安科系统(08353) - 2021 Q3 - 季度财报

Report Cover and Disclaimer Cover Information This report is Anacle Systems Limited's Q3 2021 report, covering financial information for the nine months ended February 28, 2021 - The report's subject is Anacle Systems Limited, stock code: 8353[1][3] - The reporting period is Q3 2021, covering the nine months ended February 28, 2021[2][3] GEM Characteristics and Disclaimer The Hong Kong Stock Exchange GEM market provides a listing platform for SMEs with higher investment risks, urging investors to exercise caution, and HKEX disclaims responsibility for the report's accuracy or completeness - The GEM market provides a listing platform for SMEs, carrying higher investment risks, and investors are advised to exercise caution[4] - The Hong Kong Stock Exchange is not responsible for the content of this report and does not guarantee its accuracy or completeness[4] Table of Contents Report Chapter Overview This report's table of contents lists page numbers for key sections including financial summary, condensed consolidated financial statements and notes, management discussion and analysis, and corporate governance code - The table of contents covers key sections such as financial summary, condensed consolidated financial statements notes, corporate governance code, and other information[8] Definitions Key Term Definitions This section defines key terms used in the report, including company entities, regulatory bodies, markets, currencies, and specific product names like TESSERACT, to ensure clear understanding of the content - Defines core entities such as 'the Company' (Anacle Systems Limited) and 'the Group' (the Company and its subsidiaries)[9] - Explains regulatory and market terms like 'GEM', 'Stock Exchange', and 'SFC'[9][13] - Clarifies the 'Reporting Period' as the nine months ended February 28, 2021[9] - Introduces 'TESSERACT' as Starlight's IoT smart metering and controller platform[13] Company Information Board of Directors and Corporate Governance This section lists key information including board members (executive, non-executive, independent non-executive), board committee compositions (audit, remuneration, nomination), legal representatives, auditors, share registrar, registered office, and principal bankers - Board members include executive directors such as Mr. Lau Yee Chuen (CEO) and Mr. Ong Swee Huat (COO), non-executive directors like Mr. Lee Chuan Teck (Chairman), and three independent non-executive directors[14] - The company has an Audit Committee, Remuneration Committee, and Nomination Committee, with their respective chairmen and members listed[14] - The company's registered office and principal place of business are in Singapore, with a principal place of business in Hong Kong[14] Financial Highlights Key Financial Indicators For the nine months ended February 28, 2021, the company's revenue grew 11.3% to SGD 14,266,120, gross profit increased 18.9% to SGD 5,556,929, and it achieved a profit before income tax of SGD 1,876,666, reversing a loss from the prior period Key Financial Data for the Nine Months Ended February 28, 2021 (Unaudited) | Indicator | February 28, 2021 (SGD) | February 29, 2020 (SGD) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 14,266,120 | 12,814,688 | +11.3% | | Gross Profit | 5,556,929 | 4,675,067 | +18.9% | | Profit/(Loss) Before Income Tax | 1,876,666 | (408,740) | Turned to Profit | - Simplicity revenue grew by 37.2% (SGD 3,177,260), primarily due to the Singapore government's investment in smart technology[18] - Starlight revenue decreased by 59.7% (SGD 1,614,311), impacted by subdued demand due to the COVID-19 pandemic[18] - myBill revenue temporarily decreased by 13.7% (SGD 192,364) due to a one-off contract renewal rebate, but monthly subscriptions remained stable at around 100,000[18] - SpaceMonster revenue grew by 50.1% (SGD 80,847) with continuous new subscriptions[18] - Profit before income tax turned from a loss to a profit, mainly due to revenue growth, the disposal of a China joint venture in 2019, reduced group operating expenses, and grants from the Singapore government's Job Support Scheme (JSS)[20] - The Board has not declared any dividend for the nine months ended February 28, 2021[21] Condensed Consolidated Statement of Comprehensive Income Consolidated Income Performance For the nine months ended February 28, 2021, the Group achieved a profit before income tax of SGD 1,876,666, a significant improvement from the prior year's loss of SGD 408,740, with total comprehensive income for the period at SGD 1,875,166 Condensed Consolidated Statement of Comprehensive Income (For the Nine Months Ended February 28, 2021) | Indicator | February 28, 2021 (SGD) | February 29, 2020 (SGD) | | :--- | :--- | :--- | | Revenue | 14,266,120 | 12,814,688 | | Cost of Sales | (8,709,191) | (8,139,621) | | Gross Profit | 5,556,929 | 4,675,067 | | Other Income | 780,626 | 25,594 | | Other Gains and Losses | (11,582) | 11,240 | | Selling and Distribution Costs | (971,875) | (1,243,876) | | Administrative Expenses | (2,693,892) | (3,192,618) | | Research and Development Expenses | (746,016) | (639,783) | | Finance Costs | (37,524) | (1,629) | | Impairment Loss on Investment in Associate | - | (42,735) | | Profit/(Loss) Before Income Tax | 1,876,666 | (408,740) | | Income Tax Expense | - | (19,118) | | Profit/(Loss) for the Period | 1,876,666 | (427,858) | | Total Comprehensive Loss for the Period | 1,875,166 | (441,334) | | Basic Earnings/(Loss) Per Share Attributable to Owners of the Company | 0.47 Singapore Cents | (0.03) Singapore Cents | | Diluted Earnings/(Loss) Per Share Attributable to Owners of the Company | 0.46 Singapore Cents | (0.03) Singapore Cents | - Other income significantly increased from SGD 25,594 to SGD 780,626[22] - Selling and distribution costs and administrative expenses both decreased[22] - Basic earnings per share were 0.47 Singapore Cents, compared to a loss of 0.03 Singapore Cents in the prior period[22] Condensed Consolidated Statement of Changes in Equity Changes in Shareholders' Equity As of February 28, 2021, the company's total equity was SGD 13,591,027, an increase from SGD 11,827,282 on May 31, 2020, primarily driven by the period's profit contribution Condensed Consolidated Statement of Changes in Equity (As of February 28, 2021) | Indicator | February 28, 2021 (SGD) | May 31, 2020 (SGD) | | :--- | :--- | :--- | | Share Capital | 20,645,177 | 20,756,598 | | Share Premium | (1,376,024) | (1,376,024) | | Share Compensation Reserve | 688,754 | 688,754 | | Exchange Fluctuation Reserve | 49,657 | 51,157 | | Accumulated Losses | (6,367,186) | (8,244,355) | | Non-controlling Interests | (49,351) | (48,848) | | Total | 13,591,027 | 11,827,282 | - Profit before income tax of SGD 1,877,169 for the period significantly improved accumulated losses[26] - During the reporting period, the company cancelled 1,278,000 shares, resulting in a SGD 111,421 reduction in share capital[26] Notes to the Consolidated Financial Statements 1. General Anacle Systems Limited, incorporated in Singapore in 2006, primarily provides software development, enterprise application, and energy management solutions, along with support and maintenance services, with the financial statements approved for issue by the Board on April 7, 2021 - The company was incorporated in Singapore on February 21, 2006, and converted to a public company on November 25, 2017[27] - Principal activities include software development, enterprise application software solutions, energy management solutions, and related support and maintenance services[27] - The unaudited condensed consolidated financial statements for the nine months ended February 28, 2021, were approved for issue by the Board on April 7, 2021[27] 2. Basis of Preparation and Accounting Policies This section details the basis of preparation and accounting policies for the Q3 2021 financial statements, adhering to IAS 34 and GEM Listing Rules, consistent with 2020 annual statements, and highlights specific treatments for business combinations, leases, revenue recognition, government grants, employee benefits, and share-based payments - The financial statements are prepared in accordance with IAS 34 'Interim Financial Reporting' and the GEM Listing Rules, on a historical cost basis, and presented in Singapore Dollars[31][32] - Accounting policies and methods of computation are consistent with those used in the annual financial statements for the year ended May 31, 2020[32] 2(a) Business Combinations and Consolidation Basis Consolidated financial statements include the Company and its subsidiaries, with intercompany transactions and unrealized profits eliminated, and changes in control over subsidiaries accounted for as equity transactions or disposal gains/losses if control is lost - Consolidated financial statements include the Company and its subsidiaries, with intercompany transactions, intra-group balances, and unrealized profits fully eliminated[33] - Changes in ownership interests that do not result in a loss of control are accounted for as equity transactions; if control is lost, the gain or loss on disposal is calculated based on the fair value difference[33][34] 2(b) Subsidiaries Subsidiaries are investees over which the Company exercises control, assessed based on power, exposure to variable returns, and ability to affect returns, with investments in subsidiaries accounted for at cost less impairment losses in the Company's statement of financial position - Subsidiaries are defined as investees over which the Company can exercise control, with control assessed based on power, exposure to variable returns, and the ability to affect those returns[36] - Investments in subsidiaries are stated at cost less impairment losses in the Company's statement of financial position[36] 2(c) Leases Effective June 1, 2019, the Group accounts for leases under IFRS 16, recognizing right-of-use assets and lease liabilities as a lessee, measuring lease liabilities at amortized cost, and classifying leases as finance or operating leases as a lessor - Effective June 1, 2019, the Group assesses whether a contract is or contains a lease in accordance with IFRS 16[37] 2(c)(i) The Group as Lessee The Group recognizes right-of-use assets and lease liabilities at lease commencement, initially measuring right-of-use assets at cost and depreciating them, while lease liabilities are measured at the present value of unpaid lease payments and subsequently at amortized cost using the effective interest method, with short-term and low-value asset leases expensed on a straight-line basis - The Group recognizes right-of-use assets and lease liabilities at the lease commencement date, with right-of-use assets initially measured at cost and depreciated[38] - Lease liabilities are measured at the present value of unpaid lease payments and subsequently measured at amortized cost using the effective interest method[38][43] - Short-term leases and leases of low-value assets (including IT equipment) do not recognize right-of-use assets and lease liabilities, with related payments recognized as expenses on a straight-line basis[44] 2(c)(ii) The Group as Lessor As a lessor, the Group classifies each lease as a finance or operating lease at commencement, assessing whether all risks and rewards incidental to ownership of the underlying asset have been transferred, with operating lease income recognized on a straight-line basis over the lease term - As a lessor, the Group determines at lease commencement whether each lease is a finance or operating lease, assessing if all risks and rewards incidental to ownership of the underlying asset have been transferred[45] - Lease payments received from operating leases are recognized as income on a straight-line basis over the lease term, as part of 'other income'[49] 2(d) Revenue Recognition Effective June 1, 2018, the Group recognizes revenue under IFRS 15 when control of goods or services transfers to the customer, with specific methods varying by business type, including project, maintenance, hardware sales, subscription, and rental income - Revenue is recognized when control of goods or services transfers to the customer, with the amount reflecting the consideration the Group expects to be entitled to[49] - Project revenue is recognized based on the stage of completion, as assets are created or enhanced over time[50] - Maintenance services and subscription revenue are recognized as the customer simultaneously receives and consumes the benefits[55][57] - Hardware sales revenue is recognized when the customer obtains control of and accepts the product[56] - Rental income is recognized on a straight-line basis over the relevant lease term[58] 2(e) Government Grants Government grants are recognized when there is reasonable assurance of receipt and compliance with conditions, with expense-related grants recognized in profit or loss in the same period as the expenses, and asset-related grants recognized as deferred capital grants over the asset's useful life - Government grants are recognized when there is reasonable assurance that they will be received and the Group will comply with the attached conditions[60] - Grants compensating for expenses are recognized in profit or loss in the same period in which the expenses are incurred[60] - Grants compensating for asset costs are recognized as deferred capital grants and recognized over the useful life of the asset[60] 2(f) Employee Benefits Employee benefits comprise short-term employee benefits and defined contribution retirement plans, with short-term benefits recognized in the year employees render service, and defined contributions (e.g., Singapore Central Provident Fund) expensed when employees render service - Short-term employee benefits are recognized in the year in which the employees render the related service[63] - Contributions to defined contribution retirement plans, such as the Singapore Central Provident Fund, are expensed in profit or loss when employees render service[64] 2(g) Share-based Payments The fair value of share options granted to employees is recognized in profit or loss over the vesting period, with a corresponding increase in the employee share option reserve; non-market vesting conditions are considered by adjusting the number of equity instruments expected to vest, while market vesting conditions are incorporated into the fair value of the options - The fair value of share options granted to employees is recognized in profit or loss over the vesting period, with a corresponding increase in the employee share option reserve[64] - Non-market vesting conditions are considered by adjusting the number of equity instruments expected to vest, while market vesting conditions are incorporated into the fair value of the share options[64] - For cash-settled share-based payments, a liability is recognized at the fair value of the goods or services received[65] 3. Segment Reporting The Group identifies operating segments, including Simplicity and MyBill.sg, Starlight, and SpaceMonster, based on reports reviewed by the chief operating decision maker, providing detailed data on revenue, gross profit, depreciation, amortization, and profit/loss for each segment, along with analysis of revenue recognition timing, geographical distribution, and key customer contributions - The Group has three reportable segments: Simplicity and myBill (enterprise application software solutions), Starlight (energy management solutions), and SpaceMonster (online venue booking platform)[69] 3(a) Segment Reporting For the nine months ended February 28, 2021, the Simplicity and myBill segments contributed the most to revenue and gross profit, while Starlight's revenue and profit significantly declined, and SpaceMonster's revenue and profit continued to grow Reportable Segment Financial Performance (For the Nine Months Ended February 28, 2021) | Indicator | Simplicity & myBill (SGD) | Starlight (SGD) | SpaceMonster (SGD) | Total (SGD) | | :--- | :--- | :--- | :--- | :--- | | External Customer Revenue | 12,936,080 | 1,087,897 | 242,143 | 14,266,120 | | Gross Profit | 4,793,330 | 526,693 | 236,906 | 5,556,929 | | Reportable Segment Profit/(Loss) | 4,075,815 | (330,150) | 236,906 | 3,982,571 | - Simplicity and myBill segment revenue increased by 30% year-on-year, with gross profit growing by 20%[70] - Starlight segment revenue decreased by 59.7% year-on-year, with profit turning into a loss[70] - SpaceMonster segment revenue increased by 50.1% year-on-year, with profit growing by 63.5%[70] 3(b) Reconciliation of Reportable Segment Revenue and (Loss)/Profit This section reconciles reportable segment profit with consolidated profit before income tax, detailing the impact of unallocated corporate expenses such as staff costs, lease expenses, legal and professional fees, and depreciation on overall profit Reconciliation of Reportable Segment Profit with Consolidated Profit Before Income Tax (For the Nine Months Ended February 28, 2021) | Item | February 28, 2021 (SGD) | February 29, 2020 (SGD) | | :--- | :--- | :--- | | Reportable Segment Profit/(Loss) | 3,982,571 | 2,916,926 | | Other Income | 717,157 | 16,433 | | Other Gains and Losses | (10,570) | 11,240 | | Finance Costs | (37,524) | (1,629) | | Unallocated Corporate Expenses (Total) | (2,769,918) | (3,351,722) | | Profit/(Loss) Before Consolidated Income Tax | 1,876,666 | (408,742) | - Staff costs, legal and professional fees, depreciation, and depreciation of right-of-use assets are the main components of unallocated corporate expenses[73] - Total unallocated corporate expenses decreased from SGD 3,351,722 in the prior period to SGD 2,769,918[73] 3(c) Analysis of Revenue This section provides a detailed analysis of revenue by recognition timing (over time or at a point in time) and key geographical markets (Singapore, Malaysia, China, others), highlighting project revenue and maintenance services as primary sources, with Singapore as the core market Revenue Recognition Timing and Geographical Distribution (For the Nine Months Ended February 28, 2021) | Revenue Type/Region | February 28, 2021 (SGD) | February 29, 2020 (SGD) | | :--- | :--- | :--- | | Revenue Recognition Timing | | | | Project Revenue | 9,575,831 | 8,638,150 | | Maintenance Services | 2,833,339 | 2,570,334 | | Subscriptions | 1,557,360 | 1,443,914 | | Equipment Sales | 255,535 | 118,565 | | Equipment Rental Income | 44,055 | 43,725 | | Geographical Information | | | | Singapore | 13,433,590 | 12,321,031 | | Malaysia | 140,752 | 114,276 | | China | 110,082 | 195,021 | | Others | 581,696 | 184,360 | - Project revenue and maintenance services are the Group's primary revenue sources, accounting for 67.1% and 19.9% of total revenue, respectively[73] - Singapore is the Group's most significant market, contributing the majority of revenue (SGD 13,433,590, or 94.2%)[73] - Revenue from the China market decreased year-on-year, while revenue from Malaysia and other regions increased[73] 3(d) Information on Major Customers This section discloses the revenue contribution from the Group's major customers, with Customer A and Customer B each contributing over 10% of the Group's total revenue during the reporting period Major Customer Revenue Contribution (For the Nine Months Ended February 28, 2021) | Customer | February 28, 2021 (SGD) | February 29, 2020 (SGD) | | :--- | :--- | :--- | | Customer A | 5,253,262 | 1,826,694 | | Customer B | 2,082,137 | 1,354,590 | | Customer C | - | 1,328,658 | - Customer A's revenue contribution significantly increased from SGD 1,826,694 to SGD 5,253,262[80] - Customer C is no longer a major customer in the 2021 reporting period[80] 4. Other Income For the nine months ended February 28, 2021, the Group's other income significantly increased to SGD 780,626, primarily driven by government grants and new other income items Other Income Details (For the Nine Months Ended February 28, 2021) | Item | February 28, 2021 (SGD) | February 29, 2020 (SGD) | | :--- | :--- | :--- | | Government Grants | 713,424 | 23,643 | | Interest Income | 2,286 | 1,951 | | Others | 64,916 | - | | Total | 780,626 | 25,594 | - Government grants significantly increased from SGD 23,643 to SGD 713,424, serving as the primary driver for the growth in other income[80] 5. Other Gains and Losses For the nine months ended February 28, 2021, the Group recorded a net other gains and losses of SGD 11,582 loss, primarily impacted by net exchange losses and inventory impairment Other Gains and Losses Details (For the Nine Months Ended February 28, 2021) | Item | February 28, 2021 (SGD) | February 29, 2020 (SGD) | | :--- | :--- | :--- | | Net Exchange Gains/(Losses) | (10,570) | (684) | | Impairment of Inventories | (1,139) | - | | Provision for Expected Credit Losses | 127 | 11,924 | | Total | (11,582) | 11,240 | - Net exchange gains turned from a gain in the prior period to a loss of SGD 10,570[80] - A new impairment loss on inventories of SGD 1,139 was recognized in the current period[80] 6. Finance Costs For the nine months ended February 28, 2021, the Group's finance costs increased to SGD 37,524, primarily comprising interest on lease liabilities, compared to bank borrowing interest in the prior period Finance Costs Details (For the Nine Months Ended February 28, 2021) | Item | February 28, 2021 (SGD) | February 29, 2020 (SGD) | | :--- | :--- | :--- | | Interest on Lease Liabilities | 37,524 | - | | Interest on Bank Borrowings | - | 1,629 | | Total | 37,524 | 1,629 | - Interest on lease liabilities is the main component of finance costs in the current period, with no such item in the prior period[82] 7. (Loss)/Profit Before Income Tax This section lists expenses impacting profit/loss before income tax, including staff costs, depreciation, amortization, finance costs, and restoration costs; staff costs slightly decreased, while depreciation of right-of-use assets and restoration costs are new expenses for the period Factors Affecting Profit/(Loss) Before Income Tax (For the Nine Months Ended February 28, 2021) | Item | February 28, 2021 (SGD) | February 29, 2020 (SGD) | | :--- | :--- | :--- | | Staff Costs (including directors' emoluments) | 7,254,865 | 7,404,178 | | Depreciation of Property, Plant and Equipment | 102,522 | 107,234 | | Depreciation of Right-of-Use Assets | 480,187 | - | | Amortization of Intangible Assets | 668,811 | 759,170 | | Finance Costs | 37,524 | 1,629 | | Restoration Costs | 47,065 | - | | Auditors' Remuneration | 5,294 | 18,410 | - Total staff costs (including salaries, allowances, and defined contribution retirement plans) slightly decreased[83] - Depreciation of right-of-use assets (SGD 480,187) and restoration costs (SGD 47,065) are new expense items for the current period[83] - Amortization of intangible assets decreased, and auditors' remuneration also significantly declined[83] 8. Income Tax Expense For the nine months ended February 28, 2021, the Group's income tax expense was zero, compared to SGD 19,118 in the prior period, with corporate tax rates in Singapore, Malaysia, and India at 17%, 24%, and 29%, respectively Income Tax Expense (For the Nine Months Ended February 28, 2021) | Item | February 28, 2021 (SGD) | February 29, 2020 (SGD) | | :--- | :--- | :--- | | Current Portion | - | (19,118) | | Deferred Tax | - | - | | Total | - | (19,118) | - Income tax expense for the current period was zero, compared to SGD 19,118 in the prior period[87] - The Group's corporate tax rates in Singapore, Malaysia, and India are 17%, 24%, and 29%, respectively[87] 9. Interim Dividend The Board has not declared any dividend for the nine months ended February 28, 2021, consistent with the prior period - The Board has not declared any dividend for the nine months ended February 28, 2021 (February 29, 2020: nil)[88] 10. (Loss)/Earnings Per Share For the nine months ended February 28, 2021, the company's basic earnings per share were 0.47 Singapore Cents and diluted earnings per share were 0.46 Singapore Cents, a significant improvement from the prior year's loss of 0.03 Singapore Cents per share Earnings/(Loss) Per Share (For the Nine Months Ended February 28, 2021) | Indicator | February 28, 2021 (Singapore Cents) | February 29, 2020 (Singapore Cents) | | :--- | :--- | :--- | | Basic Earnings/(Loss) Per Share | 0.47 | (0.03) | | Diluted Earnings/(Loss) Per Share | 0.46 | (0.03) | - Basic earnings per share are calculated based on profit attributable to owners of the company of SGD 1,877,169 and 397,880,496 issued ordinary shares[89] - Diluted earnings per share are calculated based on profit attributable to owners of the company of SGD 1,877,169 and a weighted average of 405,762,422 issued ordinary shares[89] 11. Share Capital As of February 28, 2021, the company had 397,880,496 issued ordinary shares and share capital of SGD 20,645,177, having repurchased and cancelled 1,278,000 shares during the reporting period Changes in Share Capital (As of February 28, 2021) | Item | Number of Issued Ordinary Shares | SGD | | :--- | :--- | :--- | | May 31, 2020 (Audited) | 399,158,496 | 20,756,598 | | Cancellation of Shares | (1,278,000) | (111,421) | | February 28, 2021 (Unaudited) | 397,880,496 | 20,645,177 | - During the reporting period, the company repurchased and cancelled 1,278,000 shares for a consideration of SGD 111,421[90] Management Discussion and Analysis Business Review Established in 2006, the Group specializes in enterprise application software and energy management solutions, with this section detailing the performance of its four core businesses—Simplicity, Starlight, myBill, and SpaceMonster—during the reporting period, including revenue growth, customer base changes, and market challenges - The Group primarily generates revenue through Simplicity (enterprise application software), Starlight (energy management solutions), SpaceMonster (online venue booking platform), and myBill (utility revenue assurance platform)[91] - Products cover Singapore, Malaysia, China, and other Asian countries, serving various sectors including commercial real estate, education, healthcare, and government[91] Simplicity Simplicity's total revenue grew 37.2% year-on-year to SGD 11,721,810, driven by increased smart technology projects in Singapore's public sector and an expanding customer base, with both project and maintenance service revenues achieving significant growth Simplicity Revenue Details (For the Nine Months Ended February 28, 2021) | Item | February 28, 2021 (SGD) | February 29, 2020 (SGD) | Growth Rate | | :--- | :--- | :--- | :--- | | Total Revenue | 11,721,810 | 8,544,550 | +37.2% | | Project Revenue | 8,716,722 | 6,124,670 | +42.3% | | Maintenance Services | 2,819,808 | 2,411,260 | +16.9% | | Equipment Sales | 185,280 | 8,620 | +2049.4% | - Increased smart technology projects in Singapore's public sector are the primary driver for Simplicity's revenue growth[93] - Project revenue significantly grew by 42.3%, and maintenance service revenue increased by 16.9%[92][93] Starlight Starlight's total revenue significantly decreased by 59.7% year-on-year to SGD 1,087,897, primarily due to subdued demand caused by the COVID-19 pandemic; despite the revenue decline, recurring ad-hoc works from existing customers generated higher quality income Starlight Revenue Details (For the Nine Months Ended February 28, 2021) | Item | February 28, 2021 (SGD) | February 29, 2020 (SGD) | Change Rate | | :--- | :--- | :--- | :--- | | Total Revenue | 1,087,897 | 2,702,208 | -59.7% | | Project Revenue | 746,269 | 2,394,680 | -68.8% | | Maintenance Services | 227,318 | 153,858 | +47.7% | | Equipment Rental Income | 44,055 | 43,725 | +0.8% | | Equipment Sales | 70,255 | 109,945 | -36.1% | - Subdued demand due to the COVID-19 pandemic led to a significant 68.8% decrease in Starlight's project revenue[96] - Despite the decline in total revenue, maintenance services and rental income increased, indicating a stable existing customer base and higher quality revenue generation[96] myBill myBill's total revenue decreased 14.5% year-on-year to SGD 1,214,270, primarily due to a one-off contract renewal rebate; despite this temporary decline, myBill platform subscriptions have steadily grown since its June 2018 launch, stabilizing at around 100,000 monthly subscriptions myBill Revenue Details (For the Nine Months Ended February 28, 2021) | Item | February 28, 2021 (SGD) | February 29, 2020 (SGD) | Change Rate | | :--- | :--- | :--- | :--- | | Total Revenue | 1,214,270 | 1,406,634 | -13.7% | | Subscriptions | 1,101,430 | 1,287,834 | -14.5% | | Project Revenue | 112,840 | 118,800 | -5.0% | - myBill revenue decline was primarily due to a one-off contract renewal rebate, resulting in a temporary 14.5% decrease in subscription revenue[100] - myBill platform subscriptions have shown continuous stable growth, with monthly subscriptions stabilizing at around 100,000[100][101] SpaceMonster SpaceMonster revenue grew 50.1% year-on-year to SGD 242,143, reflecting sustained growth in demand for venue sharing services, and the segment maintained a healthy gross profit margin of 97.8% SpaceMonster Revenue (For the Nine Months Ended February 28, 2021) | Item | February 28, 2021 (SGD) | February 29, 2020 (SGD) | Growth Rate | | :--- | :--- | :--- | :--- | | Revenue | 242,143 | 161,296 | +50.1% | - Sustained growth in demand for venue sharing services drove SpaceMonster's revenue increase of 50.1%[103] - SpaceMonster maintained a healthy gross profit margin of 97.8%[103] Future Prospects and Outlook The Group anticipates continued strong performance from Simplicity, myBill, and SpaceMonster, benefiting from digitalization trends in Singapore and Southeast Asia's enterprise application software market, while Starlight's business faces ongoing challenges from subdued demand due to the COVID-19 pandemic in the short term - Singapore and Southeast Asia's enterprise application software market remains strong due to digitalization trends, with Simplicity, myBill, and SpaceMonster expected to continue performing well[106] - Starlight's business continues to face subdued demand due to the COVID-19 pandemic, limiting short-term revenue[106] Financial Review This section provides a detailed financial analysis of the Group's revenue, gross profit, cost of sales, selling and distribution costs, administrative expenses, R&D expenses, and profit before income tax for the reporting period, explaining the reasons for changes in each metric Revenue The Group's total revenue grew 11.3% year-on-year to SGD 14,266,120, primarily driven by Simplicity's 37.2% revenue growth, partially offset by declines in Starlight and myBill revenue - Group revenue increased by 11.3% (SGD 1,451,432), reaching SGD 14,266,120[110] - Simplicity revenue grew by 37.2% (SGD 3,177,260), primarily benefiting from Singapore's public sector digitalization projects[110] - Starlight revenue decreased by 59.7% (SGD 1,614,311), and myBill revenue decreased by 13.7% (SGD 192,364), partially offsetting Simplicity's growth[110] Gross Profit and Gross Profit Margin The Group's total gross profit increased 18.9% year-on-year, primarily due to revenue growth; myBill's gross profit margin rose from 26.8% to 46.2%, SpaceMonster's improved to 97.8%, while Simplicity's slightly decreased - The Group's total gross profit increased by 18.9% (SGD 881,862)[111] - myBill's gross profit margin increased from 26.8% to 46.2%, benefiting from new value-added services and reduced third-party costs[111] - SpaceMonster's gross profit margin improved from 89.8% to 97.8%[111] - Simplicity's gross profit margin decreased from 42.2% to 36.1%[111] Cost of Sales The Group's cost of sales increased 7.0%, with Simplicity's cost of sales growing 51.6% to support revenue growth, partially offset by declines in myBill, Starlight, and SpaceMonster, where myBill saw significant reductions in third-party costs due to new service development - The Group's cost of sales increased by 7.0%[112] - Simplicity's cost of sales increased by 51.6% (SGD 2,550,187), primarily related to increased manpower costs and outsourced work[112] - myBill's cost of sales decreased by 36.5% (SGD 375,767) due to the development of new value-added services eliminating significant third-party costs[112] - Starlight's cost of sales decreased by 74.0%, consistent with the decline in revenue[112] - SpaceMonster's cost of sales decreased by 68.1% (SGD 11,155) as intangible assets were fully amortized[112] Selling and Distribution Costs Selling, marketing, and distribution expenses decreased, primarily due to the China joint venture being deemed disposed of, and significant reductions in trade fair and overseas business travel expenses caused by COVID-19 restrictions - Selling and distribution costs decreased, mainly due to the China joint venture being deemed disposed of, and reduced overseas travel and social gathering expenses due to COVID-19 restrictions[119] Administrative Expenses Administrative expenses decreased by SGD 498,726, primarily because the China joint venture was deemed disposed of, and its administrative expenses are no longer consolidated into the Group's statements, while administrative expenses for Singapore's core business remained stable - Administrative expenses decreased by SGD 498,726, mainly because the China joint venture was deemed disposed of, and its administrative expenses are no longer consolidated[120] - Administrative expenses for the Group's core business in Singapore remained stable[120] Research and Development Expenses The Group continuously invests in improving existing products and developing new features to enhance customer experience and maintain market competitiveness, notably developing additional value-added services for myBill aimed at eliminating third-party costs and improving future gross profit margins - The Group continuously improves existing products and develops new features for Simplicity, Starlight, and myBill to enhance customer experience[120] - Additional value-added services were developed for myBill, aiming to eliminate third-party costs and improve future gross profit margins[120] - Simplicity's intangible assets are expected to reach the end of their remaining useful lives by the end of FY2021[120] Profit Before Income Tax The Group achieved a net profit before tax of SGD 1,876,666, reversing a net loss before tax of SGD 408,740 in the prior period, primarily due to the cessation of consolidation of the China joint venture, whose losses no longer impact Singapore's core business - The Group achieved a net profit before tax of SGD 1,876,666, compared to a net loss before tax of SGD 408,740 in the prior period[120] - The turnaround to profit is mainly due to the cessation of consolidation of the China joint venture in September 2020, whose losses no longer affect the Group's core business in Singapore[120] Corporate Governance Code and Other Information Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures of the Company and its Associated Corporations As of February 28, 2021, executive directors Mr. Lau Yee Chuen and Mr. Ong Swee Huat held interests in the company's shares, with 11.45% and 5.72% stakes respectively, and no other directors or chief executives held any other interests or short positions Directors' and Chief Executive's Long Positions in Shares (As of February 28, 2021) | Director's Name | Role/Nature | Number of Shares with Interests | Total Interests | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Lau Yee Chuen | Beneficial Interest | 45,572,000 | 45,572,000 | 11.45% | | Mr. Ong Swee Huat | Beneficial Interest | 22,750,000 | 22,750,000 | 5.72% | - The percentage of share capital is calculated based on the total number of 397,880,496 issued shares of the company as of February 28, 2021[125] Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares As of February 28, 2021, various entities/persons, other than directors, held interests or short positions in the company's shares, with iGlobe Platinum Fund Limited being the largest shareholder at 20.69% Substantial Shareholders' and Other Persons' Interests in Shares (As of February 28, 2021) | Shareholder Name | Role/Nature | Number of Shares | Number of Relevant Shares Held | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Wong Yin Yin | Spouse's Interest | 45,572,000 | - | 11.45% | | Lim Lay Peng | Spouse's Interest | 22,750,000 | - | 5.72% | | BAF Spectrum Pte. Ltd. | Beneficial Interest | 39,565,162 | - | 9.94% | | iGlobe Platinum Fund Limited | Beneficial Interest | 82,326,335 | - | 20.69% | | Majuven Fund 1 Ltd. | Beneficial Interest | 36,528,219 | - | 9.18% | | OWW Investments III Limited | Beneficial Interest | 20,873,307 | - | 5.25% | | M1 TeliNet Pte. Ltd. | Beneficial Interest | 20,259,000 | - | 5.09% | | M1 Limited | Interest in Controlled Corporation | 20,259,000 | - | 5.09% | - Ms. Wong Yin Yin and Ms. Lim Lay Peng are deemed to have interests in the shares of Mr. Lau Yee Chuen and Mr. Ong Swee Huat, respectively[130] - iGlobe Platinum Fund Limited is the largest single shareholder, with a 20.69% stake[130] Share Option Schemes The company has Pre-IPO and Post-IPO Share Option Schemes; as of February 28, 2021, 9,095,632 options remain unexercised under the Pre-IPO scheme, while no unexercised options exist under the Post-IPO scheme Pre-IPO Share Option Scheme The company adopted two Pre-IPO Share Option Schemes to incentivize eligible persons; as of February 28, 2021, 9,095,632 options granted to six grantees (including senior management and employees) remain unexercised - The Pre-IPO Share Option Scheme aims to incentivize eligible persons responsible for the company's management, growth, and financial success[135] - The exercise price for share options is approximately SGD 0.01 or SGD 0.07 per share, exercisable in four equal tranches annually from the grant date[135] - As of February 28, 2021, 9,095,632 options have been granted to six grantees but remain unexercised[135] Post-IPO Share Option Scheme The company adopted a Post-IPO Share Option Scheme, but no options have been granted, exercised, or cancelled since its adoption, and there are no unexercised options as of February 28, 2021 - The company has adopted a Post-IPO Share Option Scheme, but no options have been granted, exercised, or cancelled since its adoption[136] - As of February 28, 2021, there are no unexercised share options issued under the Post-IPO Share Option Scheme[136] Code of Conduct for Securities Transactions by Directors The company has adopted a code of conduct for directors' securities transactions no less exacting than required by the GEM Listing Rules, and all directors confirm compliance since the listing date - The company has adopted a code of conduct for directors' securities transactions no less exacting than required by Rules 5.48 to 5.67 of the GEM Listing Rules[137] - All directors confirm compliance with the code of conduct from the listing date up to the date of this annual report[137] Directors' and Controlling Shareholders' Interests in Contracts During the review period, no directors, controlling shareholders, or their respective close associates held interests in any contracts directly or indirectly competing or potentially competing with the Group's business - During the review period, neither directors nor controlling shareholders and their close associates held interests in contracts competing with the Group's business[138] Purchase, Redemption or Sale of Listed Securities During the reporting period, neither the company nor its subsidiaries repurchased, sold, or redeemed any of the company's listed securities - During the reporting period, neither the company nor its subsidiaries repurchased, sold, or redeemed any of the company's listed securities[138] Corporate Governance Practices The company is committed to fulfilling its responsibilities to shareholders and safeguarding and enhancing shareholder value through robust corporate governance, having complied with the code provisions of Appendix 15 'Corporate Governance Code' of the GEM Listing Rules - The company is committed to safeguarding and enhancing shareholder value through robust corporate governance[138] - The company has complied with the code provisions of Appendix 15 'Corporate Governance Code' of the GEM Listing Rules[138] Interim Dividend The Board has not declared any dividend for the nine months ended February 28, 2021, consistent with the prior period - The Board has not declared any dividend for the nine months ended February 28, 2021 (February 29, 2020: nil)[138] Audit Committee The Board established the Audit Committee on November 24, 2016, comprising three independent non-executive directors, with key responsibilities including recommending auditor appointment/removal, reviewing financial statements, advising on financial reporting, and overseeing risk management and internal control procedures; the current period's financial statements have been reviewed by the Audit Committee - The Audit Committee comprises three independent non-executive directors, with Mr. Lee Boon Wee as Chairman[141] - Key responsibilities include recommending auditor appointment/removal, reviewing financial statements, providing financial reporting advice, and overseeing risk management and internal control procedures[141] - The Q3 2021 financial statements were not audited by the company's auditors but have been reviewed by the Audit Committee[141]