8VI Holdings Ltd
Annual Report 2021

Plain-text annual report

l y n o e s u l a n o s r e p r o F 8VI Holdings Limited FY2021 Annual Report { = [ Smarter ] = [ Faster ] = [ Easier ] Principle const constant = ( const const Speed const Mode return ( < FinEduTech > ); ); // How we continue to prioritise our key ideas? $orderBy = array( =>’DESC’, ‘ Digitalisation ’ ‘ Talent ’ =>’DESC’, ‘ Expand Addressable Market ’ ‘ Widen Product Offerings’ =>’DESC’, =>’DESC’, // Results achieved? $this->db->from-> Investment Intelligence as a Service (IIAAS) } ?> Coding Towards a Smarter 10C100UN11Y0111010001_111 01100001110000011001111010 0,100101010_100101111_0010 00_180I110A0P,10100P,01011 0CO0M1NI1Y01_010 1001001 01,010110100100,1001010101 0000100 100101118VI01_1P01 011_00010011101100,1000110 01010AI,10010010010101C00 M0NTY_0111P81V0110110_01 010010110100P8VI,0100 0A0 P,11_1001111001_0110011110 100,100100100100_11100,001 01_011101 0011110100,1001010 1011001100_11100,0010 0100 800,0001110001000_11110010 011100001 0001111LEGE_1_0 01101000111101_10011100110 01_001001110 011001001100,,0010 0100 801,0001110001000_11110 011011100001 01111LEGE10 01_1011000111101_100110 8,1100100100111101101001 10,10000100010111 00110, 001100110010011100_111 0011011000010001 00101 10_001101_100110101010 1011,0010 0100111A, 11000 CIA0P,NI001011010EG181 1,10100APP 001110101100 10A0P,11_01100110110110 _101100P8VI_0110101110 0,0010 0100800,010111000 10_0011110010011100001 0001111LEGE_1_00110100 118VI01_1P01011_000100111 01100,100011001010AI,10010 0_10010101C00M0NTY_0111 0APP,111A1P11011_01111010100_ 1P0001AP81V0110110_01010010 110100P8VI,0100 0A0P,11_10011 11001_0110011110100,100100100 100_11100,0010101110 00111101 00,100101010100100_11100,001 0 11100800,0001110001000_1111 0010011100001 0001111LEGE_1_ 001101000111101_1001110011001 _0010011100_00100111110000100 010111 001110011001_0010011100 _001001_1111000010001 0010_1 10001101_1001101010101011,001 0 0100111A, 11000CIA0P,NI0010 11010EG1811,10100APP _0011101 0110010A0P,11_01100110110110 _101100P8VI_011010_11100,0010 0100800,0001110001000_1111 011001001100,,0010 0100 801,0001110001000_11110 011011100001 01111LEGE10 01_1011000111101_100110 8,1100100100111101101001 10,10000100010111 00110, 001100110010011100_111 0011011000010001 00101 10_001101_100110101010 1011,0010 0100111A, 11000 CIA0P,NI001011010EG181 1,10100APP 001110101100 10A0P,11_01100110110110 _101100P8VI_0110101110 0,0010 0100800,010111000 10_0011110010011100001 0001111LEGE_1_00110100 110100P8VI,0100 0A0P, 11_1001111001_0110011 110100,100100100100_1 1100_0010101110 00111 10100,1001010101_0010 011100,0010 0100800,00 01110001000_111100100 11100001 0001111LEGE1 001_10100011110110011 10011001_001001110011 0_001001111100001000 10111001110011001_001 0011,1000010011111000 01_00010010_11000110 11001101010101011,0010 010111A, 111000CIA0P, NI001011010EG1811,101 00APP _001 01010_101001_0011100,0010 0100 800,0001110001000_111100100111 00001 0001111LEGE_1_0011010001 1P81V0110110_01010010110100P8 VI,01100 0A0P,11_1001111001_0110 0111,10100,100100100100_11100,00 10100,0001110001000_1111001001 1100001 0001111LEGE_1_00110100 0,111101_1001110011001_00100111 00_00100111110000100010111 0011 10011001_0010011100_0010011111 000010001 00110_110001101_10011 01010101011,0010 0100111A, 11000 CIA0P,NI001011010EG1811,10100A PP _00111010110010A0P,11_01100 110110110_101100P8VI_011010_11 100,0010 01 At our core, 8VI’s codes of being rooted in FinEduTech, driving lifelong learning and community exchange through technology, and empowering everyone to achieve sustainable wealth; have now been fully written and embedded within our value system. We are now ready to look forward and start coding for a smarter future, having pivoted our business model successfully. With all the right elements in place to support our growth, 8VI Holdings will look to deepen and broaden our business offerings and strategies to ensure we continue to deliver value for our subscribers as well as our shareholders in the long-term. PRELUDE We have almost fully completed our digitalisation journey in FY2021 and have successfully achieved a few significant goals we have put in place in the last few years. With digitalisation, we are doing more with less every day. VI App now has a stable base of subscribers, surpassing its own target in record time. The regulatory clearance granted by the Monetary Authority of Singapore for VI App as a Licensed Financial Adviser means that we can demonstrate more conviction on VI Analysis’ research and development and put forward detailed recommendations. l y n o While we have undoubtedly set new records in terms of its earnings and operations this year, we are also looking further ahead into plans to invest heavily in talent acquisition and the right skill sets to bring our Group forward. e s u l a n o s r e p r o F CONTENTS About 8VI 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 Playing Our Part For Communities Corporate Governance Statement Remuneration Report 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 - 9 10 11 - 18 19 - 20 21 - 22 23 24 25 26 - 35 36 - 39 40 - 44 45 - 48 49 50 51 52 - 53 54 55 56 - 100 101- 102 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. About 8VI Holdings Limited >> Invest Smarter, Faster, Easier 8VI Holdings Limited (“8VI”) is a Singapore-based FinEduTech company operating under the brand name VI. in 2008, VI (read as “vee”) is the Established in Value representation of our beliefs and roots Investing and empowers everyone 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 Global”), 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. As a licensed Financial Adviser approved by the Monetary Authority of Singapore, 8BIT Global provides financial advice on securities and units in collective investment schemes through research analyses and research reports, through VI App. Key Markets >> Spreading smart investing knowledge to the world l y n o e s u l a n o s r e p r o F Supporting a global community of value investors since 2008 Offices in 4 cities: Singapore, Malaysia, Shanghai, Taiwan Presence across 29 cities globally 1 VI App >> Smart stock analysis and screening tool Developed by 8BIT Global, licensed by the Monetary Authority of Singapore. l y n o e s u l a n o s r e p r o F 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. Within 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 - Search and screen companies with great potential that suit your investment preference in seconds > VI Watchlist - Potential companies to watch, organised into one space, with consolidated view of companies for easy monitoring, and notifications when opportunities arise > VI Portfolio - Keeps a record of investment positions, allows tracking and monitoring and shows portfolio performance at a glance l y n o e s u > VI Analysis - VI Risk Rating – Identifies high-risk stocks, corporate governance issues or accounting treatments, vigorously supported by backtesting - VI Star Chart – Comprehensive snapshot of a company’s performance based on profitability, financial health, growth, assets and dividends - 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 > VI Social Bubble l - Social media module for all users which encourages exchange of investment opinions and ideas, aggregates market sentiments and improves important information flow 42,000+ companies covered a n o s r e p r o F 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 l y n o FLAGSHIP PROGRAMMES e s u OTHER PROGRAMMES l a n o s r e p r o F 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. 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. VI REITs Understand the different kind of REITs and their characteristics as well as key things to look out for to protect your investment. Learn about advanced REITs valuation strategies accompanied with real case studies. VI Xponential Growth An intensely packed 2.5 days programme with ground-breaking content which will transform the way you view stocks with a single aim: to give you ultimate clarity on which stocks have the best growth potential. 4 VI College (Cont’d) Edutainment & Outreach l y n o e s u l a n o s r e p r o F Behind the Stock Dive deep and have a look behind the curtains on the latest trending stocks in this YouTube web series with our VI College speaker and trainer. 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 word 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. Bijak Labur A series focused on sharing of knowledge and exemplary stories in financial planning, business models as well as the advantages and risks of stock investing. Will Be Good Will Be Good explores and discusses sensible approaches to improve various aspects of one’s personal growth and financial wellness in conjunction with trending topics and news in Taiwan. 投资金股追 A series which provides a quick understanding and overview on noteworthy companies around the world, providing viewers with the opportunity with a deeper understanding of a company’s business model and performance, while diving into the latest trends and business models. 深VI一口气 A podcast which covers different aspects of what makes a person a better investor including personal development plans, motivational talks, as well as financial management and investment strategies. The series also explores and discusses current events and global developments in a relatable and light-hearted fashion. VI Channel A dedicated channel featuring a variety of talkshow programmes, discussing trending topics around stocks, markets, and investing opportunities and strategies. 5 l y n o e s u l a n o s r e p r o F 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 13 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 with close to 100,000 app users. 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: 207%* Subscriber growth rate: 189%* Page view growth rate: 82%* * Last Twelve Months ending March 2021 6 >> Value investors brought together by VI College and VI App Letter from the Chairman The global COVID-19 situation continues to evolve as governments around the world are working hard to get their economies back on track in line with vaccination rollouts, even amidst ongoing lockdowns and fresh waves of the pandemic in various countries. Clive Tan Non-Executive Chairman 8VI Holdings Limited l y n o >> e s u l a n o s r e p r o F Dear shareholders I am pleased to share that we have enjoyed another remarkable year in FY2021 with significant developments in our business. The strong building blocks that we have been working relentlessly to put in place last year by devoting 100% of our effort and energy into our digital transformation strategy, are now firmly in place. While it had always been our strategy to move to an online platform, riding on the acceleration of digitalisation and technology and amidst the COVID-19 pandemic, 8VI successfully transitioned from an offline education provider to an integrated FinEduTech platform in 2020. This changed the way in which we conducted business significantly, given our ability to touch even more lives while scaling our business exponentially in the absence of geographical barriers. We have also since refocused our growth efforts to further cement our position in core English, Chinese and Malay speaking markets in order to tap growth opportunities. Today, we are proud to see that our core codes of being rooted in FinEduTech, driving lifelong learning and community exchange through technology, and empowering everyone to achieve sustainable wealth; have now been fully written and embedded within our value system. Buoyed by the digital framework that we have put in place since 2016 to pave the way towards a smarter future, as well as our expedited digital transformation across the region, we have set new records in both our operations and earnings. Through the unyielding effort of our 8VI team, we have achieved what we set out to accomplish a year ago. 7 Letter from the Chairman (Cont’d) l y n o e s u l a n o s r e p r o F We have come a long way as an integrated FinEduTech platform – serving investors who are seeking knowledge and lifelong-learning opportunities through a variety of both one-off and recurring subscription products. Our unique, proprietary stock analysis tool, VI App, developed through 8BIT Global Pte Ltd (“8BIT Global”) continued to break new ground this year as it garnered regulatory clearance as a Licensed Financial Adviser approved by the Monetary Authority of Singapore. This breakthrough was a result of the team’s tireless efforts – from the perspectives of both research and development, as well as regulatory clearance; as this was no easy feat given the time spent in taking this milestone across the line. 8BIT Global is therefore licensed to provide financial advice on securities and units in collective investment schemes through research analyses and research reports via VI App. In particular, the license enables us to demonstrate more conviction on VI Analysis’ research and development and put forward detailed recommendations based on a rating system that better informs our users on a company’s financials and valuation methods. This represents a major milestone in our journey to bring smarter investing to everyone. Our license will allow us to further etch out new areas of capabilities, expand and improve on our offerings and services, and ultimately develop new proprietary features for VI App which will enhance overall user experiences and information delivery around smart stock analysis. During the year, we have also been pushing ahead with our strategy to acquire and retain graduates, and invest in technology development while bearing our guiding principles in mind – focusing on innovation, our customers’ needs, and staying results-driven. FinTech remains as the cornerstone of our growth and customer experiences and our VI Community of investors continues to grow at a healthy pace. In the past year, our efforts to further strengthen our position in core markets are tracking well, particularly in markets that are predominantly English, Chinese and Malay speaking. Having established VI App as a smart, technology-enabled investing platform, we will work to continue to attract like-minded individuals who are looking to make better investment decisions in a smarter, faster and easier manner. This group of potential graduates will have access to ongoing support from our coaches and learn through real- life case studies, while also benefitting from knowledge exchange with the wider network of VI users within the community. Particularly, as we look at the total addressable market (“TAM”) for asset and wealth management in the coming years, we believe there is immense potential to be tapped. Amongst three core segments of the TAM comprising “Do It Myself”, “Do It With Me” and “Do It For Me” groups, we will target the “Do It With Me” segment. Essentially, these savvy individuals are keen to learn about investing and prefer to use a paid service to assist them in making the right investment decisions. We elaborate more on this approach in the Operations Review. The global COVID-19 situation continues to evolve as governments around the world are working hard to get their economies back on track in line with vaccination rollouts, even amidst ongoing lockdowns and fresh waves of the pandemic in various countries. As a result, many industries have been witnessing a structural shift to an online model of operations. At 8VI, the fast-tracked digitalisation of our company since late 2019 has weathered us well, where we have already transformed our existing working processes and embraced new ways of working wholeheartedly. In FY2020, we successfully held our first virtual Annual General Meeting (“AGM”), and FY2021 will mark our second edition. VI College also held its annual keynote event VI Summit 2021 virtually for the first time this year, garnering a record number of participants across the Asia Pacific region. In addition to a Group-wide upgrade of our assets and technology which enables us with the infrastructural capability and flexibility to readily handle both on-site and off-site working arrangements, we have also launched two new broadcasting studios in Malaysia and Singapore, from which we can host virtual masterclasses and events either on-site or remotely across borders. We attribute our success in implementing our strategies to the commitment of our team, as well as the dynamism, vision and stewardship of our CEO, Mr Ken Chee. All the progress we have made thus far would not have been possible without their collective effort, sacrifice and resilience. Our team’s belief in our vision propels us forward every day and brings us closer to our goal of coding a smarter future. With the above, we are pleased to report that we have further grown our profitability in FY2021. This year, 8VI achieved strong increments across our net profit, operating profit margin and free cash flow. We recorded EBITDA of 8 Letter from the Chairman (Cont’d) >> We will continue striving to deliver our value proposition to better serve our community of like-minded investors through technology-empowered investment analysis and education. l y n o e s u l a n o s r e p r o F S$9.5 million in FY2021, which represented a 246.7% jump as compared to the S$2.7 million reported in the previous year and EBITDA margin of 36.5%. Accordingly, our net profit after tax attributable to owners of the company soared 446.7% to S$5.9 million over S$1.1 million in the corresponding period in FY2020. We also saw a significant increase in our cash flow from operations alongside growth in revenue. Our healthy financial performance this year is in line with our expedited digital transformation strategy across the region with an extended period of recovery expected yet from the COVID-19 pandemic. Looking ahead, as we build out our long-term plan for the next decade, continual digitalisation and acquiring talent to grow our technological capabilities, the area of financial services remains one of our key focuses as we believe that having the right team on board will be key to our growth strategy. In the coming year, we will be looking to invest in a new space for our talents to come together to build a stronger brand and culture for the Group and team. Digitalisation continues to be critical to our long-term strategy, where we will continue to adopt not just digital programmes and practices, but also a digital mindset. With immense potential to be tapped in the TAM for asset and wealth management in the coming years, particularly in the “Do It With Me” segment, we intend to focus on these savvy, investing individuals who will use a paid service for their investment decisions. At the same time, we will work to attract more potential VI App users who are avid, mass- market investors, and also expand VI College’s business model laterally with new offerings for our customers. Also, we will explore ways to offer complementary financial services that can integrate with our VI App platform and core capabilities where it makes sense. We are of the view that we should look at ways to make inroads into these types of regulated services so as to further raise our competitive edge. Meanwhile, we also intend to broaden and deepen our acquisition, retention and technology development pillars to ensure we grow across the markets we operate in. We continue to do our part for the communities where we operate, based on education and fintech as our identified material pillars. Our efforts include establishing a free financial literacy platform for young adults in Malaysia, as well as supporting deserving students and lower-income families through bursaries and fund-raising efforts in conjunction with industry partners. I would like to welcome on board Attlee Hue, our new CEO at 8BIT Global, who has joined us on our exciting journey towards coding a smarter future. Attlee will be responsible for 8BIT Global’s overall strategic performance in line with 8VI’s wider direction. We have also introduced an Advisory Panel for 8VI in the course of the year – all experts in their own fields across fintech, blockchain, data analytics and marketing. Their collective experience and counsel will no doubt bring valuable perspectives and enable us to hone our strengths further. Moving forward, we also intend to look at ways to diversify our Board composition as part of our effort to continue to upkeep the highest levels of corporate governance. This move will also help ensure that our Group maintains the latest pulse on industry best practices and standards. At 8VI, we remain firmly rooted in our vision and mission to empower everyone with smart investing knowledge in order to achieve sustainable wealth. Our priorities have not wavered – we will continue striving to deliver our value proposition to better serve our community of like-minded investors through technology-empowered investment analysis and education. I am confident that we will be able to rise collectively to even greater heights by constantly moving towards individual and group mastery. Clive Tan Non-Executive Chairman 8VI Holdings Limited 9 Financial Highlights Year ended 31 March 2021 l y n o e s u l a n o s r e p r o F Revenue (S$’m) EBITDA (S$’m) 30 20 10 0 26.0 22.3 9.4* 12.9 10.9 FY2019 FY2020 FY2021 * Digital and Marketing Segment contribution prior to disposal 10 5 0 -5 -10 9.5 2.7 FY2020 FY2021 FY2019 -2.3 Net Profit After Tax Attributable To Equity Holders Of The Company (S$’m) Earnings Per Share (Singapore cents) 10 5 0 -5 5.9 FY2019 1.1 FY2020 FY2021 -4.9 15 10 5 0 -5 -10 -15 14.3 FY2019 2.6 FY2020 FY2021 -11.6 Cash and Cash Equivalents (S$’m) Net Tangible Assets Per Security (Singapore cents) 20 15 10 5 0 18.6 7.4 4.7 FY2019 FY2020 FY2021 30 20 10 0 26.0 11.0 9.3 FY2019 FY2020 FY2021 Operating Cash Flow (S$’m) Free Cash Flow (S$’m) 20 15 10 5 0 -5 16.8 3.9 FY2020 FY2021 FY2019 -1.4 20 15 10 5 0 -5 15.6 3.6 FY2020 FY2021 FY2019 -1.7 10 Operating and Financial Review l y n o e s u l >> We intend to remain laser- focused on building a smarter future with our growth initiatives and we are confident that the strong foundation we have put in place enables us to strengthen our FinEduTech platform further for the next decade. Ken Chee Executive Director & CEO 8VI Holdings Limited a n o s r e p Overview FY2021 has undoubtedly been another eventful year in 8VI’s journey since we embarked on our digital transformation. We have not only successfully circumvented the traditional earning challenges and limitations of a conventional education and training business in record time, but we have also rewritten records in terms of our progress – both operationally and financially. r o F In FY2021, 8VI has stayed true to our mantra of achieving ever more with ever less and that has shone through in all aspects of our business. Through our successful digitalisation efforts, we are proud to have brought together an integrated, smart and easy investing platform for a community of like-minded investors through a variety of value-added subscription products. Our community is at the heart of all that we do and drives our inspiration to continually improve and find new ways of fulfilling their needs. By embarking on the right strategy, managing the right level of prudence in terms of our costs and expenses and embodying the right spirit and determination, our team has never stopped spinning the wheels of innovation. We are always working to further raise the bar when it comes to our VI App platform, ensuring that we look at ways to improve on our capabilities, features and how to amplify knowledge sharing and exchange with the VI community. FY2021 in review Following the successful implementation of our 3-year transformation plan in FY2019, we are today operating on a model where more than 90% of our operations are held online. In FY2021, we worked to further refine our strategy to ensure we enjoy economies of scale while 11 Operating and Financial Review (Cont’d) keeping an eye on costs and cashflow against the backdrop of our broader macro-environment. l y n o As a result, the Group recorded revenue of S$26.0 million in FY2021 as compared to S$10.9 million in the corresponding period in the previous year (“FY2020”), representing a growth of 139.1% with expanded gross profit and net profit margins. Of which, 29% of our revenue is recurring, a significant improvement from the 20.5% in FY2020, which is a strong testament to our successful acquisition and retention strategies. e s u We recorded EBITDA of S$9.5 million in FY2021, which represented a 246.7% jump as compared to the S$2.7 million reported in the previous year and EBITDA margin of 36.5%. Accordingly, our net profit after tax attributable to owners of the company soared 446.7% to S$5.9 million over S$1.1 million in the corresponding period in FY2020. FY2020 FY2021 Movement 10.9 2.7 26.0 9.5 139.1% 246.7% 1.1 5.9 446.7% Net Profit Margin Free Cash Flow Margin 77.3% 25.0% 60.1% 32.9% 7.2% FY2020 FY2021 FY2020 FY2021 Net profit after tax attributable to owners of the company Gross Profit Margin 72.8% l (S$’m) Revenue EBITDA a n o s r e p r o F FY2020 FY2021 in With revenue growth of 139.1% achieved FY2021, accompanied by an EBITDA margin of 36.5%, we have also exceeded the Rule of 40, a performance metric commonly used for fast-growing technology companies, by 4-fold. Testament to 8VI’s transformation strategy, the Group has grown its EBITDA at a faster pace than revenue, thus achieving operating leverage in FY2021. In FY2021, we maintained a strong financial position with cash and cash equivalents as well as short term 12 Quarterly Receipts from Customers (S$’m) UP 118% 10.7 8.1 7.1 7.3 4.9 3.1 2.8 2.3 1.6 FY2019 FY2020 FY2021 12 10 8 6 4 2 0 liquid assets totalling S$22.2 million, as compared to S$7.8 million in FY2020, and remained at zero debt with S$9.8 million unearned revenue to be recognised. receipts from customers have Cash increased significantly over the last nine quarters. Cash receipts from customers for the fourth quarter of FY2021 stood at S$10.7 million, up 118% as compared to S$4.9 million in the fourth quarter of FY2020. Cash flow from operations have increased significantly to S$16.8 million compared to S$3.9 million in FY2020, while free cash flow stands at S$15.6 million, a jump from S$3.6 million in FY2020. This was attributable to improved performances across both our Financial Education and FinTech segments. We also made a significant breakthrough this year with VI App, developed through 8BIT Global Pte Ltd (“8BIT Global”), which garnered regulatory clearance as a Licensed Financial Adviser approved by the Monetary Authority of Singapore. This means we can provide financial advice on securities and units in collective investment schemes through research analyses and research reports via VI App. The license enables us to demonstrate more conviction on our research and development and put forward detailed recommendations based on VI Analysis, our proprietary rating system. The system allows our users to immediately verify the soundness of the target company’s financials and show how valuations are derived. These features are designed to aid overall investor confidence in making smarter, faster and easier investment decisions. Operating and Financial Review (Cont’d) Across Malaysia and Taiwan, we also launched 6 new content programmes in local languages to engage with our audiences in those markets, and these have been well received so far. • A spin-off to our “Behind The Stock” video series, we have created “The Unscripted Video”, which takes a laidback approach the wider topic of investing and financial management for the layman. tackle to MALAYSIA • Inspired by our “Bijak Labur” video series, we also introduced the “Pecah Rahsia” series that covers a wide range of financial topics from personal finance, investment, current stock market developments and current trending discussions. • Also, “Wokao!”, designed for those who have burning questions about investment or financial management with practical solutions, ideas, and answers for the everyday investor, made its debut in Malaysia this year. • “深VI一口气” personal is a podcast which covers different aspects of what makes a person a better investor including development plans, motivational talks, as well as financial management and investment strategies. The series also explores and discusses current events and global developments in a relatable and light- hearted fashion. TAIWAN • “Will Be Good” explores and discusses sensible approaches to improve various aspects of one's personal growth and financial wellness in conjunction with trending topics and news in Taiwan. • The “投资金股追” series provides a quick understanding and overview on noteworthy companies around the world, giving viewers the opportunity to gain a deeper understanding of a company’s business model and performance, while diving into the latest trends and business models. STAYING TRUE TO OUR FY2020 ACTION PLAN Adding breadth and depth to our acquisition, retention, and technology development efforts i. Acquisition The ability to generate a unique and robust content flow remains key to how we acquire potential graduates, which entails planning, creating and deploying content across various platforms to build engagement and feature the new additions to our educational programmes. This year, we have broadened our content creation efforts on many levels and across regions to ensure we reach a wider audience set and engage with them in more meaningful ways and in localised contexts, whilst building awareness for our brand. By ensuring a robust content calendar and leveraging our owned social channels, we have extended our reach across borders both in Malaysia and Singapore through targeted, language-specific content. Following our success in Malaysia in reducing the reliance on direct marketing, we have replicated the same approach in Singapore by assembling a dedicated team that is responsible for content planning, creation and implementation. We have been pilot-testing YouTube content in Singapore that feature real and relatable investment journeys of various individuals, who will share their own experiences and stories with other investors. We plan to roll these out in due course in FY2022, as our Singapore office had been integrating our digitalisation efforts to date. Meanwhile, we have set up two virtual broadcast studios in Singapore and Malaysia, which will allow us to host large-scale online events seamlessly across borders, such as the 10th VI Summit in January 2021 which saw a record number of more than 3,500 attendees. l y n o e s u l a n o s r e p r o F Growth in users 207% growth in LTM 10% growth in CMGR LTM CMGR - Compounded Monthly Growth Rate - Last Twelve Months 13 Operating and Financial Review (Cont’d) l y n o From an acquisition perspective, we are also seeing the benefits of the network effect from the ecosystem. This network effect is a result of the virtuous cycle that originates from the content that we generate, which is then shared across various platforms to build engagement across languages and broaden our reach across borders to grow our community and followers. As a result, there are deeper opportunities within our ecosystem to drive collaboration through third-party partnerships with financial services agents, brokerages and financial planners. This not only effectively expands our service base and offerings to our existing graduates and community, but also contributes to how we can attract new, potential graduates. e s u l a n o s r e p r o F Our success in acquisition is based on monthly growth in users and subscribers, as well as growth in Annual Recurring Revenue (“ARR”); both of which have increased on healthy levels in FY2021. We have also seen overall growth in our Total Number of Graduates of 450% at 25,926 pax in FY2021, Total User Growth Rates of 207% as well as Subscriber Growth Rates of 189% in the last twelve months, which is testament to our successful acquisition model. While we have seen our percentage growth in the past year stabilise over the course of the year, our growth in terms of absolute numbers have actually grown significantly. The success of various programmes such as our flagship VI Bootcamp reflects the success of our strategy, as these continue to grow in popularity and take up. ii. Retention In the past year, we have been building retention amongst our graduates by bringing a customer-centric culture and mindset to the table, which in turn enables us to create entire lifetime value. Through the use of our planned CRM system to mine data analytics, we see long-term potential to build on our insights to improve the entire experience for our graduates. Once complete, our CRM system will build, link and leverage data to optimise both our operations and our product and programme offerings with the appropriate business intelligence. The system is currently being implemented and is expected to be completed in phases over the next year. We also practice active engagement and content building via our VI Social Bubble, while providing content and support well received in the form of VI Coaching Sessions and VI Resources for flagship programme graduates. We have expanded our 14 library of VI Resources this year as well across English, Malay and both Simplified and Traditional Chinese languages, with content to ensure that we continue to promote knowledge sharing and exchange amongst our community. Our retention success rates are measured via performance metrics such as the Page View Growth Rate, equivalent to the number of average page views on our website, which continues to grow healthily in FY2021. We also measure success via our overall participation in VI Coaching viewership and participation, which has also been gaining momentum in the past year. For example, VI Coaching sessions in English have grown at a rate of 202% since its inception in May 2020 till March 2021. Growth in average page views 82% increase since FY2020 iii. Technology Development This year, we have continued to develop existing and new features on VI App that are designed to enhance the overall experience. In relation to the AI and machine learning (“ML”) aspects, we are already in the process of establishing a team of data science engineers focusing on enhancing various features within the VI App. The team will focus on using various ML techniques, working closely with our community managers and business analysts, to enhance existing features and possibly discover new features. Some of the planned upcoming enhancements and premium features within VI App include: “Enhanced Peers” which allows better identification of peer companies so as to unearth other opportunities that are in the same business; “Dynamic News Feed” which presents relevant social news that matters and is aligned with the user behavioural patterns; l y n o e s u l a n o s r e p r o F Operating and Financial Review (Cont’d) “Intelligent Alerts” which generates notifications that are relevant and deemed important based on the user profile; despite the pandemic, we aim to similarly establish our 80:20 model here as well in the long run – to have 80% of our revenue on a recurring basis. “VI Score” which complements the Screener and Peer Comparison modules in VI App, while ranking the quality of a company based on historical financial and price-performance, ranking companies based on their quality for research prioritisation; as well as “Guru Bubble” where a Watchlist is linked to a Social Bubble under a specific theme with a community built around the bubbles which encourages learning and discussion of specific strategies within the Bubble. With our digital transformation complete, we are doing ever more with ever less as a result of our technological capabilities. Ongoing digitalisation has further catalysed the changes and pace of change as compared to the conventional ways of operating. By integrating our signature programs with the subscription to our VI platform, we have achieved a massive breakthrough in the way our company grows and generates high-quality recurring revenue and positive cashflow. Refining the distinctions in stock classification through machine learning More than 55,000 lives inspired to date 25,926 VI College graduates in FY2021 187 new VI College batches in FY2021 All these will not only improve user experiences but also allow users to quickly discover new perspectives in their investment journeys. These exciting developments are testament to our core capabilities as a technology company that integrates our loves for finance and education, as well as one that constantly seeks to stay ahead of the curve as we code for a smarter future. Growing our recurring revenue model VI App, coupled with VI College, is a cohesive ecosystem which is designed to make investments Smarter, Faster and Easier and without borders. Our value proposition is crystal clear: users can Analyse, Learn and Connect on all levels of smart investing using one single tool. We leverage the unit economics of our unique business model, where unlike other technology start- ups that invest heavily in acquiring users through cash, our entry-level product range already covers our cost of acquiring a new potential graduate. As such, we are witnessing amplified benefits where all additional spending translates into positive impact on our margins, which we intend to re-invest into our growth plans. Coupled with our prudent cashflow management Cementing our position in core markets Today, we operate in highly successful and well-adapted English, Chinese and Malay language-speaking markets, with our operations in Singapore, Malaysia, Shanghai and Taiwan. In these markets, we have a physical presence while operating almost solely through online channels. Our geographical revenue also represents one of our 80:20 strategies, where we hope to work towards having 80% of our revenue outside of Singapore. In FY2021, Malaysia accounted for 40% of our revenue, whilst another 20% comprised international income – a combination of revenue from other markets and our VI App subscriptions. Our Singapore revenue contribution stood at 40% meanwhile. Malaysia remains a significant, addressable growth market of focus and together with Taiwan, continued to generate positive growth in FY2021. Malaysia has always been an important market for us with its large, multi-language population, and represents a much deeper market where we can capture new opportunities. Here, we are developing the market through bespoke content and learning materials catered according to local language and demographics, such as Shariah-compliant investing. 15 Operating and Financial Review (Cont’d) Our 80:20 rule also applies to our way of working, where 80% of our operations will be digital going forward. With work-from-home (“WFH”) practices here to stay, we have equipped our employees with the right infrastructure, hardware and software setups to ensure we are ready to tackle hybrid working arrangements. In the coming year, we will be looking to invest in a new space for our talents to come together to build a stronger brand and culture for the Group and team, ensuring that we are on the front foot and ready to face any challenges at any given time. In addition, we have also expanded our training and development budget so that our team members can benefit from continuous learning. Last year, we grew our development team to be the largest component within the Group as part of our expansion plans. Going forward, we plan to invest a significant amount of our resources and costs into diversifying our human capital in various aspects, in order to find the right talent to strengthen our position in technology. Our quest to acquire talented individuals in the fields that support our growth plans is expected to accelerate further in the coming years, as we focus on acquiring the right skill sets in these areas. We are constantly looking for subject matter experts who have a passion for all things FinEduTech to join us on our exciting growth journey. l y n o e s u l a n o s r e p r o F We have seen good traction in our Taiwan market to date, which is now operating independently with positive growth. On the whole, Taiwan is a more mature market which offers healthy potential as the local audiences are well exposed to investment-related topics and more receptive towards personal development programmes. The focus will therefore be to grow our presence and brand in the region with outreach activities and engaging social media content to reach Taiwan’s local audiences. KEY TO FUTURE GROWTH Digitalisation & talent, expanding our addressable market, and positioned to offer new products in the regulated space We have witnessed a major structural shift in many industries, including ours, and in how we work amidst the ongoing COVID-19 pandemic. To adapt ourselves to these changes, we intend to invest heavily in a few key areas. Investing for a smarter future – digitalisation & talent • We will be working towards progressive automation of our operational processes and a data-driven approach to analytics to enable us to achieve the best business results and optimise business decisions on the backend. In the course of doing so, we also plan to digitalise more programmes and integrate these programmes onto our VI App platform going forward. We also plan to digitalise more specific aspects of our programmes going forward, for instance, for our participants in our VI Bootcamp, Full Edition programme (“VIB FE”). Within the simulated investing games offered in VIB FE, we are automating and incorporating the game portal into the VI App to enable more hands-on participation from participants and involve less manual facilitation and intervention from our team members. This year, we set up our broadcasting studios in Singapore and Malaysia for the production of digital content to serve this purpose. As a borderless working culture becomes the new norm, our broadcasting studios are also outfitted with the requisite capabilities to host large scale events that transcend borders, such as our recent VI Summit 2021, which saw approximately 3,500 members in attendance – our largest VI Summit event to date. 16 l y n o e s u l a n o s r e p r o F Operating and Financial Review (Cont’d) • Expanding our addressable market As we look at the total addressable market (“TAM”) for asset and wealth management in the coming years, there is immense potential to be tapped. Amongst three core segments of the TAM comprising “Do It Myself”, “Do It With Me” and “Do It For Me” groups, we have identified a core group of target users, whom we call the “Do It With Me” group, that we want to engage with at this stage. These individuals are straddling the Millennial and Gen X ages of between 25 – 55 years of age, who would be keen to learn how to invest, and are willing to pay for a service that can offer coaching, ongoing support and case studies. They would also be the ones to use VI Analysis to make investment decisions. In the longer-term future, we will also be keen to look at the “Do It For Me” group of users and ways to engage with them through more offerings on our platform. These are individuals who appreciate our investment philosophies and the learning offered through our programmes and resources, but still prefer to have a representative who will manage and invest on their behalf – a role which we can work towards fulfilling. As part of our growth strategy, we hope to be able to cast our net wider to attract more potential VI App users. These could be avid, mass-market investors who may primarily choose to tap on the convenience of a generic, user-friendly version of our app for smarter, faster, easier investing. At the same time, we would also look at ways to expand VI College’s business model laterally with new offerings to extend the value chain for our existing and new customer base. • Positioned to offer more regulated products and services Having secured 8BIT Global’s license to provide financial advice on securities and units in collective investment schemes through research analyses and research reports via VI App, we believe we are in a position to explore offering more of such regulated products and services that are complementary to our existing FinEduTech business. Tapping on our capabilities in using data, analytics and AI to analyse our users, incorporate risk assessment and better understand our users’ investment styles, we plan to integrate complementary financial services on our VI App platform where we see synergies and value-add to our community. By making inroads into these types of regulated services, we believe we can further raise our competitive edge in the long-term by extending our position on the value chain – all towards our ultimate goal of building a smarter future for our community. Total Addressable Market I am sophisticated, do my own research & analysis using/supplemented by VI App (self-directed investing) I want to learn how to invest, will pay for on-going support & case studies from coaches. I use VI Analysis to make my investment decisions. TAM: 5 Million Users (SG, MY, TW) Untapped Market: 35 Million Users (ID, VN, CN) I like your investment style/philosophy & enjoyed the learning. Still prefer someone to invest for me. TAM: US$11.9 trillion (Asia Pacific e2025 mutual fund AUM) Do It Myself Do It With Me Do It For Me 17 Operating and Financial Review (Cont’d) TOWARDS A SMARTER FUTURE l y n o e s u l a n o s r e p r o F Having emerged stronger through the disruption a year ago, we are set up and ready to face any upcoming challenges whenever resilience, nimbleness and flexibility that we have developed through weathering past challenges will equip us well to handle oncoming ones. they arise. The In the coming year, we will be looking at ways to further raise our corporate profile so as to attract new opportunities within various markets. In line with these efforts, we will be exploring ways to improve the liquidity of our counter, which may result in certain shareholders realising a portion of their investment in order to create the necessary headroom for potential new investors. We believe this is an opportune and appropriate time to embark on this as we ready 8VI for the next growth phase. Also, as part of our ongoing efforts to enhance shareholder value and raise our profile, we are planning to undertake a secondary listing by way of introduction on the Main Board of the Singapore Exchange Securities Trading Limited (“SGX-ST”), with further details to be made available by end 2021. Meanwhile, we will continue to sharpen our competitive edge on our Investment Intelligence as a Service (“IIAAS”) model – leveraging AI, big data analytics and machine- learning, sharing investing knowledge and empowering better investment decisions, and ultimately generating alpha for our investors. Our commitment to delivering long-term value to our shareholders and our mission and vision are unwavering – to empower everyone to create sustainable wealth and inspire 100 million lives, whilst driving growth and building a sustainable business. We intend to remain laser-focused on building a smarter future with our growth initiatives and we are confident that the strong foundation we have put in place enables us to strengthen our FinEduTech platform further for the next decade. 18 We would like to express our appreciation for the support of our shareholders and the hard work of our 8VI team who have made our journey meaningful and fulfilling so far, and we look forward to our onward path together. Ken Chee Executive Director & CEO 8VI Holdings Limited Board of Directors l y n o e s u >> Clive Tan Non-Executive Chairman 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 business. 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. l a n o s r e p r o F 19 >> Ken Chee Executive Director & CEO Ken is the co-founder of the Group and sits on the board of parent company, 8I Holdings Limited. As CEO of 8VI, he is involved in driving the all-round growth of the Group’s FinEduTech business under the VI brand. He has more than 20 years of professional experience across business development, operations, strategy and marketing from his past roles in data management firms including Quicken (Singapore) and Telekurs Financial. Prior to his current appointment, Ken held executive and management roles in 8I Holdings Limited 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. Board of Directors (Cont’d) l y n o e s u >> Pauline Teo Executive Director Pauline is involved in the management and regional operations of the Company, leading VI College. She is also one of the key speakers for the various programs, seminars and coaching sessions that the Company undertakes. Under her leadership, VI College is currently the leading Financial Education provider in Singapore and Malaysia, with presence in Taiwan and mainland China. She leads 8VI’s retention team in terms of organising, planning the activities and topics for our subscribers, keeping conversations alive in the community. Pauline 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. l a n o s r e p r o F 20 >> Charles Mac Non-Executive Director With rich IT corporate experience comprising 15 years in the SAP industry dealing with multinational companies across the Asia Pacific region, Charles provides advisory and counsel on the operations, strategy and compliance for the Company. Charles Mac was appointed Non-Executive Director in May 2019. Charles has more than 18 years of IT corporate experience, of which 15 years was spent in the SAP industry dealing with multinational companies across the Asia Pacific Region. He has held various leadership roles for large, global multinational companies with extensive experience across Asia Pacific in Team Management, Quality Management, Audits, Business Development and Contract Deliveries. Charles currently serves on the Board of Australian- listed companies, 8I Holdings Limited and 8VI Holdings Limited as a Non-Executive Director. Charles is an Australian citizen and holds a Bachelor of Computing (Information System) from Monash University. Key Management l y n o e s u >> Bernard Siah CTO, 8BIT Global l a n o s r e p r o F Bernard leads the technology development at 8BIT Global, leveraging the digital economy for improved positioning and competitiveness. With 8BIT Global’s position as a Licensed Financial Adviser to provide financial advice concerning securities and units in collective investment schemes through research analyses and research reports, approved by the Monetary Authority of Singapore, Bernard will focus on expanding and improving the proprietary features on VI App to enhance user experiences and information delivery. 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). 21 >> Gary Yeow Executive Director, 8VI Malaysia Gary oversees the planning and implementation of marketing, operations and business development strategies across the regional markets and 8VI’s overseas expansion activities. Gary Yeow is the Director of 8VI Malaysia Sdn Bhd. He has been with the Group since May 2012. Gary brings over 30 years of business experience, where prior to 8VI, he held the directorship of a building materials wholesale and manufacturing business. Gary graduated from Anglo-Chinese Secondary School in Sitiawan, Malaysia. Key Management (Cont’d) l y n o e s u >> Juanna Chua Executive Director, 8VI China Juanna 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. l a n o s r e p r o F 22 >> 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. 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 acting as a corporate spokesperson. 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. Corporate Structure l y n o e s u l a n o s r e p r o F > > > > >>>>>>>>> > > >>>>>>>>> > > 8VI Global Pte. Ltd. (100%) 8BIT Global Pte. Ltd. (51%) >>>>>>>>>>>>>>>>>> > > > > > > > >>>>>>>>>>>>>>>>>> > > 8VI Malaysia Sdn. Bhd. (100%) 8VI Taiwan Co., Ltd. (70%) > > 8VIC JooY Media Sdn. Bhd. (100%) 8VI China Pte. Ltd. (65%) > > 8VI China (Shanghai) Co. Ltd. (100%) 23 Engaging Our Team Members l y n o e s u l a n o s r e p We have put in place several initiatives to continuously engage with our team members, particularly in this ‘new normal’ age. As WFH becomes a cultural mainstay in our everyday lives, our employees are equipped with the right infrastructure, hardware and software setups to ensure they are ready to tackle hybrid working arrangements. In addition to expanding our training and development budget so that our team members can benefit from continuous learning and upgrading of their skill sets, we will be looking to invest in a new space for our talented team of individuals to come together to build a stronger brand and culture for the Group and team, ensuring that 24 r o F we are on the front foot and ready to face any challenges at any given time. Apart from just focusing on their operational efficacies and core competencies, the Group also places great emphasis on cultivating a strong team bond amongst our supportive team members and establishing a supportive, conducive and collaborative working environment for our team members to grow alongside the organisation. We do so through virtual events such as birthday and life milestone celebrations for our team, regional anniversary events, as well as festive occasions. Playing Our Part For Communities l y n o e s u l a n o s r e p With FinTech and financial education in our DNA, we look to contribute and share our knowledge on finance and investing within the communities where we operate and in turn, give back to our communities through meaningful social initiatives in these sectors. Education will be a material, guiding pillar as we embark on corporate citizenry, and as the origin from which we built our business since 2008. FinTech will also be a key area since we view technology as the way forward and an important part of our future which drives us to stay vested and do our part for advancing technology. This year, we established the “VI Club for Youth” in Malaysia - a financial education platform that is freely accessible for students between 16-24 years old. With an aim to empower and encourage financial literacy among young adults, we wanted to equip young adults across the globe with proper financial knowledge, and our initiatives in the pipeline include a series of talks, both online and offline engagement activities and partnerships with universities, amongst others. r o F In partnership with Nanyang Technological University (“NTU”) of Singapore, we have also established the VI College NTU Bursary Fund for the School of Computer Science and Engineering, in support of NTU’s vision of ensuring that every deserving student has access to quality education while also remaining true to our aim of advancing technology by supporting education. 25 In December 2020, we also contributed to the Singapore FinTech Association’s efforts to raise S$100,000 for the NTUC-U Care Fund under the “FinTech for Good initiative” to provide financial assistance to lower- income union members and families. We are heartened that our vision of empowering growth and transforming lives through VI College and VI App now extends across our community efforts, and will endeavour to give back in more meaningful ways going forward. l y n o e s u l a n o s r e p r o F Corporate Governance Statement 31 March 2021 Introduction 8VI Holdings Limited (the “Company”) and its Board has adopted comprehensive systems of control and accountability as the basis for the administration of corporate governance, which are in effect as of the 30 June 2020. The Board is committed to administering the Company’s policies and procedures with openness and integrity, pursuing true spirit of corporate governance commensurate with the Company’s needs. the To the extent applicable, the Company has adopted the ASX Corporate Governance Council’s Corporate Governance Recommendations (Recommendations). Principles and In light of the Company’s size and nature, the Board considers that the current Board is a cost effective and practical method of directing and managing the Company. As the Company’s activities develop in size, nature and scope, the size of the Board and the implementation of additional corporate governance policies and structures will be reviewed. The Company’s main corporate governance policies and practices as at the date of this report are detailed below. The Company’s full Corporate Governance Plan is in a dedicated corporate governance available information section of the Company’s website at www.8viholdings.com. Principle 1: Lay solid foundations for management and oversight Recommendation 1.1 A listed entity should disclose: (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management. the The Company has adopted a Board Charter. The Board Charter sets out the specific responsibilities of the Board, requirements as to the Boards composition, the roles and responsibilities of the Chairman and Company and establishment, Secretary, management of Board Committees, Directors access to company records and information, details of the Board’s relationship with management, details of the Board’s performance review and details of the Board’s disclosure policy. A copy of the Company’s Board Charter is available on the Company’s website. operation The Board is responsible for the corporate governance of the Company. The Board develops strategies for the Company, reviews strategic objectives and monitors Clearly performance against articulating the division of responsibilities between the Board and management will help manage expectations and avoid misunderstandings about their respective roles and accountabilities. those objectives. In general, the Board assumes (amongst others) the following responsibilities: (i) providing leadership and setting the strategic objectives of the Company; (ii) appointing and when necessary replacing the Executive Directors; (iii) approving the appointment and when necessary replacement, of other senior executives; (iv) undertaking appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; (v) overseeing management’s implementation of the Company’s strategic objectives and its performance generally; (vi) approving operating budgets and major capital expenditure and investment; (vii) overseeing the accounting and corporate including the external audit; integrity of the company’s reporting systems (viii) overseeing the company’s process for making timely and balanced disclosure of all material information concerning the Company that a reasonable person would expect to have a material effect on the price or value of the Company’s securities; (ix) ensuring that the Company has in place an appropriate risk management framework and setting the risk appetite within which the Board expects management to operate; and (x) monitoring the effectiveness of the Company’s governance practices. The Company is committed to ensuring that appropriate checks are undertaken before the appointment of a Director and has in place written agreements with each Director which detail the terms of their appointment. 26 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 Corporate Governance Statement 31 March 2021 Principle 1: Lay solid foundations for management and oversight (continued) l y n o e s u l a n o s r e p r o F Recommendation 1.2 A listed entity should: (c) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and (d) provide security holders with all material information relevant to a decision on whether or not to elect or re-elect a director. Election of Board members is substantially the province of the Shareholders in general meeting. The Board currently consists of two Executive Directors and two Non-Executive Directors is independent). As the Company’s activities develop in size, nature and scope, the composition of the Board and the implementation of additional corporate governance policies and structures will be reviewed. of whom (each Nominations of new Directors are considered by the full Board. If any vacancies arise on the Board, all directors are involved in the search and recruitment of a replacement. The Board has taken a view that the full Board will hold special meetings or sessions as required. The Board is confident that this process for selection, including undertaking appropriate checks before appointing a person, or putting forward to security holders a candidate for election, and review is stringent and full details of all Directors will be provided to Shareholders in the annual report and on the Company’s website. All material information relevant to a decision on whether or not to elect or re-elect a Director will be provided to security holders in Section 3 of the Prospectus or a Notice of Meeting pursuant to which the resolution to elect or re-elect a Director will be voted on. Recommendation 1.3 A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment. into Executive Service The Company has entered Agreements with Executive Directors and Letters of Appointment with each Non-Executive Director. Recommendation 1.4 The company secretary of a listed entity should be accountable directly to the Board, through the chair, on all matters to do with the proper functioning of the Board. The Board Charter outlines the roles, responsibility and accountability of the Company Secretary. The Company Secretary is accountable directly to the Board, through the chair, on all matters to do with the proper functioning of the Board. Recommendation 1.5 A listed entity should: (a) have and disclose a diversity policy; (b) through its board or a committee of the board set measurable objectives for achieving gender diversity and in the composition of its board, senior executives and workforce generally; and (c) disclose in relation to each reporting period: (i) the measurable objectives set for that period to achieve gender diversity; (ii) the entity’s progress towards achieving those objectives; and (iii) either: (A) the respective proportions of men and women on the Board, in senior executive the whole positions organisation (including how the entity has defined “senior executive” for these purposes); or across and (B) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under that Act. The Company has adopted a Diversity Policy. The Board values diversity and recognises the benefits it can bring its goals. to the organisation’s ability to achieve Accordingly, the Company has set in place a diversity policy. This policy outlines the Company’s diversity objectives to gender, age, cultural background and ethnicity. It includes requirements for the Board to establish measurable objectives for achieving diversity, and for the Board to assess annually both the objectives, and the Company’s progress in achieving them. relation in 27 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 Corporate Governance Statement 31 March 2021 Principle 1: Lay solid foundations for management and oversight (continued) Recommendation 1.5 (continued) The Diversity Policy provides a framework for the Company to achieve a list of measurable objectives that encompass gender equality. The Diversity Policy provides for the monitoring and evaluation of the scope and currency of the Diversity Policy. The company is responsible for implementing, monitoring and reporting on the measurable objectives. The Diversity Policy is available on the Corporate Governance Plan on the Company’s website. The Company does not discriminate on the basis of gender. The Company is not of a relevant size to consider setting measurable objectives for achieving gender diversity. As such the Board has not set any measurable objectives for achieving gender diversity. l Category 31 March 2021 Board of Directors Senior Management Company wide Male 3 3 50 Female 1 1 42 The Senior Management refer to those persons having authority and responsibility for planning, directing, controlling the activities of the consolidated entity, directly or indirectly, of the consolidated entity. Recommendation 1.6 A listed entity should: (a) have and disclose a process for periodically evaluating the performance of the Board, its committees and individual directors; and (b) disclose in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process. a Nomination Committee. The Company is not of a relevant size to consider formation of The responsibilities of the Nomination Committee are currently carried out by the Board and evaluating the performance of the Board, any committees and individual directors on an annual basis. The Board may do so with the aid of an independent advisor. The process for this can be found in Schedule 5 of the Company’s Corporate Governance Plan. l y n o e s u a n o s r e p r o F The Company has established the Nomination Committee Charter, which requires disclosure as to whether or not performance evaluations were conducted during the relevant reporting period. During the year, a performance evaluation of the Executive Directors was undertaken by the Non- Executive Directors. The performance of the Board, its committees and the individual directors is assessed on an on-going basis by the Chairman of the Board. Recommendation 1.7 A listed entity should: (a) have and disclose a process for periodically evaluating the performance of its senior executives at least once every reporting period; and (b) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period. The responsibilities of the Nomination Committee are currently carried out by the Board, which includes periodically evaluating the performance of senior executives. The process is disclosed in Schedule 6 of the Corporate Governance Plan. During March 2021, over a series of informal discussions, the Executive Directors have reviewed each senior executive. All senior executives’ performances met performance criteria. Principle 2: Structure the Board to add value Recommendation 2.1 The Board of a listed entity should: (a) have a nomination committee which: (i) has at least three members, a majority of whom are independent directors; and (ii) is chaired by an independent director, and disclose: (iii) the charter of the committee; (iv) the members of the committee; and (v) as at the end of each reporting period, the the committee met individual those times number of throughout the period and the attendances of meetings; or the members at 28 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 Corporate Governance Statement 31 March 2021 Principle 2: Structure the Board to add value (continued) l y n o Recommendation 2.1 (continued) (b) if it does not have a nomination committee, disclose that fact and the processes it employs to address Board succession issues and to ensure that the Board has the appropriate balance of skills, experience, independence and knowledge of the entity to enable it to discharge its duties and responsibilities effectively. e s u l a n o s r e p r o F The Company does not comply with Principle 2.1. The Company is not of a relevant size to consider formation of a nomination committee to deal with the selection and appointment of new Directors and as such a nomination committee has not been formed. Nominations of new Directors are considered by the full Board. If any vacancies arise on the Board, all directors are involved in the search and recruitment of a replacement. The Board has taken a view that the full Board will hold special meetings or sessions as required. The Board is confident that this process for selection, including undertaking appropriate checks before appointing a person, or putting forward to security holders a candidate for election, and review is stringent and full details of all Directors will be provided to Shareholders in the annual report and on the Company’s website. Recommendation 2.2 A listed entity should have and disclose a Board skill matrix setting out the mix of skills and diversity that the Board currently has or is looking to achieve in its membership. The Company identifies the following as the main areas of skills required by the Board to successfully service the Company. The directors have been measured to these areas in the skills matrix: Executive and Non-Executive experience Industry experience and knowledge Leadership Corporate governance & Risk Management Strategic thinking Desired behavioural competencies Geographic experience Capital Markets experience Number of Directors that meet the skill 4 4 4 4 4 4 4 3 (continued) Subject matter expertise - accounting - capital management - corporate financing - industry taxation - risk management - legal - IT expertise Number of Directors that meet the skill 3 3 3 1 4 2 1 The Board Charter requires the disclosure of each Board member’s qualifications and expertise as set out in the Company’s Board skills matrix. Full details as to each Director and senior executive’s relevant skills and experience are available in the Annual Report and the Company’s Website. Recommendation 2.3 A listed entity should disclose: (a) the names of the directors considered by the Board to be independent directors; (b) if a director has an interest, position, association or relationship of the type described in Box 2.3 of the ASX Corporate Governance Principles and Recommendation (3rd Edition), but the Board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the Board is of that opinion; and (c) the length of service of each director The Board Charter provides for the disclosure of the names of Directors considered by the Board to be independent. Currently two members of the Board are considered independent being Mr Clive Tan Che Koon and Mr Charles Mac; The Board Charter requires Directors to disclose their interest, positions, associations and relationships and requires that the independence of Directors is regularly assessed by the Board in light of the interests disclosed by Directors. Details of the Directors interests, positions associations and relationships are provided in the Annual Report; and 29 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F Corporate Governance Statement 31 March 2021 Principle 2: Structure the Board to add value (continued) Recommendation 2.3 (continued) The Board Charter provides for the determination of the Directors’ terms and requires the length of service of each Director to be disclosed. The length of service of each Director is as follows: • Mr Clive Tan Che Koon appointed on 1 Sep 2015 • Ms Pauline Teo Puay Lin appointed on 3 Jan 2018 • Mr Chee Kuan Tat, Ken appointed on 1 Jan 2019 • Mr Charles Mac appointed on 23 May 2019 Recommendation 2.4 A majority of the Board of a listed entity should be independent directors. The Board considers that only two out of the four Directors are independent directors in accordance with the ASX Corporate Governance Council’s definition of independence: Mr. Clive Tan Che Koon (Independent Non-Executive Director) Mr. Charles Mac (Independent Non-Executive Director) The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the expense of the appointment of additional independent non-executive Directors. The Board believes that the individuals on the Board can make, and do make, quality and independent judgements in the best interests of the Company on all relevant issues. Directors having a conflict of interest in relation to a particular item of business must absent themselves the Board meeting before commencement of discussion on the topic. from Recommendation 2.5 The chair of the Board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity. Mr. Clive Tan currently holds the position of Non- Executive Chairman which does not comply with the ASX Corporate Governance Council’s recommendations. The Board considers the importance of a division of responsibility and independence at the head of the Company, the existing Board is chaired by Mr Tan who is also a Non-Executive Director. The Board considers that he is able to bring quality and independent judgement to all relevant issues, and the Company benefits from his its operations and business relationships. long-standing experience of Recommendation 2.6 A listed entity should have a program for inducting new directors and providing appropriate professional development opportunities for continuing directors to develop and maintain the skills and knowledge needed to perform their role as a director effectively. The Board Charter states that a specific responsibility of is to procure appropriate professional the Board The development opportunities Remuneration Committee for the induction and continuing approval and review of professional development programs and procedures for Directors to ensure that they can effectively discharge their responsibilities. for Directors. is responsible Principle 3: Act ethically and responsibly Recommendation 3.1 A listed entity should articulate and disclose its values. The Company has statement of values which can be viewed on its website. Recommendation 3.2 A listed entity should: (a) have and disclose a code of conduct for its directors, senior executives and employees; and (b) ensure that the board or a committee of the board is informed of any material breaches of that code. The Board is committed to the establishment and maintenance of appropriate ethical standards. The Corporate Code of Conduct applies to the Company’s directors, senior executives and employees. The Company’s Corporate Code of Conduct is available in the Corporate Governance plan which is on the Company’s website. 30 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F Corporate Governance Statement 31 March 2021 Principle 3: Act ethically and responsibly (continued) Recommendation 3.3 A listed entity should: (a) have and disclose a whitsleblower policy; and (b) ensure that the board or a committee of the board is informed of any material incidents reported under that policy. The Company has implemented a whistleblower policy which can be viewed on its website and the Board is informed when any material incidents are reported under the policy. Recommendation 3.4 A listed entity should: (a) have and disclose an anti-bribery and corruption policy; and (b) ensure that the board or a committee of the board is informed of any material breaches of that policy. The Company has implemented an anti-bribery and corruption policy which can be viewed on its website and the Board is informed when any material incidents are reported under the policy. Principle 4: Safeguard integrity in financial reporting Recommendation 4.1 The Board of a listed entity should: (a) have an audit committee which: (i) has at least three members, all of whom are Non-Executive Directors and a majority of whom are independent directors; and (ii) is chaired by an independent director, who is not the chair of the Board, and disclose: (iii) the charter of the committee; (iv) the relevant qualifications and experience of the members of the committee; and (v) in relation to each reporting period, the the committee met individual those number of times throughout the period and the attendances of meetings; or the members at the processes (b) if it does not have an audit committee, disclose that fact and that independently verify and safeguard the integrity of its financial reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner. it employs The Company is not currently of a size, nor are its affairs of such complexity to justify the formation of audit committee to satisfy this recommendation. The Board believes that the individuals on the Board can make, and do make, quality and informed judgements in the best interests of the Company on all relevant issues. affecting The Board will carry out the duties that would ordinarily be assigned to that committee under the written terms of reference for that committee, including but not limited to, monitoring and reviewing any matters of significance and compliance, the integrity of the financial reporting of the Company, the Company's internal financial control system and risk management systems and the external audit function. The Board from time to time will review the scope, performance and fees of the external auditors and the rotation of the audit engagement partner. reporting financial Recommendation 4.2 The Board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. The Board ensure that before they approve the entity’s financial statements for a financial period, the Executive Directors have declared that in their opinion the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. 31 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 Corporate Governance Statement 31 March 2021 Principle 4: Safeguard integrity in financial reporting (continued) Principle 6: Respect the rights of security holders l y n o e s u l a n o s r e p r o F Recommendation 4.3 A listed entity should disclose its process to verify the integrity of any periodic corporate report it releases to the market that is not audited or reviewed by an external auditor. Any periodic corporate reports are prepared by the accountant, reviewed by Executive Directors and presented to the Board for sign off prior to release to the market. Principle 5: Make timely and balanced disclosure Recommendation 5.1 A listed entity should have and disclose a written policy for complying with its continuous disclosure obligations under the Listing Rules 3.1. The Company’s Corporate Governance Plan includes a continuous disclosure program. The Corporate Governance Plan is available on the Company’s website. Recommendation 5.2 A listed entity should ensure that its board receives copies of all material market announcements promptly after they have been made. All material market announcements are circulated to the board via email. Recommendation 5.3 A listed entity that gives a new and substantive investor or analyst presentation should release a copy of the presentation materials the ASX Market Announcements Platform ahead of the presentation. on Results, presentations and transcripts of the Chairman’s address at annual general meetings are released on the ASX Market Announcements Platform as soon as practically possible after the conclusion of the general meeting. Other presentations to new or substantive shareholders or investor analysts are released on the ASX Market Announcements Platform prior to the presentation. Recommendation 6.1 A listed entity should provide information about itself and its governance to investors via its website. there are The Company has a comprehensive website found at www.8viholdings.com, where to directors, corporate governance, plans and policies. links to all financial reports, Also announcements, notice of meetings and presentations and any external media commentary made on the Company. included are links Recommendation 6.2 A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors. a has adopted Company The Shareholder Communications Strategy which aims to promote and two-way communication with facilitate effective investors. The Strategy outlines a range of ways in which information is communicated to shareholders. The Shareholder Communications Strategy can be found in the Corporate Governance plan under schedule 11 which is available at the Company’s website. Recommendation 6.3 A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders. The Shareholder Communication Strategy, which can be found in schedule 11 of the Corporate Governance Plan which is available on the Company’s website. Recommendation 6.4 A listed entity should ensure that all substantive resolutions at a meeting of security holders are decided by a poll rather than by a show of hands. The Company decides all resolutions at a meeting of security holders by a poll. 32 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 Corporate Governance Statement 31 March 2021 Principle 6: Respect the rights of security holders (continued) Recommendation 6.5 A listed entity should give security holders the option to receive send communications to, the entity and its security registry electronically. communications from, and Security holders can register with the Company to receive email notifications when an announcement is made by the Company to the ASX. Shareholders queries should be referred to the Company Secretary at first instance. Principle 7: Recognise and manage risk Recommendation 7.1 The Board of a listed entity should: (a) have a committee or committees to oversee risk, each of which: (i) has at least three members, a majority of whom are independent directors; and (ii) is chaired by an independent director, and disclose: (iii) the charter of the committee; (iv) the members of the committee; and (v) as at the end of each reporting period, the the committee met individual those times number of throughout the period and the attendances of meetings; or the members at (b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the process it employs for overseeing the entity’s risk management framework. The Board has not established a separate Risk Management Committee. However, the Board has assumed the role of a separate Risk Management Committee and it is ultimately responsible for risk oversight and risk management. Discussions on the recognition and management of risks were also considered by the Board. l y n o e s u l a n o s r e p r o F The Board's collective experience will assist in the identification of the principal risks that may affect the Company's business. Key operational risks and their management will be recurring items for deliberation at Board meetings. Recommendation 7.2 The Board or a committee of the Board should: (a) review the entity’s risk management framework with management at least annually to satisfy itself that it continues to be sound, to determine whether there have been any changes in the material business risks the entity faces and to ensure that they remain within the risk appetite set by the Board; and (b) disclose in relation to each reporting period, whether such a review has taken place. The Company process for risk management and internal compliance includes a requirement to identify and measure risk, monitor the environment for emerging factors and trends that affect these risks, formulate risk management strategies and monitor the performance of risk management systems. Schedule 8 of the Corporate Governance Plan, which can be found on the Company’s website, ‘Disclosure - Risk is entitled Management’ and details the Company’s disclosure requirements with respect to the risk management review procedure and internal compliance and controls. The Board Charter requires in relation to the reporting period relevant to that Committee, to disclose the number of times that Committee met throughout the period, and the individual attendances of the members at those Committee meetings. The Board has not established a separate Risk Management Committee and hence no meeting was being conducted in the reporting period. Recommendation 7.3 A listed entity should disclose: (a) if it has an internal audit function, how the function is structured and what role it performs; or (b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes. 33 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 Corporate Governance Statement 31 March 2021 Principle 7: Recognise and manage risk (continued) Recommendation 7.3 (continued) The Company does not currently have an internal audit function. Given the size of the Company, no internal audit function is currently considered necessary. The Company’s Management periodically undertakes an internal review of financial systems and processes and where systems are considered to require improvement these systems are developed. The Board also considers external reviews of specific areas and monitors the implementation of system improvements. Recommendation 7.4 A listed entity should disclose whether, it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks. in or apparent business, The Board details the Company’s risk management identifying and managing systems which assist economic, potential (if environmental and social sustainability appropriate). Review of risk management framework is conducted at least annually and reports are continually created by management on the efficiency and effectiveness of the Company’s risk management internal compliance and control procedures. framework and associated the Company’s risks Principle 8: Remunerate fairly and responsibly Recommendation 8.1 The Board of a listed entity should: (a) have a remuneration committee which: l y n o e s u l a n o s r e p r o F (i) has at least three members, a majority of whom are independent directors; and (ii) is chaired by an independent director, and disclose: (iii) the charter of the committee; (iv) the members of the committee; and (v) as at the end of each reporting period, the the committee met individual those number of times throughout the period and the attendances of meetings; or the members at (b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive. remuneration The Board as a whole performs the function of the Remuneration Committee which includes setting the Company's structure, determining eligibilities to incentive schemes, assessing performance senior management and and determining the remuneration and incentives of the Board. remuneration of from The Board may obtain external advice independent consultants in determining the Company's remuneration practices, including remuneration levels, where considered appropriate. The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the expense of the appointment of additional independent Non-Executive Directors to satisfy this recommendation. Recommendation 8.2 A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives. The Board outlines the Company’s policies and practices regarding the remuneration of non-executive, executive and other senior directors. The remuneration of any Executive Director will be decided by the Board following the recommendation of the Remuneration Committee, without the affected Executive Director participating in that decision-making process. The Constitutions provide that the Non-Executive Directors will be paid by way of remuneration for their services as Directors a sum not exceeding such fixed sum per annum pursuant to a resolution passed at a general meeting of the Company. Until a different amount is determined, the amount of the remuneration is S$200,000 per annum. 34 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 Corporate Governance Statement 31 March 2021 Principle 8: Remunerate fairly and responsibly (continued) Recommendation 8.2 (continued) In addition, subject to any necessary Shareholder approval, a Director may be paid fees or other amounts as the Directors determine where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director (e.g. non- cash performance incentives such as options). Directors are also entitled to be paid reasonable travel and other expenses incurred by them in the course of the performance of their duties as Directors. The Board reviews and approves the Company’s remuneration policy in order to ensure that the Company is able to attract and retain executives and Directors who will create value for Shareholders, having regard to the amount considered to be commensurate for an entity of the Company’s size and level of activity as well as the relevant Directors’ time, commitment and responsibility. Recommendation 8.3 A listed entity which has an equity-based remuneration scheme should: (a) have a policy on whether participants are permitted to enter into transactions (whether through the use limit the of derivatives or otherwise) which economic risk of participating in the scheme; and (b) disclose that policy or a summary of it. The Company had obtained its shareholders’ approval on the creation of an equity-based remuneration scheme. The Company’s full Employee Share Plan is available at the www.8viholdings.com. Company’s website in The Board has adopted a policy that sets out the guidelines on the sale and purchase of securities in the Company by its key management personnel (i.e. Directors and, if applicable, any employees reporting directly to the Executive Directors). The policy generally provides that the written acknowledgement of the Non- Executive Chairman (or the Board in the case of the Non- Executive Chairman) must be obtained prior to trading. l y n o e s u l a n o s r e p r o F Principle 9: Additional Recommendations that apply only in certain cases Recommendation 9.1 A listed entity with a director who does not speak the language in which board or security holder meetings are held or key corporate documents are written should disclose the processes it has in place to ensure the director understands and can contribute to the discussions at those meetings and understands and can discharge those documents. their obligations in relation to Not applicable. Recommendation 9.2 A listed entity established outside Australia should ensure that meetings of security holders are held at a reasonable place and time. Meetings of security holders are held at the Company’s head office in Singapore. In addition, where possible the Company provide security holders with the option to attend the meeting via electronic/online facilities. Recommendation 9.3 A listed entity established outside Australia, and an externally managed listed entity that has an AGM, should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit. The Company ensures that its auditor attends each AGM and is available to answer questions from security holders relevant to the audit. 35 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F Remuneration Report For the financial year ended 31 March 2021 This remuneration report set out information about the remuneration of 8VI Holdings Limited’s key management personnel for the financial year ended 31 March 2021. The term ‘key management personnel’ refer to those persons having authority and responsibility for planning, directing, controlling the activities of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the consolidated entity. Remuneration Policy The remuneration policy of 8VI 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 Non-Executive Directors’ remuneration The Constitution and the ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from time to time by shareholders in general meeting. Total remuneration for all Non-Executive Directors, last voted upon by shareholders in 2020, is not to exceed $200,000 per annum. Directors’ fees cover all main board activities and membership of committees if applicable. Non-Executive Directors do not receive any retirement benefits. Executive remuneration Remuneration for executives is set out in employment agreements. Details of the employment agreement with Executive Directors are provided below. Executive Directors may receive performance-related compensation but do not receive any retirement benefits, other than statutory Central Provident Fund (CPF) contribution. Assessing performance The Board is responsible for assessing performance against Key Performance Indicators (KPIs) and determining the Short- term Incentives (STI) and Long-term Incentive (LTI) to be paid. To assist in this assessment, the Board may request detailed reports on performance from management and market share. The Group does not have any formal bonus scheme in place. The Group does not have any ongoing commitment to pay bonuses. 36 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 Remuneration Report For the financial year ended 31 March 2021 Remuneration Policy (continued) Long-term incentive Long-term Incentives (LTI) may be provided to key management personnel in the form of Share Plans over ordinary shares of the Company. LTI are considered to promote continuity of employment and provide additional incentive to recipients to increase shareholder wealth. Share Plans may only be issued to Directors subject to approval by shareholders in general meeting. Service Agreements Remuneration and other terms of employment for the Executive Directors and other Key Management Personnel are formalised in a service agreement. For Non-Executive Directors, these terms are set out in a Letter of Appointment. The major provisions of the agreements relating to Directors’ remuneration as at date of this report are set out below. Name Clive Tan Che Koon Chee Kuan Tat, Ken Pauline Teo Puay Lin Charles Mac Base Salary(1) S$nil S$192,000 p.a. S$216,000 p.a. S$nil Fees S$43,200 p.a. (2) S$nil S$nil S$42,000 p.a.(2) Term of Agreement No fixed term No fixed term No fixed term No fixed term Notice Period N/A N/A N/A N/A (1) Excluding employer’s Central Provident Fund (CPF) contribution (2) Non-executive director fee of the Company Details of Remuneration A breakdown showing the level and mix of each Director’s and Key Management Personnel’s remuneration for the financial year ended 31 March 2021 is set out below: l y n o e s u l a n o s r e p r o F Name of Directors Executive Directors Chee Kuan Tat, Ken Pauline Teo Puay Lin Non-executive Directors Clive Tan Che Koon Charles Mac Short-term Bonus/ Profit- sharing S$’000 369 225 - - Salary S$’000 192 178 - - Post- employment Share-based Payments Directors’ Fee S$’000 CPF Contribution S$’000 Share Plan S$’000 Total S$’000 - - 43 21 17 17 - - 307 153 153 37 885 573 196 58 37 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 Remuneration Report For the financial year ended 31 March 2021 Details of Remuneration (continued) 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 Below S$100,000 Juanna Chua Will Huang Chief Technology Officer Director, China subsidiary General Manager, Taiwan subsidiary Short-term Salary % Bonus % Post- employment Pension Contribution % Share-based Payments Share Plan % Total % 77 79 86 44 12 12 5 56 11 9 9 - - - - - 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. The total remuneration of the top five key executives (who are not directors of the Company) is S$994,018 for the financial year ended 31 March 2021 (2020: S$543,403). There were no terminations, retirement or post-employment benefits granted to Directors and Key Management Personnel other than the standard contractual notice period termination payment in lieu of service for the financial year ended 31 March 2021. No employee whose remuneration exceeded S$50,000 during the financial year is an immediate family member of any of the members of the Board. The Company did not provide any equity compensation to Directors or executives during the financial year ended 31 March 2021. The Company also reimburses validly incurred business expenses of Directors and Key Management Personnel. Share-based remuneration No options over ordinary shares in the Company were granted as compensation to each key management person during the reporting period except for the Rights and Share Options granted to Directors as shown in the Directors’ Statement. 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 Board of Directors reviewed and approved the Company’s remuneration policy. l y n o e s u l a n o s r e p r o F 38 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 Remuneration Report For the financial year ended 31 March 2021 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: l y n o 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. e s u l a n o s r e p r o F 39 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 DIRECTORS’ STATEMENT For the financial year ended 31 March 2021 The directors are pleased to present their statement to the members together with the audited consolidated financial statements of 8VI 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 2021. 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 2021 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 or options in, or debentures of, the Company or any other body corporate. 4. Directors’ interests in shares or debentures (a) 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: l y n o e s u l a n o s r e p r o F 40 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F DIRECTORS’ STATEMENT For the financial year ended 31 March 2021 4. Directors’ interests in shares or debentures (continued) Holding Company, 8I Holdings Limited (No. of ordinary shares) Clive Tan Che Koon Pauline Teo Puay Lin Chee Kuan Tat, Ken The Company, 8VI Holdings Limited (No. of ordinary shares) Clive Tan Che Koon Pauline Teo Puay Lin Chee Kuan Tat, Ken Holdings registered in name of director or nominee At 31.3.2021 At 1.4.2020 65,140,000 8,859,103 86,885,009 65,140,000 8,859,103 86,684,792 200,000 184,943 400,000 - - - (b) According to the register od director’s shareholdings, certain directors holding office at the end of the financial year had interests in performance rights and options to subscribe for ordinary shares of the Company, granted pursuant to the Company’s Employee Securities Incentive Plan set out below and under “Rights and Share Options” below: 8VI Holdings Limited Clive Tan Che Koon and Pauline Teo Puay Lin Class C Performance Rights Class D Performance Rights Class E Performance Rights Class F Performance Rights Options Chee Kuan Tat, Ken Class C Performance Rights Class D Performance Rights Class E Performance Rights Class F Performance Rights Options No. of unissued ordinary shares under performance rights and options At 31.3.2021 At 1.4.2020 100,000 100,000 125,000 125,000 500,000 200,000 200,000 250,000 250,000 1,000,000 - - - - - - - - - - (c) Chee Kuan Tat, Ken, who by virtue of his interest of not less than 20% of the issued capital of the holding company, is deemed to have an interest in the share capital of the Company. (d) The directors’ interests in the ordinary shares and convertible securities of the Company as at 21 April 2021 were the same as those as at 31 March 2021. 5. Rights and share options (a) Employee Securities Incentive Plan The Company’s Employee Securities Incentive Plan (“Share Plan”) for key directors and employees of the Group was approved by members of the Company as its annual general meeting on 23 July 2020. The Share Plan provides a means to attract, motivate and retain key directors and employees and provide them with the opportunity to participate in the future growth of the Company. 41 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F DIRECTORS’ STATEMENT For the financial year ended 31 March 2021 5. Rights and share options (continued) (a) Employee Securities Incentive Plan (continued) Under the Share Plan, the board of directors may from time to time determine that a director of the companies of the Group, subject to its members’ approval, or an employee may participate in the Share Plan to apply for securities on such terms and conditions as the board of directors decides. The persons to whom the rights and options have been issued have no right to participate by virtue of the options in any share issue of any other companies of the Group. The Group has no legal or constructive obligation to repurchase or settle the securities in cash. During the financial year, pursuant to members’ approval at its annual general meeting on 23 July 2020, the Company granted its directors options to subscribe for 2,000,000 ordinary shares at exercise price of AUD 0.45 per share (“Options”) and performance rights to be converted into 2,600,000 ordinary shares upon meeting the vesting conditions (“Performance Rights”). The Options are exercisable from 21 August 2020 and expire on 30 June 2025. The total fair value of the Options granted was estimated to be AUD 955,600 using the Hoadleys Employee Stock Option Model. Details of the Options granted to directors of the Company are as follows: No. of unissued ordinary shares of the Company under Options Granted in financial year ended 31.3.2021 500,000 500,000 1,000,000 Aggregated granted since commencement of plan to 31.3.2021 Aggregated exercised since commencement of plan to 31.3.2021 Aggregate outstanding as at 31.3.2021 500,000 500,000 1,000,000 - - - 500,000 500,000 1,000,000 Name of director Clive Tan Che Koon Pauline Teo Puay Lin Chee Kuan Tat, Ken The Performance Rights will not have consideration on satisfaction of the vesting conditions. The vesting conditions for the Performance Rights are: - The holder being a director of the Company as at the relevant vesting determination dates specified in the table below; and - The relevant volume weighted average price (VWAP) of the Company’s shares traded on ASX over any 20-day period exceeds the prices specified in the table below. Performance Rights granted Vesting conditions Performance Rights Class A Class B Class C Class D Class E Class F Number 400,000 400,000 400,000 400,000 500,000 500,000 Effective grant date 23 Jul 2020 23 Jul 2020 23 Jul 2020 23 Jul 2020 23 Jul 2020 23 Jul 2020 Fair value per right at effective grant date (AUD) Earliest vesting determination date VWAP Share Price condition (AUD) 0.4675 0.3813 0.4037 0.2016 0.2570 0.1389 21 Aug 2020 21 Aug 2020 01 Apr 2021 01 Apr 2021 01 Apr 2022 01 Apr 2022 0.45 0.60 0.70 2.00 2.30 5.00 Expiry Date 30 Apr 2021 30 Apr 2021 30 Apr 2022 30 Apr 2022 30 Apr 2023 30 Apr 2023 42 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 DIRECTORS’ STATEMENT For the financial year ended 31 March 2021 5. Rights and share options (continued) (a) Employee Securities Incentive Plan (continued) The total fair value of the Performance Rights granted was estimated to be AUD 779,590 using the Hoadleys Hybrid ESO Model (a Monte Carlo simulation model). Details of the Performance Rights granted to directors of the Company are as follows: No. of unissued ordinary shares of the Company under Performance Rights Granted in financial year ended 31.3.2021 Aggregated granted since commencement of plan to 31.3.2021 Aggregated exercised since commencement of plan to 31.3.2021 Aggregate outstanding as at 31.3.2021 Name of director Clive Tan Che Koon Pauline Teo Puay Lin Chee Kuan Tat, Ken 650,000 650,000 1,300,000 650,000 650,000 1,300,000 200,000 200,000 400,000 450,000 450,000 900,000 During the financial year, the vesting conditions of the Class A Performance Rights and Class B Performance Rights were satisfied and both classes of Performance Rights were converted into ordinary shares. Mr Chee received 400,000 ordinary shares while Mr Tan and Ms Teo received 200,000 ordinary shares respectively from the exercising of their Class A Performance Rights and Class B Performance Rights. (b) Performance Rights and Options outstanding The number of unissued shares under Performance Rights and Options in relation to the Share Plan outstanding at the end of the financial year was as follows: No. of unissued ordinary shares under the rights and options at 31.3.2021 Exercise price Exercise period Performance Rights - Class C - Class D - Class E - Class F Options 400,000 400,000 500,000 500,000 2,000,000 - - - - AUD 0.45 01 Apr 2021 to 30 Apr 2022 01 Apr 2021 to 30 Apr 2022 01 Apr 2022 to 30 Apr 2023 01 Apr 2022 to 30 Apr 2023 21 Aug 2020 to 30 Jun 2025 l y n o e s u l a n o s r e p r o F 43 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 DIRECTORS’ STATEMENT For the financial year ended 31 March 2021 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 2021 Pauline Teo Puay Lin Director l y n o e s u l a n o s r e p r o F 44 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 KLP LLP 13A MacKenzie Road Singapore 228676 Tel: (65) 6227 4180 klp@klp.com.sg www.klp.com.sg l y n o e s u l a n o s r e p r o F Independent Auditor's Report to the members of 8VI Holdings Limited Report on the Audit of the Financial Statements Opinion We have audited the financial statements of 8VI Holdings Limited (the “Company”) and its subsidiaries (the “Group”), which comprise the consolidated statement of financial position of the Group and the statement of financial position of the Company as at 31 March 2021, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group 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 2021 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. 45 l y n o e s u l a n o s r e p r o F 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 8VI Holdings Limited (continued) Key audit matters (continued) Key audit matter in the audit of the Group Intangible assets recognition and measurement How our audit addressed the key audit matter Our procedures in relation to the Group’s recognition and measurement of development software, we: 1. Obtained an understanding and assessing the design of the controls in relation to how management determined and measured costs that are directly attributable to the development activities; 2. Evaluate the nature of the development costs incurred that are capitalised into intangible assets; 3. Assessing the reasonableness of the capitalisation based on our knowledge of the business and industry. 4. Evaluating the appropriateness of expenses capitalised on a sample basis by agreeing the costs to internal timesheet and payroll records. Based on the procedure performed above, we consider the costs capitalised to be supportable by available evidence. Refer to Note 5 “Intangible assets”, Note 2.6 (b) ‘Summary of significant accounting policies – intangible assets and Note 3.1 (d) “Critical accounting estimates, assumptions and judgments” to the consolidated financial statements. As at 31 March 2021, the Group’s intangible assets included development to S$790,401 (net of amortisation). software amounting During the year, the Group conducted a continuous update on the mobile application for VI App. Management applied judgement in identifying which functions need updates and expenditure attributable to the updates that met the criteria for capitalisation under the requirements of accounting standards. Factors taken into account by management included the Group’s intention, availability of technical, financial and other resources and technical ability to complete the updates, the likelihood of generating sufficient future economic benefits to the Group and its ability to measure the expenditure incurred. We considered such to be a key audit matter because of the significance of the costs capitalised and the judgement the involved capitalisation criteria have been met. in assessing whether Other Information Management is responsible for other information. The other information comprises the Board of Directors, Corporate Governance Report and Directors’ Statement (but does not include the financial statements and our auditor’s report thereon), which we obtained prior to the date of this auditor’s report, and the other sections of the annual report (“the Other Sections”), which are expected to be made available to us after that date. 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. 46 KLP LLP 13A MacKenzie Road Singapore 228676 Tel: (65) 6227 4180 klp@klp.com.sg www.klp.com.sg l y n o e s u l a n o s r e p r o F Independent Auditor's Report to the members of 8VI Holdings Limited (continued) Other Information (continued) 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. 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. 47 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 8VI Holdings Limited (continued) Auditor’s Responsibilities for the Audit of the Financial Statements (continued) • • 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. 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 Rochelle Santiago. l y n o e s u l a n o s r e p r o F KLP LLP Public Accountants and Chartered Accountants Singapore, 29 May 2021 48 CONSOLIDATED STATEMENT OF FINANCIAL POSITION - GROUP As At 31 March 2021 SOFP Assets Non-current assets Property, plant and equipment Intangible assets Investment in associated company Financial assets, at FVOCI Deferred tax assets Current assets Trade and other receivables Current tax assets Prepayment Financial assets, at FVPL Fixed deposits Cash and cash equivalents Total assets Equity and liabilities Equity attributable to owners of the Company Share capital Retained earnings/(Accumulated loss) Foreign currency translation reserve Employee securities plan 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 Unearned revenue Lease liabilities Deferred tax liabilities l y n o e s u l a n o s r e p r o F Group Note 2021 S$ 2020 S$ 4 5 7 8 18 9 8 10 10 11 12 13 14 15 16 17 16 17 18 1,440,868 799,706 - 7,421 296,355 2,544,350 1,493,543 73,394 516,048 3,600,947 100,000 18,629,229 24,413,161 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 26,957,511 11,976,067 13,282,193 2,422,799 (90,905) 278,750 (4,481,538) 11,411,299 876,848 12,288,147 3,446,851 9,521,393 798,089 591,617 14,357,950 233,789 73,625 4,000 311,414 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 Total liabilities 14,669,364 6,828,699 Total equity and liabilities 26,957,511 11,976,067 The accompanying notes form an integral part of these financial statements. 49 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 STATEMENT OF FINANCIAL POSITION - COMPANY As At 31 March 2021 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 Employee securities plan reserve Accumulated losses Total equity Current liabilities Trade and other payables Unearned revenue Total liabilities Company Note 2021 S$ 2020 S$ 6 9 10 11 13 15 16 2,568,393 2,568,393 2,760 18,516 1,574,600 1,595,876 2,568,393 2,568,393 587,747 10,093 288,525 886,365 4,164,269 3,454,758 77,810,264 278,750 (74,165,691) 3,923,323 77,423,174 - (74,075,327) 3,347,847 240,946 - 240,946 90,811 16,100 106,911 Total equity and liabilities 4,164,269 3,454,758 l y n o e s u l a n o s r e p r o F SOCI The accompanying notes form an integral part of these financial statements. 50 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the financial year ended 31 March 2021 Note 2021 S$ 19 20 21 23 Revenue Cost of sales and services Gross profit Other income Other items of expense Administrative expenses Marketing and other expenses Finance costs Share of results of associated companies Profit before tax Income tax expense Profit after tax Other comprehensive (loss)/income: Items that may be reclassified subsequently to profit or loss Foreign currency translation Items that will not be reclassified subsequently to profit or loss Financial assets, at FVOCI - Fair value gains/(losses) – equity investments Other comprehensive (loss)/income, net of tax Total comprehensive income for the year Total profit after tax attributable to: Owners of the Company Non-controlling interests Total comprehensive income attributable to: Owners of the Company Non-controlling interests l y n o e s u l a n o s r e p r o F 2020 S$ 10,859,351 (2,957,453) 7,901,898 25,960,661 (5,894,172) 20,066,489 1,054,432 236,121 (5,994,774) (7,559,680) (33,693) (3,699,332) (3,352,423) (81,574) - (135,939) 7,532,774 (1,037,169) 6,495,605 868,751 (89,330) 779,421 (17,569) (17,569) 40,922 40,922 142 (17,427) 6,478,178 5,861,405 634,200 6,495,605 5,832,443 645,735 6,478,178 (746) 40,176 819,597 1,072,047 (292,626) 779,421 1,076,357 (256,760) 819,597 Earnings per share (cents per share) Basic Diluted 24 14.34 13.87 2.64 2.64 The accompanying notes form an integral part of these financial statements. 51 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the financial year ended 31 March 2021 SOCE 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$ 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 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. 52 l y n o e s u l a n o s r e p r o F CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the financial year ended 31 March 2021 Accumulated profits/ (losses) S$ Foreign currency translation reserve S$ Employee securities plan reserve S$ Other reserves S$ Share capital S$ Total equity to owners of the Company S$ Non- controlling interest S$ Total equity S$ Group Balance as at 1 April 2020 Profit for the year Other comprehensive income/(loss), net of tax Total comprehensive income/(loss) for the year Contributions by and distributions to owners Changes in non-controlling interest Value of employee services Performance rights exercised Total transactions with owners in their capacity as owners Balance as at 31 March 2021 12,895,103 - - - (3,438,606) 5,861,405 - 5,861,405 (61,801) - (29,104) (29,104) - - - - (4,490,583) - 142 142 4,904,113 5,861,405 (28,962) 5,832,443 243,255 634,200 11,535 645,735 5,147,368 6,495,605 (17,427) 6,478,178 - 51,882 335,208 - - - - - - - 613,958 (335,208) 8,903 - - 8,903 665,840 - (12,142) - - (3,239) 665,840 - 387,090 13,282,193 - 2,422,799 - (90,905) 278,750 278,750 8,903 674,743 (4,481,538) 11,411,299 662,601 (12,142) 876,848 12,288,147 The accompanying notes form an integral part of these financial statements. 53 l y n o e s u l a n o s r e p r o F STATEMENT OF CHANGES IN EQUITY For the financial year ended 31 March 2021 Share capital S$ Employee securities plan reserve S$ Accumulated losses S$ Total equity S$ Company Balance as at 1 April 2019 Total comprehensive loss for the year Balance as at 31 March 2020 77,423,174 - 77,423,174 Total comprehensive loss for the year - - - - - (73,618,732) (456,595) 3,804,442 (456,595) (74,075,327) 3,347,847 (90,364) (90,364) Contributions by and distributions to owners Value of employee services Performance rights exercised Total transactions with owners in their capacity 51,882 335,208 613,958 (335,208) - - 665,840 - as owners Balance as at 31 March 2021 387,090 77,810,264 278,750 278,750 - (74,165,691) 665,840 3,923,323 l y n o e s u l a n o s r e p r o F The accompanying notes form an integral part of these financial statements. 54 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 CONSOLIDATED STATEMENT OF CASH FLOWS For the financial year ended 31 March 2021 SOCF l y n o e s u l a n o s r e p r o F Cash flows from operating activities Profit before tax Adjustments for: Amortisation of development of software Depreciation of property, plant and equipment Property, plant and equipment written-off Finance cost Impairment of financial assets Fair value (gain)/loss in financial assets at FVPL Gain on disposal of an associate Gain on disposal of property, plant and equipment Interest income Dividend income Employee share plan expense Rent concession Share of results of associated company Unrealised exchange loss Working capital changes in: Trade and other receivables Prepayment Trade and other payables Unearned revenue Cash generated from operating activities Interest income Dividend income Income tax paid Net cash generated from operating activities Cash flows from investing activities Additions to property, plant and equipment Additions to development of software Acquisition of subsidiaries, net of cash acquired Disposal in associated companies Dilution of non-controlling interest Investment in financial assets at FVPL Loan to non-related party Placement of fixed deposits Proceeds from disposal of property, plant and equipment Net cash (used in)/generated from investing activities Cash flows from financing activities Principal payment of lease liabilities Interest paid Net cash used in financing activities Net increase 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) 2021 S$ 2020 S$ 7,532,774 868,751 313,134 1,631,297 34,936 33,693 175,481 (209,138) - (1,710) (37,504) (9,581) 665,840 (65,191) - 39,813 10,103,844 12,340 (382,068) 1,642,091 5,909,380 17,285,587 37,504 9,581 (579,129) 16,753,543 (469,283) (673,096) - - (3,239) (2,987,688) - (100,000) 5,995 (4,227,311) (1,219,403) (33,693) (1,253,096) 11,273,136 7,433,590 (77,497) 18,629,229 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 (1,392,434) (81,574) (1,474,008) 2,729,869 4,702,031 1,690 7,433,590 The accompanying notes form an integral part of these financial statements. 55 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 These notes form an integral part and should be read in conjunction with the accompanying financial statements. 1. Corporate information 1.1 General 8VI Holdings Limited (the “Company”, formerly known as 8VIC Holdings Limited) 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 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 2020 On 1 April 2020, the Group has adopted the new or amended FRSs and Interpretations of FRSs (“INT FRSs”) that are mandatory for application for the financial year. Changes to the Group’s accounting policies have been made as required, in accordance with the transitional provisions in the respective FRSs and INT FRSs. The adoption of these new or amended FRSs and INT FRSs did not result in substantial changes to the Group’s accounting policies and had no material effect on the amounts reported for the current or prior financial years except for the early adoption of amendment to FRS 116 Leases: Covid-19-Related Rent Concessions: Early adoption of amendment to FRS 116 Leases: Covid-19-Related Rent Concessions The Group has elected to early adopt the amendment to FRS 116 which introduced a practical expedient for a lessee to elect not to assess whether a rent concession is a lease modification, if all the following conditions are met: (a) the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change; 56 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Summary of significant accounting policies (continued) 2.1 Basis of preparation (continued) l y n o e s u l a n o s r e p r o F Early adoption of amendment to FRS 116 Leases: Covid-19-Related Rent Concessions (continued) (b) any reduction in lease payments affects only payments originally due on or before 30 June 2021; and (c) there is no substantive change to other terms and conditions of the lease. The Group has elected to apply this practical expedient to all property leases. As a result of applying the practical expedient, rent concessions of S$65,191 (Note 20) was included in “Government grants” presented under “Other income” in the profit or loss during the year. 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 provides 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) Programme fees This comprises of providing financial education and training services. Revenue is recognised when the participants attended first day of training. The Company will record contractual liabilities for advance payment made for the training. (d) Interest income Interest income is recognised using the effective interest method. (e) Dividend income Dividend income is recognised when the right to receive payment is established. It is probable that the economic benefits associated with the dividend will flow to the Group, and the amount of the dividend can be reliably measured. (f) Subscription income Subscription income is recognised over the subscription period. 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. 57 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Summary of significant accounting policies (continued) 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. 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. 58 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Summary of significant accounting policies (continued) 2.4 Group accounting (continued) (a) Subsidiaries (continued) (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. (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. l y n o e s u l a n o s r e p r o F 59 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Summary of significant accounting policies (continued) 2.4 Group accounting (continued) (c) Associated companies (continued) (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. 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. Dismantlement, removal or restoration costs are included as part of the cost of property, plant and equipment if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the property, plant and equipment. 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. l y n o e s u l a n o s r e p r o F 60 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Summary of significant accounting policies (continued) 2.5 Property, plant and equipment (continued) (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. 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 VI App and CRM system are capitalised as intangible assets only when technical feasibility of the project is demonstrated, the Group has an intention and ability to complete and use the software and the costs can be measured reliably. Such costs include purchases of materials and services and payroll-related costs of employees directly involved in the project and are amortised over their estimated useful lives of 2 years. 61 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Summary of significant accounting policies (continued) 2.6 Intangible assets (continued) (b) Development of software (continued) 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. (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. 62 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 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 (continued) 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. 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. l y n o e s u l a n o s r e p r o F 63 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Summary of significant accounting policies (continued) 2.9 Financial assets (continued) (a) Classification and measurement (continued) At subsequent measurement (continued) (i) Debt instruments (continued) There are three subsequent measurement categories, depending on the Group’s business model for managing the asset and the contractual cash flow characteristics of the asset: • Amortised cost: Debt instruments that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the asset is derecognised or impaired. Interest income from these financial assets is included in other income and presented as interest income using the effective interest rate method. • FVOCI: Debt instruments that are held for collection of contractual cash flows and for sale, and where the assets’ cash flows represent solely payments of principal and interest, are classified as FVOCI. Movements in fair values are recognised in Other Comprehensive Income (OCI) and accumulated in fair value reserve, except 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”. (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. 64 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Summary of significant accounting policies (continued) 2.9 Financial assets (continued) (b) Expected credit losses (continued) 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 recognised 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. 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. 65 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Summary of significant accounting policies (continued) 2.9 Financial assets (continued) (d) Recognition and derecognition (continued) 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. 2.13 Leases (a) When the Group is the lessee: At the inception of the contract, the Group assesses if the contract contains a lease. A contract contains a lease if the contract convey the right to control the use of an identified asset for a period of time in exchange for consideration. 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. 66 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Summary of significant accounting policies (continued) 2.13 Leases (continued) (a) When the Group is the lessee: (continued) 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. 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. • 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. 67 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Summary of significant accounting policies (continued) 2.13 Leases (continued) (a) When the Group is the lessee: (continued) • Early adoption of amendment to FRS 116 Leases: Covid-19-Related Rent Concessions The Company has applied the amendment to FRS 116 Leases: Covid-19-Related Rent Concessions. The Company applies the practical expedient allowing it not to assess whether a rent concession related to COVID-19 is a lease modification. The Company applies the practical expedient consistently to contracts with similar characteristics and in similar circumstances. For rent concessions in leases to which the Company chooses not to apply the practical expedient, or that do not qualify for the practical expedient, the Company assesses whether there is a lease modification. (b) When the Group is the lessor The accounting policy applicable to the Group as a lessor in the comparative period were the same under FRS 16 except when the Group is an intermediate lessor. In classifying a sublease, the Group as an intermediate lessor classifies the sublease as a finance or an operating lease with reference to the right of-use asset arising from the head lease, rather than the underlying asset. When the sublease is assessed as a finance lease, the Group derecognises the right-of-use asset relating to the head lease that it transfers to the sublessee and recognised the net investment in the sublease within “Trade and other receivables”. Any differences between the right-of-use asset derecognised and the net investment in sublease is recognised in profit or loss. Lease liability relating to the head lease is retains in the balance sheet, which represents the lease payments owed to the head lessor. When the sublease is assessed as an operating lease, the Group recognise lease income from sublease in profit or loss within “Other income”. The right-of-use asset relating to the head lease is not derecognised. For contract which contains lease and non-lease components, the Group allocates the consideration based on a relative stand-alone selling price basis. 2.14 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. l y n o e s u l a n o s r e p r o F 68 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Summary of significant accounting policies (continued) 2.14 Income taxes (continued) l y n o e s u l a n o s r e p r o F A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries and associated companies, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised. Deferred income tax is measured: (i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period; and (ii) based on the tax consequence that will follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amounts of its assets and liabilities. 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. 69 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Summary of significant accounting policies (continued) 2.16 Employee compensation (continued) l y n o e s u l a n o s r e p r o F Employee share plan The Group operates an equity-settled, share-based compensation plan. The value of the employee services received in exchange for the grant of options is recognised as an expense with a corresponding increase in the share option reserve over the vesting period. The total amount to be recognised over the vesting period is determined by reference to the fair value of the options granted on grant date. Non- market vesting conditions are included in the estimation of the number of shares under options that are expected to become exercisable on the vesting date. At each balance sheet date, the Group revises its estimates of the number of shares under options that are expected to become exercisable on the vesting date and recognises the impact of the revision of the estimates in profit or loss, with a corresponding adjustment to the share option reserve over the remaining vesting period. When the options are exercised, the proceeds received (net of transaction costs) and the related balance previously recognised in the share option reserve are credited to the share capital account, when new ordinary shares are issued, or to the “treasury shares” account, when treasury shares are re-issued to the employees. 2.17 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. When a foreign operation is disposed of or any loan forming part if the net investment of the foreign operation is repaid, a proportion share of the accumulated currency translation differences is reclassified to profit or loss, as part of the gain or loss on disposal. (c) Translation of Group entities’ financial statements The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (i) (ii) assets and liabilities are translated at the closing exchange rates at the reporting date; income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the transactions); and 70 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 2. Summary of significant accounting policies (continued) 2.17 Currency translation (continued) l y n o e s u l a n o s r e p r o F (c) Translation of Group entities’ financial statements (continued) (iii) all resulting currency translation differences are recognised in other comprehensive income and accumulated in the currency translation reserve. These currency translation differences are reclassified to profit or loss on disposal or partial disposal of the entity giving rise to such reserve. Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and translated at the closing rates at the reporting date. 2.18 Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the executive committee whose members are responsible for allocating resources and assessing performance of the operating segments. 2.19 Cash and cash equivalents For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents include cash at banks, cash on hand and deposits with financial institutions which are subject to an insignificant risk of change in value. 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. 71 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 3. Critical accounting estimates, assumptions and judgments (continued) 3.1 Critical judgements in applying the entity’s accounting policies (continued) (a) Provision for expected credit losses of trade receivables (continued) 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 2021 was S$282,856 (2020: S$318,298). (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 2021 was S$1,440,868 (2020: S$1,572,875). (d) Amortisation and useful lives of 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 2021, the Group’s lease liabilities, which are measured with reference to an estimate of the lease term, amounted to S$871,714, of which none arose from extension options. Extension option is included in the lease term if the lease is reasonably certain to be extended. In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise the extension option. l y n o e s u l a n o s r e p r o F 72 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 3. Critical accounting estimates, assumptions and judgments (continued) 3.1 Critical judgements in applying the entity’s accounting policies (continued) (e) Determination of lease term of contracts with extension options (continued) For leases of office premises, the following factors are considered to be most relevant: • If any leasehold improvements are expected to have a significant remaining value, the Group typically includes the extension option in lease liabilities; • Otherwise, the Group considers other factors including its costs required to obtain replacement assets, and business disruptions. As at 31 March 2021, the Group did not include the extension option in the lease term for leases of office premises as it is not certain that the extension options will be exercised. (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. l y n o e s u l a n o s r e p r o F 73 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 4. Property, plant and equipment Group Cost At 1 April 2019 Adoption of FRS116 Additions Acquisition of subsidiaries Exchange differences At 31 March 2020 Additions Disposals Written off Exchange differences At 31 March 2021 Accumulated depreciation At 1 April 2019 Depreciation Exchange differences At 31 March 2020 Depreciation Disposals Written off Exchange differences At 31 March 2021 Net carrying amount At 31 March 2020 At 31 March 2021 l y n o e s u l a n o s r e p r o F Furniture and fittings S$ Office equipment S$ Motor vehicles S$ Office premises S$ - 2,497,157 2,497,157 70,928 - 8,693 2,576,778 969,403 - (2,189,602) (7,424) 1,349,155 104,128 - 104,128 - - (345) 103,783 - - - (2,257) 101,526 67,683 20,649 (116) 88,216 15,368 - - (2,058) 101,526 - 1,381,191 6,256 1,387,447 1,263,914 - (2,165,814) (4,399) 481,148 Total S$ 1,654,422 2,497,157 4,151,579 239,743 2,944 34,826 4,429,092 1,543,686 (5,998) (2,466,062) (76,518) 3,424,200 1,132,856 1,694,801 28,560 2,856,217 1,631,297 (1,713) (2,431,126) (71,343) 1,983,332 1,167,312 - 1,167,312 90,607 1,320 16,598 1,275,837 148,703 (1,471) (264,308) (36,269) 1,122,492 754,691 235,604 13,549 1,003,844 219,628 (204) (254,114) (35,110) 934,044 382,982 - 382,982 78,208 1,624 9,880 472,694 425,580 (4,527) (12,152) (30,568) 851,027 310,482 57,357 8,871 376,710 132,387 (1,509) (11,198) (29,776) 466,614 271,993 188,448 95,984 384,413 15,567 1,189,331 - 868,007 1,572,875 1,440,868 (a) The carrying amounts of motor vehicles held under finance leases are S$Nil (2020: S$15,567) at the end of reporting period. The hire purchase liabilities had been fully settled during the financial year. (b) Right-of-use assets acquired under leasing arrangements are presented as “office premises”. 74 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 5. Intangible assets Compositions: Goodwill (a) Development of software (b) (a) Goodwill Cost Beginning of financial year Addition from acquisition of subsidiaries End of financial year (b) Development of software Cost Beginning of financial year Acquisition of subsidiaries Additions End of financial year Accumulated amortisation Beginning of financial year Amortisation charged End of financial year Carrying amount Group 2021 S$ 9,305 790,401 799,706 2020 S$ 9,305 430,439 439,744 Group 2021 S$ 2020 S$ 9,305 - 9,305 Group 2021 S$ 528,406 - 673,096 1,201,502 97,967 313,134 411,101 - 9,305 9,305 2020 S$ - 340,347 188,059 528,406 - 97,967 97,967 790,401 430,439 (c) Amortisation expense included in the statement of comprehensive income is analysed as follows: Administrative expenses 313,134 97,967 Group 2021 S$ 2020 S$ 6. Investment in subsidiaries Shares, at cost Addition of subsidiaries Less: Allowance for impairment losses Company 2021 S$ 2020 S$ 29,418,798 - (26,850,405) 2,568,393 29,140,848 277,950 (26,850,405) 2,568,393 75 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 6. Investment in subsidiaries (continued) a) Composition of the Group The Group has the following investment in subsidiaries. Name Held by the Company 8VI Global Pte. Ltd. (a) 8Bit Global Pte. Ltd. (a) Held through 8VI Global Pte. Ltd. 8VIC Singapore Pte. Ltd. (d) 8VI Malaysia Sdn. Bhd. (b) 8VI Taiwan Co., Ltd. (d) 8VIC (Thailand) Co., Ltd. (d) Value Investing College Pte. Ltd. (d) 8VI China Pte. Ltd. (a) Held through 8VI Malaysia Sdn Bhd 8VIC JooY Media Sdn Bhd (c) Held through 8VI China Pte. Ltd. 8VI China (Shanghai) Co. Ltd (d) Principal place of business Principal activities Singapore Singapore Conducting business courses Computer programming and data processing and hosting Singapore Dormant Conducting business courses Malaysia Conducting business courses Taiwan Thailand Dormant Singapore Dormant Singapore Investment holdings Proportion of ownership interest 2021 2020 % 100 51 % 100 51 100 100 70 90.6 100 65 100 100 70 90.6 100 65 Malaysia Agency and media 100 70 People’s Republic of China Business and management consultancy services 65 65 Held through 8VI China (Shanghai) Co. Ltd Shanghai Ba Tou Culture Media Co. Ltd (d) People’s Republic of China (a) Audited by Group auditor, KLP LLP (b) Audited by Crowe Malaysia PLT (c) Audited by CWC & ENG PLT (d) No statutory audit required Seminar and programs organiser 65 - Significant restrictions Cash and short-term deposits of S$297,811 (2020: S$130,608) are held in the People’s Republic of China and are subject to local exchange control regulations. These local exchange control regulations provide for restrictions on exporting capital from the country, other than through normal dividends. b) Interest in subsidiaries with material non-controlling interest (NCI) The Group has the following subsidiary that has NCI that are material to the Group. Principal place of business Proportion of ownership interest held by non- controlling interest Name 8Bit Global Pte. Ltd. Singapore 49% 76 Profit allocated to NCI during the reporting period S$ 890,618 Accumulated NCI at the end of reporting period S$ 1,082,965 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 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 Current Assets Liabilities Net current assets Net assets Summarised statement of comprehensive income Revenue Profit/(Loss) before tax Income tax expense Total comprehensive income/(loss) for the year Other summarised information Net cash flows from operating activities Net cash flows used in investing activities Net cash flows from financing activities Subsidiary with material NCI 2020 S$ 2021 S$ 4,879,223 (3,497,263) 1,381,960 2,210,133 1,099,951 (1,137,843) (37,892) 392,546 4,204,782 1,779,815 - 1,817,587 539,972 (134,209) - (134,209) 3,980,536 (673,036) - 56,568 (188,059) 500,000 l y n o e s u l a n o s r e p r o F 77 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 7. Investment in associated company Group 2021 S$ 2020 S$ Investment in associated company, at carrying amount - - Set out below is the associated company of the Group as at 31 March 2021, 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. Learnpod Pte. Ltd. 8. Financial assets at FVPL and at FVOCI Place of business/ country of incorporation % of ownership interest 2021 2020 Singapore 30.0% 30.0% Group Company 2021 S$ 2020 S$ 2021 S$ 2020 S$ Current – listed quoted equity securities Financial assets, at FVPL 3,600,947 402,305 - - Non-current – listed quoted equity securities Financial assets, at FVOCI 7,421 7,443 - - 3,608,368 409,748 - - 9. Trade and other receivables Trade receivables - third parties Less: Allowance for credit losses (Note 26(b)) Trade receivables (net) Other receivables Amount due from subsidiaries Deposits GST receivables Group 2021 S$ 2020 S$ Company 2021 S$ 2020 S$ 387,505 455,835 (104,649) 282,856 (137,537) 318,298 121,453 - 1,082,955 6,279 1,493,543 339,006 - 926,883 45,652 1,629,839 - - - 2,760 - - - 2,760 - - - 40,671 547,076 - - 587,747 78 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 9. Trade and other receivables (continued) l y n o e s u l a n o s r e p r o F Trade receivables are unsecured, non-interest bearing and are generally on 7 to 30 days terms (2020: 7 to 30 days). Included in current deposits are bankers’ guarantee of S$426,000 (2020: S$190,000) as required by Global Payments Asia Pacific (Hong Kong Holding) Limited and Green World FinTech Service Co., Ltd. in order to provide services in accordance to the merchant agreements. Related party balances Amount due from subsidiaries are non-trade, unsecured, interest-free and with no fixed terms of repayment. 10. Cash and cash equivalents Cash on hand Cash at banks Short-term bank deposits Fixed deposits Group Company 2021 S$ 32,945 15,971,196 2,625,088 100,000 18,729,229 2020 S$ 45,814 4,377,776 3,010,000 - 7,433,590 2021 S$ - 1,574,600 - - 1,574,600 2020 S$ - 288,525 - - 288,525 Cash at banks earn interest at floating rates based on daily bank deposit rates. Short-term bank deposits have maturity of one to three months and a weighted average effective interest rates of 1.52% (2020: 1.42%) per annum of the Group. Fixed deposits have maturity of more than three months and bear interest rate of 0.15% (2020: Not applicable). For the purpose of presenting the consolidated statement of cash flows, cash and cash equivalents comprise the following: Group 2021 S$ 2020 S$ Cash and bank balances (as above) Less: Fixed deposits Cash and cash equivalents per consolidated statement of cash flows 18,729,229 (100,000) 18,629,229 7,433,590 - 7,433,590 11. Share capital 2021 2020 No. of shares(1) S$ No. of shares(1) S$ Group Issued and fully paid ordinary shares At beginning of financial year Issuance of shares under Employee Securities Incentive Plan At end of financial year 40,545,626 12,895,103 40,545,626 12,895,103 828,800 41,374,426 387,090 13,282,193 - 40,545,626 - 12,895,103 79 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 11. Share capital (continued) 2021 2020 No. of shares(1) S$ No. of shares(1) S$ Company Issued and fully paid ordinary shares At beginning of financial year Issuance of shares under Employee Securities Incentive Plan At end of financial year 40,545,626 77,423,174 40,545,626 77,423,174 828,800 41,374,426 387,090 77,810,264 - 40,545,626 - 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. 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. Employee securities plan reserve Movement: Beginning of financial year Value of employee services Performance rights exercised End of financial year Group/Company 2021 S$ - 613,958 (335,208) 278,750 2020 S$ - - - - The Company’s Employee Securities Incentive Plan (“Share Plan”) for key directors and employees of the Group was approved by members of the Company as its annual general meeting on 23 July 2020. The Share Plan provides a means to attract, motivate and retain key directors and employees and provide them with the opportunity to participate in the future growth of the Company. Under the Share Plan, the board of directors may from time to time determine that a director of the companies of the Group, subject to its members’ approval, or an employee may participate in the Share Plan to apply for securities on such terms and conditions as the board of directors decides. The persons to whom the rights and options have been issued have no right to participate by virtue of the options in any share issue of any other companies of the Group. The Group has no legal or constructive obligation to repurchase or settle the securities in cash. During the financial year, pursuant to members’ approval at its annual general meeting on 23 July 2020, the Company granted its directors options to subscribe for 2,000,000 ordinary shares at exercise price of AUD 0.45 per share (“Options”) and performance rights to be converted into 2,600,000 ordinary shares upon meeting the vesting conditions (“Performance Rights”). 80 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 13. Employee securities plan reserve (continued) The Options are exercisable from 21 August 2020 and expire on 30 June 2025. The total fair value of the Options granted was estimated to be AUD 955,600 using the Hoadleys Employee Stock Option Model. The Performance Rights will not have consideration on satisfaction of the vesting conditions. The vesting conditions for the Performance Rights are: - The holder being a director of the Company as at the relevant vesting determination dates specified in the table below; and - The relevant volume weighted average price (VWAP) of the Company’s shares traded on ASX over any 20-day period exceeds the prices specified in the table below. Performance Rights granted Vesting conditions Performance Rights Class A Class B Class C Class D Class E Class F Number 400,000 400,000 400,000 400,000 500,000 500,000 Effective grant date 23 Jul 2020 23 Jul 2020 23 Jul 2020 23 Jul 2020 23 Jul 2020 23 Jul 2020 Fair value per right at effective grant date (AUD) Earliest vesting determination date VWAP Share Price condition (AUD) 0.4675 0.3813 0.4037 0.2016 0.2570 0.1389 21 Aug 2020 21 Aug 2020 01 Apr 2021 01 Apr 2021 01 Apr 2022 01 Apr 2022 0.45 0.60 0.70 2.00 2.30 5.00 Expiry Date 30 Apr 2021 30 Apr 2021 30 Apr 2022 30 Apr 2022 30 Apr 2023 30 Apr 2023 The total fair value of the Performance Rights granted was estimated to be AUD 779,590 using the Hoadleys Hybrid ESO Model (a Monte Carlo simulation model). Movements in the number of unissued ordinary shares of the Company under the Share Plan and their exercise prices are as follows: No. of unissued ordinary shares of the Company under Share Plan Exercised during the financial year Granted during the financial year End of financial year Beginning of financial year Exercise price Exercise period Performance Rights: - Class A - Class B - Class C - Class D - Class E - Class F Options - - - - - - - - 400,000 400,000 400,000 400,000 500,000 500,000 2,000,000 4,600,000 (400,000) (400,000) - - - - - - - 400,000 400,000 500,000 500,000 21.08.2020-30.04.2021 21.08.2020-30.04.2021 01.04.2021-30.04.2022 01.04.2021-30.04.2022 01.04.2022-30.04.2023 01.04.2022-30.04.2023 2,000,000 AUD 0.45 21.08.2020-30.06.2025 - - - - - - (800,000) 3,800,000 There were no unissued ordinary shares under Share Plan in financial year 2020. During the financial year, the vesting conditions of the Class A and Class B Performance Rights were satisfied and both classes of Performance Rights were exercised. 800,000 ordinary shares of 8VI were issued to the holders of Class A and Class B Performance Rights. 81 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 14. 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. 15. Trade and other payables Group 2021 S$ 2020 S$ Company 2021 S$ 2020 S$ Trade payables - third parties Other payables Accruals Amount due to holding company Amount due to related companies GST payable 474,973 213,394 2,105,504 - 392,627 260,353 3,446,851 199,247 283,448 687,474 - 301,730 176,336 1,648,235 5,545 - 196,341 - - 39,060 240,946 5,561 - 81,393 3,857 - - 90,811 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. 16. Unearned revenue Current: Advances from customers Deferred grant income Non-current: Advances from customers Group 2021 S$ 9,521,393 - 9,521,393 2020 S$ 3,696,702 149,100 3,845,802 233,789 - 9,755,182 3,845,802 Company 2021 S$ 2020 S$ - - - - - - 16,100 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. 17. Lease liabilities Lease liabilities - current Lease liabilities – non-current Total Group 2021 S$ 2020 S$ 798,089 73,625 871,714 1,146,938 67,574 1,214,512 82 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 17. Lease liabilities (continued) (i) 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 2021 S$ 31 March 2020 S$ Office premises 868,007 1,189,331 (b) Depreciation charged during the financial year Office premises 1,263,914 1,381,191 (c) Interest expense Interest expense on lease liabilities 33,693 80,429 2021 S$ 2020 S$ (d) (e) (f) (g) (h) The lease expense not capitalised in lease liabilities from low value leases was S$3,293 (2020: S$Nil). Total income from subleasing ROU assets in 2021 was S$60,632 (2020: S$154,783). Net cash outflow for all the office leases in 2021 was S$1,253,096 (2020: S$1,436,440). Addition of ROU assets during the financial year 2021 was S$969,403 (2020: S$70,928). Reconciliation of lease liabilities arising from financing activities: Beginning of financial year Principal and interest payments Non-cash changes - Adoption of FRS 116 - Addition during the year - Rent concession - Interest expense - Written off - Foreign exchange movement End of financial year 2021 S$ 2020 S$ 1,214,512 (1,253,096) 36,424 (1,474,008) - 969,403 (65,191) 33,693 (23,788) (3,819) 871,714 2,497,157 70,928 - 81,574 - 2,437 1,214,512 l y n o e s u l a n o s r e p r o F 83 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 17. Lease liabilities (continued) (ii) Lease liabilities – the Group as a lessor l y n o e s u l a n o s r e p r o F Nature of the Group’s leasing activities – Group as an intermediate lessor Subleases – classified as operating leases The Group acts as an intermediate lessor under arrangement in which it subleases out office space to a third party for monthly lease payments. The sublease periods do not form a major part of the remaining lease terms under the head leases and accordingly, the sub-leases are classified as operating leases. Income from subleasing the office space recognised during the financial year 2021 was S$60,632 (2020: S$154,783). The Group is no longer lessor as at balance sheet date. (iii) Borrowings The subsidiary of the Company had secured SGD 1 million temporary bridging loan, with 3% interest rate per annum, guaranteed by the Company. None has been drawn down as at balance sheet date. 18. Deferred income taxes Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current income tax assets against current income tax liabilities and when the deferred income taxes relate to the same taxation authority. The amounts, determined after appropriate offsetting, are shown on the balance sheet as follows: Group 2021 S$ 2020 S$ Company 2021 S$ 2020 S$ Deferred tax assets: - Accelerated tax depreciation - Unearned revenue Deferred tax liabilities: - Accelerated tax depreciation Net deferred tax assets: 2,321 294,034 296,355 (4,000) 292,355 2,373 261,958 264,331 - - - - - - (4,000) 260,331 - - - - The movement in net deferred income tax (assets)/liabilities is as follows: Beginning of financial year Tax credited to profit or loss Currency translation differences End of financial year Group 2021 S$ (260,331) (37,772) 5,748 (292,355) 2020 S$ (174,865) (86,058) 592 (260,331) Company 2021 S$ 2020 S$ - - - - - - - - 84 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 18. Deferred income taxes (continued) The Group has unrecognised tax losses of S$Nil (2020: S$2,739,695) and capital allowances of S$Nil (2020: S$Nil) at the balance sheet date which can be carried forward and used to offset against future taxable income subject to meeting certain statutory requirements by those companies with unrecognised tax losses and capital allowances in their respective countries of incorporation. The tax losses and capital allowances have no expiry date. 19. Revenue Type of goods or services Subscription income Programme fees Commission income Rendering of services Timing of transfer of goods or services At a point of time Over time 20. Other income Dividend income Fair value gain/(loss) on financial assets at FVPL Gain on disposal of associated company Gain on disposal of property, plant and equipment Interest income Government grants Rental income Miscellaneous income Group 2021 S$ 2020 S$ 5,212,642 20,385,924 277,138 84,957 25,960,661 539,972 10,041,699 128,088 149,592 10,859,351 20,740,794 5,219,867 25,960,661 10,319,379 539,972 10,859,351 Group 2021 S$ 9,581 209,138 - 1,710 37,504 698,537 60,632 37,330 1,054,432 2020 S$ 6,511 (4,392) 8,121 - 12,704 44,915 154,783 13,479 236,121 Included within Government grants are Covid-19 related rent concessions received from lessors of S$65,191 to which the Group applied the practical expedient as disclosed in Note 2.1. l y n o e s u l a n o s r e p r o F 85 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 21. Profit before tax The following items have been included in arriving at profit before tax: l y n o e s u l a n o s r e p r o F Agency cost Amortisation of development of software Audit fee: - Auditors of the Company - Other auditors Depreciation of property, plant and equipment Foreign exchange differences (net) Impairment of financial assets IT expenses Marketing expenses Merchant charges Office expenses Other COS Professional fees Program costs Property, plant and equipment written-off Speakers’ fees Software expenses Travelling expenses Employee benefits expense (Note 22) 22. Employee benefits expense Employee benefits expenses (including directors) Salaries, fees and bonus CPF Contributions Employee Securities Share Plan Commissions and other benefits Group 2021 S$ 10,967 313,134 44,525 17,382 1,631,297 125,750 175,481 235,979 5,394,321 1,228,428 174,828 88,501 351,679 263,106 34,936 1,038,894 438,240 298,543 6,695,816 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 Group 2021 S$ 2020 S$ 3,672,143 509,002 665,840 1,848,831 6,695,816 2,225,176 294,258 - 412,065 2,931,499 86 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 23. Income tax l y n o e s u l a n o s r e p r o F The major components of income tax expenses recognised in profit or loss for the years ended 31 March 2021 and 2020 were: Current income tax: Current year Under/(Over) provision in respect of prior years Deferred income tax: Current year Group 2021 S$ 1,046,198 28,743 1,074,941 2020 S$ 184,706 (9,318) 175,388 (37,772) (86,058) Income tax expense recognised in profit or loss 1,037,169 89,330 Relationship between tax expenses and accounting profit A reconciliation between tax expenses and the product of accounting profit multiplied by the applicable corporate tax rate for the financial years ended 31 March 2021 and 2020 were as follows: Group 2021 S$ Profit before tax Share of results of associated company, net of tax Profit before tax and share of results of associated company 7,532,774 - 7,532,774 2020 S$ 868,751 135,939 1,004,690 Income tax using the statutory tax rate of 17% (2020: 17%) 1,280,572 170,797 Tax effects of: Non-deductible expenses Income not subject to taxation Tax exemptions Deferred tax assets recognised Deferred tax assets not recognised Utilisation of previously unrecognised deferred tax assets Utilisation of group relief Effect of tax rates in foreign jurisdictions Under/(Over) provision in respect of prior years Income tax expense recognised in profit or loss 501,834 (118,737) (102,500) (37,772) 6,592 (571,377) (107,215) 157,029 28,743 1,037,169 30,598 (13,902) (32,425) - 237,108 (307,815) - 14,287 (9,318) 89,330 The above reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction. 87 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 23. Income tax (continued) Movement in current income tax liabilities/(assets): Group 2021 S$ 2020 S$ Company 2021 S$ 2020 S$ Beginning of financial year Income tax paid Tax expense Under/(Over) provision in respect of prior years Currency translation differences End of financial year 24,190 (579,129) 1,046,198 28,743 (1,779) 518,223 41,947 (191,061) 184,706 (9,318) (2,084) 24,190 - - - - - - - - - - - - 24. Earnings per share (a) Basic earnings per share The basic and diluted earnings per share are calculated by dividing profit net of tax by the weighted average number of ordinary shares during the financial period. The following table reflect the profit and share data used in the computation of basic and diluted earnings per share for the year ended 31 March 2021 and 2020: Group 2021 2020 Net profit attributable to equity holders of the Company (S$) 5,861,405 1,072,047 Weighted average number of ordinary shares outstanding for basic earnings per share 40,867,766 40,545,626 Basic earnings per share (Singapore cents per share) 14.34 2.64 (b) Diluted earnings per share For the purpose of calculating diluted earnings per share, profit attributable to equity holders of the Company and the weighted average number of ordinary shares outstanding are adjusted for the effects of all dilutive potential ordinary shares. The Company has one category of dilutive potential ordinary shares: share options. For share options, the weighted average number of shares on issue has been adjusted as if all dilutive share options were exercised. The number of shares that could have been issued upon the exercise of all dilutive share options less the number of shares that could have been issued at fair value (determined as the Company’s average share price for the financial year) for the same total proceeds is added to the denominator as the number of shares issued for no consideration. No adjustment is made to the net profit. l y n o e s u l a n o s r e p r o F 88 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 24. Earnings per share (continued) (b) Diluted earnings per share (continued) Group 2021 2020 Net profit attributable to equity holders of the Company (S$) 5,861,405 1,072,047 Weighted average number of ordinary shares outstanding for basic earnings per share Adjusted for share options 40,867,766 1,402,449 42,270,215 40,545,626 - 40,545,626 Diluted earnings per share (Singapore cents per share) 13.87 2.64 25. 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: Group 2021 S$ 221,283 (234,000) (224,000) Group 2021 S$ 1,485,465 67,097 613,958 2,166,520 2020 S$ 291,340 (185,000) (24,000) 2020 S$ 712,193 62,947 - 775,140 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 Employee Securities Share Plan 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. 89 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 26. Financial risk management (continued) (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”), New Taiwan Dollar (“NTD”), Thailand Baht (“THB”) and Hong Kong Dollar (“HKD”). 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: At 31 March 2021 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 MYR S$ USD S$ AUD S$ NTD S$ RMB S$ HKD S$ 6,627,759 103,533 187,544 7,421 6,926,257 327,790 - 3,250,055 - 3,577,845 11,839 - 27,213 - 39,052 328,136 708,957 - - 1,037,093 297,811 462 - - 298,273 - - 49,135 - 49,135 (865,659) (97,946) (963,605) - - - (4,689) - (4,689) (76,872) (199,161) (276,033) - - - - - - Net financial assets 5,962,652 3,577,845 34,363 761,060 298,273 49,135 Currency exposure of financial (liabilities) /assets net of those denominated in the respective entities’ functional currencies (76) 3,577,845 34,363 17,975 - 49,135 l y n o e s u l a n o s r e p r o F 90 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 26. Financial risk management (continued) (a) Market risk (continued) (i) Currency risk (continued) 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) The Company’s currency exposure based on the information provided to key management is as follows: At 31 March 2021 Financial assets Cash and cash equivalents Financial liabilities Trade and other payables Net financial assets USD S$ AUD S$ 30,330 11,839 - (4,689) 30,330 7,150 Currency exposure of financial assets net of those denominated in the respective entities’ functional currencies 30,330 7,150 At 31 March 2020 Financial assets Cash and cash equivalents Financial liabilities Trade and other payables Net financial assets 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 91 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 26. Financial risk management (continued) (a) Market risk (continued) (i) Currency risk (continued) If the AUD, USD, NTD, RMB and HKD change against the SGD by 17% (2020: 8%), 5% (2020: 5%), 2% (2020: 7%), 2% (2020: 3%), 7% (2020: not applicable) 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 2021 S$ 2020 S$ Company 2021 S$ 2020 S$ 4,849 (4,849) 4,403 (4,403) 1,009 (1,009) 4,403 (4,403) 148,481 (148,481) 11,084 (11,084) 1,259 (1,259) 1,331 (1,331) 298 (298) - - 2,855 (2,855) 720 (720) (105) 105 - - - - - - - - - - - - - - AUD against SGD - Strengthened - Weakened USD against SGD - Strengthened - Weakened NTD against SGD - Strengthened - Weakened RMB against SGD - Strengthened - Weakened HKD against SGD - Strengthened - Weakened (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, the United States, Australia and Hong Kong had changed by 49% (2020: 17%), 49% (2020: 17%), 69% (2020: 17%), 49% (2020: not applicable) and 49% (2020: not applicable) respectively with all other variables including tax rate being held constant, the effects on profit after tax and other comprehensive income would have been: l y n o e s u l a n o s r e p r o F 92 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 26. Financial risk management (continued) (a) Market risk (continued) (ii) Price risk (continued) Increase / (Decrease) Profit after tax 2021 2020 Profit after tax S$ Other comprehensive income S$ Profit after tax S$ Other comprehensive income S$ 35,383 (35,383) - - 8,918 (8,918) - - 76,274 (76,274) 3,018 (3,018) 26,484 (26,484) 1,050 (1,050) Group Listed in Singapore - increased by - decreased by Listed in Malaysia - increased by - decreased by Listed in the United States - increased by - decreased by 1,861,306 (1,861,036) Listed in Australia - increased by - decreased by Listed in Hong Kong - increased by - decreased by (b) Credit risk 11,068 (11,068) 19,983 (19,983) - - - - - - 21,364 (21,364) - - - - - - - - - - Credit exposure to an individual counterparty is restricted by credit limits that are approved by the Board of Directors based on ongoing credit evaluations. The counterparty’s payment pattern and credit exposure are continuously monitored at the entity level by the respective management and at the Group level by the Executive Management. Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Group. The Group categorises a loan or receivable for write off when a debtor fails to make contractual payments greater than a year past due based on historical collection trend. Where loans or receivables have been written off, the company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in profit or loss. The Group applies the simplified approach to providing for expected credit losses prescribed by FRS 109, which permits the use of the lifetime credit loss provision for all trade receivables. To measure the expected credit losses, trade receivables, have been grouped based on shared credit risk characteristics and days past due. In calculating the expected credit loss rates, the Group considers historical loss rates for each category of customers, and adjusts for forward-looking macroeconomic data. 93 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 26. Financial risk management (continued) (b) Credit risk (continued) l y n o e s u l a n o s r e p r o F 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 (Reversal)/Charge for the year Written off Exchange differences Balance at end of year (Note 9) Group 2021 S$ 137,537 (32,731) - (157) 104,649 2020 S$ 77,067 62,635 (2,165) - 137,537 Company 2021 S$ 2020 S$ - - - - - - - - - - The Group’s credit risk exposure in relation to trade receivables, under FRS 109 as at 31 March 2021 are set out in the provision matrix as follows: 2021 Expected loss rate Gross carrying amount (S$) Credit loss allowance (S$) 2020 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% 278,522 - 0% 4,049 - 5% 10% 300 (15) 100% 104,634 (104,634) - - 387,505 (104,649) 0% 255,975 - 0% 26,221 - 5% 12,977 (714) 10% 26,488 (2,649) 100% 134,174 (134,174) 455,835 (137,537) 94 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 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 2021 Trade and other payables Lease liabilities At 31 March 2020 Trade and other payables Finance lease liabilities Company At 31 March 2021 Trade and other payables At 31 March 2020 Trade and other payables (d) Capital risk One year or less S$ Two to five years S$ 3,446,851 816,163 1,648,235 1,176,581 - 67,686 - 68,630 One year or less S$ 240,946 90,811 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. 95 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 26. Financial risk management (continued) (e) Fair value measurements l y n o e s u l a n o s r e p r o F 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 2021 Financial assets: Financial assets, at FVPL (quoted) Financial assets, at FVOCI (quoted) As at 31 March 2020 Financial assets: Financial assets, at FVPL (quoted) Financial assets, at FVOCI (quoted) Level 1 S$ Level 2 S$ Level 3 S$ 3,600,947 7,421 - - 402,305 7,443 - - - - - - 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 2021 S$ 2020 S$ Company 2021 S$ 2020 S$ Financial assets, at FVPL Financial assets, at FVOCI Financial assets at amortised cost Financial liabilities at amortised cost 3,600,947 7,421 20,222,772 (4,188,565) 402,305 7,443 9,017,777 (2,686,411) - - 1,577,360 (240,946) - - 876,272 (90,811) 96 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 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. 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 and China. 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. l y n o e s u l a n o s r e p r o F 97 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 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. 31 March 2021 Revenue Total revenue Inter-segment Revenue from external customers Results: Depreciation and amortisation Segment profit/(loss) Assets: Additions to property, plant and equipment Additions to intangible assets Segment asset Liabilities: Segment liabilities Singapore S$ Financial Education Malaysia S$ Total S$ Others Corporate Total S$ S$ S$ 11,050,339 (602,575) 10,447,764 10,562,204 (256,334) 10,305,870 21,612,543 (858,909) 20,753,634 5,637,511 (430,484) 5,207,027 1,915,962 (1,915,962) - 29,166,016 (3,205,355) 25,960,661 1,173,908 4,053,768 292,520 1,561,815 1,466,428 5,615,583 478,003 970,386 - (90,364) 1,944,431 6,495,605 1,175,955 - 13,127,341 111,140 - 6,122,986 1,287,095 - 19,250,327 256,591 673,096 5,833,358 - - 1,873,826 1,543,686 673,096 26,957,511 (5,460,385) (4,284,622) (9,745,007) (4,683,411) (240,946) (14,669,364) 98 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 27. Segment information (continued) 31 March 2020 Revenue Total revenue Inter-segment Revenue from external customers Results: Depreciation and amortisation Share of result of associated companies Segment profit/(loss) Assets: Additions to plant and equipment Additions to intangible assets Segment asset Liabilities: Segment liabilities Singapore S$ Financial Education Malaysia S$ Total S$ Others Corporate Total S$ S$ S$ 7,274,355 (389,704) 6,884,651 3,285,799 (69,816) 3,215,983 10,560,154 (459,520) 10,100,634 758,717 - 758,717 216,000 (216,000) - 11,534,871 (675,520) 10,859,351 (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) (1,792,768) (135,939) 779,421 25,797 - 7,013,434 67,814 - 1,924,349 93,611 - 8,937,783 75,204 197,364 1,877,826 - - 1,160,458 168,815 197,364 11,976,067 (3,577,254) (1,617,795) (5,195,049) (1,530,596) (103,054) (6,828,699) 99 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 March 2021 28. New or revised accounting standards and interpretations Below are the mandatory standards, amendments and interpretations to existing standards that have been published, and are relevant for the Group’s accounting periods beginning on or after 1 April 2021 and which the Group has not early adopted. Amendments to FRS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (effective for annual periods beginning on or after 1 January 2023) The narrow-scope amendments to FRS 1 Presentation of Financial Statements clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date (e.g. the receipt of a waver or a breach of covenant). The amendments also clarify what FRS 1 means when it refers to the ‘settlement’ of a liability. The amendments could affect the classification of liabilities, particularly for entities that previously considered management’s intentions to determine classification and for some liabilities that can be converted into equity. The Group does not expect any significant impact arising from applying these amendments. Amendments to FRS 16 Property, Plant and Equipment: Proceeds before Intended Use (effective for annual periods beginning on or after 1 January 2022) The amendment to FRS 16 Property, Plant and Equipment (PP&E) prohibits an entity from deducting from the cost of an item of PP&E any proceeds received from selling items produced while the entity is preparing the asset for its intended use. It also clarifies that an entity is ‘testing whether the asset is functioning properly’ when it assesses the technical and physical performance of the asset. The financial performance of the asset is not relevant to this assessment. Entities must disclose separately the amounts of proceeds and costs relating to items produced that are not an output of the entity’s ordinary activities. The Group does not expect any significant impact arising from applying these amendments. 29. Authorisation of financial statements for issue The financial statements for the financial year ended 31 March 2021 were authorised for issue by the Board of Directors on the date of the Directors' Statement. l y n o e s u l a n o s r e p r o F 100 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 ADDITIONAL INFORMATION Shareholders Information as at 17 June 2021 8VI 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 Number of shares % of issued capital 741 370 32 47 14 1,204 327,767 794,892 247,020 1,389,526 39,615,221 42,374,426 0.77% 1.88% 0.58% 3.28% 93.49% 100.00% The number of investors holding less than a marketable parcel of 100 8VI shares (based on a share price of A$5.33) was 25. They hold 760 8VI shares in total. Twenty Largest Shareholders and CDI Holders* Registered Holder 1. 8I Holdings Limited 2. HSBC Custody Nominees (Australia) Limited 3. BNP Paribas Nominees Pty Ltd 4. Chee Kuan Tat, Ken 5. Citicorp Nominees Pty Limited 6. Pauline Teo Puay Lin 7. Low Ming Li 8. Clive Tan Che Koon 9. Wong Wai Chuan 10. Chua Chun Woei 11. Yeow Hin Lai 12. Bernard Siah Wee Boon 13. Goh Siew Bee 14. Low Chern Hong 15. Jeff Li Mingyuan 16. Yeo Yue Ru 17. Huang Shih Hao 18. Chai Lin Lin 19. Ho Tuck Chee 20. Cherie Lim ALL OTHER SHAREHOLDERS Total Number of Shares % of issued capital 33,375,566 1,176,370 1,142,151 800,000 545,015 484,943 452,933 400,000 289,887 275,111 268,245 175,000 128,800 101,200 76,500 68,000 61,300 60,000 57,500 49,389 2,386,516 42,374,426 78.76% 2.78% 2.70% 1.89% 1.29% 1.14% 1.07% 0.94% 0.68% 0.65% 0.63% 0.41% 0.30% 0.24% 0.18% 0.16% 0.14% 0.14% 0.14% 0.12% 5.64% 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. l y n o e s u l a n o s r e p r o F 101 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 ADDITIONAL INFORMATION Shareholders Information as at 17 June 2021 Substantial Shareholders and CDI Holders** Name Direct Interest Shares % of voting power Deemed Interest Shares % of voting power 8I Holdings Limited and its subsidiaries 33,375,566 78.76% - - 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 a current on-market buy-back arrangement for the Company as announced on 28 July 2020. Corporate Governance Statement The directors of 8VI 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.8viholdings.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. l y n o e s u l a n o s r e p r o F 102 8VI Holdings Limited and its Subsidiaries Annual Report FY2021 l y n o e s u l a n o s r e p r o F 8VI Holdings Limited (Incorporated in the Republic of Singapore) Company Registration Number: 201505599H ARBN 605 944 198 www.8viholdings.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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