilities Redeemable participating shares MYR S$ AUD S$ USD S$ RMB S$ HKD S$ JPY S$ NTD S$ INR S$ 1,332,540 794,410 5,767,737 1,665,727 4,457,406 549,892 5,474,437 1,012,069 170,435 1,502,975 - - 794,410 5,784,923 1,731,891 4,457,406 17,186 66,164 - 549,892 335,268 - 5,809,705 1,012,069 (245,076) (222,140) (12,177) - (97,908) - (15,700) - - (467,216) - (3,927,686) (12,177) (4,025,594) - (15,700) - - - - - - - - - (107,918) - (107,918) - - - - Net financial assets 1,035,759 782,233 1,759,329 1,716,191 4,457,406 549,892 5,701,787 1,012,069 Currency exposure of financial assets net of those denominated in the respective entities’ functional currencies - 5,304,063 292,401 1,231,687 2,000,761 2,000,761 6,626,372 3,004,605 The Company’s currency exposure based on the information provided to key management is as follows: At 31 March 2021 Financial Assets Cash and cash equivalents, financial assets, at FVPL and financial assets, at FVOCI Financial Liabilities Trade and other payables Net financial assets AUD S$ USD S$ CAN S$ 256,945 10,280,132 88,051 (6,230) - - 250,715 10,280,132 88,051 Currency exposure of financial assets net of those denominated in the respective entities’ functional currencies 250,715 10,280,132 - 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 76 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 24. 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 (continued): At 31 March 2020 Financial Assets Cash and cash equivalents, financial assets, at FVPL and financial assets, at FVOCI Financial Liabilities Trade and other payables Net financial assets AUD S$ USD S$ CAN S$ 9,055 2,855,617 (5,654) (5,654) 3,401 2,849,963 Currency exposure of financial assets net of those denominated in the respective entities’ functional currencies 3,401 2,849,963 - - - - If the MYR, AUD, USD, RMB, HKD, JPY, NTD, INR and CAN change against the SGD by 2% (2020: 2%), 17% (2020: 8%), 5% (2020: 5%), 2% (2020: 3%), 6% (2020: 6%), 7% (2020: 7%), 1% (2020: 7%), 3% (2020: 1%) and 6% (2020: Nil) respectively with all other variables including tax rate being held constant, the effects arising from the net financial asset that are exposed to currency risk will be as follows: Group MYR against SGD - Strengthened - Weakened AUD against SGD - Strengthened - Weakened USD against SGD - Strengthened - Weakened RMB against SGD - Strengthened - Weakened HKD against SGD - Strengthened - Weakened JPY against SGD - Strengthened - Weakened Increase/(Decrease) 2021 2020 Profit after tax S$ Other comprehensive loss S$ Loss after tax S$ Other comprehensive income S$ 1,220 (1,220) - - - - - - 293,461 (293,461) 36,485 (36,485) 47,996 (47,996) 26,285 (26,285) 687,450 (687,450) 77,940 (77,940) 188,741 (188,741) - - - - - - - - - - 161,592 (161,592) 42,125 (42,125) 267,444 (267,444) 38,492 (38,492) - - - - - - - - 77 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 24. Financial risk management (continued) (a) Market risk (continued) (i) Currency risk (continued) 2021 Increase/(Decreased) 2020 Profit after tax S$ Other comprehensive loss S$ Loss after tax S$ Other comprehensive income S$ - - 56,441 (56,441) 5,283 (5,283) 6,136 (6,136) 514,007 (514,007) 5,283 (5,283) - - - - - - - - - - - - 377,694 (377,694) 10,121 (10,121) - - 309 (309) 142,781 (142,781) - - - - - - - - - - - - - - NTD against SGD - Strengthened - Weakened INR against SGD - Strengthened - Weakened CAN against SGD - Strengthened - Weakened Company AUD against SGD - Strengthened - Weakened USD against SGD - Strengthened - Weakened CAN against SGD - Strengthened - Weakened 78 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 24. 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, Canada, Malaysia and Singapore had changed by 49% (2020: 17%), 49% (2020: 17%), 49% (2020: 17%), 49% (2020: 17%), 49% (2020: 17%), 49% (2020: 17%), 68% (2020: 17%), 68% (2020: 17%), 49% (2020: 17%) and 49% (2020: 17%) respectively with all other variables including tax rate being held constant, the effects on profit after tax and other comprehensive income would have been: Group Listed in Australia - increased by - decreased by Listed in Japan - increased by - decreased by Listed in India - increased by - decreased by Listed in Taiwan - increased by - decreased by Listed in China - increased by - decreased by Listed in Hong Kong - increased by - decreased by Listed in America - increased by - decreased by Listed in Canada - increased by - decreased by Increase/(Decrease) 2021 2020 Profit after tax S$ Other comprehensive loss S$ Loss after tax S$ Other comprehensive income S$ 409,585 (409,585) 105,164 (105,164) 89,840 (89,840) 30,827 (30,827) - - 921,874 (921,874) - - 934,458 (934,458) 765,804 (765,804) 8,606,099 (8,606,099) 59,875 (59,875) - - - - - - - - - - - - - - 93,482 (93,482) 172,052 (172,052) 917,257 (917,257) 239,422 (239,422) 757,759 (757,759) 36,483 (36,483) - - - - - - - - - - - - - - - - 79 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 24. Financial risk management (continued) (a) Market risk (continued) (ii) Price risk (continued) Group Listed in the Malaysia - increased by - decreased by Listed in the Singapore - increased by - decreased by Company Listed in Japan - increased by - decreased by Listed in Hong Kong - increased by - decreased by Listed in America - increased by - decreased by Listed in Canada - increased by - decreased by (b) Credit risk Increase/(Decrease) 2021 2020 Profit after tax S$ Other comprehensive loss S$ Loss after tax S$ Other comprehensive income S$ 106,493 (106,493) 3,636 (3,636) 31,908 (31,908) 325,032 (325,032) - - - - 6,396,062 (6,396,062) 59,875 (59,875) - - - - - - - - - - 102,739 (102,739) 4,548 (4,548) 899 (899) - - - - - - - - - - - - - - - - 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. 80 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 24. 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 Basis for recognition of expected credit loss provision 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. 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 2021 Balance at 1 April 2020 Changes in credit loss recognised in profit or loss: - Increase/(decrease) due to credit risk Balance at 31 March 2021 2020 Balance at 1 April 2019 Changes in credit loss recognised in profit or loss: - Increase due to credit risk Balance at 31 March 2020 Company 2021 Balance at 1 April 2020 Changes in credit loss recognised in profit or loss: - Increase due to credit risk Balance at 31 March 2021 2020 Balance at 1 April 2019 Changes in credit loss recognised in profit or loss: - Increase due to credit risk Balance at 31 March 2020 Other financial assets at amortised costs Stage 1 S$ Trade receivables S$ Total S$ 137,537 56,412 193,949 (32,887) 104,650 169,150 225,562 136,263 330,212 74,902 6,264 81,166 62,635 137,537 50,148 56,412 112,783 193,949 Other financial assets at amortised costs Stage 1 S$ 56,412 1,270,958 1,327,370 6,264 50,148 56,412 81 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 24. 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 2021 are set out in the provision matrix as follows: Group 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% 278,522 - 0% 4,049 - 5% 10% 300 (16) 100% 104,634 (104,634) - - 387,505 (104,650) The Group’s credit risk exposure in relation to trade receivables, under FRS 109 as at 31 March 2020 are set out in the provision matrix as follows: Group 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% 255,975 - 0% 26,222 - 5% 12,977 (714) 10% 26,488 (2,649) 100% 134,174 (134,174) 455,836 (137,537) Trade receivables 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. Receivables that are neither past due nor impaired are substantially companies with a good collection track record with the Group and Company. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 82 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 24. 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. Less than 1 year S$ Between 1 and 5 years S$ Group At 31 March 2021 Trade and other payables Lease liabilities Redeemable participating shares At 31 March 2020 Trade and other payables Lease liabilities Redeemable participating shares Company At 31 March 2021 Trade and other payables At 31 March 2020 Trade and other payables 3,852,696 816,163 5,359,489 1,767,983 1,176,581 3,927,686 316,457 137,455 - 67,686 - - 68,630 - - - (d) Capital risk 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. (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: (i) (ii) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1); 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 (iii) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3). 83 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 24. Financial risk management (continued) (e) Fair value measurements (continued) Group 2021 Assets Financial assets, at FVPL Financial assets, at FVOCI Total assets 2020 Assets Financial assets, at FVPL Financial assets, at FVOCI Total assets Company 2021 Assets Financial assets, at FVPL Financial assets, at FVOCI Total assets 2020 Assets Financial assets, at FVPL Financial assets, at FVOCI Total assets Level 1 S$ Level 2 S$ Level 3 S$ Total S$ 24,868,213 222,041 25,090,254 14,358,481 174,903 14,533,384 9,494,024 214,620 9,708,644 32,041 - 32,041 - - - - - - - - - - - - - 24,868,213 1,275,182 1,053,141 1,053,141 26,143,395 - 14,358,481 1,091,358 1,266,261 1,091,358 15,624,742 9,494,024 - 1,267,761 1,053,141 1,053,141 10,761,785 - 1,077,479 1,077,479 32,041 1,077,479 1,109,520 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 fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Where a valuation technique for these instruments is based on significant unobservable inputs, such instruments are classified as Level 3. Level 3 instruments include unquoted equity securities which are measured based on recent transacted prices and net asset value of the investments. The carrying amount less impairment provision of trade receivables and payables are assumed to approximate their fair values. (f) Financial instruments by category Financial assets, at FVPL Financial assets, at FVOCI Financial assets at amortised cost Financial liabilities at amortised cost 84 Group 2021 S$ 2020 S$ Company 2021 S$ 2020 S$ 1,275,182 24,868,213 14,358,481 1,266,261 28,735,809 22,010,975 (6,910,181) (10,083,899) 32,041 9,494,024 1,267,761 1,077,479 1,834,227 14,203,299 (137,455) (316,457) 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 25. Related party transactions 26. Segment information 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 Employee share plan Group 2021 S$ 2020 S$ 1,564,177 1,003,833 77,482 460,469 2,102,128 73,440 - 1,077,273 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: - - - Financial Education: financial involved education in the discipline of value investing and supporting a community of value investors from 29 cities globally under the “VI” brand. in providing Financial Investment: involved in investment in listed equities in the Asia-Pacific through a focused strategy of investing in value-adding, nimble and scalable business to achieve long-term investment returns. It also involved in strategic investment in private businesses. All other segments: fintech business and included subsidiaries that provided financial education and training in China, Taiwan and Thailand. 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. 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 85 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 26. Segment information (continued) The segment information provided to the key management for the reportable segments are as follows: 2021 Revenue and investment gains Total segment revenue and investment gains Inter-segment revenue and investment gains Revenue and investment gains to external parties Profit/(loss) after tax Depreciation Amortisation Segment assets Segment assets includes additions to: - property, plant and equipment - Development of software Segment liabilities 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L Singapore Malaysia Financial Education S$ Financial Investment S$ Financial Education S$ Financial Investment S$ 12,779,314 (2,122,412) 10,656,902 6,536,142 (180,000) 6,356,142 10,699,785 (393,915) 10,305,870 3,972,866 4,266,795 1,561,815 (1,173,897) - - - (292,520) - 12,669,879 18,471,694 7,454,423 457,322 - - - 63,208 - (5,663,857) (5,542,563) (4,029,543) - - - - - - - - - - All other segments S$ 5,211,382 - 5,211,382 Corporate S$ TOTAL S$ 679,653 (679,653) - 35,906,276 (3,375,980) 32,530,296 1,974,178 (2,733,742) 9,041,912 (164,873) (313,134) (28,429) - (1,659,719) (313,134) 6,757,323 12,652,352 58,005,671 53,753 673,096 13,151 - 587,434 673,096 (4,507,167) (564,987) (20,308,117) l i s g n d o H I 8 86 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 26. Segment information (continued) 2020 Revenue and investment gains Total segment revenue and investment gains Inter-segment revenue and investment gains Revenue and investment gains to external parties Singapore Malaysia Financial Education S$ Financial Investment S$ Financial Education S$ Financial Investment S$ All other segments S$ Corporate S$ TOTAL S$ 7,199,356 (314,704) 6,884,652 (2,523,894) - (2,523,894) 3,311,366 (48,897) 3,262,469 5,320 - 5,320 1,769,760 - 1,769,760 1,060,476 (1,060,476) - 10,822,384 (1,424,077) 9,398,307 Profit/(loss) after tax 1,059,598 (2,858,194) 196,893 (24,332) (867,399) (1,493,494) (3,986,928) Depreciation Amortisation Share of loss of an associated company Net gain on disposal of subsidiaries Net gain from sale of an associated company Segment assets Segment assets includes additions to: - property, plant and equipment - Development of software Segment liabilities (1,210,355) - - - - - - - - - (286,248) - - - - - - (29,652) - 5,320 (219,442) (158,481) - 51,977 - (21,081) - - - - (1,737,126) (158,481) (29,652) 51,977 5,320 7,354,225 16,923,184 1,864,120 25,797 - - - 138,742 - (3,341,104) (4,096,384) (1,353,464) - - - - 2,946,811 11,171,461 40,259,801 84,625 405,782 20,394 - 269,558 405,782 (1,430,457) (662,524) (10,883,933) 87 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 26. Segment information (continued) 27. New or revised accounting standards and 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 gains from public and private markets and digital & marketing. Breakdown of the revenue and investment gains is as follows: Revenue and investment gains Financial Education Financial Investment Others (b) Geographical information 2021 S$ 2020 S$ 20,962,772 10,147,121 (2,518,574) 1,769,760 9,398,307 6,356,142 5,211,382 32,530,296 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 in public and private providers, and markets; investment • Malaysia - the operations in this area are principally the financial education and training providers, and private markets investee; 2021 S$ 2020 S$ 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 2021 and which the Group has not early adopted. Amendments to FRS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (effective for annual periods beginning on or after 1 January 2023) The narrow-scope amendments to FRS 1 Presentation of Financial Statements clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date (e.g. the receipt of a waver or a breach of covenant). The amendments also clarify what FRS 1 means when it refers to the ‘settlement’ of a liability. The amendments could affect the classification of liabilities, particularly for entities that previously considered management’s intentions to determine classification and for some liabilities that can be converted into equity. The Group does not expect any significant impact arising from applying these amendments. Amendments to FRS 16 Property, Plant and Equipment: Proceeds before Intended Use (effective for annual periods beginning on or after 1 January 2022) The amendment to FRS 16 Property, Plant and Equipment (PP&E) prohibits an entity from deducting from the cost of an item of PP&E any proceeds received from selling items produced while the entity is preparing the asset for its intended use. It also clarifies that an entity is ‘testing whether the asset is functioning properly’ when it assesses the technical and physical performance of the asset. The financial performance of the asset is not relevant to this assessment. Revenue and investment gains Singapore Malaysia Others Non-current assets Singapore Malaysia Others 21,217,826 10,305,870 1,006,600 32,530,296 5,314,180 3,267,789 816,338 9,398,307 Entities must disclose separately the amounts of proceeds and costs relating to items produced that are not an output of the entity’s ordinary activities. The Group does not expect any significant impact arising from applying these amendments. 3,409,430 473,116 282,001 4,164,547 4,131,045 546,861 124,039 4,801,945 28. Authorisation of financial statements These financial statements were authorised for in accordance with a resolution of the Board of Directors of 8I Holdings Limited on 29 May 2021. issue 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 88 ADDITIONAL INFORMATION Shareholders Information as at 16 June 2021 8I Holdings Limited – Ordinary Shares The Company has ordinary shares on issue. These are listed on the Australian Securities Exchange under ASX code: 8IH. Details of trading activity are published daily by electronic information vendors. All ordinary shares carry one vote per share without restriction. Analysis of Shareholders and CDI Holders* Category (size of holding) 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over Number of holders Number of shares % of issued capital 28 92 61 453 248 882 11,158 347,562 549,005 20,639,873 337,444,847 358,992,445 0.00% 0.10% 0.15% 5.75% 94.00% 100.00% The number of investors holding less than a marketable parcel of 1,667 8IH shares (based on a share price of A$0.30) was 33. They hold 17,036 8IH shares in total. Twenty Largest Shareholders and CDI Holders* Registered Holder 1. Chee Kuan Tat, Ken 2. Clive Tan Che Koon 3. BNP Paribas Noms Pty Ltd 4. Citicorp Nominees Pty Limited 5. HSBC Custody Nominees (Australia) Limited 6. Pauline Teo Puay Lin 7. Clarence Wee Kim Leng 8. Hue Kuan Yew 9. Lim Wei Lin 10. Hor Chook Lam 11. Alex Chia Che Keng 12. Neo Choon Seng 13. Fance Chua Meon Keng 14. Loo Tian Guan 15. Rodney Tay 16. Kang Tien Hock Edwin 17. Yap Pei Koon 18. Tan Chong Yan 19. Lau Eng Seng 20. Lim Pik King ALL OTHER SHAREHOLDERS Total Number of Shares % of issued capital 86,885,009 65,140,000 43,468,714 29,292,444 23,692,731 8,859,103 2,063,400 2,053,914 2,000,000 1,546,000 1,398,140 1,172,992 1,118,000 1,107,203 1,065,336 1,055,664 1,020,872 870,020 776,243 733,312 83,673,348 358,992,445 24.20% 18.15% 12.11% 8.16% 6.60% 2.47% 0.57% 0.57% 0.56% 0.43% 0.39% 0.33% 0.31% 0.31% 0.30% 0.29% 0.28% 0.24% 0.22% 0.20% 23.31% 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. 89 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L l i s g n d o H I 8 ADDITIONAL INFORMATION Shareholders Information as at 16 June 2021 (continued) Substantial Shareholders and CDI Holders** Name Chee Kuan Tat, Ken Clive Tan Che Koon Direct Interest Shares % of voting power Deemed Interest Shares % of voting power 86,885,009 65,140,000 24.20% 18.15% - - - - 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. ASX Listing Rule 4.10.18 Current On-Market Buy-Back There is a current on-market buy-back arrangement for the Company as announced on 28 July 2020. ASX Listing Rule 4.10.20 Investment The Group had a total of 791 transactions in securities during the financial year ended 31 March 2021 and has paid or accrued brokerage and management fees totalling S$120,126 and S$Nil respectively. As at 31 March 2021, the Group held investment in Autowealth Private Limited, Dealt Limited, Emmbi Industries Ltd, Alarm.com Holdings, Alibaba Group Holding Limited, Alteryx, Amazon.com, Arco Platform Limited, Atlassian Corporation Plc, Axon Enterprise, BioLife Solutions, BlackLine, CareDx, Celsius Holdings, CrowdStrike Holdings, DocuSign, Elastic N.V., Emergent BioSolutions, Etsy, Facebook, Fortinet, Globant S.A., HealthEquity, HubSpot, II-VI Incorporated, Insulet Corporation, MercadoLibre, Mimecast Limited, Mitek Systems, MongoDB, Neurocrine Biosciences, NovoCure Limited, Okta, OptimizeRx Corporation, Palo Alto Networks, PayPal Holdings, Peloton Interactive, Pinterest, Pluralsight, Proofpoint, Purple Innovation, Q2 Holdings, Rapid7, Repligen Corporation, SailPoint Technologies Holdings, salesforce.com, ServiceNow, Shopify, Smartsheet, Square, Teladoc Health, Twilio, Veeva Systems, Vertex Pharmaceuticals Incorporated, Wix.com Ltd., Workday, Workiva, Yandex N.V., Yext, Zendesk, Zoom Video Communications, Zynex, Advanced Micro Devices, Afya Limited, Alarm.com Holdings, Arco Platform Limited, Aspen Group, Aterian, Betterware de Mexico, BRP Group, Chegg, Digital Turbine, Exact Sciences Corporation, Farfetch International Ltd., Futu Holdings Limited, Limited, Fiverr GrowGeneration Corp., II-VI Incorporated, InMode Ltd., Inphi Corporation, LifeMD, LivePerson, NV5 Global, Pinduoduo, Purple Innovation, RADA Electronic Industries Ltd., Retractable Technologies, salesforce.com, Skillz, Square, The Boston Beer Company, The Lovesac Company, The Scotts Miracle-Gro Company, UP Fintech Holding Limited, Upland Software, Wayfair, Youdao, Zynga, Afterpay Ltd, Audinate Group Ltd, Fineos Corp Ltd, Xero Ltd, China International Travel Service Corp Ltd, Hangzhou Hikvision Digital Technology Co Ltd, Kweichow Moutai Co Ltd, 90 Wuliangye Yibin Co Ltd, AK Medical Holdings Ltd, Alibaba Health Information Technology Ltd, Ausnutria Dairy Corp Ltd, Beijing Chunlizhengda Medical Instruments Co Ltd, China Feihe Ltd, JD Health International Inc, Sunny Optical Technology Group Co Ltd, Hartalega Holdings Bhd, Riverstone Holdings Ltd, Maxscend Microelectronics Co Ltd, Quectel Wireless Solutions Co Ltd, Shenzhen Mindray Bio-Medical Electronics Co Ltd, Thunder Software Technology Co Ltd, Digital Turbine, Inc., CrowdStrike Inc., Zoom Video Inc., DocuSign, Holdings, Communications, Inc., Cloudflare, GrowGeneration Corp., Inari Medical, Inc., NovoCure Limited, Square, Inc., Masimo Corporation, Wix.com Ltd., Fiverr International Ltd., The Boston Beer Company, Inc., Veeva Systems Inc., Logitech International S.A., Inc., Amazon.com, Inc., DexCom, Inc., Docebo Inc., Datadog, Inc., Corporate Information Company registration 201414213R number ARBN 601 582 129 Registered office (Singapore) Goldbell Towers, 47 Scotts Road, #03- 03/04, Singapore 228233 Tel: +65 6801 4500 Registered office (Australia) Share registrar C/- SmallCap Corporate Pty Ltd, Suite 6, 295 Rokeby Road, Subiaco WA, Australia, 6008 Tel: Fax: +61 (8) 6555 2950 +61 (8) 6166 0261 Boardroom Pty Limited Level 7, 207 Kent Street, Sydney, NSW, Australia 2000 Tel: Fax: +61 (2) 9290 9600 +61 (2) 9279 0664 Stock exchange listing 8I Holdings Limited shares are listed on the Australian Securities Exchange (ASX code: 8IH) 1 2 0 2 Y F t r o p e R l a u n n A | i s e i r a d i s b u S s t i d n a d e t i m i L i l s g n d o H I 8 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: www.facebook.com/8IHoldings Linkedin: www.linkedin.com/company/8iholdings 

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