8VI Holdings Ltd
Annual Report 2020

Plain-text annual report

8VIC Holdings Limited FY2020 Annual Report { const Value = [ Smarter ] const Speed = [ Faster ] const Mode = [ Easier ] return ( < FinEduTech > ); ); // How we prioritised our key ideas? $orderBy = array( ‘ Lifetime Value ’=>’DESC’, ‘ Community Centric ’=>’DESC’, ‘ Content Driven ’=>’DESC’, ‘ Technology Focus ’=>’DESC’, // Results achieved? $this->db->from-> Entering A New Dimension } ?> 1 CONTENTS About 8VIC Holdings Limited VI App VI College VI Community Letter from the Chairman Financial Highlights Operating and Financial Review Board of Directors Key Management Corporate Structure Engaging our Team Members / Our Core Values Remuneration Report General Information Directors’ Statement Independent Auditors’ Report Consolidated Statement of Financial Position - Group Statement of Financial Position - Company Consolidated Statement of Comprehensive Income Consolidated Statement of Changes in Equity Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Financial Statements Additional Information 1 2 - 3 4 5 6 - 7 8 9 - 13 14 15 16 17 18 - 20 21 22 - 23 24 - 29 30 31 32 33 - 34 35 36 37 - 85 86 - 87 PRELUDE Since our major consolidation and leadership change in FY2019, we have continued to push strongly ahead to revitalise our business, which has resulted in our return to profitability in FY2020. This year, we have also rebranded our business under the new “VI” icon. The launch of our FinEduTech “VI” platform marks a significant paradigm shift in several ways. We are no longer known as an offline education unit, but instead recognised as an integrated, subscription-based platform for investors who are seeking value investing knowledge. In addition, the way we do business has also transformed entirely. We have moved from a transactional based business model to one that is of a recurring base; where customers are no longer one-time graduates of our programmes, but instead retained as valued VI Community members who have access to our suite of products and the ability to tap into lifelong, repeat learning opportunities. Also, we have fully restructured our operations internally to ensure our processes are fully aligned to drive the growth of this new business model. Our restructured teams are working with renewed specific focuses, whilst also collaborating closely to ensure overall synergy. With these new ways of working and grounded on a technology-focused approach, today, we are extremely proud that 8VI connects a community of value investors globally. With our continued effort to bring value investing to the world, we will strive to build upon the success of our robust FinEduTech business beyond 2020, and explore new ways to scale our business for further growth. 2 About 8VIC Holdings Limited Invest Smarter, Faster, Easier 8VIC Holdings Limited (“8VI”) is a Singapore-based FinEduTech company operating under the brand name VI. Established in 2008, VI (read as “vee”) is the representation of our beliefs and roots in Value Investing and empowers the average man-on-the-street to achieve sustainable wealth as part of their mission to make investments smarter, faster and easier. At VI, we offer results-oriented and process-driven analysis powered by technology, as well as promote investor education and knowledge exchange on a single platform. VI App, a proprietary stock analysis tool developed through 8BIT Global Pte Ltd (“8BIT”), crunches traditional financial data and simplifies the complex stock analysis and decision-making process for equity investors into easy-to-use visuals under a comprehensive framework. With numerous offices across the Asia Pacific region, VI College supports a community of value investors from 29 cities globally through its flagship “VI Bootcamp” and other advanced programmes. As the region’s leading FinEduTech provider, VI College leverages the power of technology and transforms the perception and application of value investing. Key Markets Supporting a community of value investors globally Offices in 4 cities Programmes conducted across 29 cities globally since 2008 SHANGHAI TAIWAN MALAYSIA SINGAPORE 1 1 VI App Smart stock analysis and screening tool (formerly WealthPark) We strive to help you build your wealth by investing smarter, faster, and easier through a single platform. Seize control of the stock market and get set for real results as you connect with users within the VI Community through the app’s Social Bubbles. VI App simplifies all the key essential ratios which makes businesses easier to understand, and identifies winning stocks across 25 stock exchanges, 4 continents and 42,000 companies to compound your wealth. With the VI App, you can be assured of deeper insights into business models, accounting risk, intrinsic value, and easily track your personal watchlist of stocks, gains and losses – across multiple portfolios – in one place. Key Benefits Powered by technology Distils complex stock analysis processes into easy- to-use visuals with a comprehensive framework Unique and practical features Promotes investor education and knowledge exchange on a single platform Integrated offering on a single app Access VI College and its offerings on VI App as a one-stop platform 2 VI App (Cont’d) • VI Screener o Search and screen companies with great potential that suit your investment preference in seconds • VI Watchlist o Potential companies to watch, organised into one space, with consolidated view of companies for easy monitoring, and notifications when opportunities arise • VI Portfolio o Keeps a record of investment positions, allows tracking and monitoring and shows portfolio performance at a glance • VI Social Bubble o Social media module for all users which encourages exchange of investment opinions and ideas, aggregates market sentiments and improves important information flow • VI Analysis o VI Risk Rating – Identifies high-risk stocks, corporate governance issues or accounting treatments, vigorously supported by backtesting o VI Star Chart – Comprehensive snapshot of a company’s performance based on profitability, financial health, growth, assets and dividends o VI Line – Smart algorithms to calculate intrinsic value of a company, calculates Margin-of-Safety based on different valuation methods and provides quick overview of valuation vs price of companies 25 stock exchanges 42,000+ companies covered 3 VI College Spreading Value Investing knowledge to the World Established since 2008 Offices in Singapore, Malaysia, Taiwan and Shanghai Supporting a community of value investors globally FLAGSHIP PROGRAMMES VI Bootcamp An investment programme conducted in English and Mandarin designed to impart fundamental knowledge in value investing with hands-on practical learning to build your financial portfolio through intelligent stock investments and passive income. PJS Value investing programme with a Shariah-compliant perspective and focus. OTHER PROGRAMMES VI OS+ Learn the mechanics of an option contract and how it behaves. Use it to complement your value investing strategy by amplifying your returns and at the same time reduce your risks. ReWealth Called “the most important financial class you will ever attend”; you deserve to lead a life of financial abundance and joy, and it will not happen unless you choose to fix your wealth container today. Infinite Wealth A holistic personal development and mentoring program - from business strategies, stock investing, healthy living to personal relationships. VI Summit Since 2012, VI Summit is the largest gathering of value investors in Asia which features renowned investors and fund managers, as well as some of the best investing minds around the world. EDUTAINMENT & OUTREACH Money Money Home A financial literacy programme about the importance of managing personal and home finance in an easy-to-comprehend, light-hearted manner. Bai Gu Jing Jointly created by Money Money Home and VI, Bai Gu Jing is a new talk show which shares insights on noteworthy listed companies around the world using value investing methodology, bringing new investors into the world of investing with an eye on superior business models, excellent management, and optimal value and prices. VI Talk A series of live broadcasts which discusses stocks, handling investments, improving business strategies and returns amidst different market circumstances. Let’X Invest An online content series which breaks down investment tips and tricks, and empowers investors to enjoy wealth creation from the stock market. 4 VI Community Value investors brought together by VI College and VI App Our VI Community has been painstakingly built from the ground up over the last 12 years, drawing on our years of experience as a financial education provider. Today, our community of value investors continues to scale on a healthy upward path, totalling 30,000 app users and touching more than 100,000 lives. The VI Community features a rich roster of engagement activities driven by both our retention and acquisition teams. As part of the VI Community, our members actively foster collective intelligent decision-making as a result of aggregation of market sentiment. The social interaction within the VI Community further drives a powerful network effect whereby community-based content is generated and insights into investor behaviour are actively shared. The VI Social Bubble social networking platform further empowers the VI Community’s interaction, fostering greater engagement which is even more frequent and streamlined on a single platform. This feature also allows us to track and monitor overall engagement and interaction levels, which in turn enables us to make the necessary improvements to the VI App in order to serve our community even better. Total user growth rate: 183%* Subscriber growth rate: 195%* Page view growth rate: 404%* * Last Twelve Months ending March 2020 5 Letter from the Chairman FY2020 has been a milestone year in our strategic transformation, and we have been relentlessly working to develop our capabilities to pave the foundation for our success in the last 12 months. Clive Tan Non-Executive Chairman Dear shareholders FY2020 has been a milestone year in our strategic transformation, and we have been relentlessly working to develop our capabilities to pave the foundation for our success in the last 12 months. While the team gained momentum and continued to build on its efforts as outlined in the previous year, we were cognisant of the opportunities and challenges that await us with the coming of the 4th industrial revolution. With that in mind, we have devoted 100% of our effort and energy in delivering on our digital transformation process that has been put in place since 2016. Our goal has always been to create a long-term for our sustainable business which creates value community, team members and shareholders. Riding on the rise of digitalisation and technology, we launched VI, our FinEduTech platform in January 2020, marking a significant paradigm shift in the way we conduct our business. We are no longer an offline education provider but an integrated FinEduTech platform for investors seeking knowledge through a variety of recurring subscription products. We work to retain our customers as long-term VI Community members who can tap into our products for lifelong, repeat learning opportunities. 6 With FinTech as a key driver of growth and customer experience while staying true to our principles in value investing, we are committed to build on customer experiences within the VI Community through our acquisition and retention efforts, invest in continuous technology development to build on and create new features which will not only establish a recurring revenue stream but also continue to pave the way forward for our business. At the same time, we made the difficult decision to wind down certain subsidiaries that could be better served by using technology rather than a physical presence, allowing us to further reduce our costs and increase productivity. Our financial technology tool, formerly known as WealthPark, was rebranded as “VI App” and was unveiled at our 9th Value Investing Summit in January 2020. Together with VI College, VI App supports our VI Community and rounds off our FinEduTech ecosystem which is set to drive the future of value investing around the region and the world. This is an extremely positive turn in the corner for us, as we move towards a business platform which will lead us towards greater profitability and scalability. Letter from the Chairman (Cont’d) “ FinTech will remain a key driver of growth and customer experience for our business. We are committed to build on experiences within the VI Community through acquisition, retention, and technology development, which will continue to pave the way forward for our business.” This year, I am pleased to welcome Mr Charles Mac as a Non-Executive Director with effect from 23 May 2019. Charles takes over from Mr Zane Lewis as part of our ongoing effort to ensure regular Board renewals, and I am confident that he will bring fresh new perspectives given his extensive IT corporate experience and time spent in the IT industry. Meanwhile, on behalf of the Board, I would also like to thank Zane for his contributions to the company and we wish him all the best in his future endeavours. As we continue to push ahead in this ‘new normal’ situation, we will concentrate on delivering our value proposition to better serve a community of value investors through technology-empowered investment analysis and education. With the tireless, collective effort of our team, I have confidence that we will be able to raise the bar even higher and achieve results beyond the ordinary by constantly moving towards individual and group mastery. Clive Tan Non-Executive Chairman During the year, the world faced an extraordinary challenge with the COVID-19 novel coronavirus outbreak, which resulted in multi-country lockdowns and disruptions to the majority of businesses and the economy. Given the situation, we were able to successfully execute a rapid transition plan in both Malaysia and Singapore to continue serving the needs of our new and existing customers and users across the region by shifting our efforts and operations online. Whilst our strategy had always been to transition our offerings to an online platform gradually, we took steps to accelerate and expand our online programmes to accommodate offsite training curriculum amidst the evolving COVID-19 landscape. Anchored on technology, we can now reach out to even more customers and touch more lives, while scaling our business exponentially without an actual physical presence, and transcending geographical borders. We have also adapted successfully to new operational practices as we move to digitalise our company by changing existing working processes and to embrace the new norm – such as holding our Annual General Meeting virtually this year, for instance. Meanwhile, we have also refocused our growth efforts to further cement our position in core markets, particularly in markets that are predominantly English, Chinese and Malay speaking. With these developments, we are pleased to report that we have returned to a healthy financial baseline and profitability as a result of this paradigm shift. In FY2020, we achieved healthy increases to our net profit, operating profit margin and free cash flow. We also saw a significant increase in our cash flow from operations despite a dip in revenue. We attribute our financial turnaround this year to the positive impact of transforming our business model, continued prudent cost management, further improvement in streamlining our marketing efforts and managing our general overheads. 7 Financial Highlights Year ended 31 March 2020 Revenue (S$’m) Net Profit After Tax Attributable To Equity Holders Of The Company (S$’m) 25 20 15 10 5 0 22.3 9.4* 12.9 10.9 FY2019 FY2020 * Digital and Marketing Segment contribution prior to disposal 2 0 -2 -4 -6 1.1 -4.9 FY2019 FY2020 Earnings Per Share (Singapore cents) Cash and Cash Equivalents (S$’m) 2.64 5 0 -5 -10 -15 -11.57 7.4 4.7 8 6 4 2 0 FY2019 FY2020 FY2019 FY2020 Net Tangible Assets Per Security (Singapore cents) Free Cash Flow (S$’m) 20 15 10 5 0 11.0 9.3 6 4 0 -4 -6 4.2 -3.8 FY2019 FY2020 FY2019 FY2020 8 Operating and Financial Review It has been slightly over a year since I was tasked to lead 8VI on a digital transformation and development path in order to overcome the traditional earning challenges and operational limitations in conventional education and training businesses. Ken Chee CEO & Executive Director It has been slightly over a year since I was tasked to lead 8VI on a digital transformation and development path in order to overcome the traditional earning challenges and operational limitations in conventional education and training businesses. our resources on expanding the FinEduTech business in Asia-Pacific. Notwithstanding the sale, our revenue stands at S$12.9 million, representing a decrease of 16%. FY2020 has been a significant year for us and we are now doing ever more with ever less. Not only have we managed to successfully transform the business into an integrated, value investing platform for investors seeking knowledge through a variety of recurring subscription products, we have also built a solid community (VI Community) that offers lifelong learning opportunities. In addition, with the collective effort of the team and management, 8VI has also regained its footing to a healthy financial position. FY2020 in review The Group recorded revenue of S$10.9 million in FY2020 as compared to S$22.3 million in the previous corresponding year (FY2019). This was mainly attributable to the one-off contribution from the strategic disposal of the Digital and Marketing Segment in FY2019, which had contributed revenue of S$9.4 million in the previous financial year prior to disposal, so as to focus Meanwhile, we recorded net profit after tax attributable to owners of the company of S$1.1 million, thereby signifying a return to profitability over FY2019’s net loss position. Cash flow from operations have increased significantly to S$3.9 million inflow (FY2019: S$1.4 million outflow) while free cash flow stands at S$4.2 million inflow (FY2019: S$3.8 million outflow). This was made possible with the improved performance of the Financial Education segment which we attribute to the resilience and determination of our team, who have innovated continuously to meet the ever evolving demands of today. Operations review We set out on a 3-year transformation plan in FY2019 to work towards a more integrated offering, based on an 80% online, 20% offline model (80:20). In FY2020, we have since developed further on our initial strategy based on a few key areas of focus. 9 Operating and Financial Review (Cont’d) Building a recurring revenue model with technology Given that we are operating in the age of the 4th industrial revolution, we recognised an inherent challenge to remain relevant and to move towards an integrated business model which comprises an 80% online, 20% offline offering. Our VI App is the culmination of years of contemplation, planning, investment and work. Together with VI College, we have established a cohesive ecosystem which is designed to make investments Smarter, Faster and Easier and without borders. Essentially, we work to transition and retain every “one- off” course graduate persona into a thriving member of our VI Community, benefitting from the continuous support and repeat learning opportunities through tiered subscription options. Coupled with the integration of signature programs with the subscription to our VI platform, we achieved a massive breakthrough in the way our company grows and generates high-quality recurring revenue and positive cashflow. This is the result of our recurring “Software as a Service” Approach where we leverage our software to infuse new ideas, products and services, to ultimately serve more customers. with the community through various activities and trending topics. The launch of VI Social Bubble within VI App in early 2020 facilitates the opportunity for investors and direct knowledge exchange among potentially companies. As we improve user experience and incorporate aspects of artificial intelligence (AI) and machine learning (ML) over time, we expect a marked improvement in information flow to users, with VI Social Bubble becoming a powerful aggregation of market sentiments providing insights into investor behaviour. Acquisition, retention, and technology development at our core Acquisition Generating robust content is one of the core pillars of our acquisition strategy. We plan and create content which is deployed across various platforms to build engagement and showcase continual, new additions to our programmes such as the latest VI Talk live broadcasts. These owned digital assets are critical as they can be leveraged across languages, broaden our reach across borders, drive organic traffic while reducing the reliance on direct marketing, and build brand awareness and loyalty. With our ecosystem in place, the assets can be further amplified amongst the community and benefit from the natural network effect. We measure our success in acquisition rates based on monthly growth in users and subscribers, as well as growth in Annual Recurring Revenue (ARR). Our digital transition was accelerated as a result of the current COVID-19 situation, but we took this challenge on by the horns. As our ecosystem moves into full swing, the value investing know-how, ideas and experience are channeled back into and exchanged within this growing, thriving network. Eventually, we hope to empower the average man-on-the-street to embark on their own sustainable wealth journey through this collaborative, collective network of like-minded value investors. Our VI Community has been the cornerstone of 8VI’s success, and the team has persisted with its efforts through FY2020 to cultivate and engage meaningfully 10 Growth in users 183% growth in LTM, 9% growth in CMGR LTM - Last Twelve Months CMGR - Compounded Monthly Growth Rate Operating and Financial Review (Cont’d) Retention We are also focused on building retention through a customer-centric culture and mindset to bring entire lifetime value. We believe in active engagement and content building via our VI Social Bubble, providing content and support in the form of VI Coaching Sessions and VI Resources for flagship programme graduates, as well as showcasing the potential and power of the VI App and value investing so that the information is relatable, easily understandable and ultimately results- oriented. Retention success rates are measured via broad performance metrics such as the renewal rate for VI App subscription, customer engagement which is data- and analytics-driven, as well as increasing number of average page views on our website which has increased by 637% since FY2019. We also monitor the usage level of VI Social Bubbles, which has been growing steadily since implementation. it can aggregate and reach out to other users who are actively engaging or putting out content with regards to the same type of information. Functions such as these improve searchability and interaction around the topics or tags of their interest. We are also invested in continuously improving the robustness of our existing proprietary VI Analysis e.g. VI Star Chart, a classification algorithm which we built to enable easy discovery and identification of the different classes of stocks. Using machine learning to refine the distinctions in the stock classifications, we were able to identify and create new categories within the app to improve overall user experience. Furthermore, we are building our own backtesting and scenario testing methods to ensure that we verify the reliability of the system, whilst exploring the possibility of extrapolating this data to build future predictive features. Refining the distinctions in stock classification through machine learning Growth in average page views 404% increase since FY2019 Technology development As we develop our technology, we continuously build on existing and new features that enhance user experience. For instance, we have incorporated a Smart Tagging feature this year so that our users can benefit from Smart Tag suggestions using machine learning- based services while posting on our VI Social Bubble. This could mean that users will be prompted with relevant tags to include while crafting their post so that 11 We are also building AI and ML capabilities and making investments in cloud facilities and machine processing so as to achieve results-driven outcomes for our customers. Ultimately, continuous technology development leads to better investment and learning experiences, which aligns with our main objective of enabling users to Invest Smarter, Faster, Easier. Cementing our position in core markets In FY2020, we moved to cement our position in highly successful and well-adapted English, Chinese and Malay language-speaking markets, which resulted in the further streamlining of our operations to Singapore, Malaysia, Shanghai and Taiwan. Operating and Financial Review (Cont’d) In Singapore, we continued to see good traction for programmes such as our flagship VI Bootcamp, VI OS+ and ReWealth and we have gained good momentum in growing the number of programme participants. expanded rapidly to accommodate the offsite training curriculum, catering to the rise of new consumption habits of graduates. Malaysia remains a significant, addressable growth market of focus as it continues to generate positive growth, whilst our operations in Taiwan have stabilised in FY2020 with a good team in place, and we are confident this is headed in the right direction. This year, while we expanded our efforts in mainland China out of our base in Shanghai, our Thailand office – which we started as an overseas testbed – has wrapped up its operations in line with our strategy outlined above. Programmes such as VI Bootcamp, Pelabur Jutawan Syariah and Seminar Labur Saham Syariah continue to be grow in popularity and takeup in Singapore and Malaysia, whilst we have introduced more bite-sized programmes such as VI OS+, an extension programme for VI College graduates teaching them how to generate cash flow and boost return on investments using options strategies anchored on value investing principles. In addition, we have also refined our ReWealth and VI REITs programmes to ensure they are concise and tailored for online adaption. Refining our programmes Embracing new ways of working In 2020, we have seen a functional shift in our organisation and new ways of operating through greater digitalisation on all fronts. Essentially, we have also applied our 80:20 rule beyond our business model but also to the way we work moving forward. What this means is that our existing team members will take on a 80% online, 20% offline working arrangement while we explore remodeling our office in preparation of this new era – such as looking at preparing our infrastructure in view of a longer-term plan of a potentially ‘touchless’ environment, and establishing virtual broadcast studios in Singapore and Malaysia for the production of digital content. We are also digitalising across other formats such as eliminating printed name cards, producing an interactive Annual Report this year, and moving our Annual General Meeting online. Whilst we put in place these hardware and software improvements, we will also provide our team with the necessary resources to take up courses and digital or technology-related training to support their transition and keep pace with our new business direction. 35,000 lives inspired to date 4,714 VI College graduates in FY2020 102 new VI College batches in FY2020 During the year, we have also refined our programmes to cater to the diverse and growing needs of our community. Particularly in view of the evolving COVID-19 situation, we have since undertaken a range of business continuity measures beginning in the last quarter of FY2020 in accordance to local directives in numerous regions including Singapore and Malaysia. Our operations and existing online services remain available and have 12 Operating and Financial Review (Cont’d) Going forward, we anticipate that we will harness the skillsets and experience of individuals in the area of software and data engineering to meet our future growth needs. Together, we will aim to work towards the progressive automation of our operational processes and application of data analytics on the backend to optimise our business decisions. Key to future growth: continuous innovation As we look towards future growth, we will be digitalising more programmes which were already in line to be converted to online modules as part of our 80:20 strategy. Technology will remain the bedrock of our journey as we explore further innovation in the areas of machine learning and AI. With this, we will mine insightful data and create better experiences which we will deliver as a value-added service. Following the successful launch of online programmes during the COVID-19 period, we will also continue to innovate and expand our offerings and service levels which are tailored to our users’ preferences, such as ‘bite-sized’ subscriptions and programmes which are growing in popularity. “We will sharpen and hone our competitive edge in the area of value investing with our Investment Intelligence as a Service (IIAAS) model – leveraging AI, big data analytics and machine-learning, sharing value investing knowledge and empowering smart investment decisions. Ultimately, we will make investing Smarter, Faster and Easier for our growing VI community.” Looking ahead We have set in motion and put in place the right plans, teams and growth strategies to see through a systematic and measured expansion in the Asia-Pacific region. We recognise that there will be difficult decisions to be made in all businesses, and ours is no exception. It is important not to lose the lesson from the learning experiences that we have gone through. Meanwhile, we will continue to manage our expenses prudently, and work to generate better cash from operations as we refocus our efforts on the FinEduTech segment in our core identified growth markets. Our team remains steadfast in its efforts, whilst staying nimble to adapt and change. This year, we invite you to join us on our digitalisation journey as we deliver our FY2020 Annual Report in an interactive format for the first time ever. Ultimately, we remain focused on making investments Smarter, Faster and Easier, delivering long-term value to our shareholders and our mission and vision are unwavering – to empower the man-on- the-street to create sustainable wealth and inspire 100 million lives, whilst we work to drive growth and build a sustainable business. Transforming more than 100,000 lives in our VI Community Ken Chee CEO & Executive Director 13 Board of Directors .profile { name: Clive Tan; title: Non-Executive .profile { name: Ken Chee; title: Executive .profile { name: Pauline Teo; title: Executive .profile { name: Charles Mac; title: Non-Executive Chairman; Director & CEO; Director; Director; Clive Tan Non-Executive Chairman Clive Tan was appointed Non-Executive Chairman September 2015. in As co-founder and executive director of parent company, 8I Holdings Limited, Clive is familiar with the strategic planning, business development, corporate policies and risk management practices for the financial education and asset management businesses. Within 8VI, Clive advises on corporate governance, strategic planning and overall direction of the Group. Clive holds a Post-Graduate Diploma in Education from the National Institute of Education and an Honours Degree in Mechanical and Production Engineering from the Nanyang Technological University. He also attended the University of Technology, Sydney on an academic exchange programme. He began his professional career in the public education sector in Singapore. Ken Chee Executive Director & CEO Ken Chee was appointed Executive Director & Chief Executive Officer in January 2019. He is the co-founder of the Group and sits on the board of parent company, 8I Holdings Ltd. Currently CEO of 8VI, he is involved in driving the all-round growth of the Group’s FinEduTech business under the VI brand. 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. Prior to his current appointment, Ken held executive and management roles in 8I Holdings Ltd and was the originator and key trainer of its financial education programmes. Ken was awarded the Spirit of Enterprise, Honoree Award in 2005 by the President of Singapore for outstanding business results. He is also a Young Presidents’ Organisation member 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 and graduated from its Executive Program in Value Investing. Pauline Teo Executive Director Pauline Teo was appointed Executive Director in January 2018. Under her leadership, VI College is currently the leading Financial Education provider in Singapore and Malaysia, with presence in Taiwan and mainland China. Pauline is involved in the management and regional operations of the Company. She is also one of the key speakers for the various programs, seminars and coaching sessions that the Company undertakes. She is based in Singapore and has more than 10 years’ experience working as a public servant, primarily in the field of learning and development. During her days with Singapore Ministry of Defence and Civil Service College, Pauline led a team of course developers and had the full spectrum of experience in training and development, ranging from conducting learning-needs analysis to outcome evaluation. Pauline graduated from the Nanyang Technological University with a Master of Arts (Instructional Design and Methodology) and holds a Bachelor in Business Studies. Charles Mac Non-Executive Director in Charles Mac was appointed Non-Executive Director May 2019. Charles has more than 18 years of IT corporate experience, of which 15 years in the SAP industry dealing with multinational companies across the Asia Pacific Region. He has held various leadership roles for large, global multinational companies with extensive experience across Asia Pacific in Team Management, Quality Management, Audits, Business Development and Contract Deliveries. Charles currently serves on the Board of Australian-listed companies, 8I Holdings Limited and Ennox Group Limited as a Non-Executive Director. Charles is an Australian citizen and holds a Bachelor of Computing (Information System) from Monash University. 14 Key Management .profile { name: Bernard Siah; title: CTO, .profile { name: Gary Yeow; title: Executive 8VI; Director, 8VI, Malaysia; .profile { name: Juanna Chua; title: Executive Director, 8VI, China .profile { name: Will Huang ; title: General Manager, 8VI, Taiwan; Bernard Siah CTO, 8VI Juanna Chua Executive Director, 8VI China Bernard currently leads the technology development at 8Bit Global Pte Ltd (“8Bit”), leveraging the digital economy for improved positioning and competitiveness. He has more than 10 years of experience as a technology specialist. Bernard began his career in a start-up and led the R&D and product development team. During this period, he gained invaluable experience in building the R&D team and developing processes to deliver products in the intelligent CCTV industry. Eventually, he grew with the company through its IPO in SGX. After his start-up experience, he joined a marine company and continued to apply his vast experience in product development to create a world-class system which provides advance vessel performance monitoring services. The entity was eventually acquired by a French company from the growing LPG market. Bernard graduated from the National University of Singapore with a Bachelor of Computing (Technology Focus). Gary Yeow Executive Director, 8VI Malaysia Gary Yeow is the Director of 8VI Malaysia Sdn Bhd. He has been with the Group since May 2012. Juanna Chua is the Executive Director of 8VI China and manages the Company’s strategic objectives and plans within the Chinese market. Previously, Juanna spent 9 years on distribution and central store management with Shell Malaysia Trading Sdn Bhd. She brings with her strong human capital and operations knowledge. She graduated with a Bachelor of Business Administration (Honours) in Marketing from Universiti Tenaga Nasional. Will Huang General Manager, 8VI Taiwan Will is the General Manager of 8VI Taiwan, where he leads the office’s operations and strategy. As a leader, Will successfully bridges technical and business aspects, while handling high- level management and operations. He has been with the Group since 2019. Prior to this, Will created and headed an ODM/OEM unit at Strongled LED Lighting Systems, a Taiwan-listed company and leading manufacturer of LED lighting, where he led market research and development, analysis of business model, team establishment, resource evaluation and coordination, process formulation and staff training. the Group, Gary oversees Within the planning and implementation of marketing, operations and business development strategies across the regional markets and 8VI’s overseas expansion activities. Will has more than 6 years of experience across quality engineering and customer service in multi-national companies. He was also a key member in Strongled’s IPO team, handling public relations and as a corporate spokesperson. Gary brings over 30 years of business experience, where prior to 8VI, Gary held the directorship of a building materials wholesale and manufacturing business. Gary graduated from Anglo-Chinese Secondary School in Sitiawan, Malaysia. Will holds a Masters’ Degree in MSc. Management from the University of Southampton, as well as a Bachelor of Geomatics from the National Cheng-Kung University. 15 Corporate Structure 8VI Global Pte. Ltd. (100%) 8Bit Global Pte. Ltd. (51%) 8VI Malaysia Sdn. Bhd. (100%) 8VIC Taiwan Co., Ltd. (70%) 8VI China Pte. Ltd. (65%) 8VIC JooY Media Sdn. Bhd. (70%) 信益安（上海） 实业有限公司 (100%) 16 Engaging our Team Members Beyond the digital transformation and increasing usage of technology in our business operations, the Group has also put in place several initiatives to continuously engage with our team members and provide them with the necessary resources to take up courses and digital or technology-related training to upgrade their skillsets to excel in the new phase of the Group’s digital transformation. 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. CORE VALUES We do what we think & say We enjoy what we do We take care of one another like family We uphold the trust of our stakeholders We work towards mastery without invalidation of self & others We are value-conscious for the price paid We keep our hearts & minds open We make it simple 17 Remuneration  Report This  remuneration  report  set  out  information  about  the  remuneration  of  8VIC  Holdings  Limited’s  key  management   personnel  for  the  financial  year  ended  31  March  2020.  The  term  ‘key  management  personnel’  refer  to  those  persons   having   authority   and   responsibility   for   planning,   directing,   controlling   the   activities   of   the   consolidated   entity,   directly  or  indirectly,  including  any  director  (whether  executive  or  otherwise)  of  the  consolidated  entity.   Remuneration  Policy The  remuneration  policy  of  8VIC  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:   Clive  Tan  Che  Koon   Chee  Kuan  Tat,  Ken   Pauline  Teo  Puay  Lin   Charles  Mac   Gary  Yeow  Hin  Lai   Bernard  Siah   Juanna  Chua   Will  Huang   Non-­‐Executive  Chairman     Executive  Director  &  Chief  Executive  Officer   Executive  Director   Non-­‐Executive  Director   Director,  Malaysia  subsidiary   Chief  Technology  Officer   Director,  China  subsidiary   General Manager,  Taiwan  subsidiary   Service  Agreements Remuneration   and   other   terms   of   employment   for   the   Executive   Directors   and   other   Key   Management   Personnel   are   formalised   in   a   service   agreement.   For   Nona Executive   Directors,   these   terms   are   set   out   in   a   Letter   of  Appointment.   The   major   provisions   of   the   agreements   relating   to   Directors’   remuneration   as   at   date  of  this  report  are  set  out  below.   Name   Base  Salary(1)   Fees   Clive  Tan  Che  Koon   Chee  Kuan  Tat,  Ken   Pauline  Teo  Puay  Lin   Charles  Mac   S$nil   S$144,000  p.a.   S$144,000  p.a.   S$nil   S$43,200  p.a.  (2)   S$nil   S$nil   S$21,000  p.a.(2)   Term  of   Agreement   No  fixed  term   No  fixed  term   No  fixed  term   No  fixed  term   Notice  Period   N/A   N/A   N/A   N/A   (1)  Excluding  employer’s  Central  Provident  Fund  (CPF)  contribution (2)  Non-­‐executive  director  fee  of  the  Company 18   Remuneration  Report  (continued) Details  of  Remuneration A  breakdown  showing  the  level  and  mix  of  each  Director’s  and  Key  Management  Personnel’s  remuneration  for  the   financial  year  ended  31  March  2020  is  set  out  below:   Name  of  Directors S$100,000  to  below  S$250,000   Chee  Kuan  Tat,  Ken     Pauline  Teo  Puay  Lin   Below  S$100,000   Clive  Tan  Che  Koon   Charles  Mac   Salary*   %   Bonus/Profit-­‐ sharing   %   Directors’   Fee   %   Total   %   92   91   -­‐ -­‐ 8   9   -­‐ -­‐ -­‐   -­‐ 100   100   100   100   100   100   Name  of  Key   Management  Personnel Designation   S$100,000  to  below   S$250,000   Gary  Yeow  Hin  Lai   Director,  8VI  Malaysia  Sdn  Bhd   Bernard  Siah   Chief  Technology  Officer   Below  S$100,000   Juanna  Chua   Director,  China  subsidiary     Will  Huang     General Manager,  Taiwan  subsidiary   * Salary  is  inclusive  of  fixed  allowance  and  CPF  contribution. Salary*   %   Bonus/Profit-­‐ sharing   %   Total   %   92   92   100   82   8   8   -­‐   18   100   100   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.   19   Remuneration  Report  (continued) Details  of  Remuneration  (continued) The  total  remuneration  of  the  top  five  key  executives  (who  are  not  directors  of  the  Company)  is  S$543,403  for  the   financial  year  ended  31  March  2020  (2019:  S$551,841).   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  2020.   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  2020.   The  Company  also  reimburses  validly  incurred  business  expenses  of  Directors  and  Key  Management  Personnel.   Other  Information There  were  no  loans  made  to  any  Key  Management  Personnel  during  the  financial  year  or  outstanding  at  financial   year  ended.   Apart  from  disclosed  elsewhere  in  this  report,  there  were  no  transactions  with  Key  Management  Personnel  during   the   financial   year.   During   the   financial   year,   the   Remuneration   Committee   reviewed  and  approved  the  Company’s   remuneration  policy.   Directors  Meetings Since  the  beginning  of  the  financial  year,  four  meetings  of  directors  were  held.  Attendances  by  each  director  during   the  period  were  as  follows:   DIRECTORS   Clive  Tan  Che  Koon     Chee  Kuan  Tat,  Ken   Pauline  Teo  Puay  Lin   Charles  Mac   DIRECTORS'  MEETINGS   ELIGIBLE  TO  ATTEND   4   4   4   4   ATTENDED   4   4   3   4   Environmental  Issues The  Company’s  operations  comply  with  all  relevant  environmental  laws  and  regulations,  and  have  not  been  subject   to  any  actions  by  environmental  regulators.   20   GENERAL INFORMATION For the financial year ended 31 March 2020 Directors Mr Clive Tan Che Koon (Non-Executive Chairman) Ms Pauline Teo Puay Lin (Executive Director) Mr Chee Kuan Tat, Ken (Executive Director) Mr Charles Mac (Non-Executive Director) Company Secretary (Singapore) Ms Amanda Thum Sook Fun Company Secretary (Australia) Mr Louis Chua Chun Woei Registered Office (Singapore) Registered Office (Australia) Principal place of business Share registrar Auditor 47 Scotts Road #03-03/04 Goldbell Towers Singapore 228233 SmallCap Corporate Pty Ltd Suite 6, 295 Rokeby Road Subiaco WA 6008 47 Scotts Road #03-03/04 Goldbell Towers Singapore 228233 Link Market Services Limited Level 4, Central Park 152-158 St Georges Terrace Perth WA 6000 KLP LLP Public Accountants and Chartered Accountants 13A MacKenzie Road Singapore 228676 Partner in charge: Lim Yeong Seng Stock exchange listing 8VIC Holdings Limited’s shares are listed on the Australian Securities Exchange (ASX code: 8VI) Website www.8vicglobal.com 21 DIRECTORS’ STATEMENT For the financial year ended 31 March 2020 The directors are pleased to present their statement to the members together with the audited consolidated financial statements of 8VIC Holdings Limited (the “Company”) and its subsidiaries (the “Group”) and the statement of financial position and statement of changes in equity of the Company for the financial year ended 31 March 2020. 1. Opinion of the directors In the opinion of the directors, (a) the consolidated financial statements of the Group and the statement of financial position and statement of changes in equity of the Company are drawn up so as to give a true and fair view of the financial position of the Group and of the Company as at 31 March 2020 and the financial performance, changes in equity and cash flows of the Group and changes in equity of the Company for the year ended on that date, 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. 2. Directors The directors of the Company in office at the date of this statement are: Clive Tan Che Koon Pauline Teo Puay Lin Chee Kuan Tat, Ken Charles Mac 3. Arrangements to enable directors to acquire shares or debentures Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose objects are, or one of whose objects is, 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. 4. Directors’ interests in shares or debentures According to the register of directors’ shareholdings kept by the Company under section 164 of the Singapore Companies Act, Chapter 50 (the “Act”), the directors of the Company who held office at the end of the financial year had no interests in the shares or debentures of the Company and its related corporations except as stated below: 22 DIRECTORS’ STATEMENT For the financial year ended 31 March 2020 4. Directors’ interests in shares or debentures (continued) Name of Directors Ordinary shares of the Holding Company (8I Holdings Limited) Clive Tan Che Koon Pauline Teo Puay Lin Chee Kuan Tat, Ken 5. Share options Direct interest At the beginning of financial year At the end of financial year 65,140,000 8,859,103 86,684,792 65,140,000 8,859,103 86,684,792 There were no share options granted during the financial year to subscribe for unissued shares of the Company. There were no shares issued during the financial year by virtue of the exercise of options to take up unissued shares of the Company. There were no unissued shares of the Company under option at the end of the financial year. 6. Auditor KLP LLP has expressed its willingness to accept re-appointment as auditor. On behalf of the Board of Directors, Chee Kuan Tat, Ken Director Singapore, 29 May 2020 Pauline Teo Puay Lin Director 23 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 8VIC Holdings Limited Report on the Audit of the Financial Statements Opinion We have audited the financial statements of 8VIC 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 2020, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group and the statement of changes in equity of the Company 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 2020 and of the consolidated financial performance, consolidated changes in equity and consolidated cash flows of the Group and changes in equity of the Company 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 of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled our responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements. 24 Independent Auditor's Report to the members of 8VIC Holdings Limited (continued) KLP LLP 13A MacKenzie Road Singapore 228676 Tel: (65) 6227 4180 klp@klp.com.sg www.klp.com.sg How our audit addressed the key audit matter In relation to the Group’s application of FRS 116, we: 1. obtained an understanding of the internal controls, including the new processes and controls in relation to the application of FRS 116; 2. obtained an understanding of the lease contracts the identified by management and assessed appropriateness of management’s identification of those contracts as leases based on contractual agreements; the 3. assessed the reasonableness of management’s expectation of lease period using our understanding of the Group’s historical lease periods for similar assets, importance of the leased asset to the Group’s business and whether the cost of obtaining replacement asset would be significant; 4. Assessed discount rates applied by the Group; 5. Tested the mathematical accuracy of the lease calculations; and 6. Evaluated adequacy of the Group’s disclosure in relation to leases including disclosure of associated judgements and estimates. We found the judgement applied by management in the recognition of lease liabilities to be appropriate. We also found the disclosure on the critical judgements applied by management in the determination of the lease term in Note 3.1(e)(f) to be reasonable. Key audit matters (continued) Key audit matter in the audit of the Group Adoption of FRS 116 Leases Refer to Note 3.1 (e)(f) (Critical judgements in applying the entity’s accounting policies) and Note 16 (Lease liabilities) to the financial statements. The Group adopted FRS 116 Leases on 1 April 2019 and elected to recognise right-of-use assets based on amount equal to the lease liability, adjusted by the amount of any prepaid and accrued lease payments previously recognised. Comparative figures were not restated. lease liabilities were The initially measured by discounting the lease payments over the lease terms. For leases with extension options, the Group applied significant judgement in determining whether such extension options should be reflected in measuring the lease liabilities. As at 31 March 2020, the Group’s lease liabilities amounting to S$1,214,512. We focused on the adoption of FRS 116 in view of the significant effort required to audit the lease liabilities recognised due to the large volume of leases and significant judgement applied in determining whether the facts and circumstances created an economic incentive for the Group to exercise the lease extension option. 25 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 8VIC Holdings Limited (continued) Key audit matters (continued) Key audit matter in the audit of the Group Impact of the disruption to the operations due to Covid 19 Refer to Note 28 The spread of COVID-19 has severely impacted many local economies around the globe. In many countries, businesses are being forced to cease or limit operations for long or indefinite periods of time. Measures taken to contain the spread of the virus, including travel bans, quarantines, social distancing, and closures of non- essential services have triggered significant disruptions to businesses worldwide, resulting in an economic slowdown. Global stock markets have also experienced great significant weakening. Governments and central banks have responded with monetary and fiscal interventions to stabilise economic conditions. As a result, these have impacted on the Financial Education segments of the Group. volatility and a How our audit addressed the key audit matter 1. Considered the implications of COVID-19 when obtaining an understanding of the Group and its environment, in light of its objectives, strategies and other business risks. 2. Discussed with management whether the impact of the COVID-19 has been incorporated into their risk assessment processes and how they have identified and assessed the significance of the business risks arising. 3. Evaluated the assessment of management as to whether risks from COVID-19 could be material. 4. Assessed the financial impact involving accounting estimates prepared by the management including significant assumptions used. 5. Considered the adequacy of the disclosures in the Financial Education Segment financial statements. 8VIC had shifted from offline trainings and programme services to online services in mid-March 2020 in Singapore and Malaysia. The offering of web-based financial education programmes and training have been expanded and community support was integrated fully within VI App to reach a wider audience and meet the evolving consumer habits. This temporary change in business operation had not significantly affect the financial performance of the financial education business during the financial year. 6. Considered the impact of the COVID-19 events after the reporting period if it requires adjustment to or disclosure in the financial report and whether the event impacts the appropriateness of the going concern basis of accounting. We found that the judgement applied, assessment made and method and assumptions used by the management were reasonable. We also found the disclosure in the financial statements to be adequate and sufficient. We considered the impact of COVID-19 to be a key audit matter in view that the Group is in an industry which is mainly affected by the COVID-19 namely, education sector. 26 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 8VIC Holdings Limited (continued) Other Information Management is responsible for other information. The other information comprises the information included in the annual report, but does not include the financial statements and our auditor’s report thereon. The annual report is expected to be made available to us after the date of the auditor’s report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. 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. 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. 27 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 8VIC Holdings Limited (continued) Auditor’s Responsibilities for the Audit of the Financial Statements (continued) 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 Company’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. 28 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 8VIC Holdings Limited (continued) Auditor’s Responsibilities for the Audit of the Financial Statements (continued) From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on Other Legal and Regulatory Requirements In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiary corporations incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act. The engagement partner on the audit resulting in this independent auditor’s report is Lim Yeong Seng. KLP LLP Public Accountants and Chartered Accountants Singapore, 29 May 2020 29 CONSOLIDATED STATEMENT OF FINANCIAL POSITION - GROUP As At 31 March 2020 SOFP Assets Non-current assets Property, plant and equipment Intangible assets Investments in associated companies Financial assets, at FVOCI Deferred tax assets Current assets Trade and other receivables Current tax assets Prepayment Financial assets, at FVPL Cash and cash equivalents Total assets Equity and liabilities Equity attributable to owners of the Company Share capital Accumulated losses Foreign currency translation reserve Other reserves Non-controlling interests Total equity Current liabilities Trade and other payables Unearned revenue Lease liabilities Provision for income tax Non-current liabilities Lease liabilities Deferred tax liabilities Group Note 2020 S$ 2019 S$ 4 5 7 8 16 9 8 10 11 12 13 14 15 16 16 17 1,572,875 439,744 - 7,443 264,331 2,284,393 1,629,839 91,960 133,980 402,305 7,433,590 9,691,674 521,566 - 147,818 8,219 178,865 856,468 1,221,093 132,355 164,523 181,542 4,702,031 6,401,544 11,976,067 7,258,012 12,895,103 (3,438,606) (61,801) (4,490,583) 4,904,113 243,255 5,147,368 1,648,235 3,845,802 1,146,938 116,150 6,757,125 67,574 4,000 71,574 12,895,103 (4,510,653) (66,857) (4,546,552) 3,771,041 303,138 4,074,179 1,247,801 1,721,306 18,567 174,302 3,161,976 17,857 4,000 21,857 Total liabilities 6,828,699 3,183,833 Total equity and liabilities 11,976,067 7,258,012 The accompanying notes form an integral part of these financial statements. 30 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 STATEMENT OF FINANCIAL POSITION - COMPANY As At 31 March 2020 Assets Non-current assets Investment in subsidiaries Current assets Trade and other receivables Prepayment Cash and cash equivalents Total assets Equity and liabilities Equity attributable to owners of the Company Share capital Accumulated losses Total equity Current liabilities Trade and other payables Unearned revenue Total liabilities Company Note 2020 S$ 2019 S$ 6 9 10 11 14 15 2,568,393 2,568,393 587,747 10,093 288,525 886,365 2,290,443 2,290,443 122,259 27,269 1,422,314 1,571,842 3,454,758 3,862,285 77,423,174 (74,075,327) 3,347,847 77,423,174 (73,618,732) 3,804,442 90,811 16,100 106,911 57,843 - 57,843 Total equity and liabilities 3,454,758 3,862,285 SOCI The accompanying notes form an integral part of these financial statements. 31 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the financial year ended 31 March 2020 Revenue Cost of sales and services Gross profit Other income Other items of expense Administrative expenses Marketing and other expenses Finance costs Impairment of goodwill Note 2020 S$ 2019 S$ 18 19 10,859,351 (2,957,453) 7,901,898 22,291,337 (9,998,631) 12,292,706 236,121 351,233 (3,699,332) (3,352,423) (81,574) - (7,655,304) (7,478,184) (2,402) (1,585,013) Share of results of associated companies (135,939) (252,182) Profit/(Loss) before tax Income tax expense Profit/(Loss) after tax 20 22 868,751 (89,330) 779,421 (4,329,146) (386,518) (4,715,664) Other comprehensive income/(loss): Items that may be reclassified subsequently to profit or loss Foreign currency translation Cumulative translation differences in respect of net assets of the subsidiary reclassified from equity to profit or loss upon disposal of a subsidiary Items that will not be reclassified subsequently to profit or loss Financial assets, at FVOCI - Fair value losses – equity investments Other comprehensive income/(loss), net of tax Total comprehensive income/(loss) for the year Total profit/(loss) after tax attributable to: Owners of the Company Non-controlling interests Total comprehensive income/(loss) attributable to: Owners of the Company Non-controlling interests 40,922 (29,609) - 40,922 (12,948) (42,557) (746) 40,176 819,597 1,072,047 (292,626) 779,421 1,076,357 (256,760) 819,597 - (42,557) (4,758,221) (4,867,345) 151,681 (4,715,664) (4,905,349) 147,128 (4,758,221) Earnings per share (cents per share) Basic Diluted 23 2.64 2.64 (11.57) (11.57) The accompanying notes form an integral part of these financial statements. 32 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the financial year ended 31 March 2020 SOCE Group Balance as at 1 April 2018 Loss for the year Foreign currency translation Cumulative translation differences in respect of net assets of the subsidiary reclassified from equity to profit or loss upon disposal of a subsidiary Total comprehensive (loss)/income for the year Contributions by and distributions to owners Dilution of subsidiary without change in control Disposal of subsidiaries (Note 6) Total transactions with owners in their capacity as owners Balance as at 31 March 2019 Accumulated profits/ (losses) S$ Foreign currency translation reserve S$ Share capital S$ Other reserves S$ Total equity to owners of the Company S$ Non- controlling interest S$ Total equity S$ 14,872,793 - - 356,692 (4,867,345) - (28,853) - (25,056) (4,533,629) - - 10,667,003 (4,867,345) (25,056) 569,900 151,681 (4,553) 11,236,903 (4,715,664) (29,609) - - - (4,867,345) (12,948) (38,004) - - (12,948) (4,905,349) - 147,128 (12,948) (4,758,221) - (1,977,690) - - - - (12,923) - (12,923) (1,977,690) 48,229 (462,119) 35,306 (2,439,809) (1,977,690) 12,895,103 - (4,510,653) - (66,857) (12,923) (4,546,552) (1,990,613) 3,771,041 (413,890) 303,138 (2,404,503) 4,074,179 The accompanying notes form an integral part of these financial statements. 33 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the financial year ended 31 March 2020 Group Balance as at 1 April 2019 Profit/(Loss) for the year Other comprehensive income/(loss), net of tax Total comprehensive income/(loss) for the year Contributions by and distributions to owners Dilution of non-controlling interest Acquisition of subsidiaries Total transactions with owners in their capacity as owners Balance as at 31 March 2020 Accumulated profits/ (losses) S$ Foreign currency translation reserve S$ Share capital S$ Other reserves S$ Total equity to owners of the Company S$ Non- controlling interest S$ Total equity S$ 12,895,103 - - - (4,510,653) 1,072,047 - 1,072,047 (66,857) - 5,056 5,056 (4,546,552) - (746) (746) 3,771,041 1,072,047 4,310 1,076,357 303,138 (292,626) 35,866 (256,760) 4,074,179 779,421 40,176 819,597 - - - - - - 56,715 - 56,715 - (64,195) 261,072 (7,480) 261,072 - 12,895,103 - (3,438,606) - (61,801) 56,715 (4,490,583) 56,715 4,904,113 196,877 243,255 253,592 5,147,368 The accompanying notes form an integral part of these financial statements. 34 STATEMENT OF CHANGES IN EQUITY For the financial year ended 31 March 2020 Note Share capital S$ Accumulated losses S$ Total equity S$ Company Balance as at 1 April 2018 Total comprehensive loss for the year Contributions by and distribution to owners Disposal of subsidiaries Total transactions with owners in their capacity as owners Balance as at 31 March 2019 79,400,864 - (46,304,895) (27,313,837) 33,095,969 (27,313,837) 11 (1,977,690) - (1,977,690) (1,977,690) 77,423,174 (27,313,837) (73,618,732) (29,291,527) 3,804,442 Total comprehensive loss for the year Balance as at 31 March 2020 - 77,423,174 (456,595) (74,075,327) (456,595) 3,347,847 The accompanying notes form an integral part of these financial statements. 35 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 CONSOLIDATED STATEMENT OF CASH FLOWS For the financial year ended 31 March 2020 SOCF Cash flows from operating activities Profit/(Loss) before income tax Adjustments for: Amortisation of prepayment Amortisation of software development expenditure Depreciation of property, plant and equipment Plant and equipment written off Finance cost Impairment of financial assets Impairment of non-financial assets Fair value loss in financial assets at FVPL Gain on disposal of an associate Impairment of goodwill Interest income Dividend income Share of results of associated company Unrealised exchange loss Operating cash flow before changes in working capital Working capital changes in: Inventories Trade and other receivables Prepayment Trade and other payables Unearned revenue Cash generated from/(used in) operating activities Interest income Dividend income Income tax paid Net cash generated from/(used in) operating activities Cash flows from investing activities Additions to property, plant and equipment Additions to software development expenditure Acquisition of subsidiaries, net of cash acquired Disposal of subsidiaries, net of cash outflow Disposal/(Investment) in associated companies Dilution of non-controlling interest Dilution of subsidiary without change in control Investment in financial assets at FVPL Loan to non-related party Withdrawal of fixed deposits Net cash generated from/(used in) investing activities Cash flows from financing activity Repayment of lease liabilities Net cash used in financing activity Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of financial year Effect of currency translation on cash and cash equivalents Cash and cash equivalents at the end of financial year (Note 10) 2020 S$ 2019 S$ 868,751 (4,329,146) - 97,967 1,694,801 - 81,574 74,635 - 4,392 (8,121) - (12,704) (6,511) 135,939 34,959 2,965,682 - (451,537) 45,936 132,933 1,408,402 4,101,416 12,704 6,511 (191,061) 3,929,570 (168,815) (188,059) 936,828 - 20,000 (7,481) - (226,169) (91,997) - 274,307 50,000 - 567,356 38,499 2,402 958,070 305,000 - - 1,585,013 (58,073) (6,674) 252,182 29,637 (605,734) (507,834) (279,447) 337,830 220,521 (206,416) (1,041,080) 58,073 6,674 (426,276) (1,402,609) (259,576) - - (3,108,243) (430,000) - 40,983 - - 1,311,280 (2,445,556) (1,474,008) (1,474,008) (20,888) (20,888) 2,729,869 4,702,031 1,690 7,433,590 (3,869,053) 8,569,179 1,905 4,702,031 The accompanying notes form an integral part of these financial statements. 36 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 These notes form an integral part and should be read in conjunction with the accompanying financial statements. 1. Corporate information 1.1 General 8VIC Holdings Limited (the “Company”) is a limited liability company incorporated and domiciled in Singapore and is listed on the Australian Securities Exchange (ASX). The registered office and principal place of business of the Company is located at 47 Scotts Road #03-03/04 Goldbell Towers, Singapore 228233. The principal activities of the Company are investment holding and management consultancy services. The immediate and ultimate holding company is 8I Holdings Limited, which is incorporated and domiciled in Singapore and is listed on the Australian Securities Exchange (ASX). The principal activities of the subsidiaries are disclosed in Note 6 to the financial statements. 2. Summary of significant accounting policies 2.1 Basis of preparation The consolidated financial statements of the Group and the statement of financial position and statement of changes in equity of the Company have been prepared in accordance with Financial Reporting Standards in Singapore (FRSs), under the historical cost convention, except as disclosed in the accounting policies below. The preparation of 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. The financial statements are presented in Singapore Dollars (S$). Interpretations and amendments to published standards effective in 2019 On 1 April 2019, 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 adoption of FRS 116 Leases: Adoption of FRS 116 Leases When the Group is the lessee Prior to the adoption of FRS 116, non-cancellable operating lease payments were not recognised as liabilities in the statement of financial position. These payments were recognised as rental expenses over the lease term on a straight-line basis. 37 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 2.1 Basis of preparation (continued) Interpretations and amendments to published standards effective in 2019 (continued) Adoption of FRS 116 Leases (continued) i) ii) On initial application of FRS 116, the Group has elected to apply the following practical expedients: For all contracts entered into before 1 April 2019 and that were previously identified as leases under FRS 17 Lease and INT FRS 104 Determining whether an Arrangement contains a Leases, the Group has not reassessed if such contracts contain leases under FRS 116; and On a lease-by-lease basis, the Group has: a) applied a single discount rate to a portfolio of leases with reasonably similar characteristics; b) relied on previous assessments on whether leases are onerous as an alternative to performing an impairment review; c) accounted for operating leases with a remaining lease term of less than 12 months as at 1 April 2019 as short-term leases; d) excluded initial direct costs in the measurement of the right-of-use (“ROU”) asset at the date of initial application; and e) used hindsight in determining the lease term where the contract contains options to extend or terminate the lease. There were no onerous contracts as at 1 April 2019. For leases previously classified as operating leases on 1 April 2019, the Group has applied the following transition provisions: i) On a lease-by-lease basis, the Group chose to measure its ROU assets at a carrying amount as if FRS 116 had been applied since the commencement of the lease but discounted using the incremental borrowing rate at 1 April 2019. ii) Recognised its lease liabilities by discounting the remaining lease payments as at 1 April 2019 using the incremental borrowing rate for each individual lease or, if applicable, the incremental borrowing rate for each portfolio of leases with reasonably similar characteristic. iii) The difference between the carrying amounts of the ROU assets and lease liabilities as at 1 April 2019 is not significant. Comparative information is not restated. iv) For leases previously classified as finance leases, the carrying amount of the leased asset and finance lease liability as at 1 April 2019 are determined as the carrying amount of the ROU assets and lease liabilities. The effects of adoption of FRS 116 on the Group’s financial statements as at 1 April 2019 are as follows: Property, plant and equipment Lease liabilities Increase S$ 2,497,157 2,497,157 38 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 2.1 Basis of preparation (continued) Interpretations and amendments to published standards effective in 2019 (continued) Adoption of FRS 116 Leases (continued) An explanation of the differences between the operating lease commitments previously disclosed in the Group’s financial statements as at 31 March 2019 and the lease liabilities recognised in the balance sheet as at 1 April 2019 are as follows: Operating lease commitment disclosed as at 31 March 2019 Add: Undisclosed operating lease commitment Less: Discounting effect using weighted average incremental borrowing rate of 5% Add: Finance lease liabilities recognised as at 31 March 2019 Lease liabilities recognised as at 1 April 2019 S$ 2,350,443 254,004 2,604,447 (107,290) 36,424 2,533,581 2.2 Revenue recognition Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. Revenue is recognised when the Group satisfies a performance obligation by transferring a promised good or service to the customer, which is when the customer obtains control of the good or service. A performance obligation may be satisfied at a point in time or over time. The amount of revenue recognised is the amount allocated to the satisfied performance obligation. (a) Rendering of services The Group provide program sales, events site rental income, digital production and advertising income. Revenue is recognised when the services have been performed and rendered. (b) Commission income Commission income is recognised when the corresponding service is provided. (c) Sale of goods The Group delivered the goods to locations specified by its customers and the customers have accepted the goods in accordance with the sales contract and the collectability of the related receivables is reasonably assured. Revenue is recognised when the goods are passed to the customers. (d) Programme fees This comprises of providing financial education and training services. Revenue is recognised when the training has been conducted. The Company will record contractual liabilities for advance payment made for the training. There is no change to timing of revenue recognition from FRS 115. (e) Interest income Interest income is recognised using the effective interest method. (f) 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. 39 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 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. Government grants relating to assets are deducted against the carrying amount of the assets. 2.4 Group accounting (a) Subsidiaries (i) Consolidation Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date on that control ceases. In preparing the consolidated financial statements, inter-companies transactions and balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment indicator of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Non-controlling interests comprise the portion of a subsidiary’s net results of operations and its net assets, which is attributable to the interests that are not owned directly or indirectly by the equity holders of the Company. They are shown separately in the consolidated statement of comprehensive income, statement of changes in equity, and consolidated statement of financial position. Total comprehensive income is attributed to the non-controlling interests based on their respective interests in a subsidiary, even if this results in the non-controlling interests having a deficit balance. The acquisition method of accounting is used to account for business combinations entered into by the Group. (ii) Acquisitions The consideration transferred for the acquisition of a subsidiary or business comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes any contingent consideration arrangement and any pre-existing equity interest in the subsidiary measured at their fair values at the acquisition date. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. 40 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 2.4 Group accounting (continued) (a) Subsidiaries (continued) (ii) Acquisitions (continued) On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date of acquisition either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. The excess of (a) the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the (b) fair value of the identifiable net assets acquired is recorded as goodwill. Please refer to the paragraph “Intangible assets – Goodwill on acquisitions” for the subsequent accounting policy on goodwill. (iii) Disposals When a change in the Group’s ownership interest in a subsidiary result in a loss of control over the subsidiary, the assets and liabilities of the subsidiary including any goodwill are derecognised. Amounts previously recognised in other comprehensive income in respect of that entity are also reclassified to profit or loss or transferred directly to retained earnings if required by a specific Standard. Any retained equity interest in the entity is remeasured at fair value. The difference between the carrying amount of the retained interest at the date when control is lost and its fair value is recognised in profit or loss. Please refer to the paragraph “Investments in subsidiaries and associated companies” for the accounting policy on investments in subsidiaries in the separate financial statements of the Company. (b) Transactions with non-controlling interests Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control over the subsidiary are accounted for as transactions with equity owners of the Company. Any difference between the change in the carrying amounts of the non-controlling interest and the fair value of the consideration paid or received is recognised within equity attributable to the equity holders of the Company. (c) Associated companies Associated companies are entities over which the Group has significant influence, but not control, generally accompanied by a shareholding giving rise to voting rights of 20% and above but not exceeding 50%. Investments in associated companies is accounted for in the consolidated financial statements using the equity method of accounting less impairment losses, if any. 41 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 2.4 Group accounting (continued) (c) Associated companies (continued) (i) Acquisitions Investments in associated companies is initially recognised at cost. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Goodwill on associated companies represents the excess of the cost of acquisition of the associated company over the Group’s share of the fair value of the identifiable net assets of the associated company and is included in the carrying amount of the investments. (ii) Equity method of accounting Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise Group’s share of its associated companies’ post-acquisition profits or losses of the investee in profit or loss and its share of movements in other comprehensive income of the investee’s other comprehensive income. Dividends received or receivable from the associated companies are recognised as a reduction of the carrying amount of the investments. When the Group’s share of losses in an associated company equals to or exceeds its interest in the associated company, the Group does not recognise further losses, unless it has legal or constructive obligations to make, or has made, payments on behalf of the associated company. If the associated company subsequently reports profits, the Group resumes recognising its share of those profits only after its share of the profits equals the share of losses not recognised. Unrealised gains on transactions between the Group and its associated companies are eliminated to the extent of the Group's interest in the associated companies. Unrealised losses are also eliminated unless the transactions provide evidence of impairment of the assets transferred. The accounting policies of associated companies is changed where necessary to ensure consistency with the accounting policies adopted by the Group. (iii) Disposals Investments in associated companies is derecognised when the Group loses significant influence. If the retained equity interest in the former associated company is a financial asset, the retained equity interest is measured at fair value. The difference between the carrying amount of the retained interest at the date when significant influence is lost, and its fair value and any proceeds on partial disposal, is recognised in profit or loss. Please refer to the paragraph “Investments in subsidiaries and associated companies” for the accounting policy on investments in associated companies and in the separate financial statements of the Company. 42 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 2.5 Property, plant and equipment (a) Measurement (i) (ii) Property, plant and equipment Property, plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses. 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. (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: Office premises Office equipment Furniture and fittings Motor vehicles Useful lives 1 to 3 years 1 to 3 years 3 years 5 years 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. (c) Subsequent expenditure 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 and (losses)”. 2.6 Intangible assets (a) Goodwill Goodwill on acquisitions of subsidiaries and businesses, represents the excess of (i) the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over (ii) the fair value of the identifiable net assets acquired. Goodwill on subsidiaries is recognised separately as intangible assets and carried at cost less accumulated impairment losses. Goodwill on acquisitions of associated companies represents the excess of the cost of the acquisition over the Group’s share of the fair value of the identifiable net assets acquired. Goodwill on associated companies is included in the carrying amount of the investments. 43 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 2.6 Intangible assets (continued) (a) Goodwill (continued) Gains and losses on the disposal of subsidiaries and associated companies include the carrying amount of goodwill relating to the entity sold. (b) Development of software Research costs are recognised as an expense when incurred. Costs directly attributable to the development of computer software 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. Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It has a finite useful life and is amortised over the period of expected future benefit (2 years) on a straight-line basis. Amortisation is recorded in cost of sales. During the period of development, the asset is tested for impairment annually. 2.7 Investments in subsidiaries and associated companies Investments in subsidiaries and associated companies are carried at cost less accumulated impairment losses in the Company’s statement of financial position. On disposal of such investments, the difference between disposal proceeds and the carrying amounts of the investments are recognised in profit or loss. 2.8 Impairment of non-financial assets (a) Goodwill Goodwill recognised separately as an intangible asset is tested for impairment annually and whenever there is indication that the goodwill may be impaired. For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash- generating-units (“CGU”) expected to benefit from synergies arising from the business combination. An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds the recoverable amount of the CGU. The recoverable amount of a CGU is the higher of the CGU’s fair value less cost to sell and value-in-use. The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU. An impairment loss on goodwill is recognised as an expense and is not reversed in a subsequent period. 44 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 2.8 Impairment of non-financial assets (continued) (b) Intangible assets Property, plant and equipment Right-of-use assets Investments in subsidiaries and associated companies 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. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash inflows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the CGU to which the asset belongs. If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. The difference between the carrying amount and recoverable amount is recognised as an impairment loss in profit or loss. An impairment loss for an asset other than goodwill is reversed only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss, 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. 2.9 Financial assets (a) Classification and measurement The Group classifies its financial assets in the following measurement categories: • Amortised cost; • Fair value through other comprehensive income (FVOCI); and • Fair value through profit or loss (FVPL). The classification depends on the Group’s business model for managing the financial assets as well as the contractual terms of the cash flows of the financial asset. The Group reclassifies debt investments when and only when its business model for managing those assets changes. 45 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 2.9 Financial assets (continued) (a) Classification and measurement (continued) At initial recognition At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss. At subsequent measurement (i) Debt instruments Debt instruments mainly comprise of cash and cash equivalents, trade and other receivables, listed and unlisted debt securities. There are three subsequent measurement categories, depending on the Group’s business model for managing the asset and the contractual cash flow characteristics of the asset: • Amortised cost: Debt instruments that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the asset is derecognised or impaired. Interest income from these financial assets is included in finance income using the effective interest rate method. • • FVOCI: Debt instruments that are held for collection of contractual cash flows and for sale, and where the assets’ cash flows represent solely payments of principal and interest, are classified as FVOCI. Movements in fair values are recognised in Other Comprehensive Income (OCI) and accumulated in fair value reserve, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses, which are recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and presented in “other gains/(losses)”. Interest income from these financial assets is recognised using the effective interest rate method and presented in “interest income”. FVPL: Debt instruments that are held for trading as well as those that do not meet the criteria for classification as amortised cost or FVOCI are classified as FVPL. Movement in fair values and interest income that is not part of a hedging relationship is recognised in profit or loss in the period in which it arises and presented in “other gains/(losses)”. (ii) Equity instruments The Group subsequently measures all its equity investments at their fair values. Equity instruments are classified as FVPL with movements in their fair values recognised in profit or loss in the period in which the changes arise and presented in “other gains/ (losses)”, except where the Group has elected to classify the investments as FVOCI. Movements in fair values of investments classified as FVOCI are presented as “fair value gains and losses” in Other Comprehensive Income. Dividends from equity investments are recognised in profit or loss as “dividend income”. 46 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 2.9 Financial assets (continued) (b) Expected credit losses The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at FVPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is recognised for credit losses expected over the remaining life of the exposure, irrespective of timing of the default (a lifetime ECL). For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment which could affect debtors’ ability to pay. For debt instruments at FVOCI, the Group applies the low credit risk simplification. At every reporting date, the Group evaluates whether the debt instrument is considered to have low credit risk using all reasonable and supportable information that is available without undue cost or effort. In making that evaluation, the Company reassesses the internal credit rating of the debt instrument. In addition, the Company considers that there has been a significant increase in credit risk when the contractual payments are more than 90 days past due. The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. (c) Impairment The Group assesses on a forward looking basis the expected credit losses associated with its debt financial assets carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the Group applies the simplified approach permitted by the FRS 109, which requires expected lifetime losses to be recognised from initial recognition of the receivables. (d) Recognition and derecognition Regular way purchases and sales of financial assets are recognised on trade date – the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. 47 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 2.9 Financial assets (continued) (d) Recognition and derecognition (continued) On disposal of a debt instrument, the difference between the carrying amount and the sale proceeds is recognised in profit or loss. Any amount previously recognised in other comprehensive income relating to that asset is reclassified to profit or loss. On disposal of an equity investment, the difference between the carrying amount and sales proceed is recognised in profit or loss if there was no election made to recognise fair value changes in other comprehensive income. If there was an election made, any difference between the carrying amount and sales proceed amount would be recognised in other comprehensive income and transferred to retained profits along with the amount previously recognised in other comprehensive income relating to that asset. 2.10 Offsetting of financial instruments Financial assets and liabilities are offset and the net amount reported in the consolidated statement of financial position when there is a legally enforceable right to offset and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. 2.11 Trade and other payables Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. They are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). Otherwise, they are presented as noncurrent liabilities. Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using the effective interest method. 2.12 Fair value estimation of financial assets and liabilities The fair values of financial instruments traded in active markets (such as exchange-traded and over-the- counter securities and derivatives) are based on quoted market prices at the reporting date. The quoted market prices used for financial assets are the current bid prices; the appropriate quoted market prices used for financial liabilities are the current asking prices. The fair values of financial instruments that are not traded in an active market are determined by using valuation techniques. The Group uses a variety of methods and makes assumptions based on market conditions that are existing at each reporting date. Where appropriate, quoted market prices or dealer quotes for similar instruments are used. Valuation techniques, such as discounted cash flow analysis, are also used to determine the fair values of the financial instruments. 48 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 2.13 Leases The accounting policy for lease before 1 April 2019 are as follows: (a) When the Group is the lessee The Group leases motor vehicles under finance leases and office premises and event spaces under operating leases from non-related parties. • Lessee - Finance leases Leases where the Group assumes substantially all risks and rewards incidental to ownership of the leased assets are classified as finance leases. The leased assets and the corresponding lease liabilities (net of finance charges) under finance leases are recognised on the consolidated statement of financial position as property, plant and equipment and borrowings respectively, at the inception of the leases based on the lower of the fair value of the leased assets and the present value of the minimum lease payments. Each lease payment is apportioned between the finance expense and the reduction of the outstanding lease liability. The finance expense is recognised in profit or loss on a basis that reflects a constant periodic rate of interest on the finance lease liability. • Lessee - Operating leases Leases where substantially all risks and rewards incidental to ownership are retained by the lessors are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessors) are recognised in profit or loss on a straight-line basis over the period of the lease. Contingent rents are recognised as an expense in profit or loss when incurred. (b) When the Group is the lessor: The Group leases event rental space under operating leases to non-related parties. • Lessor - Operating leases Leases of event rental spaces where the Group retains substantially all risks and rewards incidental to ownership are classified as operating leases. Rental income from operating leases (net of any incentives given to the lessees) is recognised in profit or loss on a straight-line basis over the lease term. Initial direct costs incurred by the Group in negotiating and arranging operating leases are added to the carrying amount of the leased assets and recognised as an expense in profit or loss over the lease term on the same basis as the lease income. Contingent rents are recognised as income in profit or loss when earned. 49 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 2.13 Leases (continued) The accounting policy for leases from 1 April 2019 are as follows: (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. Reassessment is only required when the terms and 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 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. These right-of-use asset is subsequently depreciated using the straight-line method from the 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. 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 determined, the Group shall use its incremental borrowing rate. Lease payments include the following: - Fixed payment (including in-substance fixed payments), less any lease incentives receivables; - 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 interest method. Lease liability shall be remeasured when: - There is a change in future lease payments arising from changes in an index or rate; - 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. 50 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 2.13 Leases (continued) (a) When the Group is the lessee (continued) • 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. (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. 2.14 Income taxes Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted at the end of reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax authorities. 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. 51 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 2.14 Income taxes (continued) 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. Current and deferred income taxes are recognised as income or expense in profit or loss, except to the extent that the tax arises from a business combination or a transaction which is recognised directly in equity. Deferred tax arising from a business combination is adjusted against goodwill on acquisition. The Group accounts for investment tax credits (for example, productivity and innovative credit) similar to accounting for other tax credits where deferred tax asset is recognised for unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax credit can be utilised. 2.15 Provisions Provisions are measured at the present value of the expenditure expected to be required to settle the obligation using a pre-tax discount rate that reflects the current market assessment of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised in the statement of comprehensive income as finance expense. Changes in the estimated timing or amount of the expenditure or discount rate are recognised in profit or loss when the changes arise. 2.16 Employee compensation Employee benefits are recognised as an expense, unless the cost qualifies to be capitalised as an asset. Defined contribution plans Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as the Central Provident Fund on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. Short-term compensated absences Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the reporting date. Employee share plan The Group maintained an incentive securities plan pursuant to which the Company can offer shares to eligible employees to subscribe at a discounted price. The discounted value, based on the difference between the issue price and the market price on the date of issuance, is recognised as expense in profit or loss. 52 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 2.17 Currency translation (a) Functional and presentation currency Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements are presented in Singapore Dollars, which is the functional currency of the Company. (b) Transactions and balances Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates at the dates of the transactions. Currency exchange differences resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the reporting date are recognised in profit or loss. (c) Translation of Group entities’ financial statements The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (i) (ii) (iii) assets and liabilities are translated at the closing exchange rates at the reporting date; income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the transactions); and all resulting currency translation differences are recognised in other comprehensive income and accumulated in the currency translation reserve. These currency translation differences are reclassified to profit or loss on disposal or partial disposal of the entity giving rise to such reserve. Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and translated at the closing rates at the reporting date. 2.18 Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the executive committee whose members are responsible for allocating resources and assessing performance of the operating segments. 2.19 Cash and cash equivalents For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents include cash at banks, cash on hand and deposits with financial institutions which are subject to an insignificant risk of change in value. 53 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Summary of significant accounting policies (continued) 2.20 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. 3. Critical accounting estimates, assumptions and judgments Estimates, assumptions and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. 3.1 Critical judgements in applying the entity’s accounting policies (a) Provision for expected credit losses of trade receivables The Group uses a provision matrix to calculate ECLs for trade receivables. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns. The provision matrix is initially based on the Group’s historical observed default rates. The Group will calibrate the matrix to adjust historical credit loss experience with forward-looking information. At every reporting date, historical default rates are updated and changes in the forward-looking estimates are analysed. The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future. The information about the ECLs on the Group’s trade receivables is disclosed in Note 26. The carrying amount of the Group’s trade receivables as at 31 March 2020 was S$318,298 (2019: S$313,208). (b) Deferred tax assets Deferred tax assets in respect of current and prior period accumulated tax losses are not (unless related to overseas jurisdictions) recognised at balance sheet date as management has assessed that it is not probable that sufficient taxable surplus will be available to allow all or part of the deferred income tax asset to be utilised. (c) Useful lives of property, plant and equipment The useful life of an item of property, plant and equipment is estimated at the time the asset is acquired and is based on historical experience with similar assets and takes into account anticipated technological or other changes. If changes occur more rapidly than anticipated or the asset experiences unexpected level of wear and tear, the useful life will be adjusted accordingly. The carrying amounts of the Group’s property, plant and equipment as at 31 March 2020 was S$1,572,875 (2019: S$521,566). 54 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 3. Critical accounting estimates, assumptions and judgments (continued) 3.1 Critical judgements in applying the entity’s accounting policies (continued) (d) Intangible assets The Group estimates the useful lives to amortise intangible assets 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 intangible assets are reviewed periodically, taking 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 intangible assets would increase the recorded expenses and decrease the non-current assets. The cost of intangible asset is amortised on a straight-line basis over the assets' useful lives. Directors estimate the useful lives of these intangible assets to be 2 years. (e) Determination of lease term of contracts with extension options As at 31 March 2020, the Group’s lease liabilities, which are measured with reference to an estimate of the lease term, amounted to S$1,214,512, 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 2020, 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. (f) 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 lease. The Group estimates the incremental borrowing rate using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates. 55 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 4. Property, plant and equipment Group Cost At 1 April 2018 Additions Disposals Written-off Disposal of subsidiaries Exchange differences At 31 March 2019 Adoption of FRS116 Additions Acquisition of subsidiaries Exchange differences At 31 March 2020 Accumulated depreciation At 1 April 2018 Depreciation Disposal Written-off Disposal of subsidiaries Exchange differences At 31 March 2019 Depreciation Exchange differences At 31 March 2020 Net carrying amount At 31 March 2019 At 31 March 2020 Furniture and fittings S$ Office equipment S$ Motor vehicles S$ 1,370,881 100,832 (10,893) (46,896) (241,735) (4,877) 1,167,312 - 1,167,312 90,607 1,320 16,598 1,275,837 538,908 424,296 (908) (22,284) (176,258) (9,063) 754,691 235,604 13,549 1,003,844 532,382 158,744 (11,685) (47,358) (252,167) 3,066 382,982 - 382,982 78,208 1,624 9,880 472,694 293,843 122,205 (9,980) (33,471) (60,369) (1,746) 310,482 57,357 8,871 376,710 105,851 - - - - (1,723) 104,128 - 104,128 - - (345) 103,783 47,633 20,855 - - - (805) 67,683 20,649 (116) 88,216 Office premises S$ - - - - - - - 2,497,157 2,497,157 70,928 - 8,693 2,576,778 - - - - - - - 1,381,191 6,256 1,387,447 Total S$ 2,009,114 259,576 (22,578) (94,254) (493,902) (3,534) 1,654,422 2,497,157 4,151,579 239,743 2,944 34,826 4,429,092 880,384 567,356 (10,888) (55,755) (236,627) (11,614) 1,132,856 1,694,801 28,560 2,856,217 412,621 271,993 72,500 95,984 36,445 15,567 - 521,566 1,189,331 1,572,875 (a) The carrying amounts of motor vehicles held under finance leases are S$15,567 (2019: S$36,445) at the end of reporting period. The hire purchase liabilities had been fully settled at end of financial year. (b) Right-of-use assets acquired under leasing arrangements are presented as “office premises”. 56 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 4. Property, plant and equipment (continued) Company Cost At 1 April 2018 Additions At 31 March 2019 and 2020 Accumulated depreciation At 1 April 2018 Depreciation Written off At 31 March 2019 and 2020 Net carrying amount At 31 March 2019 and 2020 5. Intangible assets Compositions: Goodwill (a) Trademark (b) Software Development Expenditure (c) (a) Goodwill Cost Beginning of financial year Addition from acquisition of subsidiaries Disposal of Digital and Marketing businesses Impairment End of financial year Furniture and fittings S$ Office equipment S$ Total S$ 2,497 (2,497) - 18,454 (18,454) - 20,951 (20,951) - 902 416 (1,318) - 12,416 3,077 (15,493) - 13,318 3,493 (16,811) - - - - Group 2020 S$ 2019 S$ 9,305 - 430,439 439,744 - - - - Group 2020 S$ 2019 S$ - 9,305 - - 9,305 2,148,994 - (563,981) (1,585,013) - In previous financial year, an impairment loss was recognised to the carrying amount of goodwill based on management assessment. The impairment loss of S$Nil (2019: S$1,585,013) has been recognised in consolidated statement of comprehensive income. (b) Trademark Cost Beginning of financial year Additions Disposal of Digital and Marketing businesses End of financial year Group 2020 S$ 2019 S$ - - - - 47,287 1,849 (49,136) - Trademarks relate to the brands that the Group has registered in Singapore. 57 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 5. Intangible assets (continued) (c) Software Development Expenditure Cost Beginning of financial year Acquisition of subsidiaries Additions End of financial year Accumulated amortisation Beginning of financial year Amortisation charged End of financial year Carrying amount Group 2020 S$ 2019 S$ - 340,347 188,059 528,406 - 97,967 97,967 430,439 (d) Amortisation expense included in the statement of comprehensive income is analysed as follows: - - - - - - - - - Group 2020 S$ 2019 S$ 97,967 Company 2020 S$ 2019 S$ 29,140,848 277,950 (26,850,405) 2,568,393 31,883,429 (2,742,581) (26,850,405) 2,290,443 Administrative expenses 6. Investment in subsidiaries Shares, at cost Addition/(Disposal) of subsidiaries Less: Allowance for impairment losses In previous financial year, the Company had provided an impairment loss of S$26,850,405 which was to write down the carrying value of a subsidiary to its recoverable amount as the investment no longer represented by net assets of the investee. 58 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 Proportion of ownership interest 2020 2019 % % 100 100 51 44.4* 100 100 70 90.6 100 100 60 100 70 70 90 100 65 - NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 6. a) Investment in subsidiaries (continued) Composition of the Group The Group has the following investment in subsidiaries. Name Held by the Company 8VI Global Pte. Ltd. (a) (f.k.a 8VIC Global Pte. Limited) Principal place of business Principal activities Singapore Conducting business courses 8Bit Global Pte. Ltd. (a) Singapore Computer programming and data processing and hosting Held through 8VI Global Pte. Ltd. 8VIC Singapore Pte. Ltd. (a) 8VIC Malaysia Sdn. Bhd. (b) 8VIC Taiwan Co., Ltd. (d) 8VIC (Thailand) Co., Ltd. (d) 8VIC (Australia) Pty Ltd (d) Value Investing College Pte. Ltd. (d) 8VI China Pte. Ltd. (a) (f.k.a 8IH China Pte. Ltd.) Held through 8VIC Malaysia Sdn Bhd JooY Media Sdn Bhd (c) Held through 8VI China Pte. Ltd. 8IH China (Shanghai) Co. Ltd (d) Singapore Dormant Conducting business courses Malaysia Conducting business courses Taiwan Dormant Thailand Australia Dormant Singapore Dormant Singapore Investment holdings Malaysia Agency and media 70 70 People’s Republic of China Business and management consultancy services 65 - (a) (b) (c) (d) * Audited by Group auditor, KLP LLP Audited by Crowe Malaysia PLT Audited by CWC & ENG PLT No statutory audit required The Group holds 44.4% ownership in 8Bit Global Pte. Ltd. in 2019 and account for it as an associated company (Note 7). Significant restrictions Cash and short-term deposits of S$130,608 (2019: not applicable) are held in the People’s Republic of China and are subject to local exchange control regulations. These local exchange control regulations provide for restrictions on exporting capital from the country, other than through normal dividends. b) Interest in subsidiaries with material non-controlling interest (NCI) The Group has the following subsidiary that has NCI that are material to the Group. Principal place of business Proportion of ownership interest held by non- controlling interest Name 8Bit Global Pte. Ltd. Singapore 49% 59 Profit allocated to NCI during the reporting period S$ 65,763 Accumulated NCI at the end of reporting period S$ 192,348 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 6. c) Investment in subsidiaries (continued) Summarised financial information about subsidiary with material NCI Summarised financial information including goodwill on acquisition and consolidation adjustments but before intercompany eliminations of subsidiaries with material non-controlling interests, from date of acquisition, are as follows: Summarised statement of financial position Subsidiary with material NCI 2020 S$ 2019 S$ Current Assets Liabilities Net current assets Net assets Summarised statement of comprehensive income Revenue Loss before tax Income tax expense Total comprehensive expense for the year Other summarised information Net cash flows from operating activities Net cash flows from investing activities Net cash flows from financing activities 1,099,951 (1,137,843) (37,892) 392,546 539,972 (134,209) - (134,209) 56,568 (188,059) 500,000 - - - - - - - - - - - 60 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 6. Investment in subsidiaries (continued) d) Disposal of subsidiaries On 1 October 2018, the Company completed the sale of four of its subsidiaries Digimatic Media Private Limited, Digimatic Creatives Pte. Ltd., WEWE Media Group Pte. Ltd. and Webbynomics Pte. Ltd. (together, “Digital and Marketing Businesses” or “Disposal Group”) for a consideration of 3,031,974 Company’s shares at A$0.66 per share (the “Consideration Share”). Carrying amounts of assets and liabilities disposed Assets Cash and cash equivalents Trade and other receivables Inventories Plant and equipment Financial assets, at FVOCI Liabilities Trade and other payables Current income tax liabilities Contractual liabilities Deferred income tax liabilities Carrying value of net assets Effect of the disposal of Disposal Group on cash flow: Disposal Group S$ 3,108,243 2,139,986 962,557 257,275 100,000 6,568,061 2,337,036 82,724 1,600,276 89,591 4,109,627 2,458,434 2019 S$ Consideration for 3,031,974 Company’s shares in the form of share buy back (a) 1,977,690 Carrying amount of assets and liabilities prior to disposal (b) Less: Non-controlling interests Less: Foreign currency translation reserve for Disposal Group Carrying amount of assets and liabilities derecognised (c) Impairment loss between consideration and carrying amount of tangible assets and liabilities derecognised (d=a-c) Net assets disposed of (per above) (e=b-d) Total loss on disposal: Impairment loss between consideration and carrying amount of tangible assets and liabilities derecognised (per above) (d=a-c) Goodwill derecognised (Note 5) (f) Total loss upon disposal (g=d+f) Cash and cash equivalents in Disposal Group disposed of Net cash outflow on disposal 2,777,621 (462,119) (18,625) 2,296,877 (319,187) 2,458,434 (319,187) (563,981) (883,168) (3,108,243) (3,108,243) 61 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 6. Investment in subsidiaries (continued) e) Acquisition of subsidiaries On 1 November 2019, the Company acquired 44.4% of investment in 8Bit Global Pte. Ltd. (previously an associated company, “8BG”) from its subsidiary, 8VI Global Pte. Ltd. On the same date, 8BG has capital injection of S$500,000, of which the Company has injected S$257,950, which resulted in gain of control with total equity interest of 51%, hence 8BG has changed from associated company to subsidiary. On 31 March 2020, the Group’s subsidiary company, 8VI Global Pte Ltd. acquired 65% equity interest in 8VI China Pte. Ltd. from its holding company, 8I Holdings Limited. The fair value of the identifiable assets and liabilities of acquired entities as at date of acquisition were: Property, plant and equipment Software development expenditure Trade and other receivables Prepayment Cash and cash equivalents Trade and other payables Unearned revenue Total identifiable net assets at fair value Less: Non-controlling interest Goodwill from business acquisition Consideration transferred Effects on cash flows Cash paid (as above) Cash and cash equivalents in subsidiary acquired Cash inflow on acquisition Fair value recognised on acquisition S$ 2,944 340,347 27,355 15,396 1,220,278 1,606,320 (355,011) (716,092) (1,071,103) 535,217 (261,072) 9,305 283,450 (283,450) 1,220,278 936,828 Revenue and profit contribution The acquired businesses contributed revenue of S$539,972 and net loss of S$134,209 to the Group since date of acquisition till end of financial year. Had the businesses been acquired from 1 April 2019, consolidated revenue and consolidated loss for the year ended 31 March 2020 would have been S$1,462,421 and S$718,115. 62 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 7. Investment in associated companies 8Bit Global Pte. Ltd. At beginning of financial year Investment in associated companies Share of results of associated companies Impairment loss Disposal of associated company At end of financial year Group 2020 S$ 2019 S$ - 147,818 147,818 - (135,939) - (11,879) - - 430,000 (252,182) (30,000) - 147,818 Set out below is the associated company of the Group as at 31 March 2020, which, in the opinion of the directors, is material to the Group. The associated company as listed below have share capital consisting solely of ordinary shares, which is held directly by the Group; the country of incorporation is also its principal place of business. Name of entity Held through 8VI Global Pte. Ltd. 8Bit Global Pte. Ltd. Learnpod Pte. Ltd. Place of business/ country of incorporation % of ownership interest 2020 2019 Singapore Singapore 51.0%* 30.0% 44.4% 30.0% * The Group holds 51% ownership in 8Bit Global Pte. Ltd. in FY2020 and account for it as a subsidiary (Note 6). 8Bit Global Pte. Ltd. (“8BG”) is principally involved in computer programming and data processing and hosting. There are no contingent liabilities relating to the Group’s interest in the associated company. The Group had injected more capital into the associated company which is now a subsidiary of the Group (Note 6(e)). Set out below is the summarised financial information for 8BG. Summarised statement of financial position Current assets Includes: - Cash and cash equivalents Current liabilities Includes: - Financial liabilities (excluding trade payables) Non-current assets Net assets 8BG As at 31 March 2020 S$ - - - - - - 2019 S$ 479,332 289,972 (451,045) (51,660) 304,637 332,924 63 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 7. Investment in associated companies (continued) Summarised statement of comprehensive income Revenue and other income Expenses Includes: - Amortisation Loss before tax Income tax credit Loss after tax 8BG April 2019 – Oct 2019 S$ Aug 2018 – Mar 2019 S$ 416,529 310,242 (722,698) (877,875) (20,014) (101,546) (306,169) (567,633) - 1,557 (306,169) (566,076) The information above reflects the amounts presented in the financial statements of the associated company (and not the Group’s share of those amounts). Reconciliation of summarised financial information Reconciliation of the summarised financial information presented, to the carrying amount of the Group’s interest in the associated company, is as follows: At beginning of financial year/date of acquisition Loss for the period At date of disposal/end of financial year 8BG April 2019 – Oct 2019 S$ Aug 2018 – Mar 2019 S$ 332,924 (306,169) 26,755 856,216 (523,292) 332,924 Carrying value - Interest in associated company (44.4%) - 147,818 8. Financial assets at FVPL and at FVOCI Group Company 2020 S$ 2019 S$ 2020 S$ 2019 S$ Current – listed quoted equity securities Financial assets, at FVPL 402,305 181,542 - Non-current – listed quoted equity securities Financial assets, at FVOCI 7,443 8,219 - 409,748 189,761 - - - - 64 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 9. Trade and other receivables Group Company 2020 S$ 2019 S$ 2020 S$ Trade receivables - third parties Less: Allowance for credit losses (Note 26(b)) Trade receivables (net) Other receivables Amount due from subsidiaries Deposits GST receivables 455,835 390,275 (137,537) 318,298 339,006 - 926,883 45,652 1,629,839 (77,067) 313,208 191,925 - 715,960 - 1,221,093 - - - 40,671 547,076 - - 587,747 2019 S$ 12,000 - 12,000 24,571 85,688 - - 122,259 Trade receivables are unsecured, non-interest bearing and are generally on 7 to 30 days terms (2019: 7 to 30 days). Included in current deposits is a banker’s guarantee of S$190,000 (2019: S$190,000) as required by Global Payments Asia Pacific (Hong Kong Holding) Limited in order to provide services in accordance to the merchant agreement. Related party balances Amount due from subsidiaries are non-trade, unsecured, interest-free and with no fixed terms of repayment. 10. Cash and cash equivalents Cash on hand Cash at banks Fixed deposits Group Company 2020 S$ 45,814 4,377,776 3,010,000 7,433,590 2019 S$ 5,306 2,954,525 1,742,200 4,702,031 2020 S$ - 288,525 - 288,525 2019 S$ - 1,422,314 - 1,422,314 Cash at banks earns interest at floating rates based on daily bank deposit rates. Fixed deposit had maturity of one to three months and had a weighted average effective interest rates of 1.42% (2019: 0.20%) per annum of the Group. 65 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 11. Share capital Group Issued and fully paid ordinary shares At beginning of financial year Share buy back from disposal of Digital and Marketing businesses (2) At end of financial year Company Issued and fully paid ordinary shares At beginning of financial year Share buy back from disposal of Digital and Marketing businesses (2) At end of financial year 2020 2019 No. of shares(1) S$ No. of shares(1) S$ 40,545,626 12,895,103 43,577,600 14,872,793 - 40,545,626 - 12,895,103 (3,031,974) 40,545,626 (1,977,690) 12,895,103 40,545,626 77,423,174 43,577,600 79,400,864 - 40,545,626 - 77,423,174 (3,031,974) 40,545,626 (1,977,690) 77,423,174 The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions. The ordinary shares have no par value. (1) The equity structure (i.e. the number and types of equity instruments issued) reflect the equity structure of the Company, being the legal parent, including the equity instruments issued by the Company to effect the reverse acquisition. (2) On 1 October 2018, the Company acquired 3,031,974 shares through disposal of subsidiaries. The total fair value of the acquired shares was S$1,977,690 and this was presented as share buy back from another shareholders. 12. Foreign currency translation reserve The foreign currency translation reserve represents exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. 13. Other reserves Other reserves comprise of premium paid on acquisition of 49% non-controlling interest in 8VIC Singapore Pte. Ltd. during the financial year ended 31 March 2017. 66 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 14. Trade and other payables Group Company 2020 S$ 2019 S$ 2020 S$ 2019 S$ to holding to related 199,247 283,448 687,474 247,422 306,221 478,792 5,561 - 81,393 - - 3,857 301,730 176,336 1,648,235 172,844 42,522 1,247,801 - - 90,811 8,383 - 49,460 - - - 57,843 Trade payables - third parties Other payables Accruals Amount company Amount companies GST payable due due Trade payables are non-interest bearing and are generally payable based on agreed terms between the parties. Amount due to holding company and related companies are non-trade, unsecured, interest-free and with no fixed terms of repayment. 15. Unearned revenue Advances from customers Deferred grant income Group Company 2020 S$ 3,696,702 149,100 3,845,802 2019 S$ 1,721,306 - 1,721,306 2020 S$ 2019 S$ - 16,100 16,100 - - - Advances from customers represent amount received from customers but not yet recognised to the profit or loss as service has yet to be rendered as at reporting date. 16. Lease liabilities Current Finance lease liabilities (i) Lease liabilities (ii) Non-current Finance lease liabilities (i) Lease liabilities (ii) Group 2020 S$ 2019 S$ - 1,146,938 1,146,938 - 67,574 67,574 18,567 - 18,567 17,857 - 17,857 Total 1,214,512 36,424 67 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 16. Lease liabilities (continued) (i) Finance lease liabilities Minimum lease payments due - Not later than one year - Between one and five years Less: Future finance charges Present value of finance lease liabilities Group 2020 S$ 2019 S$ - - - - - 19,988 18,304 38,292 (1,868) 36,424 As at 31 March 2019, the Group leases motor vehicles from non-related parties under finance leases. Finance lease liabilities were reclassified to lease liabilities on 1 April 2019 arising from the adoption of FRS 116.The finance lease liabilities had been fully settled as at end of 31 March 2020. (ii) Lease liabilities - The Group as a lessee 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 2020 S$ 1 April 2019 S$ Office premises 1,189,331 2,497,157 (b) Depreciation charged during the financial year 2020 S$ 1,381,191 80,429 Office premises (c) Interest expense Interest expense on lease liabilities (d) There is no lease expense not capitalised in lease liabilities. (e) Total income from subleasing ROU assets in 2020 was S$154,783. (f) Total cash outflow for all the office leases in 2020 was S$1,436,440. (g) Addition of ROU assets during the financial year 2020 was S$70,928. 68 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 16. Lease liabilities (continued) (ii) Lease liabilities - The Group as a lessee (continued) (h) Reconciliation of lease liabilities arising from financing activities: Beginning of financial year Principal and interest payments Non-cash changes - Adoption of FRS 116 - Addition during the year - Interest expense - Foreign exchange movement End of financial year 2020 S$ 2019 S$ 36,424 (1,474,008) 54,910 (20,888) 2,497,157 70,928 81,574 2,437 1,214,512 - - 2,402 - 36,424 17. Deferred income taxes 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 taxation authority. The amounts, determined after appropriate offsetting, are shown on the balance sheet as follows: Group 2020 S$ 2019 S$ Company 2020 S$ 2019 S$ Deferred tax assets: - Accelerated tax depreciation - Unearned revenue Deferred tax liabilities: - Accelerated tax depreciation Net deferred tax assets: 2,373 261,958 264,331 (4,000) 260,331 (4,422) 183,287 178,865 (4,000) 174,865 - - - - - The movement in net deferred income tax (assets)/liabilities is as follows: Group 2020 S$ 2019 S$ Company 2020 S$ 2019 S$ Beginning of financial year Tax (credited)/charged to profit or loss Disposal of subsidiaries Currency translation differences End of financial year (174,865) (123,415) (86,058) - 592 (260,331) 34,606 (89,591) 3,535 (174,865) - - - - - - - - - - - - - - - The Group has unrecognised tax losses of S$2,739,695 (2019: S$2,625,760) and capital allowances of S$Nil (2019: S$147,067) at the balance sheet date which can be carried forward and used to offset against future taxable income subject to meeting certain statutory requirements by those companies with unrecognised tax losses and capital allowances in their respective countries of incorporation. The tax losses and capital allowances have no expiry date. 69 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 18. Revenue Type of goods or services Rendering of services Sale of goods Commission income Programme fees Timing of transfer of goods or services At a point of time Over time 19. Other income Dividend income Fair value loss on financial assets at FVPL Foreign exchange differences (net) Gain on disposal of associated company Interest income PIC and other government grants Rental income Miscellaneous income Group 2020 S$ 2019 S$ 634,069 - - 10,225,282 10,859,351 1,177,481 2,466,802 2,338,728 16,308,326 22,291,337 10,319,379 539,972 10,859,351 22,291,337 - 22,291,337 Group 2020 S$ 6,511 (4,392) - 8,121 12,704 44,915 154,783 13,479 236,121 2019 S$ 6,674 - 59,426 - 58,073 115,250 97,215 14,595 351,233 70 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 20. Profit/(Loss) before tax The following items have been included in arriving at profit/(loss) before tax: Group Advertising fee Agency cost Amortisation of software development expenditure Amortisation of prepayment Audit fee: - Auditors of the Company - Other auditors Cost of goods sold - Ecommerce Depreciation of property, plant and equipment Foreign exchange differences (net) Impairment of financial assets Impairment of non-financial assets IT expenses Marketing expenses Merchant charges Office expenses Online marketing expenses Other COS Professional fees Program costs Rental Speakers fees Software expenses Travelling expenses Employee benefits expense (Note 21) 21. Employee benefits expense Employee benefits expenses (including directors) Salaries, fees and bonus CPF Contributions Commissions and other benefits 2020 S$ - 59,370 97,967 - 56,750 10,770 - 1,694,801 4,218 74,635 - 185,601 2,369,969 589,493 196,902 - 61,990 139,395 671,062 - 206,435 53,671 318,949 2,931,499 2019 S$ 2,130,767 401,890 - 50,000 21,935 151,985 982,692 567,356 - 958,070 305,000 63,859 5,579,248 706,651 333,531 998,895 488,842 337,028 516,777 1,778,065 3,390,099 - 513,893 4,086,445 Group 2020 S$ 2019 S$ 2,225,176 294,258 412,065 2,931,499 3,282,145 344,935 459,365 4,086,445 71 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 22. Income tax The major components of income tax expenses recognised in profit or loss for the years ended 31 March 2020 and 2019 were: Current income tax: Current year (Over)/Under provision in respect of prior years Deferred income tax: Current year Group 2020 S$ 2019 S$ 184,706 (9,318) 175,388 204,945 146,967 351,912 (86,058) 34,606 Income tax expense recognised in profit or loss 89,330 386,518 Relationship between tax expenses and accounting profit/(loss) A reconciliation between tax expenses and the product of accounting profit/(loss) multiplied by the applicable corporate tax rate for the financial years ended 31 March 2020 and 2019 were as follows: Profit/(Loss) before tax Share of results of associated company, net of tax Profit/(Loss) before tax and share of results of associated Group 2020 S$ 868,751 135,939 2019 S$ (4,329,146) 252,182 company 1,004,690 (4,076,964) Income tax using the statutory tax rate of 17% (2019: 17%) 170,797 (693,085) Tax effects of: Non-deductible expenses Income not subject to taxation Tax exemptions Deferred tax assets not recognised Utilisation of previously unrecognised deferred tax assets Effect of tax rates in foreign jurisdictions (Over)/Under provision in respect of prior years Income tax expense recognised in profit or loss 30,598 (13,902) (32,425) 237,108 (307,815) 14,287 (9,318) 89,330 500,275 (80,069) (16,575) 446,379 - 82,626 146,967 386,518 The above reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction. 72 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 22. Income tax (continued) Movement in current income tax liabilities/(assets): Group 2020 S$ 2019 S$ Company 2020 S$ 2019 S$ Beginning of financial year Income tax paid Tax expense (Over)/Under provision in respect of prior years Disposal of subsidiaries Currency translation differences End of financial year 41,947 (191,061) 184,706 (9,318) - (2,084) 24,190 202,569 (426,276) 204,945 146,967 (82,724) (3,534) 41,947 - - - - - - - - - - - - - - 23. Earnings per share Basic earnings per share is calculated by dividing the net profit attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the financial year. Group 2020 2019 Net profit/(loss) attributable to equity holders of the Company (S$) 1,072,047 (4,867,345) Weighted average number of ordinary shares outstanding for basic earnings per share 40,545,626 42,074,073 Basic earnings per share (Singapore cents per share) 2.64 (11.57) 24. Significant related party transactions In addition to the related party information disclosed elsewhere in the financial statements, the following transactions with related parties took place at terms agreed between the parties during the financial year: Cost of lease sharing charged to related parties Admin handling expenses charged by related parties Consultancy expense charged by related parties Compensation of key management personnel Salaries, fees and bonus CPF Contributions Commissions and other benefits Group 2020 S$ 291,340 (185,000) (24,000) 2019 S$ 372,714 (96,600) (24,368) Group 2020 S$ 2019 S$ 712,193 62,947 - 775,140 858,831 32,963 12,419 904,213 73 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 25. Operating lease commitments Where the Group is a lessee The Group have entered into commercial leases on rental of offices. The lease has average life of 3 years with renewal option included in the contracts. There are no restrictions places upon the Group by entering into these leases. As at 31 March 2019, the future minimum rental payable under non-cancellable operating leases contracted for but not recognised as liabilities, are as follows: Not later than one year Later than one year but not later than five years Group 2019 S$ 1,163,876 1,186,567 2,350,443 As disclosed in Note 2.1, the Group has adopted FRS 116 on 1 April 2019. These lease payments have been recognised as ROU assets and lease liabilities on the balance sheet as at 31 March 2020, except for short-term and low value leases. Where the Group is a lessor The Group lease out office to non-related parties under non-cancellable operating leases. The lessees are required to pay fixed lease payments during the lease period. The future minimum lease receivables under non-cancellable operating leases contracted for at the balance sheet date but not recognised as receivables, are as follows: Not later than one year Group 2020 S$ 2019 S$ 69,750 69,750 The Group has not recognised leases receivables disclosed above as at 31 March 2020 as it is short term lease contract. 74 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 26. 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 and Malaysia. Entities in the Group regularly transact in currencies other than their respective functional currencies (“foreign currencies”). Currency risk arises within entities in the Group when transactions are denominated in foreign currencies primarily Singapore Dollar (“SGD”), Malaysian Ringgit (“MYR”), Australian Dollar (“AUD”), United States Dollar (“USD”), Chinese Renminbi (“RMB”), Japanese Yen (“JPY”), New Taiwan Dollar (“NTD”) and Thailand Baht (“THB”). 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, Taiwan 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$ USD S$ AUD S$ NTD S$ THB S$ RMB S$ 1,137,400 128,155 187,358 7,443 1,460,356 126,538 - 151,409 - 277,947 74,243 - - - 74,243 91,192 379,781 - - 470,973 27,063 - - - 27,063 257,360 61,026 - - 318,386 (245,077) (222,140) (467,217) (10,851) - (10,851) (5,561) - (5,561) (27,280) (107,918) (135,198) - (32,122) (32,122) (9,485) - (9,485) At 31 March 2020 Financial assets Cash and cash equivalents Trade and other receivables Financial assets, at FVPL Financial assets, at FVOCI Financial liabilities Trade and other payables Lease liabilities Net financial assets/(liabilities) 993,139 267,096 68,682 335,775 (5,059) 308,901 Currency exposure of financial assets/ (liabilities) net of those denominated in the respective entities’ functional currencies - 267,096 66,317 12,385 - (4,216) 75 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 26. Financial risk management (continued) (a) Market risk (continued) (i) Currency risk (continued) At 31 March 2019 Financial assets Cash and cash equivalents Trade and other receivables Financial assets, at FVPL Financial assets, at FVOCI Financial liabilities Trade and other payables Finance lease liabilities MYR S$ USD S$ AUD S$ NTD S$ THB S$ JPY S$ 574,697 92,064 181,542 8,219 856,522 179,682 - - - 179,682 37,800 - - - 37,800 715,072 207,652 - - 922,724 52,463 - - - 52,463 19,187 55,624 - - 74,811 (428,012) (36,424) (464,436) - - - - - - (32,881) - (32,881) (2,092) - (2,092) - - - Net financial assets 392,086 179,682 37,800 889,843 50,371 74,811 Currency exposure of financial assets net of those denominated in the respective entities’ functional currencies - 179,682 30,969 - - 74,811 The Company’s currency exposure based on the information provided to key management is as follows: At 31 March 2020 Financial assets Cash and cash equivalents Financial liabilities Trade and other payables Net financial assets USD S$ AUD S$ 32,075 71,878 - (5,561) 32,075 66,317 Currency exposure of financial assets net of those denominated in the respective entities’ functional currencies 32,075 66,317 At 31 March 2019 Financial assets Cash and cash equivalents Amount due from subsidiaries Financial liabilities Trade and other payables Net financial assets 171,365 - 171,365 30,969 30,118 61,087 (80) (8,303) 171,285 52,784 Currency exposure of financial assets net of those denominated in the respective entities’ functional currencies 171,285 52,784 76 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 26. Financial risk management (continued) (a) Market risk (continued) (i) Currency risk (continued) If the AUD, USD, NTD, RMB and JPY change against the SGD by 8% (2019: 4%), 5% (2019: 3%), 7% (2019: 2%), 3% (2019: 3%), 7% (2019: 2%) 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: Increase / (Decrease) Profit after tax Group 2020 S$ 2019 S$ Company 2020 S$ 2019 S$ 4,403 (4,403) 1,028 (1,028) 4,403 (4,403) 1,752 (1,752) 11,084 (11,084) 4,474 (4,474) 1,331 (1,331) 7,108 (7,108) 720 (720) (105) 105 - - - - - - 1,242 (1,242) - - - - - - - - - - - - AUD against SGD - Strengthened - Weakened USD against SGD - Strengthened - Weakened NTD against SGD - Strengthened - Weakened RMB against SGD - Strengthened - Weakened JPY against SGD - Strengthened - Weakened 77 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 26. 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 either as financial assets, at FVPL or FVOCI. These securities are listed in Singapore, Malaysia and the United States. 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 Singapore, Malaysia and the United States had changed by 17% (2019: 7%), 17% (2019: 7%) and 17% (2019: 7%) respectively with all other variables including tax rate being held constant, the effects on profit after tax and other comprehensive income would have been: Increase / (Decrease) Profit after tax 2020 2019 Profit after tax S$ Other comprehensive income S$ Profit after tax S$ Other comprehensive income S$ Group Listed in Singapore - increased by - decreased by Listed in Malaysia - increased by - decreased by 8,918 (8,918) - - - - 26,484 (26,484) 1,050 (1,050) 10,548 (10,548) Listed in the United States - increased by - decreased by 21,364 (21,364) - - - - - - - - - - (b) Credit risk Credit exposure to an individual counterparty is restricted by credit limits that are approved by the Board of Directors based on ongoing credit evaluations. The counterparty’s payment pattern and credit exposure are continuously monitored at the entity level by the respective management and at the Group level by the Executive Management. Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Group. The Group categorises a loan or receivable for write off when a debtor fails to make contractual payments greater than a year past due based on historical collection trend. Where loans or receivables have been written off, the company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in profit or loss. The Group applies the simplified approach to providing for expected credit losses prescribed by FRS 109, which permits the use of the lifetime credit loss provision for all trade receivables. 78 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 26. Financial risk management (continued) (b) Credit risk (continued) 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. A summary of assumptions underpinning the Group’s expected credit loss model is as follow: Group and Company’s category of internal credit rating Performing Underperforming Non-performing Write-off Group and Company’s definition of category Customers have a low risk of default and a strong capacity to meet contractual cash flows. Loans for which there is a significant increase in credit risk. As significant increase in credit risk is presumed if interest and/or principal repayments are 30 days past due. Interest and/or principal repayments are 60-365 days past due. Interest and/or principal repayments are 365 days past due and there is no reasonable expectation of recovery. Basis for recognition of expected credit loss provision 12-month expected credit losses Lifetime expected credit losses Lifetime expected credit losses Asset is written off Movements in credit loss allowance for trade receivables are set out as follows: Balance at beginning of year Charge for the year Written off Disposal of Digital and Marketing Businesses Balance at end of year Group 2020 S$ 77,067 62,635 (2,165) - 137,537 2019 S$ 88,606 77,067 - (88,606) 77,067 Company 2020 S$ 2019 S$ - - - - - - - - - - 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: 2020 Expected loss rate Gross carrying amount (S$) Credit loss allowance (S$) 2019 Expected loss rate Gross carrying amount (S$) Credit loss allowance (S$) Current 1-30 days Past due 31-60 days 61-90 days > 90 days Total 0% 255,975 - 0% 26,221 - 5% 12,977 (714) 10% 26,488 (2,649) 100% 134,174 (134,174) 455,835 (137,537) 0% 174,425 - 0% 30,542 - 5% 62,003 (3,100) 10% 54,820 (5,482) 100% 68,485 (68,485) 390,275 (77,067) 79 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 26. Financial risk management (continued) (c) Liquidity risk Prudent liquidity risk management includes maintaining sufficient cash and cash equivalents and the ability to close out market positions at a short notice. At the reporting date, assets held by the Group and the Company for managing liquidity risk included cash and short term deposits as disclosed in Note 10. The table below analyses non-derivative financial liabilities of the Group and the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of discounting is not significant. Group At 31 March 2020 Trade and other payables Lease liabilities At 31 March 2019 Trade and other payables Finance lease liabilities Company At 31 March 2020 Trade and other payables At 31 March 2019 Trade and other payables (d) Capital risk One year or less S$ Two to five years S$ 1,648,235 1,176,581 - 68,630 1,247,801 19,988 - 18,304 One year or less S$ 90,811 57,843 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. 80 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 26. Financial risk management (continued) (e) Fair value measurements The table below presents assets and liabilities measured and carried at fair value and classified by level of the following fair value measurement hierarchy: (i) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1); (ii) 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). Group As at 31 March 2020 Financial assets: Financial assets, at FVPL (quoted) Financial assets, at FVOCI (quoted) As at 31 March 2019 Financial assets: Financial assets, at FVPL (quoted) Financial assets, at FVOCI (quoted) Level 1 S$ Level 2 S$ Level 3 S$ 402,305 7,443 - - 181,542 8,219 - - - - - - There were no transfers between levels 1 and 2 during the year. The fair value of financial instruments traded in active markets (such as fair value through profit and loss and financial assets through other comprehensive income) is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in Level 1. The carrying amount less impairment provision of trade receivables and payables are assumed to approximate their fair values. (f) Financial instruments by category Group 2020 S$ 2019 S$ Company 2020 S$ 2019 S$ Financial assets, at FVPL Financial assets, at FVOCI Financial assets at amortised cost Financial liabilities at amortised cost 402,305 7,443 9,017,777 (2,686,411) 181,542 8,219 5,923,124 (1,241,703) - - 876,272 (90,811) - - 1,544,573 (57,843) 81 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 27. Segment information For management purposes, the Group is organised into geographical business units based on the 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 segment under the reporting model are as follows: i. ii. iii. Financial Education: involved in providing financial education in the discipline of value investing and supporting a community of value investors from 29 cities globally under the “VI” brand. Others: included fintech business and subsidiaries that provided financial education and training in Taiwan, Thailand and China. Disposal Group: involved in specialists and training academy; content creation, branding and marketing solutions provider; and marketing and selling products via ecommerce platform. Management monitors the operating results of its business units separately for the purpose of 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. 82 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 27. Segment information (continued) Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties. Singapore S$ Financial Education Malaysia S$ Total S$ Others Corporate Adjustments and eliminations Per consolidated financial statements S$ S$ S$ S$ 6,884,651 389,704 7,274,355 3,215,983 69,816 3,285,799 10,100,634 459,520 10,560,154 758,717 - 758,717 - 216,000 216,000 - (675,520) (675,520) 10,859,351 - 10,859,351 31 March 2020 Revenue External customers Inter-segment Results: Depreciation and amortisation Share of result of associated companies Segment profit/(loss) (1,209,919) (135,939) 1,827,584 (286,248) - 244,412 (1,496,167) (135,939) 2,071,996 (296,601) - (861,872) - - (430,703) Assets: Additions to plant and equipment Additions to intangible assets Segment asset Liabilities: Segment liabilities 25,797 - 7,013,434 67,814 - 1,924,349 93,611 - 8,937,783 75,204 197,364 1,877,826 - - 1,160,458 (3,577,254) (1,617,795) (5,195,049) (1,530,596) (103,054) - - - - - - - (1,792,768) (135,939) 779,421 168,815 197,364 11,976,067 (6,828,699) 83 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 27. Segment information (continued) 31 March 2019 Revenue External customers Inter-segment Results: Depreciation and amortisation Share of result of associated company Impairment of goodwill Segment (loss)/profit Assets: Investment in associated company Additions to plant and equipment Segment asset Liabilities: Segment liabilities Education S$ Disposal Group S$ Corporate S$ Adjustments and eliminations S$ Per consolidated financial statements S$ 12,751,656 - 12,751,656 9,383,252 282,541 9,665,793 156,429 - 156,429 - (282,541) (282,541) 22,291,337 - 22,291,337 (459,749) (252,182) - (1,385,351) 147,818 178,924 5,686,506 (154,038) - - 343,473 (3,492) - - (1,357,496) - - (1,585,013) (2,316,290) - 80,652 - - - 1,571,506 (3,125,990) - (57,843) (617,279) (252,182) (1,585,013) (4,715,664) 147,818 259,576 7,258,012 (3,183,833) - - - - Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements. Inter-segment revenues and expenses are eliminated on consolidation. 84 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2020 28. Events occurring after reporting date On 3 April 2020, Singapore announced a stringent set of preventive measures collectively called a "circuit breaker", to be applied from 7 April to 4 May, in response to the growing number of new cases. The circuit breaker was extended to 1 June on 21 April following continued untraced transmission within the community. With the implementation of the circuit breaker in Singapore and the movement control order in Malaysia, the Company’s financial education business transferred all its offline trainings and programmes in Singapore and Malaysia online. This temporarily change in business operation had not significantly affect the financial performance of the financial education business subsequent to the financial year to the date of this report. 29. New or revised accounting standards and interpretations Amendments to FRS 3 Business Combination (effective for annual periods beginning on or after 1 January 2020) The amendments provide new guidance on the assessment of whether an acquisition meets the definition of a business under FRS 3. To be considered a business, an acquisition would have to include an output and a substantive process that together significantly contribute to the ability to create outputs. A framework is introduced to evaluate when an input and substantive process are present. To be a business without outputs, there will now need to be an organised workforce. The definition of the term ‘outputs’ is narrowed to focus on goods and services provided to customers, generating investment income and other income, and it excludes returns in the form of lower costs and other economic benefits. It is also no longer necessary to assess whether market participants are capable of replacing missing elements or integrating the acquired activities and assets. Entities can apply a ‘concentration test’ that, if met, eliminates the need for further assessment. Under this optional test, where substantially all of the fair value of gross assets acquired is concentrated in a single asset (or a group of similar assets), the assets acquired would not represent a business. These amendments are applied to business combinations and asset acquisitions with acquisition date on or after 1 January 2020. Early application is permitted. The Group does not expect any significant impact arising from applying these amendments. 30. Authorisation of financial statements for issue The financial statements for the financial year ended 31 March 2020 were authorised for issue by the Board of Directors on the date of the Directors' Statement. 85 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 ADDITIONAL  INFORMATION Shareholders  Information  as  at  26  June  2020   8VIC  Holdings  Limited  –  Ordinary  Shares   The   Company   has   ordinary   shares   on   issue.   These   are   listed   on   the   Australian   Securities   Exchange   under   ASX   code:   8VI.   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   698   351   29   58   18   1,154   Number  of   shares   311,633   745,567   221,854   1,855,735   37,410,837   40,545,626   %  of  issued   capital   0.77%   1.84%   0.55%   4.58%   92.26%   100.00%   The  number  of  investors  holding  less  than  a  marketable  parcel  of  1,250  8VI  shares  (based  on  a  share   price  of  A$0.40)  was  763.  They  hold  390,652  8VI  shares  in  total.   Twenty  Largest  Shareholders  and  CDI  Holders*   Low  Ming  Li Registered  Holder   1. 8I  Holdings  Limited 2. Kao  Junyang 3. HSBC  Custody  Nominees  (Australia)  Limited 4. Seah  Weiming 5. 8  Investment  Pte  Ltd 6. 7. BNP  Paribas  Noms  Pty  Ltd 8. Citicorp  Nominees  Pty  Limited 9. Wong  Wai  Chuan 10. Chua  Chun  Woei 11. Yeow  Hin  Lai 12. Bernard  Siah  Wee  Boon 13. Goh  Siew  Bee 14. Tan  Teck  Yong 15. Tian  Dehua 16. Low  Chern  Hong 17. Joshua  Zhang  Yaolin 18. Chua  Teik  Gaik 19. J  P  Morgan  Nominees  Australia  Pty  Limited 20. Latha  Pillay ALL  OTHER  SHAREHOLDERS Total   Number  of   Shares   31,779,825   1,157,646   903,658   494,000   446,926   336,514   329,322   295,197   289,887   275,111   268,245   175,000   128,800   125,000   103,306   101,200   101,000   100,200   95,108   80,000   2,959,681   40,545,626   %  of  issued   capital   78.38%   2.86%   2.23%   1.22%   1.10%   0.83%   0.81%   0.73%   0.71%   0.68%   0.66%   0.43%   0.32%   0.31%   0.25%   0.25%   0.25%   0.25%   0.23%   0.20%   7.30%   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.   86 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 ADDITIONAL  INFORMATION Shareholders  Information  as  at  26  June  2020  (continued)   Substantial  Shareholders  and  CDI  Holders**   Name   8I   Holdings   subsidiaries     Limited   and   its   Direct   Interest   Shares   %  of  voting   power   Deemed   Interest   Shares   %  of  voting   power   32,226,751   79.48%   -­‐   -­‐   Notes   **    This   table   is   compiled   on   the   basis   that   each   holding   of   CDIs   is   a   separate   holding   and   accordingly,   the   holding  of  shares  by  CHESS  Depository  Nominees  Pty  Limited  is  ignored.   Current  On-­‐Market  Buy-­‐Back  (ASX  Listing  Rule  4.10.18)   There  is  no  current  on-­‐market  buy-­‐back  arrangement  for  the  Company.   Corporate  Governance  Statement   The   directors   of   8VIC   Holdings   Limited   support   and   adhere   to   the   principles   of   corporate   governance,   recognising   the   need   for   the   highest   standard   of   corporate   behaviour   and   accountability.  Please  refer  to  the  corporate  governance  statement  and  the  appendix  4G  released  to   ASX  and  posted  on  the  Company  website  at  www.8vicglobal.com.   The   directors   are   focused   on   fulfilling   their   responsibilities   individually,   and   as   a   Board,   for   the   benefit   of   all   the   Company’s   stakeholders.   That   involves   recognition   of,   and   a   need   to   adopt,   principles   of   good   corporate   governance.   The   Board   supports   the   guidelines   on   the   “Principles   of   Good  Corporate  Governance  and  Recommendations  –  3rd  Edition”  established  by  the  ASX  Corporate   Governance  Council.   Given   the   size   and   structure   of   the   Company,   the   nature   of   its   business   activities,   the   stage   of   its   development  and  the  cost  of  strict  and  detailed  compliance  with  all  of  the  recommendations,  it  has   adopted   a   range   of   modified   systems,   procedures   and   practices   which   enables   it   to   meet   the   principles  of  good  corporate  governance.   The  Company’s  practices  are  mainly  consistent  with  those  of  guidelines  and  where  do  not  correlate   with  the  recommendations  in  the  guidelines  the  Company  considers  that  its  adopted  practices  are   appropriate  to  it.   87 8VIC Holdings Limited and its Subsidiaries Annual Report FY2020 8VIC Holdings Limited (Incorporated in the Republic of Singapore) Company Registration Number: 201505599H ARBN 605 944 198 www.8vicglobal.com Singapore Goldbell Towers, 47 Scotts Road, #03-03/04, Singapore 228233 T: +65 6225 8480 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 

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