#1TUMI KANGOL TUM KANGOL I TUMI 2020 Annual Report TRUE RELIGION ひ SOREL OSSIA INTERNATIONAL LIMITED TRUE RELIGION* ひ SOREL Columbia#2TABLE OF CONTENTS 03 Group Structure 04 Corporate Profile 05 40 07 08 80 Group Executive Chairman's Statement Executive Directors Non-Executive Directors 09 Senior Management 10 10 Corporate Information 11 Corporate Governance 34 Financial Statements 105 Statistics of Shareholdings 106 Substantial Shareholdings 107 Notice of Annual General Meeting 111 Proxy Form TUM#3Group STRUCTURE [OSSIA INTERNATIONAL LIMITED] 100% W.O.G. World of Golf Pte. Ltd. 100% Alstyle Marketing Sdn. Bhd. 100% Great Alps Industry Co., Ltd. 100% Alstyle International (M) Sdn. Bhd. 100% Ossia World of Golf (M) Sdn. Bhd. 100% Alstyle Fashion Sdn. Bhd. 40% Harvey Norman Ossia (Asia) Pte. Ltd. 61% Alstyle International Resources Sdn. Bhd. 49.4% Pertama Holdings Pte. Ltd. 100% Decorion Sdn. Bhd.#4Corporate PROFILE OVERVIEW Established since 1982, Ossia is a leading regional distributor and retailer of lifestyle, outdoors, luggage and accessories products. Ossia was listed on the main board of Singapore Exchange Securities Trading Limited (SGX-ST) on 20 November 1996. The Group subsidiary in Taiwan has exclusive distribution rights for the Kango, True Religion, Tumi, Columbia and Sorel brands. The Group subsidiaries in Malaysia have ceased operations since January 2019 and are currently dormant. The Group holds an effective 19.8% stake in Pertama Holdings Pte. Ltd., a leading retailer of consumer electronics and home furnishings trading under the Harvey Norman brand in Singapore and Malaysia.#5☐ Group Executive Chairmans STATEMENT Dear Shareholders, On behalf of the Board of Directors, I am pleased to present the Annual Report of the Group for the financial year ended 31 March 2020. ("FY2020"). Below are some highlights of the performance of the Group for the financial year ended 31 March 2020. Financial Review The Group's revenue for the year ended 31 March 2020 was $25.53 million, a 6.6% increase from $23.95 million registered in FY2019. The increase in sales was mainly due to the improved performance of its Taiwan subsidiary. There was no major fluctuation in gross profit margin for the year ended 31 March 2020. Other operating income increased by 200%, mainly due to the gain on disposal of the building previously classified as held for sale from the Malaysia subsidiary, as announced on 1 February 2019. Distribution costs increased by 6.2% or $0.55 million mainly due to increase in the marketing cost for the e-commerce and online marketing for the Taiwan subsidiary. General and administrative expenses decreased by 9.9% or $0.45 million. Administrative expenses were higher in the last financial year due to the high depreciation expenses arising from the renovations carried out at the various stores of the Taiwan subsidiary. Fewer such renovations were observed in the current financial year. The Group's share of results of the associated company decreased by 16.0%, from $4.76 million in FY2019 to $4.00 million in FY2020 due to a decrease in sales performance of the associated company. Profit attributable to owners of the company was $5.05 million for the year ended 31 March 2020, as compared to $3.77 million in FY2019. Balance Sheet Review The Group's current trade and other receivables decreased from $4.65 million to $4.02 million mainly due to faster collection of receivables from Taiwan subsidiary during the year. The Group's non-current trade and other receivables decreased from $2.80 million to $2.41 million mainly due to faster collection from related parties during the year. The Group's and the Company's property, plant and equipment increased mainly due to new assets acquired for the Taiwan subsidiary and net off against the depreciation charged during the financial year. The Group's and the Company's right-of-use asset increased due to capitalisation of the leases for offices premises, warehouse, motor vehicles and retail outlets in accordance with SFRS(I) 16. These were net off against the depreciation charged during the financial year.#6G Group Executive Chairman s STATEMENT The Group's assets classified as held for sale as at 31 March 2019 relates to the sales and purchase agreement entered by a subsidiary in Malaysia for the disposal of leasehold land and building as announced on 1 February 2019 and the transaction was completed in June 2019. The Group's trade and other payables decreased from $4.27 million to $2.32 million mainly due to decrease in purchases for Taiwan operation toward the financial year end. The Group's bills payable increased by $0.16 million from $3.21 million to $3.37 million mainly due to purchases for the new season stock in December 2019. The Group's bank borrowings decreased by $1.65 million from $4.02 million to $2.37 million mainly due to the settlement of the term loan upon the disposal of the asset classified as held for sale. The Group's lease liabilities arose from the adoption of SFRS(I) 16 and the new lease agreements entered during the financial year for the Taiwan subsidiary. Cash flow Review Net cash from operating activities increased due to repayment of the trade payables for Taiwan operation toward the financial year end. Net cash from investing activities increased mainly due to dividend received from Harvey Norman Ossia (Asia) Pte Ltd and the proceed received from the disposal of the asset classified as held for sale during the financial year. Net cash used in financing activities increased mainly due to repayment for bank borrowings, lease liabilities and the dividend paid during the financial year. Moving Forward The COVID-19 pandemic has and will continue to exert a major impact on the Group's retail operations and prospects for the next financial year. Pandemic induced economic disruptions have resulted in more cautious consumer spending. The Group has undertaken a careful review of its operations in order to align operating costs and strategies with market expectations in the new normal. Acknowledgement I would like to express my heartfelt thanks to our shareholders, customers, bankers and business associates for their invaluable support, and my warm appreciation to our Directors, management team and all employees for their commitment and dedication throughout the year. Goh Ching Wah, George Group Executive Chairman#7Executive DIRECTORS DIRECTOR ཟ MR GOH CHING WAH Group Executive Chairman Mr George Goh (Age: 61) is the Group Executive Chairman of the company. Mr Goh and his brothers (Messrs Goh Ching Huat, Steven and Goh Ching Lai, Joe) are experienced entrepreneurs who co-founded the Group. Mr Goh is also the Deputy Chairman of Pertama Holdings Pte Ltd trading under the name of "Harvey Norman", which retails electrical, computer, furniture and household products. Mr Goh, together with his two brothers, were the winners of the 1994 Rotary-ASME Entrepreneur Award. They have more than 35 years of experience in distribution and retailing of lifestyle/sporting/outdoors products under the Group. Mr Goh is responsible for the overall Group direction, strategic planning and business development. Mr Goh is a member of the Nominating Committee for the Group. MR GOH CHING HUAT Chief Executive Officer/ Executive Director Mr Steven Goh (Age: 55) was appointed as Director on 1 September 1990 and re-designated as Executive Director on 1 July 2006. Mr Goh and his brothers (Messrs Goh Ching Wah, George and Goh Ching Lai, Joe) were the winners of the 1994 Rotary-ASME Entrepreneur Award. Mr Goh and his two brothers have more than 35 years of experience in distribution and retailing of lifestyle/sporting/outdoors products under the Group. Mr Goh is responsible for the overall management of the Group and businesses. MR GOH CHING LAI Executive Director Mr Joe Goh (Age: 61) was appointed as Director on 1 September 1990, re-designated as Non-Executive Director on 1 May 2009 and re-designated as Executive Director on 17 June 2016. The Goh brothers were the winners of the 1994 Rotary-ASME Entrepreneur Award. Their business interests range from marketing, distribution, retailing, technology and property development investments in the Asia Pacific region. Mr Goh is a Non-Executive Director of Pertama Holdings Private Limited, trading under the name of "Harvey Norman", which retails electrical, computer, furniture and household products. Mr Goh and his two brothers have more than 35 years of experience in distribution and retailing of lifestyle/sporting/ outdoors products under the Group. Mr Goh is a member of the Nominating Committee for the Group.#8☐ NON EXECUTIVE DIRECTORS MR WONG KING KHENG Independent/Non-Executive Director Mr James Wong (Age: 67) was appointed on 28 October 1996 as an Independent/ Non-Executive Director. Mr Wong is presently the Managing Partner of KK Wong and Associates, a public accounting firm in Singapore which he founded in 2000. In addition, he is also the Managing Director of Soh & Wong Management Consultants Pte Ltd which provides consulting services for regional tax planning, merger and acquisition, strategic business plans and advises on initial public offering services including restructuring, feasibility studies, recruitment, profit forecasts and financial restructuring. Mr Wong was the founder and Managing Partner of Soh, Wong & Partners, a public accounting firm from 1989 to 2000. Prior to that, he was an audit manager in an international accounting firm which gave him extensive exposure in the fields of auditing, tax planning, management consulting and public listing consulting. Mr Wong is a member of the Institute of Singapore Chartered Accountants (ISCA), Australian CPA and Malaysian Institute Of Accountant. Besides being the Chairman of the Audit Committee, member of the Remuneration Committee and the Nominating Committee for the Group, Mr Wong also holds directorships in Tiong Woon Corporation Holding Limited, Hatten Land Limited, and JCY International Berhad. MR ANTHONY CLIFFORD BROWN Independent Non-Executive Director Mr Anthony Brown (Age: 80) was appointed on 25 May 2002 as an Independent/ Non-Executive Director. Mr Brown was formerly the Vice President and General Manager of Prince Sports Group of United States of America for the Asia Pacific region. In this capacity, he was responsible for sales and marketing of Prince Sports products throughout Asia Pacific. Previously he was the Managing Director of LEGO Australia Pty Ltd, and held senior management position in The Coca-Cola Company in Australia, Japan and Indonesia. Mr Brown was the winner of a UK State Scholarship and holds an honours degree in Economics from The L.S.E. (London University). Mr Brown is the Chairman of the Nominating Committee and a member of the Audit and Remuneration Committees. MS HENG SU-LING, MAE Independent/ Non-Executive Director Ms Mae Heng (Age: 49) was appointed on 27 April 2010 as an Independent/ Non-Executive Director. Ms Heng is a member of the Audit and Nominating Committees and Chairman of the Remuneration Committee for the Group. Ms Heng has over 16 years of experience in audit, corporate finance and business advisory environment with Ernst & Young Singapore. Ms Heng graduated with a Bachelor of Accountancy from Nanyang Technological University, Singapore in 1992 and is a Chartered Accountant with the Institute of Singapore Chartered Accountants (ISCA). Ms Heng is an independent non-executive director of HRnet Group Limited, Chuan Hup Holdings Limited, Grand Venture Technology Limited and Apex Healthcare Berhad. Ms Heng also holds directorships in her family-owned investment holding companies.#9Senior MANAGEMENT Senior MR HSU CHIN TUNG Managing Director Mr Alan Hsu is the Managing Director of Great Alps Industry Co., Ltd. Mr Hsu is responsible for the product development, brand management, marketing and distribution of footwear, apparel, bags and accessories in Taiwan. Mr Hsu joined as a Brand Manager in 1996 and was promoted to Managing Director in 2001. Prior to joining, he was the Product Developer of E. S. Original. Mr Hsu graduated from Ta-Ming Junior College of Commerce in 1990 with a Diploma in Business Administration.#10CORPORATE INFORMATION BOARD OF DIRECTORS MR GOH CHING HUAT, STEVEN EXECUTIVE DIRECTOR MR WONG KING KHENG INDEPENDENT/ NON-EXECUTIVE DIRECTOR AUDIT COMMITTEE MR GOH CHING WAH, GEORGE GROUP EXECUTIVE CHAIRMAN MR ANTHONY CLIFFORD BROWN INDEPENDENT/ NON-EXECUTIVE DIRECTOR NOMINATING COMMITTEE MR GOH CHING LAI, JOE EXECUTIVE DIRECTOR MS HENG SU-LING, MAE INDEPENDENT/ NON-EXECUTIVE DIRECTOR REMUNERATION COMMITTEE MR WONG KING KHENG CHAIRMAN MR ANTHONY CLIFFORD BROWN MS HENG SU-LING, MAE COMPANY SECRETARIES MS LOTUS ISABELLA LIM MEI HUA MS LEE BEE FONG PRINCIPAL BANKER THE DEVELOPMENT BANK OF SINGAPORE LTD MR ANTHONY CLIFFORD BROWN CHAIRMAN MR WONG KING KHENG MS HENG SU-LING, MAE MR GOH CHING WAH, GEORGE MR GOH CHING LAI, JOE REGISTERED OFFICE OSSIA INTERNATIONAL LIMITED CO. REGN NO.: 199004330K 51 CHANGI BUSINESS PARK CENTRAL 2, #08-13 THE SIGNATURE, SINGAPORE 486066 TEL: (65) 6543 1133 FAX: (65) 6543 5800 AUDITORS ERNST & YOUNG LLP ONE RAFFLES QUAY #18-01 NORTH TOWER SINGAPORE 048583 MS HENG SU-LING, MAE CHAIRMAN MR WONG KING KHENG MR ANTHONY CLIFFORD BROWN SHARE REGISTRAR TRICOR BARBINDER SHARE REGISTRATION SERVICES (A DIVISION OF TRICOR SINGAPORE PTE LTD) 80 ROBINSON ROAD #12-02 SINGAPORE 068898 PARTNER-IN-CHARGE MR PHILIP NG (APPOINTED SINCE FINANCIAL YEAR 2019)#11Corporate GOVERNANCE The Board of Directors (the "Board") of Ossia International Limited (the "Company") is committed to maintaining a high standard of corporate governance. Good corporate governance establishes and maintains an ethical environment and enhances the interests of all shareholders. This report describes the Company's corporate governance processes and structures with specific reference made to the principles and guidelines of the Code of Corporate Governance 2018 (the 'Code"). This statement on the corporate governance practices of the Company describes the corporate governance policies practiced by the company during the financial year ended 31 March 2020, with specific references made to each of the principles set out in the Code. The Company has complied substantially with the principles and provisions as set out in the Code. Explanations have been provided in the relevant sections below where there have been any deviations from the Code. Where there are deviations from the Code, the Board has taken into consideration the current alternative practices in place and are of the view that these are sufficient to meet the underlying objectives of the Code. Board Matters Principle 1: Board Conduct of its Affairs The Company is headed by an effective Board which is collectively responsible and works with Management for the long-term success of the Group. The Company is headed by an effective Board to lead and control its operations and affairs for the success of the Company. The primary function of the Board is to protect and enhance long-term value and returns for its shareholders. Apart from its statutory responsibilities, the Board sets the overall strategy of the Company and its subsidiaries (the "Group") as well as review various matters including major funding and investments proposal, material acquisitions and disposal of assets, key operational initiatives and financial controls, the release of the Group's quarterly and full year results and interested persons transaction of a material nature. The Board conducts scheduled meetings on a quarterly basis to coincide with the announcement of the Group's quarterly results. Ad-hoc Board meetings are convened as and when they are deemed necessary in between scheduled meetings. When a physical Board meeting is not possible, timely communication with members of the Board can be achieved through electronic means. In the course of the year under review, the number of Board meetings held and the attendance of each board member at the meetings during the financial year were as follows: Number of Board meetings held Name of director Goh Ching Wah (Chairman) Goh Ching Huat Goh Ching Lai* Wong King Kheng* Anthony Clifford Brown* Heng Su-Ling, Mae* *Some of the meetings were held via tele-conference. 11 Attendance 3 3 3 3 2 3 3 3 3 3 3 3#12[C Corporate GOVERNANCE With effect from 7 February 2020, SGX Regco has adopted a risk-based approach to quarterly reporting. Based on the new approach, a company will have to report its financials on a quarterly basis if: • It has received a disclaimer of opinion, adverse opinion or qualified opinion from its auditors on its latest financial statements; • Its auditors have expressed a material uncertainty relating to going concern on its latest financial statements; or • SGX RegCo has regulatory concerns with the company, for example if it has had material disclosure breaches or where it faces issues that have material financial impact. As none of the above has occurred, and as the Company is eligible to adopt half-yearly reporting, the Board has decided to adopt half-yearly reporting. As a result, the Company only held 3 Board meetings for the year ended 31 March 2020. To assist in the execution of its responsibilities, the Board has established an Audit Committee, Nominating Committee and Remuneration Committee. These committees function within clearly defined terms of references and operating procedures, which are reviewed on a regular basis. The effectiveness of each committee is also monitored. An orientation programme, including site visit to the Company's operation outlets, is organised for new directors to familiarise them with the Company's business, operations, organisation structure and corporate policies. They are briefed on the Company's corporate governance practices, regulatory regime and their duties as directors. Board members are encouraged to attend seminars and received training to enable to perform effectively as Directors. All Directors are updated regularly concerning any changes in the Company's policies, risks management, key changes in the relevant regulatory requirements and accounting standards. The Company also provides ongoing education on Board processes, governance and best practices. Newly appointed Directors are briefed by the Management on the business activities of the Group and its strategic directions. They are also provided with relevant information on the Company's policies and procedures. Access to information In order to ensure that the Board is able to discharge its responsibilities, Management is required to provide adequate and timely information to the Board on the Board's affairs and issues that require the Board's decision, as well as ongoing reports relating to operational and financial performance of the Company. Management's proposals to the Board for approval provide background and explanatory information such as facts, risk analysis, financial impact and recommendations. Any material variances between projections and the actual results of budgets disclosed are explained to the Board. Employees who can provide additional insights into matters to be discussed, are invited at the relevant time to attend the Board meetings to address queries raised. The Board has separate and independent access to senior management at all times. If the Directors, whether as a group or individually, need independent professional advice, the Company will, upon directions by the Board, appoint a professional advisor selected by the group or individual to render the advice. The cost of such professional advice will be borne by the Company. Audit Committee meets the external auditor, Ernst & Young LLP, at least once a year, without the presence of Management. The Company Secretary, or her representatives, attends all Board meetings and is responsible in ensuring that the Board procedures are followed. It is the Company Secretary's responsibility to ensure that the Company complies with requirements of the Companies Act. Together with Management, the Company Secretary is responsible for compliance with all rules and regulations which are applicable to the Company. The appointment and removal of the Company Secretary are subject to the Board's approval. 12#13[Corporate GOVERNANCE Matters Requiring Board Approval The Board has identified a number of areas for which the Board has direct responsibility for decision-making. Interested Persons Transactions and the Group's internal control procedures are also reviewed by the Board. Major investments and funding decisions are approved by the Board. The Board will also meet to consider the following corporate matters:- • Approval of quarterly and year end result announcements; • Approval of the Annual Reports and Accounts; • Convening of Shareholder's Meetings; • Approval of Corporate Strategies; and • Material Acquisitions and disposal of assets. Disclosure of Interest All Directors are required to objectively discharge their duties and responsibilities in the best interests and benefit of the Company. Directors and Chief Executive Officer who are in any way, directly or indirectly, interested in a transaction or proposed transaction, including those identified within the Code and provisions of the Companies Act, Cap. 50 (the "Act") will declare the nature of their interests and not participate in any discussion and decision on the matter. Each Director is aware of the requirements in respect of his/her disclosure of interests in securities, disclosure of conflicts of interest in transactions involving the Company, prohibition on dealings in the Company's securities and restrictions on the disclosure of price-sensitive information. Principle 2: Board Composition and Balance The Board has an appropriate level of independence and diversity of thought and background in its composition to enable it to make decisions in the best interests of the Company. The Board consists of six directors of whom three are executive, and three are independent directors. The Company does not have any alternate directors. The criteria for independence is based on the definition as stated in the Code. The Board considers an "independent" director as one who has no relationship with the Company, its related companies or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director's independent judgment of the conduct of the Group's affairs. Based on its composition, the Board is able to exercise objective judgment on corporate affairs. The composition of the Board is reviewed annually by the Nominating Committee to ensure that the Board has an appropriate mix of expertise, experience and independence needed to discharge its duties effectively. Although Non-Executive Directors of the Company do not make up a majority of the Board, the Nominating Committee is of the view that there is a strong and independent element on the Board thereby eliminating the risk of a particular group dominating the decision-making process. The Board ensures that the process of decision making by the Board is independent and is based on collective decision without any concentration of power. 13#14[Corporate Corporate GOVERNANCE The Board comprises an appropriate mix of businessman and professional with core competencies and diversity of experience, all of whom as a group, provides the Board with the necessary experience and expertise to direct and lead the Group. The diversity of the Directors' experience allows for the useful exchange of ideas and views. The Board is satisfied that no individual member of the Board dominates the Board's decision making and that there is sufficient accountability and capacity for independent decision-making. Taking into account the scope and nature of operations of the Group, the Board considers its current size to be adequate for effective decision making. The Executive and Independent Directors ensures that key issues and strategies are critically reviewed and constructively challenged. They also scrutinize and monitor the performance of management in meeting-agreed goals and objectives, as well as ensures that financial information is accurate and that financial controls and systems are in place. The Executive and Independent Directors set aside time at each scheduled meeting to meet without the presence of management to discuss matters such as board processes, corporate governance initiatives, performance management and remunerations matters. Principle 3: Chairman and Chief Executive Officer There is a clear division of responsibilities between the leadership of the Board and Management, and no one individual has unfettered powers of decision-making. The Chairman and CEO are two separate individuals who are brothers and who are both executive directors of the Company. The Group Executive Chairman ("GEC") is Mr Goh Ching Wah, who bears the primary responsibility for Board proceedings. Together with the assistance of Company Secretaries, he schedules Board meetings as and when required and exercise control over the quality, quantity and timeliness of information flow between the Board and the Management. He is also responsible for overall Group direction, strategic planning and business development. Mr Goh Ching Huat, being Executive Director and CEO is the most senior executive in the Group. He is responsible for the day-to-day running of the Group and supervises the business operations with the Management. He is jointly responsible for overall management of the Group and businesses. All major decisions made by GEC and CEO are reviewed by the Audit Committee. Their performance and appointment to the Board are being reviewed periodically by the Nominating Committee and their remuneration package is being reviewed periodically by the Remuneration Committee. Both the Nominating Committee and the Remuneration Committee comprise a majority of/wholly of independent directors of the Company. As such, the Board believes that there are adequate safeguards in place against an uneven concentration of power and authority on a single individual. The Chief Executive Officer is responsible for implementing the Group's strategies and policies as well as the daily management and operations of the Group. The Board has no dissenting view on the Chairman's statement to the Shareholders for the financial year under review. 14#15[Corporate GOVERNANCE Principle 4: Board Membership The Board has a formal and transparent process for the appointment and re-appointment of Directors, taking into account the need for progressive renewal of the Board. The Nominating Committee was established on 25 May 2002. The NC is chaired by Mr Anthony Clifford Brown and its members are Mr Wong King Kheng, Ms Heng Su-Ling, Mae, Mr Goh Ching Lai and Mr Goh Ching Wah. With the exception of Mr Goh Ching Lai, and Mr Goh Ching Wah, the other three directors are Independent Directors. The primary function of the NC is to determine the criteria for identifying candidates and reviewing nominations for the appointment of directors to the Board and also to decide how the Board's performance may be evaluated and propose objective performance criteria for the Board's approval. When a vacancy arises under any circumstance, or where it is considered that the Board would benefit from the services of a new director with particular skills, the NC, in consultation with the Board, determines the selection criteria and identifies candidates with the appropriate expertise and experience for the position. The NC then nominates the most suitable candidate who is only then appointed to the Board. In addition, the NC also performs the following functions:- a. makes recommendations to the Board on all board appointments and re-nomination of directors after taking into account the respective director's contributions in terms of experience, business perspective, management skills, individual expertise and pro-activeness in participation of meetings; b. ensures that all directors would be required to submit themselves for re-nomination and re-election at regular intervals and at least once in every three years; c. determines annually whether a director is independent, guided by the independent guidelines contained in the Code; d. decides whether a director is able to and has adequately carried out his duties as a director of the company in particular where the director concerned has multiple board representations; and e. decides how the Board's performance may be evaluated and propose objective performance criteria. In determining the independence of directors annually, the NC reviewed and is of the view that Mr Anthony Clifford Brown, Mr Wong King Kheng and Ms Heng Su-Ling, Mae are independent and that, no individual or small group of individuals dominate the Board's decision-making process. The NC has also reviewed and is satisfied that Mr Anthony Clifford Brown, Mr Wong King Kheng and Ms Heng Su-Ling, Mae, who sit on multiple boards, have been able to devote adequate time and attention to the affairs of the Company to fulfil their duties as directors of the Company, in addition to their multiple board appointments. As a general guideline, to address time commitments that may be faced, a director who holds more than 6 Board appointments may consult the Chairman before accepting any new appointment as a director. 15#16[Corporate GOVERNANCE The number of NC meetings held and attendance at the meetings during the financial year ended 31 March 2020 were as follows: Name of director Anthony Clifford Brown (Chairman)* Wong King Kheng (Member)* Heng Su-Ling, Mae (Member)* Goh Ching Wah (Member) Goh Ching Lai (Member) * The meeting was held via tele-conference. Appointment Independent Independent Independent Executive Executive No. of meetings held 1 1 1 1 1 Attendance 1 1 1 1 0 Pursuant to the Article 89 of the Company's Constitution, one-third of the Board (other than a director holding office as Managing Director) are to retire from office by rotation and be subject to re-election at the Company's Annual General Meeting ("AGM"). In addition, Article 88 of the Company's Constitution provides that a newly appointed director must retire and submit himself for re-election at the next AGM following his appointment. Thereafter, he is subject to be re-elected at least once every 3 years. Mr. Goh Ching Lai and Mr. Wong King Kheng are due to retire by rotation, at the forthcoming Annual General Meeting, pursuant to the requirements of Article 89 of the Company's Constitution. Both Mr. Goh Ching Lai and Mr. Wong King Kheng have indicated that they will be seeking re-election at the forthcoming Annual General Meeting. Based on the changes to the Listing Rules of Singapore Securities Trading Exchange Limited, an Independent Director who has been a director for an aggregate period of more than 9 years (whether before or after listing), will be required to seek re-election as an Independent Director of the Company at a General Meeting where his continued appointment as an independent director will need to be approved in separate resolutions by (A) all shareholders; and (B) all shareholders, excluding shareholders who also serve as the directors or the chief executive officer of the company, and associates of such directors and chief executive officers. The NC has reviewed and is satisfied with their contribution and performance as Directors and has recommended the re-appointment of two retiring directors, namely Mr Goh Ching Lai and Mr Wong King Kheng at the Company's forthcoming AGM. The Board has accepted the NC's recommendation and the two retiring directors will be offering themselves for re-election and re-appointment respectively. The shareholdings of the individual directors of the Company are set out on page 35 of this Annual Report. None of the directors hold shares in the subsidiaries of the Company. 16#17[Corporate GOVERNANCE Principle 5: Board Performance The Board undertakes a formal annual assessment of its effectiveness as a whole, and that of each of its Board Committees and individual directors. In evaluating the Board's performance, the NC implements a self-assessment process that requires each director to submit the assessment based on the performance of the Board as a whole during the year under review. This self-assessment process takes into account, inter alia, the board composition, maintenance of independence, board information, board process, board accountability, communication with top management and standard of conduct. REMUNERATION MATTERS Principle 6: Procedures for Developing Remuneration Policies The Board has a formal and transparent procedure for developing policies on Director and executive remuneration, and for fixing the remuneration packages of Individual Directors and Key Executive Officers. No Director is involved in deciding his/her own remuneration. Principle 7: Level and Mix of Remuneration The level and structure of remuneration of the Board and Key Executive Officers are appropriate and proportionate to the sustained performance and value creation of the company, taking into account the strategic objectives of the Company. The Remuneration Committee was formed on 25 May 2002. The RC is chaired by Ms Heng Su-Ling, Mae and its members are Mr Anthony Clifford Brown and Mr Wong King Kheng, all of whom are directors independent of management and free from any business or other relationships, which may materially interfere with the exercise of their independent judgement. The RC has access to expert advice in the field of executive compensation outside the Company where required. Name of director Heng Su-Ling, Mae (Chairman)* Anthony Clifford Brown (Member)* Wong King Kheng (Member)* * The meeting was held via tele-conference. Appointment Independent Independent Independent Currently, the Company does not have any executive share option scheme in place. No. of meetings held 1 1 1 Attendance 1 1 1 The RC's role is to review and approve recommendations on remuneration policies and packages for key executives and senior management. It reviews the remuneration packages with the aim of building capable and committed management teams through competitive compensation and focused management and progressive policies. The RC recommends to the Board's endorsement, a framework of remuneration which covers all aspects of remuneration including but not limited to directors' fees, salaries, allowances, bonus, share options and benefits in kind. No director is involved in deciding his own remuneration. The remuneration of the Independent Directors is in the form of a fixed fee after taking into consideration factors such as effort, time spent and responsibilities of the Directors. Independent Directors' fees are subject to the Shareholders' approval at the Annual General Meeting. 17#18[Corporate GOVERNANCE Principle 8: Disclosure on Remuneration The Company is transparent on its remuneration policies, level and mix of remuneration, the procedures for setting remuneration, and the relationships between remuneration, performance and value creation. The Executive Directors do not receive director's fee. The three Executive Directors have each entered into service agreements with the Company and their compensation consists of their salary, bonus and benefits. The Board will on an annual basis, submit a proposal for Directors' Fees as a lump sum for shareholders' approval. The sum to be paid to each of the Independent directors shall be determined by his contribution to the Company, taking into account factors such as efforts and time spent as well as his responsibilities on the Board. Generally, directors who undertake additional duties as chairman and/or members of the Board Committees will receive higher fees because of their additional responsibilities. The Board will be recommending proposed Directors' Fees amounting to S$104,500/-for the financial year ended 31 March 2020 (31 March 2019: S$104,500/-). For competitive reasons, the Company is not disclosing each individual director's remuneration. Instead, the band of remuneration is disclosed in Note 27(b) to the financial statements. The following table sets out the names of Directors whose remuneration bands fell (i) within and below S$250,000; and (ii) between S$250,000 and S$499,999 for the financial year ended 31 March 2020, together with a breakdown (in percentage terms) of each directors' remuneration earned through base/fixed salary, variable or performance related income/ bonuses, and director fees/attendance fees proposed to be paid to each Director subject to the approval of shareholders at the AGM: Below S$250,000 Percentage (%) Remuneration earned through: Between S$250,000 and S$499,999 Percentage (%) Remuneration earned through: Goh Ching Wah Goh Ching Lai Goh Ching Huat Wang King Kheng Anthony Clifford Brown Heng Su-Ling, Mae Base/ fixed salary Variable or performance related income/ bonuses 100 18 Director Base/ Fees/ fixed Variable or performance Attendance salary related Fees income/ bonuses 55 45 55 45 100 100 100 Director Fees/ Attendance Fees#19[C Corporate GOVERNANCE Of the remunerations of the top five management personnel who are not directors or the Chief Executive Officer of the Company for the financial year ended 31 March 2020, the remunerations of 3 executives fell within the remuneration band of S$250,000 and below and the remunerations of 2 executives fell within the remuneration band of between S$250,000 and S$499,999. The Company has not disclosed exact details of the remuneration of its key management personnel as it is not in the best interests of the Company and the employees to disclose such details due to the sensitive nature of such information. The annual aggregate remuneration paid to the top 3 management personnel of the Company (who are not directors or the Chief Executive Officer) for FY2020 is S$1,114,727. No termination, retirement and post-employment benefit were granted to any Director, the CEO or any top five key management personnel for the year ended 31 March 2020. There is no employee of the Group who is an immediate family member of a director or substantial shareholder and whose remuneration exceeds S$50,000 for the financial year ended 31 March 2020. Principle 9: Risk Management and Internal Controls The Board is responsible for the governance of risk and ensures that management maintains a sound system of risk management and internal controls to safeguard the interests of the Company and its Shareholders. The Board acknowledges that it is responsible for the overall internal control framework, but recognises that no cost effective internal control system will preclude all errors and irregularities, as a system is designed to manage rather than to eliminate the risk of failure to achieve business objectives, and can provide only reasonable but not absolute assurance against material misstatement or loss. The Group's internal controls and systems are designed to provide reasonable assurance to the integrity and reliability of the financial information and to safeguard and maintain accountability of its assets. The Audit Committee through the assistance of external auditors, reviews and reports to the Board on the adequacy of the Company's system of controls including the maintenance of proper accounting records, the reliability of financial information, compliance with appropriate legislation, regulation and best practice, and the identification and management of business risks. The Board has reviewed the adequacy of the Group's internal controls framework in relation to financial, operational, compliance and information technology controls as well as risk management systems of the Group. The Board, with the concurrence of the Audit Committee, is of the view that the Group's internal controls addressing financial, operational, compliance and information technology risk as well as the Group's risk management systems are effective and adequate as at 31 March 2020 to provide reasonable assurance of the integrity, effectiveness and efficiency of the Company in safeguarding its assets and Shareholders' investments. Such framework serves to provide reasonable assurance against material misstatement or loss. The internal controls environment also ensures the Group's maintenance of proper accounting records, compliance with applicable regulations, best practices and timely identification and containment of financial, operational and compliance risks. The Audit Committee is also satisfied that there was no material internal control deficiencies identified. 19#20[Corporate GOVERNANCE The system of internal controls provides reasonable assurance against material financial misstatements or loss and includes the safeguarding of assets, the maintenance of proper accounting records, the reliability of financial information, compliance with appropriate legislation, regulation and best practices and the identification and management of business risks. The Board acknowledges that no system of internal controls can provide absolute assurance against the occurrence of material errors, poor judgement in decision-making, human error, fraud or other irregularities. Internal Audit The Audit Committee's responsibility in overseeing that the Company's risk management system and internal controls are adequate is complemented by the Company's appointment of Baker Tilly Consultancy (Singapore) Pte. Ltd. as the internal auditor of the Company. The internal auditor has adopted the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors. The internal auditor reports directly to the Chairman of the Audit Committee on audit matters. The internal auditor will plan its audit work in consultation with, but independent of, Management, and its annual internal audit plan will be submitted to the Audit Committee for approval. The internal auditor will report to the Audit Committee on its findings. The Audit Committee will meet the internal auditor on an annual basis, without the presence of Management. The internal auditor has full access to all the Company's documents, records, properties and personnel including access to the Audit Committee. The Audit Committee will, at least annually, review the adequacy, effectiveness and independence of the internal audit function. During the financial year under review, internal audit reviews were conducted on the operations of four subsidiaries within the Group. Based on a review on the internal audit function and activities performed, the Audit Committee is of the view that the internal auditor is independent, effective, qualified and adequately resourced. Whistle-Blowing Policy A Whistle-Blowing Policy is also in place to provide an avenue through which employees may report or communicate, in good faith and in confidence, any concerns relating to financial and other matters, so that independent investigation of such matters can be conducted and appropriate follow-up action taken. The Audit Committee Chairman is in charge of managing this specific area. The Whistle-Blowing Policy has been reviewed by the Audit Committee to ensure that it has been properly implemented. The Board is accountable to the shareholders while the management is accountable to the Board. The Board is mindful of the obligation to provide timely and fair disclosure of material information, and avoids selective disclosure. Principle 10: Audit Committee The Board has an Audit Committee which discharges its duties objectively. The Audit Committee is chaired by Mr Wong King Kheng and its members are Mr Anthony Clifford Brown and Ms Heng Su-Ling, Mae. All three members are independent of the Company, who bring with them invaluable managerial and professional expertise in the financial, legal and business management spheres. 20#21Corporate GOVERNANCE The number of AC meetings held and attendance at the meetings during the financial period ended 31 March 2020 were as follows: Name of director Wong King Kheng (Chairman)* Anthony Clifford Brown (Member)* Heng Su-Ling, Mae (Member)* Appointment Independent Independent Independent * Some of the meetings attended via tele-conference. The AC reviewed the following, where relevant, with the executive directors, and the external auditors: No. of meetings held Attendance 3 3 3 3 3 3 a. review with the external and internal auditors the audit plan, their evaluation of the system of internal controls, their audit report, their management letter and the management's response; b. review the quarterly and annual financial statements and balance sheets and income statements before submission to the Board for approval, focusing in particular, on changes in accounting policies and practices, major risk areas, significant adjustments resulting from the audit, the going concern statement, compliance with accounting standards as well as compliance with any stock exchange and statutory/regulatory requirements; c. review the internal control and procedures and ensure co-ordination between the external auditors and the management, review the assistance given by management to the auditors and discuss problems and concerns, if any, arising from the interim and final audits, and any matters which the auditors may wish to discuss (in the absence of management where necessary); d. review and discuss with the external auditors any suspected fraud or irregularity, or suspected infringement of any relevant laws, rules or regulations, which has or is likely to have a material impact on the Group's operating results or financial position, and the management's response; e. review the independence of the external auditors and recommend to the Board the appointment or re-appointment of the external auditors, the audit fee, and matters relating to the resignation or dismissal of the auditors; f. review interested person transactions (as defined in Chapter 9 of the Listing Manual of the SGX-ST) to ensure that they are on normal commercial terms and not prejudicial to the interests of the Company or its shareholders; g. undertake such other reviews and projects, in particular matters pertaining to acquisitions and realisations, etc., as may be requested by the Board and will report to the Board its findings from time to time on matters arising and requiring the attention of the Audit Committee; and h. generally undertake such other functions and duties as may be required by statute or the Listing Manual, and by such amendments made thereto from time to time. 21#22Corporate GOVERNANCE Pursuant to Rule 1207 (6)(b) and (6)(c), the Audit Committee undertook the review of the independence and objectivity of the auditors as well as reviewing the non-audit services provided by the incumbent auditors, and the aggregate amount of audit fees paid to them. During the current financial year, there was no non-audit related work carried out by the incumbent auditors, hence there was no fee paid in this respect. The Audit Committee is satisfied that neither their independence nor their objectivity is put at risk, and that they are still able to meet the audit requirements and statutory obligations of the Company. Accordingly, the Audit Committee has recommended the re-appointment of the auditors at the forthcoming Annual General Meeting ("AGM') of the Company. In recommending the re-appointment of the auditors, the Audit Committee considered and reviewed a variety of factors including adequacy of resources, experience of supervisory and professional staff to be assigned to the audit, and size and complexity of the Group, its businesses and operations. Pursuant to Rule 1207 (6)(a), the fees payable to auditors is set out in Note 8 on page 70 of this Annual Report. The AC has nominated Ernst & Young LLP ("EY") for re-appointment as external auditors of the Company at the forthcoming Annual General Meeting. The AC noted there were no non-audit services rendered in FY2019 and FY2020 and there were no non-audit fees payable to the Company's external auditors in FY2019 and FY2020. The Company is in compliance with Rules 712, 715 and 716 of the Listing Manual of the SGX-ST. The AC has the power to conduct or authorise investigations into any matter within the AC's scope of responsibility. The AC is also authorised to obtain professional advice if it deems necessary to discharge its responsibilities. Such expenses are to be borne by the Company. The AC has full access to and co-operation of the Company's management and has full discretion to invite any director or executive officer to attend meetings, and has been given reasonable resources to enable it to discharge its functions. The Audit Committee also met with the External as well as the Internal Auditors during the year, without the presence of Management, and have received assurances from both the External and Internal Auditors, that they have been accorded full cooperation from all employees of the group and its subsidiaries and have been given full access to all documents as and when required. SHAREHOLDERS RIGHTS AND ENGAGEMENT Principle 11: Shareholder Rights and Conduct of General Meeting The Company treats all Shareholders fairly and equitably in order to enable them to exercise Shareholders' rights and have the opportunity to communicate their views on matters affecting the Company. The Company gives its Shareholders a balanced and understandable assessment of its performance, position and prospects. Principle 12: Engagement with shareholders The Company communicates regularly with its Shareholders and facilitates the participation of Shareholders during general meetings and other dialogues to allow Shareholders to communicate their views on various matters affecting the Company. Principle 13: Engagement with stakeholders The Board adopts an inclusive approach by considering and balancing the needs and interests of material Stakeholders, as part of its overall responsibility to ensure that the best interests of the Company are served. 22 22#23[Corporate GOVERNANCE The Company communicates pertinent information to its shareholders on a regular and timely basis through: • . the Company's annual reports that are prepared and issued to all shareholders. The Board makes every effort to ensure that the annual report includes all relevant information about the Group and other disclosures required by the Companies Act and the Singapore Financial Reporting Standards; quarterly financial statements containing a summary of the financial information and affairs of the Group for the period. These are issued via SGXNET onto the SGX website; . notices of and explanatory memoranda for AGMs and extraordinary general meetings; and • disclosure to the SGX-ST and press releases on major development of the Group. The Board takes note that there should be separate resolution at general meetings on each substantially separate issue and supports the Code's principle as regards "bundling" of resolutions. The Board will provide reasons and material implications where resolutions are interlinked. A copy of the Notice of Annual General Meeting ("AGM") and Annual Report are despatched to every shareholder of the Company at least 14 clear days before the meeting. The Notice is also advertised in the newspapers and made available on the SGX website. During the AGM, shareholders are given opportunities to speak and seek clarifications concerning the Company and its operations. The Chairmen of the Audit, Remuneration and Nominating Committees are in attendance at the Company's AGM to address the shareholders' questions relating to the work of these Committees. The Company's external auditors are also invited to attend the AGM and are available to assist the directors in addressing any relevant queries by the shareholders relating to the conduct of the audit and the preparation and content of their auditors' report. In compliance with the requirements of the Listing Rules of the Singapore Exchange Securities Trading Limited, all resolutions are put to the vote by poll at the general meeting of the Company. The proceedings of the annual general meeting and extraordinary general meeting (if any) are properly recorded, including all comments or queries raised by Shareholders relating to the agenda of the meeting and responses from the Board and Management. All minutes of general meetings are available to Shareholders upon their request. Dividend Policy The Company's dividend policy endeavours to balance dividend return to shareholders with the need for long-term sustainable growth whilst aiming for an efficient capital structure. The Company strives to provide shareholders on an annual basis with a consistent and sustainable ordinary dividend, with a variable special dividend based on cash position, working capital, expenditure plans, acquisition opportunities and market environment. Any payouts are communicated to shareholders via announcement on SGX Net when the Company discloses its financial results. 23#24[Corporate GOVERNANCE Corporate Social Responsibility Apart from creating long term value for its Stakeholders and upholding high standards of governance, the Company recognises the importance of environmental sustainability and social responsibilities. In addition, the Company has identified its stakeholders, the details of which have been set out in the Company's Sustainability Report for the year ended 31 March 2020 The Company has put in place proper procedures for ensuring economic contribution to society, legal compliance and corporate governance, water and energy conservation as well as diversity and equal opportunity for members of its workforce. The Company will publish its standalone sustainability report for the financial year under review within the prescribed timeline and the same will be uploaded on the Company's website and SGXNET. Dealing in Securities The Group has adopted an internal code which prohibits the directors and executives of the Company from dealings in the Company's shares while in possession of unpublished price-sensitive information during the periods commencing two weeks prior to the announcement of the Group's first three quarters results, or one month prior to the announcement of the full year results, and ending on the date of announcement of the relevant results. All Directors and executives of the Company and its subsidiaries are also expected to observe insider trading laws at all times even when dealing in securities within permitted trading period. They are also discouraged from dealing in the Company's shares on short-term considerations. Material Contracts There were no material contracts entered into by the Company or any of its subsidiaries involving the interest of the CEO, any Director, or controlling shareholder. Interested Person Transactions Interested person transactions entered into by the Group during the financial period ended 31 March 2020 as the format set out in Rule 907 of the Listing Manual. Details of the interested person transactions are disclosed in Note 27 to the financial statements under Related Party Transactions. 24#25[Corporate GOVERNANCE DISCLOSURE OF INFORMATION ON DIRECTORS SEEKING RE-ELECTION Mr. Goh Ching Lai and Mr. Wong King Kheng are Directors due for retirement under rotation pursuant to Article 89 of the Constitution of the Company and seeking re-election at the forthcoming Annual General Meeting of the Company to be convened on 24 September 2020 ("AGM") (collectively, the "Retiring Directors" and each a "Retiring Director"). Pursuant to Rule 720(6) of the Listing Manual of the SGX-ST, the following is the information relating to the Retiring Directors as set out in Appendix 7.4.1 to the Listing Manual of the SGX-ST: Date of Appointment Date of last re-appointment Age Country of principal residence The Board's comments on this appointment (including rationale, selection criteria, and the search and nomination process) MR. GOH CHING LAI 1 September 1990 29 July 2016 61 Singapore The Board of Directors of the Company has considered, among others, the recommendation of the Nominating Committee ("NC") and has reviewed and considered the contribution and performance, attendance, preparedness, participation, candour and suitability of Mr. Goh Ching Lai for re-appointment as Executive Director of the Company. The Board have reviewed and concluded that Mr. Goh possess the experience, expertise, knowledge and skills to contribute towards the core competencies of the Board. MR. WONG KING KHENG 28 October 1996 29 July 2016 67 Singapore The Board of Directors of the Company has considered, among others, the recommendation of the Nominating Committee ("NC") and has reviewed and considered the qualification, work experiences, contribution and performance, attendance, preparedness, participation, candour and suitability of Mr. Wong King Kheng, for re-appointment as Independent Director of the Company. The Board have reviewed and concluded that Mr. Wong possess the experience, expertise, knowledge and skills to contribute towards the core competencies of the Board. Whether appointment is executive, and if so, the area of responsibility Executive Director, Mr. Goh is overseeing the Group's business and operations, which includes but is not limited to business development, finance, corporate governance and communications. Mr. Goh is a member of Nominating Committee. Independent/ Non-Executive Director, Chairman of Audit Committee, Member of Nominating Committee and Remuneration Committee for the Group. 25 25#26Corporate GOVERNANCE Professional qualifications MR. GOH CHING LAI NIL MR. WONG KING KHENG Mr Wong is a member of the Institute of Singapore Chartered Accountants (ISCA), Australian CPA and Malaysian Institute of Accountant Working experience and occupation(s) during the past 10 years More than 35 years of experience in distribution and retailing of lifestyle products in footwear, fashion apparel, sporting goods, golf, bags and accessories. Over 30 years of experience in audit, public accounting firm in Singapore advisory environment as a founder and managing director in public accounting firm in Singapore Shareholding interest in the listed issuer and its subsidiaries Direct interest in shares: 75,395,477 Deemed interest in shares: 114,855,040 NIL NIL Any relationship (including immediate family relationships) with any existing director, existing executive officer, the issuer and/or substantial shareholder of the listed issuer or of any of its principal subsidiaries Mr. Goh Ching Lai is brother of Mr. Goh Ching Wah Group Executive Chairman and also brother of Mr. Goh Ching Huat, Chief Executive Officer/Executive Director of the Company. No Conflict of Interest (including any competing business) Undertaking (in the format set out in Appendix 7.7) under Rule 720(1) has been submitted to the listed issuer No No Yes Yes 26#27Corporate GOVERNANCE Other Principal Commitments* Including Directorships Past (for the last 5 years): Present: MR. GOH CHING LAI Yes MR. WONG KING KHENG Yes Past: VGO Corporation Limited Present: VGO International Pte. Ltd ITG International Pte Ltd Past: VGO Corporation Limited Present: Tiong Woon Corporation Holding Limited Hatten Land Limited JCY International Berhad KK Wong and Associates. Soh & Wong Consultants Pte Ltd ITG International Pte Ltd International Renewal Energy Pte Ltd Disclose the following matters concerning an appointment of director, chief executive officer, chief financial officer, chief operating officer, general manager or other officer of equivalent rank. If the answer to any question is "yes", full details must be given. a) Whether at any time during the last 10 years, an application or a petition under any bankruptcy law of any jurisdiction was filed against him or against a partnership of which he was a partner at the time when he was a partner or at any time within 2 years from the date he ceased to be a partner? No 27 No#28Corporate GOVERNANCE b) Whether at any time during the last 10 years, an application or a petition under any law of any jurisdiction was filed against an entity (not being a partnership) of which he was a director or an equivalent person or a key executive, at the time when he was a director or an equivalent person or a key executive of that entity or at any time within 2 years from the date he ceased to be a director or an equivalent person or a key executive of that entity, for the winding up or dissolution of that entity or, where that entity is the trustee of a business trust, that business trust, on the ground of insolvency? c) Whether there is any unsatisfied judgment against him? MR. GOH CHING LAI No MR. WONG KING KHENG No No No No No or d) Whether he has ever been convicted of any offence, in Singapore elsewhere, involving fraud or dishonesty which is punishable with imprisonment, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such purpose? 28#29Corporate GOVERNANCE e) Whether he has ever been convicted of any offence, in Singapore or elsewhere, involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such breach? a f) Whether at any time during the last 10 years, judgment has been entered against him in any civil proceedings in Singapore or elsewhere involving breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or a finding of fraud, misrepresentation or dishonesty on his part, or he has been the subject of any civil proceedings (including any pending civil proceedings of which he is aware) involving an allegation of fraud, misrepresentation or dishonesty on his part? g) Whether he has ever been convicted in Singapore or elsewhere of any offence in connection with the formation or management of any entity or business. trust? MR. GOH CHING LAI No MR. WONG KING KHENG No No No No No 29 29#30[Corporate GOVERNANCE h) Whether he has ever been disqualified from acting as a director or an equivalent person of any entity (including the trustee of a business trust), or from taking part I directly or indirectly in the management of any entity or business trust? i) Whether he has ever been the subject of any order, judgment or ruling of any court, tribunal or governmental body, permanently or temporarily enjoining him from engaging in any type of business practice or activity? j) Whether he has ever, to his knowledge, been concerned with the management or conduct, in Singapore or elsewhere, of the affairs of:- i. any corporation which has been investigated for a breach of any law or regulatory requirement governing corporations in Singapore or elsewhere; or ii. any entity (not being a corporation) which has been investigated for a breach of any law or regulatory requirement governing such entities in Singapore or elsewhere; or MR. GOH CHING LAI MR. WONG KING KHENG No No No No No No 30#31Corporate GOVERNANCE iii. any business trust which has been investigated for a breach of any law or regulatory requirement governing business trusts in Singapore or elsewhere; or iiii. any entity or business trust which has been investigated for a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere in connection with any matter occurring or arising during that period when he was so concerned with the entity or business trust? k) Whether he has been the subject of any current or past investigation or disciplinary proceedings, or has been reprimanded or issued any warning, by the Monetary Authority of Singapore or any other regulatory authority, exchange, professional body or government agency, whether in Singapore or elsewhere? MR. GOH CHING LAI MR. WONG KING KHENG No No No No 31#32Corporate GOVERNANCE Disclosure applicable to the appointment of Director only MR. GOH CHING LAI MR. WONG KING KHENG Any prior experience as a director of a listed company? If yes, please provide details of prior experience. Executive Director, VGO Corporation Limited Executive Director, Yes Internet Technology Group Limited Independent Director, Yes Tiong Woon Corporation Holding Limited Independent Director, Hatten Land Limited Non-Independent Executive Director, JCY International Berhad Independent Director, Internet Technology Group Limited If no, please state if the director has attended or will be attending training on the roles and responsibilities of a director of a listed issuer as prescribed by the Exchange. Please provide details of relevant experience and the nominating committee's reasons for not requiring the director to undergo training prescribed (if applicable). by the as Exchange N/A N/A 32 N/A N/A#33[TRUE RLGN] AUTUMN/ WINTER DREAM GRUNGE LOS ANGELES STREET POETRY NEW YORK [TR/ERLGN/ TRUE RELIGION®#34[Directors Directors STATEMENT The directors are pleased to present their statement to the members together with the audited consolidated financial statements of Ossia International Limited (the "Company") and its subsidiaries (collectively, the "Group") and the balance sheet and statement of changes in equity of the Company for the financial year ended 31 March 2020. Opinion of the directors In the opinion of the directors, (a) (b) the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company are drawn up so as to give a true and fair view of the financial position of the Group and of the Company as at 31 March 2020 and of the financial performance, changes in equity and cash flows of the Group and the changes in equity of the Company for the year ended on that date; and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due. Directors The directors of the Company in office at the date of this statement are: Goh Ching Wah Goh Ching Huat Goh Ching Lai Wong King Kheng Anthony Clifford Brown Heng Su-Ling, Mae Arrangements to enable directors to acquire shares and debentures Except as described in scrip dividend scheme paragraph below, 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 debentures of the Company or any other body corporate. 34#35Directors STATEMENT Directors Directors' interests in shares and debentures The following directors, who held office at the end of the financial year had, according to the register of directors' shareholdings required to be kept under Section 164 of the Singapore Companies Act, Chapter. 50 (the Act), an interest in shares of the Company and related corporations (other than wholly-owned subsidiaries) as stated below: Name of directors Ordinary shares of the Company At the beginning of financial year Direct interest At the end of financial year At the beginning of financial year Deemed interest At the end of financial year Mr Goh Ching Lai 73,012,577 75,395,477 114,855,040 114,855,040 Mr Goh Ching Wah 57,500,386 57,500,386 130,367,231 132,750,131 Mr Goh Ching Huat 57,354,654 57,354,654 130,512,963 132,895,863 By virtue of Section 7 of the Act, Goh Ching Lai, Goh Ching Wah and Goh Ching Huat, who are brothers, are also deemed to be interested in each other's shares in Ossia International Limited. There was no change in the directors' interests in the share capital of the Company and of related corporations between the end of the financial year and 26 August 2020. Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, share options, warrants or debentures of the Company, or of related corporations, either at the beginning of the financial year or at the end of the financial year. Scrip dividend scheme At an Extraordinary General Meeting of the Company held on 29 April 2004, the shareholders approved the Scrip Dividend Scheme (the "Scheme"). Under the Scheme, the directors are entitled to receive shares in lieu of cash in respect of the dividend declared. No shares were issued under the Scheme during the financial year. 35#36Directors STATEMENT Directors Share options There were no options granted during the financial year to subscribe for unissued shares of the Company or in any subsidiary. No shares have been issued during the financial year by virtue of the exercise of options to take up unissued shares of the Company or any subsidiary. There were no unissued shares of the Company or any subsidiary under share at the end of the financial year. Audit Committee The audit committee (AC) carried out its functions in accordance with section 201B (5) of the Singapore Companies Act, Chapter 50, including the following: • • Reviewed the audit plans of external auditors of the Group and the Company, and the assistance given by the Group and the Company's management to the external auditors Reviewed the balance sheet of the Company and the consolidated financial statements of the Group for the financial year ended 31 March 2020 before their submission to the Board of Directors, as well as the external auditors' report on the balance sheet of the Company and the consolidated financial statements of the Group Reviewed effectiveness of the Group and the Company's material internal controls, including financial, operational and compliance controls and risk management via reviews carried out by the external auditor • Met with the external auditor, other committees, and management in separate executive sessions to discuss any matters that these groups believe should be discussed privately with the AC • Reviewed the nature and extent of non-audit services provided by the external auditor • • Reviewed legal and regulatory matters that may have a material impact on the financial statements, related compliance policies and programmes and any reports received from regulators Recommended to the board of directors the external auditor to be nominated, approved the compensation of the external auditor, & reviewed the scope & results of the audit • Reported actions and minutes of the AC to the board of directors with such recommendations as the AC considered appropriate • Reviewed the interested person transactions in accordance with the requirements of the Singapore Exchange Securities Trading Limited's Listing Manual Other functions performed by the Audit Committee are described in the Report on Corporate Governance included in the Annual Report. It also includes an explanation of how independent auditor objectivity and independence is safeguarded where the independent auditors provide non-audit services. 36#37Directors STATEMENT Auditor Ernst & Young LLP have expressed their willingness to accept re-appointment as auditor. On behalf of the board of directors: Goh Ching Wah Director Goh Ching Huat Director Singapore 9 September 2020 37#38Independent Auditor's REPORT Report on the audit of the financial statements Opinion We have audited the financial statements of Ossia International Limited (the "Company") and its subsidiaries (collectively, the "Group"), which comprise the balance sheets of the Group and the Company as at 31 March 2020, the statements of changes in equity of the Group and the Company and the consolidated statement of comprehensive income and consolidated cash flow statement of the Group for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying consolidated financial statements of the Group, the balance sheet and the statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the "Act") and Singapore Financial Reporting Standards (International) ("SFRS(I)") so as to give a true and fair view of the consolidated financial position of the Group and the financial position of the Company as at 31 March 2020 and of the consolidated financial performance, consolidated changes in equity and consolidated cash flows of the Group and changes in equity of the Company for the year ended on that date. Basis for opinion We conducted our audit in accordance with Singapore Standards on Auditing ("SSAS"). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority ("ACRA") Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities ("ACRA Code") together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgement, 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 assessments of the risk 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. 38#39Independent Auditor's REPORT Key audit matters (cont'd) Valuation of inventories As of 31 March 2020, the Group's inventories amounted to $11.4 million. An amount of $0.6 million has been provided for inventory write-downs. The Group's inventories comprise a range of fashion apparel, sports apparel and accessories for sale at its retail stores, wholesale and e-commerce businesses in Taiwan. The Group records its inventories at the lower of cost and net realisable value. Where necessary, allowance is provided for damaged, obsolete and slow-moving items to adjust the carrying value of inventories to the lower of cost and net realisable value. The Group's total inventory balance represents a significant portion of the Group's total assets and inventory write-downs require significant management judgement to estimate the inventories' net realisable value. The net realisable value of the Group's inventories is affected by their age, prevailing retail market conditions and consumer behaviors in the context of the increased economic uncertainties brought on by the COVID-19 pandemic. Accordingly, we have determined this to be a key audit matter. As part of the audit procedures, we checked the sales margins achieved for a sample of inventory items to assess that inventories are stated at the lower of cost and net realisable values. We reviewed management's basis for making inventory allowances based on their aging, checked that allowance amounts are in line with the Group's policy for inventory impairment assessment and evaluated management's considerations pertaining to the relevant retail market conditions, consumer behaviors and historical allowance experience that affected their judgement and estimate. We involved the auditors of the subsidiary in carrying out these procedures and reviewed their working papers to evaluate the nature and extent of the procedures performed and assessed the evidence obtained as a basis for forming an audit opinion on the consolidated financial statements. We also reviewed the adequacy of the Group's disclosures related to inventories in Note 11 of the Group's financial statements. Recoverability of amounts due from related parties As of 31 March 2020, the Group's amounts due from related parties amounted to $3.6 million and an allowance for expected credit losses ("ECL") of $0.1 million has been provided for the doubtful recovery of long outstanding receivables. The Group has assessed the recoverability of these balances and estimated the ECL allowance as at year end using significant judgement by incorporating various factors such as their assessment of the related parties' credit worthiness based on the aging of the receivables, available credit enhancements, historical repayment, refinancing and credit loss patterns and the current and forward-looking factors specific to the related parties and the economic environments where they operate in. This estimation is further affected by the economic uncertainty brought on by the COVID-19 pandemic. Accordingly, we determined that this is a key audit matter. As part of the audit procedures in evaluating management's assessment of the recoverability of these balances and estimation of the ECL allowance, we reviewed the management's assessment of the Group's processes relating to extending credit and settling of amounts due from related parties. We requested debtors' confirmations and reviewed related correspondences between the Group and the related parties. We also reviewed the aging and any refinancing of the receivables, checked to evidence of repayment histories and subsequent receipts or settlement arrangements after the year end and considered the effects of the available credit enhancements. We evaluated management's assessment of the credit worthiness of the related parties, including related parties providing the credit enhancements and the forward-looking adjustments made by reviewing both internal and external information and data used by management. We also checked the arithmetic accuracy of the ECL allowance computation. We involved the auditors of the subsidiaries in carrying out these procedures and reviewed their working papers to evaluate the nature and extent of the procedures performed and assessed the evidence obtained as a basis for forming an audit opinion on the consolidated financial statements. We also reviewed the adequacy of the Group's disclosures related to amounts due from related parties and the related risks such as credit risk and liquidity risk in Notes 28(c) and 28(d) to the financial statements. 39#40Independent Auditor s REPORT Other information Management is responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Management and Directors for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Act and SFRS(I), and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets. In preparing the financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. The directors' responsibilities include overseeing the Group's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control. 40#41Independent Auditor's REPORT Auditor's Responsibilities for the Audit of the Financial Statements (cont'd) • • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. 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 Philip Ng. Ernst & Young LLP Public Accountants and Chartered Accountants Singapore 9 September 2020 41#42Consolidated Statement of COMPREHENSIVE INCOME [Consolidated Statement of For the financial year ended 31 March 2020 Revenue Cost of sales Gross profit Other income Distribution costs General and administrative expenses Profit/(loss) from operations Interest income Finance costs Impairment loss on financial assets Share of results of associated company - net of tax Profit before income tax Income tax expense Profit for the year Profit for the year attributable to: Owners of the Company Non-controlling interests Note 2020 2019 $'000 $'000 4 25,530 23,952 11 (12,275) (11,510) 13,255 12,442 15 2,186 729 (9,358) (4,097) (8,808) (4,546) 1,986 (183) 15 6785 11 15 (209) (190) (128) 4,000 4,760 88 5,660 4,402 (607) (635) 5,053 3,767 5,052 3,812 1 (45) 5,053 3,767 Earnings per share attributable to owners of the Company (cents per share) Basic and diluted 10 2.00 1.51 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 42 42#43Consolidated Statement of COMPREHENSIVE INCOME ☐ For the financial year ended 31 March 2020 (cont'd) Profit for the year Other comprehensive income: Items that will not be reclassified to profit or loss Share of loss on property revaluation of associated company 2020 2019 $'000 $'000 5,053 3,767 (364) Items that may be reclassified subsequently to profit or loss Foreign currency translation 589 (235) Share of foreign currency translation of associated company (53) (152) 536 (387) 536 (751) Other comprehensive income for the year, net of tax Total comprehensive income for the year Total comprehensive income attributable to: Owners of the Company Non-controlling interests The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 43 5,589 3,016 5,588 3,064 1 (48) 5,589 3,016#44Balance SHEETS As at 31 March 2020 Note 2020 $'000 Group Company 2019 2020 2019 $'000 $'000 $'000 Current assets Inventories Trade receivables 11 12 11,396 10,626 12 2,481 3,978 65 649 Prepayments 29 96 15 3 Other receivables 13 1,535 667 672 237 Right of return assets 12 Cash and cash equivalents 14 7,094 5,794 4,940 1,802 Assets classified as held for sale 17 1,278 22,535 22,451 5,692 2,691 Non-current assets Investment in associated company Investment in subsidiaries Property, plant and equipment 18 Right-of-use assets 19 Trade receivables Other receivables Deferred tax assets 5680232 15 25,735 24,828 13,252 13,252 16 1,448 1,448 1,145 1,054 6 11 1,625 2 12 538 754 128 13 1,868 2,047 1,461 2,047 161 161 31,072 28,844 16,169 16,886 Total assets 53,607 51,295 21,861 19,577 44#45[Balance Balance SHEETS As at 31 March 2020 Group Company Note 2020 2019 2020 2019 $'000 $'000 $'000 $'000 Current liabilities Trade and other payables 21 2,322 4,265 94 168 Amounts due to directors 645 439 645 439 Lease liabilities Bills payable Bank borrowings 222 19 1,123 2 22 3,370 3,209 23 2,373 4,022 Income tax payable Refund liabilities 220 226 31 10,053 12,192 741 607 Non-current liabilities Other liabilities Lease liabilities Total liabilities Net current assets Net assets 21 22 43 19 511 554 10,607 12,192 741 607 12,482 10,259 4,951 2,084 43,000 39,103 21,120 18,970 45 45#46Balance SHEETS Group Company As at 31 March 2020 Note 2020 2019 2020 2019 $'000 $'000 $'000 $'000 Equity attributable to owners of the Company Share capital Revaluation reserve Legal reserve Translation reserve 2222 24 31,351 31,351 31,351 31,351 25 2,800 2,800 25 1,651 1,533 25 152 (384) Accumulated profits/(losses) 7,045 3,803 (10,231) (12,381) 42,999 39,103 21,120 18,970 1 Non-controlling interests Total equity 43,000 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 46 39,103 21,120 18,970#47[Statement Statements of Changes in EQUITY For the financial year ended 31 March 2020 2020 Group Balance at 1 April 2019 Profit for the year Other comprehensive income Foreign currency translation Share of foreign currency translation of associated company Total comprehensive income for the financial year Contributions by and distributions to owners Transfer from accumulated profits to legal reserve Dividends paid to shareholders Total contributions by and distributions to owners, representing total transactions with owners in their capacity as owners Balance at 31 March 2020 Attributable to owners of the Company Share capital reserve Legal Translation reserve Revaluation Accumulated Non-controlling Total reserve profits Total interests equity $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 31,351 1,533 (384) 2,800 3,803 39,103 39,103 5,052 5,052 1 5,053 118 589 (53) 589 (53) 589 (53) 536 5,052 5,588 1 5,589 (118) (1,692) (1,692) (1,692) 118 (1,810) (1,692) (1,692) 31,351 1,651 152 2,800 7,045 42,999 1 43,000 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 47#48Statements of Changes in EQUITY Attributable to owners of the Company For the financial year ended 31 March 2020 (cont'd) Share Legal capital reserve Translation reserve Revaluation Accumulated Non-controlling reserve profits Total interests Total equity 2019 Group $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Balance at 1 April 2018 (FRS Framework) 31,351 1,373 (4,443) 3,164 7,120 38,565 130 38,695 Cumulative effects of adopting SFRS(I) 4,443 (4,443) Balance at 1 April 2018 (SFRS(I) Framework) 31,351 1,373 3,164 2,677 38,565 130 38,695 Profit for the year 3,812 3,812 (45) 3,767 Other comprehensive income Foreign currency translation (232) (232) (3) (235) Share of gain on property revaluation of associated company Share of foreign currency translation of associated company (364) (364) (364) (152) (152) (152) Total comprehensive income for the financial year (384) (364) 3,812 3,064 (48) 3,016 Contributions by and distributions to owners Transfer from accumulated profits to legal reserve Dividends paid to shareholders 160 Dividends paid to non-controlling shareholders Total contributions by and distributions to owners, representing total transactions with owners in their capacity as owners Balance at 31 March 2019 (160) (2,526) (2,526) (82) (2,526) (82) 160 (2,686) (2,526) (82) (2,608) 31,351 1,533 (384) 2,800 3,803 39,103 39,103 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 48#49[Statement Statements of Changes in EQUITY For the financial year ended 31 March 2020 2020 Company Balance at 1 April 2019 Profit for the year Total comprehensive income Dividends Balance at 31 March 2020 2019 Company Balance at 1 April 2018 (FRS Framework) Cumulative effects of adopting SFRS(I) Balance at 1 April 2018 (SFRS(1) Framework) Profit for the year Total comprehensive income Dividends Balance at 31 March 2019 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 49 Share capital $'000 Accumulated losses Total equity $'000 $'000 31,351 (12,381) 18,970 3,842 3,842 3,842 3,842 (1,692) (1,692) 31,351 (10,231) 21,120 31,351 (11,886) 19,465 31,351 (11,886) 19,465 2,031 2,031 2,031 2,031 (2,526) (2,526) 31,351 (12,381) 18,970#50Consolidated Cash Flow STATEMENT For the financial year ended 31 March 2020 Cash flows from operating activities Profit before income tax Adjustments for: Share of results of associated company Depreciation of property, plant and equipment Depreciation expense of right-of-use assets Finance costs Write-back of allowance for inventory write-downs, net Impairment loss on financial assets Gain on disposal of asset classified as held for sales Gain on disposal of disposal group classified as held for sale Interest income Unrealised foreign exchange loss/(gain) De-recognition of right-of-use assets and lease liabilities Property, plant and equipment written-off Operating cash flow before working capital changes Changes in working capital Decrease/(increase) in inventories Decrease in trade and other receivables Decrease in prepayments (Decrease)/increase in trade and other payables Net cash from operations Income tax paid Interest received Interest paid Net cash flows from operating activities 50 Note 2020 2019 $'000 $'000 5,660 4,402 15 18 19 589 (4,000) 1,205 (4,760) 1,281 1,051 7 209 190 11 (75) (63) 88 128 5 (1,862) (125) Co 6 (11) (15) 11 (83) 18 00 00 8 (21) 50 2,295 877 66 1,775 (1,772) 1,326 69 86 (1,887) 520 2,318 1,037 (618) (749) 6 7 (176) 11 (190) 15 1,535 113#51Consolidated Cash Flow STATEMENT For the financial year ended 31 March 2020 (cont'd) Cash flows from investing activities Dividend received Advances to a related party Repayment of advances from a related party Purchase of property, plant and equipment Proceeds from disposal of asset classified as held for sale Proceeds from disposal of disposal group classified as held for sale Net cash flows from investing activities Cash flows from financing activities Proceeds from bank borrowings Repayment of bank borrowings Repayment of lease liabilities Interest paid on lease liabilities Proceeds from bills payables Repayment of bills payables Decrease/(increase) in restricted bank deposits Dividend paid to shareholders Dividend paid to a non-controlling shareholder of a subsidiary Net cash flows used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of year The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 51 Note 2020 2019 $'000 $'000 3,040 2,720 (736) 42 18 (1,222) (1,652) 3,129 1,160 4,253 2,228 2,373 2,171 (4,178) (1,609) (1,023) (33) 3,370 (3,430) 14 133 3,209 (2,318) (263) (1,692) (2,526) (82) (4,480) (1,418) 1,308 923 4,773 3,916 125 (66) 14 6,206 4,773#52Notes to the FINANCIAL STATEMENTS [Note 1. General Ossia International Limited (the "Company") is a limited liability company incorporated and domiciled in Singapore and is listed on the Singapore Exchange Securities Trading Limited ("SGX-ST"). The registered office and principal place of business of the Company was located at 10 Changi South Lane #07-01 Singapore 486162. Effective from 15 April 2020, the registered office and principal place of business has been changed to 51 Changi Business Park Central 2 #08-13, The Signature Singapore 486066. The Company's principal activity is investment holding. The principal activities of the subsidiaries are disclosed in Note 16 to the financial statements. 2. Summary of significant accounting policies 2.1 Basis of preparation The consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company have been prepared in accordance with Singapore Financial Reporting Standards (International) ("SFRS(I)"). The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below. The financial statements are presented in Singapore Dollars (SGD or $) and all values in the tables are rounded to the nearest thousand ($'000) as indicated. 2.2 Changes in accounting policies and disclosures New and amended standards and interpretations The accounting policies adopted are consistent with those of the previous financial year except in the current financial year, the Group has adopted all the new and revised standards which are effective for annual financial periods beginning on or after 1 January 2019. Except for the adoption of SFRS(I) 16 Leases and Amendment to SFRS(I) 16: COVID-19 related Rent Concessions as described below, the adoption of these standards did not have any material effect on the financial performance or position of the Group. SFRS(I) 16 Leases SFRS(I) 16 supersedes SFRS(I) 1-17 Leases, SFRS(I) INT 4 Determining whether an arrangement contains a Lease, SFRS(I) INT 1-15 Operating Leases and SFRS(I) INT 1-27 Evaluating the Substance of Transactions involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to recognise most leases on the balance sheet. - Incentives Lessor accounting under SFRS(I) 16 is substantially unchanged from SFRS(I) 1-17. Lessors will continue to classify leases as either operating or finance leases using similar principles as in SFRS(I) 1-17. Therefore, SFRS(1) 16 does not have an impact for leases where the Group is the lessor. The Group adopted SFRS(I) 16 using the modified retrospective method of adoption with the date of initial application of 1 April 2019. Accordingly, the comparative information presented for 2019 is not restated. The Group elected to use the transition practical expedient to not reassess whether a contract is, or contains, a lease at 1 April 2019. Instead, the Group applied the standard only to contracts that were previously identified as leases applying SFRS(I) 1-17 and SFRS(I) INT 4 at the date of initial application. 52 52#53Notes to the FINANCIAL STATEMENTS Not 2. Summary of significant accounting policies (cont'd) 2.2 Changes in accounting policies and disclosures (cont'd) SFRS(I) 16 Leases (cont'd) The Group has lease contracts for office premises, motor vehicle, warehouse and retail outlets. Before the adoption of SFRS(I) 16, the Group classified each of its leases (as lessee) at the inception date as an operating lease. Refer to Note 2.19 Leases for the accounting policy prior to 1 April 2019. Upon adoption of SFRS(I) 16, the Group applied a single recognition and measurement approach for all leases except for short-term leases and leases of low-value assets. Refer to Note 2.19 Leases for the accounting policy beginning 1 April 2019. The standard provides specific transition requirements and practical expedients, which have been applied by the Group. Leases previously accounted for as operating leases The Group recognised right-of-use assets and lease liabilities for those leases previously classified as operating leases, except for short-term leases and leases of low-value assets. The right-of-use assets were recognised based on the amount equal to the lease liabilities, adjusted for any related prepaid and accrued lease payments previously recognised. Lease liabilities were recognised based on the present value of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial application. The Group also applied the available practical expedients wherein it: Used a single discount rate to a portfolio of leases with reasonably similar characteristics Relied on its assessment of whether leases are onerous immediately before the date of initial application Applied the short-term leases exemptions to leases with lease term that ends within 12 months of the date of initial application Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application Used hindsight in determining the lease term where the contract contained options to extend or terminate the lease Based on the above, as at 1 April 2019, right of use assets and lease liabilities of $1,502,000 were recognised and presented separately in the consolidated balance sheet. The lease liabilities as at 1 April 2019 can be reconciled to the operating lease commitments as of 31 March 2020, as follows: Operating lease commitments as at 31 March 2019 Less: Commitments relating to short-term leases Add: Commitments relating to in-substance fixed payments Weighted average incremental borrowing rate at 1 April 2019 Lease liabilities recognised as at 1 April 2019 53 3 Group 2020 $'000 1,111 (59) 535 1,587 2.00% 1,502#54Notes to the FINANCIAL STATEMENTS [Not 2. Summary of significant accounting policies (cont'd) 2.2 Changes in accounting policies and disclosures (cont'd) Amendment to SFRS(I) 16: COVID-19 Related Rent Concessions The Group early adopted Amendment to SFRS(I) 16: COVID-19 Related Rent Concessions that is effective for annual periods beginning on or after 1 June 2020. As a practical expedient, the amendment to SFRS(I) 16 allows a lessee to elect not to assess whether a rent concession that meets the conditions in paragraph 46B is a lease modification. A lessee that makes this election shall account for any change in lease payments resulting from the rent concession the same way it would account for the change applying this standard if the change were not a lease modification. The Group has applied the practical expedient to all rent concessions that meet the confitions set out. 2.3 Standard issued but not yet effective The Group has not adopted the following standards that have been issued but not yet effective: Description Amendments to References to the Conceptual Framework in SFRS(I) Standards Amendments to SFRS(1) 3: Definition of a Business Amendments to SFRS(I) 1-1 and SFRS(I) 1-8: Definition of Material Amendments to SFRS(I) 9, SFRS(I) 1-39 and SFRS(I) 7: Interest Rate Benchmark Reform SFRS(I) 17 Insurance Contracts Amendments to SFRS(I) 1-1: Classification of Liabilities as Current or Non-current Amendments to SFRS(I) 10 and SFRS(1) 1-28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Effective for annual periods beginning on or after 1 January 2020 1 January 2020 1 January 2020 1 January 2020 1 January 2021 1 January 2022 Date to be determined The directors expect that the adoption of the other standards above will have no material impact on the financial statements in the period of initial application. 54#55Notes to the FINANCIAL STATEMENTS [Not 2. Summary of significant accounting policies (cont'd) 2.4 Basis of consolidation Business combinations from 1 January 2010 The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the end of the reporting period. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances. All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions and dividends are eliminated in full. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it: De-recognises the assets (including goodwill) and liabilities of the subsidiary at their carrying amounts at the date when control is lost; De-recognises the carrying amount of any non-controlling interest; - De-recognises the cumulative translation differences recorded in equity; Recognises the fair value of the consideration received; - Recognises the fair value of any investment retained; - Recognises any surplus or deficit in profit or loss; Re-classifies the Group's share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate. Business combinations prior to 1 January 2010 Certain of the above-mentioned requirements were applied on a prospective basis. The following differences, however, are carried forward in certain instances from the previous basis of consolidation: - - - Acquisition of non-controlling interests, prior to 1 January 2010, were accounted for using the parent entity extension method, whereby, the difference between the consideration and the book value of the share of the net assets acquired were recognised in goodwill. Losses incurred by the Group were attributed to the non-controlling interest until the balance was reduced to nil. Any further losses were attributed to the Group, unless the non-controlling interest had a binding obligation to cover these. Losses prior to 1 January 2010 were not reallocated between non-controlling interest and the owners of the Company. - Upon loss of control, the Group accounted for the investment retained at its proportionate share of net asset value at the date control was lost. The carrying values of such investments as at 1 January 2010 have not been restated. 55 55#56Notes to the FINANCIAL STATEMENTS Not 2. Summary of significant accounting policies (cont'd) 2.5 Transactions with non-controlling interests Non-controlling interests represent the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company. Changes in the Company owner's ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company. 2.6 Foreign currency The financial statements are presented in Singapore Dollars, which is also the Company's functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. (a) Transactions and balances Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. Exchange differences arising on the settlement of monetary items or on translating monetary items at the end of the reporting period are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group's net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation. (b) Consolidated financial statements For consolidation purpose, the assets and liabilities of foreign operations are translated into SGD at the rate of exchange ruling at the end of the reporting period and their profit or loss are translated at the exchange rates prevailing at the date of the transactions. The exchange differences arising on the translation are recognised in other comprehensive income and accumulated under foreign currency translation reserve in equity. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in profit or loss. 2.7 Property, plant and equipment All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. The cost includes the cost of replacing part of the property, plant and equipment and borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying property, plant and equipment. The accounting policy for borrowing costs is set out in Note 2.20. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. 56#57Notes to the FINANCIAL STATEMENTS [Not 2. Summary of significant accounting policies (cont'd) 2.7 Property, plant and equipment (cont'd) Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows: Leasehold land Building Computer equipment Motor vehicles Furniture, fixtures, fittings and renovations Over the remaining lease period of 63 years 50 years 3-5 years - 3-5 years 2-10 years 3-10 years Plant, machinery and office equipment The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset is included in profit or loss in the year the asset is derecognised. 2.8 Impairment of non-financial assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when an annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs of disposal and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses are recognised in profit or loss. A previously recognised impairment loss 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. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss. 57 557#58Notes to the FINANCIAL STATEMENTS [No. 2. Summary of significant accounting policies (cont'd) 2.9 Subsidiaries A subsidiary is an investee that is controlled by the Group. The Group controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. In the Company's balance sheet, investments in subsidiaries are accounted for at cost less impairment losses. 2.10 Associates An associate is an entity over which the Group has the power to participate in the financial and operating policy decisions of the investee but does not have control or joint control of those policies. The Group accounts for its investment in associate using the equity method from the date on which it becomes an associate. On acquisition of the investment, any excess of the cost of the investment over the Group's share of the net fair value of the investee's identifiable assets and liabilities represents goodwill and is included in the carrying amount of the investment. Any excess of the Group's share of the net fair value of the investee's identifiable assets and liabilities over the cost of the investment is included as income in the determination of the entity's share of the associate's profit or loss in the period in which the investment is acquired. Under the equity method, the investment in associate is carried in the balance sheet at cost plus post-acquisition changes in the Group's share of net assets of the associate. The profit or loss reflects the share of results of the operations of the associate. Distributions received from associate reduce the carrying amount of the investment. Where there has been a change recognised in other comprehensive income by the associate, the Group recognises its share of such changes in other comprehensive income. Unrealised gains and losses resulting from transactions between the Group and associate are eliminated to the extent of the interest in the associate. When the Group's share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group's investment in associate. The Group determines at the end of each reporting period whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in profit or loss. The financial statements of the associate are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group. 58#59Notes to the FINANCIAL STATEMENTS Not 2. Summary of significant accounting policies (cont'd) 2.11 Financial instruments (a) Financial assets Initial recognition and measurement Financial assets are recognised when, and only when the entity becomes party to the contractual provisions of the instruments. 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. Trade receivables are measured at the amount of 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 party, if the trade receivables do not contain a significant financing component at initial recognition. Subsequent measurement Investments in debt instruments Subsequent measurement of debt instruments depends on the Group's business model for managing the asset and the contractual cash flow characteristics of the asset. The three measurement categories for classification of debt instruments are: (i) Amortised cost Financial assets that are held for the collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Financial assets are measured at amortised cost using the effective interest method, less impairment. Gains and losses are recognised in profit or loss when the assets are derecognised or impaired, and through the amortisation process. ii) Fair value through other comprehensive income (FVOCI) Financial assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at FVOCI. Financial assets measured at FVOCI are subsequently measured at fair value. Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is de-recognised. (iii) Fair value through profit or loss Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt instruments that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognised in profit or loss in the period in which it arises. De-recognition A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income for debt instruments is recognised in profit or loss. 59#60Notes to the FINANCIAL STATEMENTS Not 2. Summary of significant accounting policies (cont'd) 2.11 Financial instruments (cont'd) (b) Financial liabilities Initial recognition and measurement Financial liabilities are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at fair value through profit or loss, directly attributable transaction costs. Subsequent measurement After initial recognition, financial liabilities that are not carried at fair value through profit or loss are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process. De-recognition A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. On derecognition, the difference between the carrying amounts and the consideration paid is recognised in profit or loss. 2.12 Impairment of financial assets The Group recognises an allowance for expected credit losses ("ECLS") for all debt instruments not held at fair value through profit or loss and financial guarantee contracts. ECLS are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. ECLS are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is recognised for credit losses expected over the remaining life of the exposure, irrespective of timing of the default (a lifetime ECL). For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLS at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. 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 in 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. 60#61Notes to the FINANCIAL STATEMENTS [No. 2. Summary of significant accounting policies (cont'd) 2.13 Cash and cash equivalents Cash and cash equivalents comprise cash at banks and fixed deposits which are subject to an insignificant risk of changes in value. 2.14 Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined on a weighted average basis and includes all costs incurred in bringing the inventories to their present location and condition. Where necessary, allowance is provided for damaged, obsolete and slow-moving items to adjust the carrying value of inventories to the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. 2.15 Provisions Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of the obligation can be estimated reliably. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. 2.16 Government grants Government grants are recognised when there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. Government grants shall be recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grants are intended to compensate. Grants related to income are presented as a credit in profit or loss under "Other income". 2.17 Financial guarantee A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. Financial guarantees are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequent to initial recognition, financial guarantees are measured at the higher of the amount of expected credit loss determined in accordance with the policy set out in Note 2.12 and the amount initially recognised less, when appropriate, the cumulative amount of income recognised over the period of the guarantee. 61#62Notes to the FINANCIAL STATEMENTS Not 2. Summary of significant accounting policies (cont'd) 2.18 Employee benefits (a) Defined contribution plan The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. In particular, the Singapore companies in the Group make contributions to the Central Provident Fund scheme in Singapore, a defined contribution pension scheme. Contributions to national pension schemes are recognised as an expense in the period in which the related service is performed. (b) Employee leave entitlement Employee entitlements to annual leave are recognised as a liability when they are accrued to employees. The estimated liability for leave is recognised for services rendered by employees up to the end of the reporting period. 2.19 Leases These accounting policies are applied on and after the initial application date of SFRS(I) 16, 1 April 2019: The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. (a) As lessee The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets as follows: Office premises Warehouse Retail outlets Motor vehicle 1-3 years 3 years 1-3 years 3 years The right-of-use assets are also subject to impairment. Refer to Note 2.8 Impairment of non-financial assets. 62 29#63Notes to the FINANCIAL STATEMENTS Not 2. Summary of significant accounting policies (cont'd) 2.19 Leases (cont'd) (a) As lessee (cont'd) Lease liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of the remaining lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. Short-term leases The Group applies the short-term lease recognition exemption (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). (b) As lessor Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned. These accounting policies are applied before the initial application date of SFRS(I) 16, 1 April 2019: (a) As lessee Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis. 63 83#64Notes to the FINANCIAL STATEMENTS Not 2. Summary of significant accounting policies (cont'd) 2.19 Leases (cont'd) (b) As lessor Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for rental income is set out in Note 2.21. 2.20 Borrowing costs Borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. 2.21 Revenue 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) Sale of goods Revenue is recognised when the goods are delivered to the customer and all criteria for acceptance have been satisfied. The goods are often sold with a right of return and with retrospective volume discounts based on the aggregate sales over a period of time. The amount of revenue recognised is based on the estimated transaction price, which comprises the contractual price, net of the estimated volume discounts and adjusted for expected returns. Based on the Group's experience with similar types of contracts, variable consideration is typically constrained and is included in the transaction only to the extent that it is a highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Group recognises the expected volume discounts payable to customer where consideration have been received from customers and refunds due to expected returns from customers as refund liabilities. Separately, the Group recognises a related asset for the right to recover the returned goods, based on the former carrying amount of the good less expected costs to recover the goods, and adjusts them against cost of sales correspondingly. At the end of each reporting date, the Group updates its assessment of the estimated transaction price, including its assessment of whether an estimate of variable consideration is constrained. The corresponding amounts are adjusted against revenue in the period in which the transaction price changes. 64#65Notes to the FINANCIAL STATEMENTS Not 2. Summary of significant accounting policies (cont'd) 2.21 Revenue (cont'd) (b) Rental income Rental income is recognised on a straight-line basis over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis. (c) Dividend income Dividend income is recognised when the Group's right to receive payment is established. (d) Interest income Interest income is recognised using the effective interest method. 2.22 Taxes (a) Current income tax Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the end of the reporting period, in the countries where the Group operates and generates taxable income. Current income taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. (b) Deferred tax Deferred tax is provided using the liability method on temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised for all temporary differences, except: • Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and • In respect of taxable temporary differences associated with investments in subsidiaries and associates, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. 55 65#66Notes to the FINANCIAL STATEMENTS [Not 2. Summary of significant accounting policies (cont'd) 2.22 Taxes (cont'd) (b) Deferred tax (cont'd) Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except: • Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and • In respect of deductible temporary differences associated with investments in subsidiaries and associates, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of each reporting period. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition. (c) Sales tax Revenues, expenses and assets are recognised net of the amount of sales tax except: • Where the sales tax incurred in a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and • Receivables and payables that are stated with the amount of sales tax included. 2.23 Share capital and share issuance expenses Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly attributable to the issuance of ordinary shares are deducted against share capital. 66#67Notes to the FINANCIAL STATEMENTS [Not 2. Summary of significant accounting policies (cont'd) 2.24 Segment reporting For management purposes, the Group is organised into operating segments based on their geographical locations which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 31, including the factors used to identify the reportable segments and the measurement basis of segment information. 2.25 Contingencies A contingent liability is: (a) A possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or (b) A present obligation that arises from past events but is not recognised because: (i) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (ii) The amount of the obligation cannot be measured with sufficient reliability. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. Contingent liabilities and assets are not recognised on the balance sheet of the Group, except for contingent liabilities assumed in a business combination that are present obligations and which the fair values can be reliably determined. 2.26 Assets held for sale and discontinued operation Assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Assets and disposal groups are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. Property, plant and equipment once classified as held for sale are not depreciated. A component of the Group is classified as a discontinued operation when the criteria to be classified as held-for-sale have been met or it has been disposed of and such a component represents a separate major line of business or geographical area of operations or is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations. 67#68[Not Notes to the FINANCIAL STATEMENTS 3. Significant accounting judgements and estimates The preparation of the Group's consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. Uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future periods. 3.1 Judgements made in applying accounting policies Management is of the opinion that there is no significant judgement made in applying accounting policies. 3.2 Key sources of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period are discussed below. The Group based its assumptions and estimates on parameters available when the financial statements was prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur. (a) Allowance for inventories Allowance for inventories is estimated based on the best available facts and circumstances, including but not limited to, the physical condition of the inventories, their market selling prices, and estimated costs to be incurred for their sales. The allowances are re-evaluated and adjusted as additional information received affects the amount estimated. The carrying amount of the Group's inventories at balance sheet date was $11,396,000 (2019: $10,626,000). (b) Allowance for expected credit losses of amounts due from related parties The Group estimates allowance for expected credit losses ("ECLS") for the amounts due from related parties by incorporating various factors such as their assessment of the related parties' credit worthiness based on the aging of the receivables, available credit enhancements, historical repayments, refinancing and credit loss patterns and the current and forward-looking factors specific to the related parties and the economic environments where they operate in. The assessment of the correlation between historical repayments, refinancing and credit loss patterns, current and forward-looking factors 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 repayments, refinancing and credit loss experience and forecast of economic conditions may also not be representative of the related parties' actual default in the future. The information about the ECLs on the Group's amounts due from related parties is disclosed in Note 28(c). The carrying amounts of amounts due from related parties are disclosed in Notes 12 and 13 to the financial statements. 68#69Notes to the FINANCIAL STATEMENTS [Note 4. Revenue (a) Disaggregation of revenue Segments Primary geographical markets Taiwan Malaysia Major product line Sales of bags, sporting goods, apparel and accessories Timing of transfer of goods or services At a point in time (b) Judgement and methods used in estimating revenue Estimating variable consideration for sale of goods Group 2020 2019 $'000 $'000 25,530 23,511 411 25,530 23,952 25,530 23,952 25,530 23,952 In estimating the variable consideration for the sale of goods, the Group uses the most likely method to predict the volume rebates, by the different product types. For existing products, management relies on historical experience with purchasing patterns and product returns of customers, analysed by different product types and customers, for the past 2 to 4 years. Management has exercised judgement in applying the constraint on the estimated variable consideration that can be included in the transaction price. For volume rebates, management has determined that a portion of the estimated variable consideration is subject to the constraint as, based on past experience with the customers, it is highly probable that a significant reversal in the cumulative amount of revenue recognised will occur, and therefore will not be recognised as revenue. 5. Other income Rental income Foreign exchange gain Gain on disposal of asset classified as held for sale Interest income from associated company Gain on disposal of disposal group classified as held for sale Subsidies from principals Miscellaneous income 69 Group 2020 2019 $'000 $'000 21 16 1,862 66 125 202 403 106 114 2,186 729#70Notes to the FINANCIAL STATEMENTS [Note 6. Interest income Interest income from fixed deposits 7. Finance costs Interest expense on bank loans and bills payable Interest expense on lease liabilities Group 2020 2019 $'000 11 $'000 15 Group 2020 2019 $'000 $'000 176 190 33 209 190 8. Profit before income tax The following items have been included in arriving at profit before income tax: Group 2020 2019 $'000 $'000 Auditor's remuneration Auditors of the Company Other auditors 62 62 30 46 Depreciation of property, plant and equipment (Note 18) Depreciation of right-of-use assets (Note 19) Net foreign exchange (gain)/loss De-recognition of right-of-use asset and lease liability Rental expense: Operating lease rentals (Note 19) Employee benefits expense: - Wages and salaries Contribution to defined contribution plans Other related costs Property, plant and equipment written-off (Note 18) Impairment loss on trade and other receivables 1,205 1,281 1,051 (58) 68 21 277 1,235 5,100 4,784 1,017 286 238 639 50 128 70 70#71Notes to the FINANCIAL STATEMENTS Not 9. Income tax (a) Major components of income tax expense The major components of income tax expense for the years ended 31 March 2020 and 31 March 2019 are: Group Consolidated statement of comprehensive income Current income tax Current income taxation - Under/(over) provision in respect of previous years Deferred income tax (Note 20) - Origination and reversal of temporary differences - Benefits from previously unrecognised tax losses - Deferred tax credit arising from change in tax rate Withholding tax Income tax expense recognised in the profit or loss (b) Relationship between tax expense and accounting profit 2020 $'000 2019 $'000 404 437 1 (34) 405 45 (34) (13) 403 37 - (23) 11 1 191 231 607 635 A reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rates for the years ended 31 March 2020 and 31 March 2019 is as follows: Group 2020 2019 $'000 $'000 Profit before tax 5,660 4,402 Tax at the domestic rates applicable to profits in the countries where the Group operates Adjustments: 1,122 1,034 Non-deductible expenses Income not subject to taxation Surtax on undistributed retained earnings of the Taiwan subsidiary Effect of change in tax rate Benefits from previously unrecognised tax losses Share of results of associated company Under/(over) provision in respect of previous years Withholding tax Others 137 221 (150) (30) 20 46 (23) (34) (13) (680) (809) 1 (34) 191 231 12 Income tax expense recognised in profit or loss 607 635 The above reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction. 71#72[Notes Notes to the FINANCIAL STATEMENTS 10. Earnings per share Basic earnings per share amounts are calculated by dividing profit for the year attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the financial year. Diluted earnings per share amounts are calculated by dividing profit for the year attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the financial year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. The following tables reflect the profit and share data used in the computation of basic and diluted earnings per share for the years ended 31 March: Profit for the year attributable to owners of the Company used in the computation of basic earnings Group 2020 $'000 2019 $'000 5,052 3,812 No of shares $'000 No of shares $'000 Weighted average number of ordinary shares in issue for basic and diluted earnings per share computation There were no dilutive potential ordinary shares as at 31 March 2020 and 2019. 252,629 252,629 11. Inventories Balance sheet: Finished goods Less: Allowance for inventory write-downs Consolidated statement of comprehensive income: Inventories recognised as an expense in cost of sales Inclusive of the following charge/(credit): Group 2020 2019 $'000 $'000 12,008 11,272 (612) (646) 11,396 10,626 12,275 11,239 - Allowance for inventory write-downs 271 49 - Write-back of allowance for inventory write-downs 346 (112) The write-back of allowance for inventory write-downs was made when the related inventories were sold above their carrying amounts in 2020 and 2019. 12 72#73[Notes to the FINANCIAL STATEMENTS Notes to the 12. Trade receivables Current Trade receivables - external parties Less: Allowance for impairment loss Trade receivables - related parties Less: Allowance for impairment loss Trade receivables (current) Non-current - Trade receivables related parties Less: Allowance for impairment loss Trade receivables (non-current) Group Company 2020 2019 2020 $'000 $'000 $'000 2019 $'000 2,302 3,249 (16) (16) 2,286 3,233 203 745 (8) 2,481 3,978 625 67 649 (2) 65 649 588 754 (50) 538 754 128 128 Trade receivables due from third parties are non-interest bearing and are generally on 30 to 90 days' terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition. Trade receivables due from related parties are unsecured, non-interest bearing and are expected to be settled in cash. The current portion is repayable in monthly instalments in 2021 and the non-current portion is repayable in monthly instalments with final repayment in 2024. Certain directors of the Company who are also directors of the related parties have agreed to provide continuing financial support to these related parties to enable them to meet their financial obligations as and when they fall due. Receivables that are past due but not impaired The Group has the following trade receivables that are past due at the end of the reporting period but not impaired. These receivables are unsecured and the analysis of their ageing at the end of the reporting period is as follows: Trade receivables past due but not impaired: Less than 30 days 30 to 60 days 61 to 90 days 91 to 120 days More than 120 days 73 73 Group Company 2020 2019 2020 2019 $'000 $'000 $'000 $'000 1,005 1,494 1,247 1,734 737 1,504 65 777 2,989 4,732 65 777#74[Notes Notes to the FINANCIAL STATEMENTS 12. Trade receivables (cont'd) Expected credit losses The movement in allowance for expected credit losses of trade receivables computed based on lifetime ECL are as follows: Movement in allowance accounts: At 1 April Charge for the year Written-off Exchange differences At 31 March 13. Other receivables Current Financial assets Deposits Sundry debtors Due from related parties Group 2020 2019 $'000 $'000 16 19 58 (2) (1) 74 16 Group Company 2020 2019 $'000 $'000 2020 $'000 2019 $'000 6 298 131 199 11 13 1,299 568 Due from associated company Due from subsidiaries 33 33 110 191 1,436 530 689 237 Less: Allowance for impairment loss (26) (17) 1,410 530 672 237 Non-financial asset Tax recoverable Other receivables (current) Non-current Deposits Due from related parties Less: Allowance for impairment loss 74 125 137 1,535 667 672 237 433 26 1,479 2,047 1,479 2,047 1,912 2,047 1,505 2,047 (44) (44) 1,868 2,047 1,461 2,047#75[Notes Notes to the to the FINANCIAL STATEMENTS 13. Other receivables (cont'd) The amounts due from related parties are non-trade related, unsecured, non-interest bearing and are expected to be settled in cash. The non-current portion is repayable in monthly instalments with final repayment in 2024. Related parties relate to companies where certain of its directors are also directors of the Company. These directors have agreed to provide continuing financial support to these related parties to enable them to meet their financial obligations as and when they fall due, including undertaking to repay balances due from these related parties to the Group. During the year, a subsidiary of the Group advanced an amount of $736,000 to one of these related parties, of which $638,000 remained outstanding as at 31 March 2020. This outstanding balance has been fully repaid as at the date of these financial statements. The amounts due from subsidiaries and associate are non-trade, unsecured, non-interest bearing and are repayable in cash upon demand. Expected credit losses The movement in allowance for expected credit losses of other receivables computed based on lifetime ECL are as follows: Movement in allowance accounts: At 1 April Charge for the year At 31 March Group 2020 2019 $'000 $'000 70 70 14. Cash and bank balances For the purposes of the consolidated cash flow statement, cash and cash equivalents comprise the following at the balance sheet date: Group Company 2020 2019 2020 2019 $'000 $'000 $'000 $'000 Cash at banks and on hand Fixed deposits Cash and bank balances Less: Fixed deposits - restricted Cash and cash equivalents 6,173 4,773 4,940 1,802 921 1,021 7,094 5,794 4,940 1,802 (888) (1,021) 6,206 4,773 4,940 1,802 Fixed deposits - restricted are placed with various banks to provide security for banking facilities granted to subsidiaries. Cash at banks earns interest at floating rates based on daily bank deposit rates. The fixed deposits with financial institutions mature on varying dates within 1 to 3 months (2019: 1 to 3 months) from the financial year end. The interest rates of the fixed deposits as at 31 March 2020 range from 0.19% to 2.90% (2019: 0.19% to 1.03%) per annum. 75#76Notes to the FINANCIAL STATEMENTS [Note 14. Cash and bank balances (cont'd) Cash and cash equivalents denominated in currencies other than the functional currencies of respective entities at 31 March 2020 and 31 March 2019 are as follows: Group Company 2020 2019 2020 2019 $'000 $'000 $'000 $'000 United States Dollars 32 Korean Won Euro 15. Investment in associated company 13 - 7 Group Company 2020 2019 2020 2019 $'000 $'000 $'000 $'000 Unquoted shares, at cost Share of post-acquisition reserves 13,252 13,252 13,252 13,252 12,483 11,576 25,735 24,828 13,252 13,252 Group 2020 2019 $'000 $'000 The share of post-acquisition reserves is made up as follows: Revenue reserve Translation reserve 10,985 10,025 (1,302) (1,249) Revaluation reserve 2,800 2,800 12,483 11,576 The summarised financial information of the associated company, not adjusted for the proportion of ownership interest held by the Group, is as follows: Group 2020 $'000 2019 $'000 Assets and liabilities: Current assets Non-current assets 206 97 64,314 62,067 Total assets Current liabilities Total liabilities 64,520 62,164 182 94 182 94 76#77Notes to the FINANCIAL STATEMENTS [Not 15. Investment in associated company (cont'd) Net assets Proportion of the Group's ownership Carrying amount of the investment Results: Revenue Profit for the year Other comprehensive income Total comprehensive income for the year Group 2020 $'000 2019 $'000 64,338 62,070 40% 40% 25,735 24,828 10,000 11,900 (133) (1,298) 9,867 10,602 4,000 4,760 Group's share of profit for the year During the financial year ended 31 March 2020, dividends of $3,040,000 (2019: $2,720,000) were received from the Group's associated company, Harvey Norman Ossia (Asia) Pte Ltd. The following information relates to the associated company: Name Held by the Company Harvey Norman Ossia (Asia) Pte Ltd (1) Held by associated company Pertama Holdings Pte Ltd (1) (1) Audited by Ernst & Young LLP, Singapore. 77 Principal activities (Country of incorporation and place of business) Proportion of ownership interest Cost of Investment 2020 2019 2020 2019 % % $'000 $'000 Investment holding (Singapore) 40.0 40.0 13,252 13,252 Investment holding 19.8 19.8 (Singapore)#78Notes to the FINANCIAL STATEMENTS Not 16. Investment in subsidiaries Unquoted shares, at cost Less: Impairment loss The Company has the following subsidiaries as at 31 March 2020 and 31 March 2019: Name Principal activities (Country of incorporation and place of business) Held by the Company Alstyle Marketing Sdn. Bhd. (3) Ossia World of Golf (M) Sdn. Bhd. (3) Great Alps Industry Co., Ltd (1) W.O.G. World of Golf Pte Ltd (4) Group 2020 2019 $'000 $'000 3,468 3,468 (2,020) (2,020) 1,448 1,448 Proportion of ownership interest Cost of Investment 2020 2019 2020 2019 % % $'000 $'000 Investment holding (Malaysia) 100.0 100.0 282 282 Dormant (Malaysia) 100.0 100.0 1,080 1,080 Distribution of bags, sporting goods, 100.0 100.0 677 677 apparel and accessories (Taiwan) Dormant (Singapore) 100.0 100.0 1,429 1,429 3,468 3,468 Held through Alstyle Marketing Sdn. Bhd. Alstyle International (M) Sdn. Bhd. (3) Dormant (Malaysia) 100.0 100.0 Alstyle Fashion Sdn. Bhd. (3) Dormant (Malaysia) 100.0 100.0 Alstyle International Resources Sdn Bhd. (3) Dormant (Malaysia) 61.0 61.0 Decorion Sdn. Bhd. (2) Investment holding (Malaysia) 100.0 100.0 (1) Audited by member firm of Ernst & Young Global in Taiwan. (2) Audited by W.K. Lee & Co., CPA, Malaysia. (3) Audited by KGNP, CPA, Malaysia. (4) Not required to be audited by the law of its country of incorporation. 78#79Not Notes to the FINANCIAL STATEMENTS 17. Assets classified as held for sale The leasehold land and building (the "Property”) of Decorion Sdn. Bhd. ("Decorion”) reported under the Singapore and Malaysia geographical segment, was presented as held for sale following the commitment of the Group's management on 25 January 2019 to a plan to sell the Property. At that date, Decorion entered into a Sale and Purchase agreement with a buyer to sell the Property for a consideration of RM9,500,000 (approximately $3,156,000). As at 31 March 2019, the Property had been presented in the balance sheet as "Assets classified as held for sale". There was no impairment loss recognised as the Properties' fair value less costs to sell was higher than its carrying amount. The sale of the Property was completed on 24 June 2019. Balance sheet disclosures The major class of assets of the sale of leasehold land and building classified as held for sale as at 31 March 2019 were as follows: Assets Property, plant and equipment, classified as held for sale 18. Property, plant and equipment Group 2019 $'000 1,278 Leasehold Group land and building $'000 Computer equipment $'000 Furniture, fixtures, fittings and renovations Plant, machinery $'000 Motor vehicles $'000 and office equipment Total $'000 $'000 Cost At 1 April 2018 1,571 522 8,017 23 798 10,931 Additions 32 1,595 25 1,652 Disposals (87) (934) (22) (1,043) Reclassification to assets held for sale (1,539) (1,539) Write-offs (256) (642) (359) (1,257) Exchange differences (32) (10) (155) (7) (204) At 31 March 2019 and 1 April 2019 201 7,881 23 435 8,540 Additions 2 1,215 5 1,222 Disposals Exchange differences (22) 13 (1,020) - (1,042) 473 3 489 At 31 March 2020 194 8,549 23 443 9,209 79#80Notes to the FINANCIAL STATEMENTS [Note 18. Property, plant and equipment (cont'd) Leasehold land and Group building Computer equipment Furniture, fixtures, fittings Plant, machinery Motor and office and renovations vehicles equipment Total Accumulated depreciation and impairment loss $'000 $'000 $'000 $'000 $'000 $'000 At 1 April 2018 245 459 7,353 7 787 8,851 Depreciation charge for the year 21 43 1,211 5 1 1,281 Disposals (87) (920) (20) (1,027) Reclassification to assets held for sale (261) (261) Write-offs Exchange differences At 31 March 2019 and 1 April 2019 Depreciation charge for the year Disposals Exchange differences At 31 March 2020 Net carrying amount At 31 March 2020 At 31 March 2019 (255) (600) (352) (1,207) (9) (136) (1) (151) 151 6,908 12 43 1,151 24 415 7,486 7 1,205 (22) (1,020) (1,042) 12 403 415 184 7,442 16 422 8,064 10 1,107 7 21 1,145 50 973 11 20 1,054 80 00#81Notes to the FINANCIAL STATEMENTS [Notes 18. Property, plant and equipment (cont'd) Company Cost At 1 April 2018, 31 March 2019, 1 April 2019 and 31 March 2020 Accumulated depreciation and impairment loss At 1 April 2018 Depreciation charge for the year At 31 March 2019 and 1 April 2019 Depreciation charge for the year At 31 March 2020 Net carrying amount At 31 March 2020 At 31 March 2019 Assets pledged as security Motor vehicles $'000 22 65 11 75 16 6 11 As at 31 March 2020, the leasehold land and building of the Group with carrying amount of Nil (2019: $1,278,000) were pledged to a bank to secure the Group's bank loans (Note 23). These assets had been presented as 'Assets classified as held for sale' (Note 17) as at 31 March 2019, and the sale was completed during the financial year ended 31 March 2020. The leasehold land and building of the Group consisted of the following: Property/(Location) No. 89 Jalan 10/91, Taman Shamelin Perkasa, 56100 Kuala Lumpur (Malaysia) 81 Purposes Office and warehouse Approximate land area (in sq metre) Approximate gross floor area (in sq metre) Tenure of lease 1,456 2,081 80 years expiring on 11 September 2082#82Notes to the FINANCIAL STATEMENTS [Not 19. Leases The Group has lease contracts for retail outlets, warehouse, office premises, and motor vehicle used in its operations. The Group's obligations under its leases are secured by the lessor's title to the leased assets. There are several lease contracts that include extension options which are further discussed below. Group as a lessee The Group also has certain leases with lease terms of 12 months or less. The Group applies the 'short-term lease' recognition exemptions for these leases. (a) Carrying amounts of right-of-use assets Group Retail outlets $'000 Warehouse $'000 Office premises $'000 Motor vehicle $'000 Total $'000 Cost At 1 April 2019 (as reported) Effects of adopting SFRS(I) 16 At 1 April 2019 (as restated) Additions De-recognition Exchange differences At 31 March 2020 Accumulated depreciation At 1 April 2019 Charge for the year De-recognition Exchange differences At 31 March 2020 Net carrying amount At 31 March 2020 At 31 March 2019 1,251 92 32 127 1,502 1,251 92 32 127 1,502 1,229 304 1,533 (644) (644) 120 6 17 9 152 1,956 98 353 136 2,543 748 86 144 73 1,051 (180) (180) 31 5 6 5 47 599 91 150 78 918 82 32 1,357 7 203 58 1,625#83Notes to the FINANCIAL STATEMENTS Note 19. Leases (cont'd) Group as a lessee (cont'd) (a) Carrying amounts of right-of-use assets (cont'd) Company Cost At 1 April 2019 (as reported) Effects of adopting SFRS(I) 16 At 1 April 2019 (as restated), and at 31 March 2020 Accumulated depreciation At 1 April 2019 Depreciation charge for the year At 31 March 2020 Net carrying amount At 31 March 2020 At 31 March 2019 (b) Lease liabilities Office premise $'000 32 32 32 30 30 30 2 The table below sets out the carrying amount of lease liabilities and the movements during the period: Group $'000 Company $'000 At 1 April 2019 (as reported) Effects of adopting SFRS(I) 16 At 1 April 2019 (as restated) Additions Payments Accretion of interest De-recognition Exchange differences As at 31 March 2020 Current Non-current The maturity analysis of lease liabilities is disclosed in Note 28. 1,502 32 1,502 32 1,532 (1,056) (30) 33 (485) 108 1,634 2 1,123 2 511 83 33#84[Notes Notes to the FINANCIAL STATEMENTS 19. Leases (cont'd) Group as a lessee (cont'd) (c) Amounts recognised in profit or loss Depreciation of right-of-use assets Interest expense on lease liabilities Lease expense not capitalised in lease liabilities (included in other expense): Expense relating to short term leases Total rental expense (Note 7) Total amount recognised in profit or loss (d) Total cash outflow The Company had total cash outflows for leases of $1,333,000 in 2020. (e) Extension options Group 2020 $'000 1,051 33 277 277 1,361 The Group has a lease contract that includes an extension option. The option is negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Group's business needs. Management exercises judgement in determining whether this extension option is reasonably certain to be exercised. As at 31 March 2020, potential future (undiscounted) cash outflows of approximately $524,000 have not been included in lease liabilities because it is not reasonably certain that the leases will be extended. 20. Deferred tax Deferred tax as at 31 March relates to the following: Group Deferred tax assets Provisions and accruals Exchange differences Provisions and accruals Deferred tax expense (Note 9) 84 Consolidated balance sheet Consolidated statement of comprehensive income 2020 2019 2020 2019 $'000 $'000 $'000 $'000 150 161 11 1 11 - 161 161 11 1 11 1#85☐ Notes 20. to the FINANCIAL STATEMENTS Notes to the Deferred tax (cont'd) Unrecognised tax losses and capital allowances At the end of the reporting period, the Group has unabsorbed tax losses and capital allowances of approximately $31,757,000 (2019: $31,380,000) and $271,000 (2019: $274,000), respectively, which are available for offset against future taxable profits of the companies, for which no deferred tax asset is recognised due to uncertainty of its recoverability. The use of these tax losses and capital allowances is subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislation of the respective countries in which the companies operates. Unrecognised temporary differences relating to investments in subsidiaries At the end of the reporting period, no deferred tax liability (2019: $Nil) has been recognised for taxes that would be payable on the undistributed earnings of certain of the Group's subsidiaries as the Group has determined that undistributed earnings of its subsidiaries will not be distributed in the foreseeable future. Such temporary differences for which no deferred tax liability has been recognised aggregate to $9,391,000 (2019: $8,555,000). Tax consequences of proposed dividends There are no income tax consequences (2019: $Nil) attached to the dividends to the shareholders proposed by the Company but not recognised as a liability in the financial statements (Note 32). 21. Trade and other payables Current Trade payables: - external parties Other payables: - subsidiary - related party Sundry creditors Deposits received Accrued operating expenses Non-current Deposits received Total trade and other payables Group Company 2020 2019 2020 2019 $'000 $'000 $'000 $'000 632 2,081 26 42 12 17 15 9 75 14 1,681 2,050 68 127 2,322 4,265 94 168 43 43 2,365 4,265 94 168 Trade payables due to external parties and related party are non-interest bearing and are normally settled on 30 to 60 days' terms. Other payables due to subsidiary and related party are non-trade related, non-interest bearing, unsecured and repayable on demand. Deposits received are non-interest bearing and refundable at the expiration of the lease term. 85#86Notes to the FINANCIAL STATEMENTS [Note 21. Trade and other payables (cont'd) Trade and other payables denominated in currencies other than the functional currencies of respective entities at 31 March 2020 and 31 March 2019 are as follows: Group Company 2020 $'000 2019 $'000 2020 2019 $'000 $'000 United States Dollars Chinese Renminbi 48 48 11 22. Bills payable Bills payable Group Company 2020 2019 2020 2019 $'000 $'000 $'000 $'000 3,370 3,209 Bills payable carry interest at rates ranging from 1.77% to 1.97% (2019: 1.90% to 2.25%) per annum and are repayable within 1 to 6 months (2019: 1 to 6 months) from the financial year end. Bills payable are secured by corporate guarantees from the Group and personal guarantee from a director of a subsidiary. 23. Bank borrowings Current Bank loans - secured Bank loans - unsecured Bank loans Group Company Maturity 2020 2019 2020 2019 $'000 $'000 $'000 $'000 2020 725 4,022 2020 1,648 2,373 4,022 Bank loans are secured by corporate guarantees of the Group, restricted fixed deposits placed with the respective banks. The weighted average effective interest rates at the end of the reporting period are as follows: Bank loans 86 Group Company 2020 2019 2020 % % % 2019 % 2.14 3.28#87Notes to the FINANCIAL STATEMENTS [Not 23. Bank borrowings (cont'd) A reconciliation of liabilities arising from financing activities is as follows: Non-cash changes Net cash flows from Foreign exchange 2019 financing activities movement Other 2020 $'000 $'000 $'000 $'000 $'000 Bank loans Bills payable Total 4,022 (1,805) 156 2,373 3,209 (60) 221 3,370 7,231 (1,865) 377 5,743 Non-cash changes Net cash Foreign flows from exchange 2018 financing activities movement Other 2019 Bank loans - current - non-current Bills payable $'000 $'000 $'000 $'000 $'000 1,624 562 (69) 1,905 4,022 1,905 (1,905) 2,343 891 (25) 3,209 Total 5,872 1,453 (94) 7,206 The 'other' column relates to the reclassification of non-current loans and borrowings due to the passage of time. 24. Share capital Group and Company 2020 2019 No. of shares Issued and fully paid ordinary shares '000 No. of shares 2020 '000 2019 $'000 $'000 At the beginning and end of the year 252,629 252,629 31,351 31,351 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. 87#88Notes to the FINANCIAL STATEMENTS [Note 25. Reserves (a) Revaluation reserve represents the Group's share of revaluation reserve of associated company. (b) Legal reserve represents amount set aside in compliance with local laws in certain countries where the Group operates, and are not distributable unless approval is obtained from relevant authorities. (c) Translation reserve represents exchange differences arising from the translation of financial statements of foreign operations whose functional currencies are different from the Group's presentation currency and share of translation reserve from associated company. 26. Commitments and contingencies Guarantees The Company has provided corporate guarantees of approximately $Nil (2019: $1,851,000) to secure banking facilities for certain subsidiaries (Note 28(d)). Operating lease commitments as a lessee The Group and the Company leases certain properties under lease agreements that are non-cancellable. The leases have an average tenure of between 2 to 7 are no restrictions placed upon the Group and the Company by entering into these leases. years. There Certain lease contracts include contingent rent provision and renewal option for additional lease period of 2 to 3 years at rental rates based on prevailing market conditions. Future minimum lease payments under non-cancellable operating leases at the end of the reporting period are as follows: Not later than 1 year Later than 1 year but not later than 5 years Minimum lease payments recognised as an expense in profit or loss for the financial year ended 31 March 2019 are shown in Note 8. Group Company 2019 2019 $'000 $'000 539 30 572 3 1,111 33 As disclosed in Note 2.2, the Group and the Company have adopted SFRS(I) 16 on 1 April 2019. These lease payments have been recognised as right-of-use assets and lease liabilities on the consolidated and separate balance sheets as at 31 March 2020, except for short-term leases. The Group has various lease contracts that have not yet commenced as at 31 March 2020. The future lease payments for these non-cancellable lease contracts are $168,000 within one year, and $274,000 within five years. 88#89Notes to the FINANCIAL STATEMENTS [Note 27. Related party transactions Related parties Related parties refer to VGO International Pte Ltd and W.O.S. World of Sport (M) Sdn Bhd. (a) Sales and purchases of goods and services In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place at terms agreed between the parties during the financial year: Income/(expenses) Recharge of rental and office building expenses to related parties Payment on behalf of related party to trade suppliers of the related party Recharge of staff costs and other expenses from related parties (b) Compensation of key management personnel Short-term employee benefits Central Provident Fund contributions Other short-term benefits Comprise amounts paid to: - Directors of the Company - Other key management personnel Group 2020 $'000 2019 $'000 170 441 (50) (186) Group 2020 2019 $'000 $'000 2,235 1,995 108 53 36 86 2,379 2,134 1,191 1,021 1,188 1,113 2,379 2,134 As at 31 March 2020, amounts due to directors amounted to $645,000 (2019: $439,000). These amounts are non-trade in nature, non-interest bearing and repayable on demand. (c) Commitment with related party On 19 April 2017, the Company entered into a 36-month agreement ending 18 April 2020 with VGO International Pte Ltd for the lease of the Company's office space. The Group expects the rental paid to VGO International Pte Ltd to be $30,000 in 2020 and $2,500 in 2021 respectively. As disclosed in Note 2.2, the Company have adopted SFRS(I) 16 on 1 April 2019. These lease payments have been recognised as right-of-use assets and lease liabilities on the balance sheet as at 31 March 2020. 89#90Notes to the FINANCIAL STATEMENTS [Not 27. Related party transactions (cont'd) (d) Advances to a related party During the financial year ended 31 March 2020, a subsidiary of the Group advanced $736,000 to a director-related company, out of which $638,000 remained outstanding as at 31 March 2020. The outstanding amount as at 31 March 2020 has been repaid as at the date of these financial statements. 28. Financial risk management objectives and policies The Group and the Company are exposed to financial risks arising from its operations and financial instruments. The key financial risks include foreign currency risk, interest rate risk, credit risk and liquidity risk. The Group's risk management approach seeks to minimise the potential material adverse effects from these risk exposures. The management manages and monitors these exposures and ensures appropriate measures are implemented on a timely and effective manner. The Audit Committee provides independent oversight to the effectiveness of the risk management process. It is and has been throughout the current and previous financial years, the Group's policy that no trading in derivatives for speculated purposes shall be undertaken. The Group's principal financial instruments comprise bank borrowings, bills payable and cash and deposits. The main purpose of these financial instruments is to finance the Company's operations. The Group has various other financial assets and liabilities such as trade and other receivables, trade and other payables, lease liabilities and related party balances which arise directly from its operations. The following sections provide details regarding the Group's and Company's exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks. (a) Foreign currency risk The Group has transactional currency exposures arising from sales or purchases that are denominated in currencies other than the respective functional currencies of the Group entities, primarily SGD, Malaysian Ringgit (RM) and New Taiwan Dollars (NTD). The foreign currencies in which these transactions are denominated are mainly United States Dollars (USD), Euro (EUR), Chinese Renminbi (RMB) and Japanese Yen (JPY). However, this type of exposure is minimal since substantially all of the Group's sales are denominated in the functional currency of the operating unit making the sale and operating costs substantially denominated in the unit's functional currency. The Group's trade receivable and trade payable balances at the end of the reporting period have similar exposures. The Group and the Company also hold cash and cash equivalents denominated in foreign currencies for working capital purposes. At the end of the reporting period, such foreign currency balances at the end of the reporting period are disclosed in Note 14. The Group is also exposed to currency translation risk arising from its net investments in foreign operations, including Malaysia and Taiwan, which are not hedged. No sensitivity analysis on the foreign currency risk has been presented as its impact is not significant to the profit or loss and equity of the Group. The management considers the Group's exposure to foreign currency risks to be minimal. 90#91Notes to the FINANCIAL STATEMENTS Not 28. Financial risk management objectives and policies (cont'd) (b) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Group's and the Company's financial instruments will fluctuate because of changes in market interest rates. The Group's exposure to interest rate risk arises primarily from bills payable and bank borrowings. The Group does not use derivative financial instruments to hedge its exposure to interest rate fluctuations. However, it is the Group's policy to obtain the most favourable interest rates available wherever the Group obtains additional financing through bank borrowings. The Group has cash balances placed with reputable banks which generate interest income for the Group. The Group manages its interest rate risks by placing such balances of varying maturities and interest rate terms. Sensitivity analysis for interest rate risk The table below demonstrates the sensitivity to a reasonably possible change in interest rates with all other variables held constant, of the Group's profit net of tax (through the impact on interest expense on floating rate bills payable and short-term bank loans). Group 2020 Loans and borrowings 2019 Loans and borrowings Basis points (Higher/Lower) 75 Effect on profit net of tax (Lower/Higher) $'000 36 75 45 (c) Credit risk Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group's and the Company's exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including cash and short-term deposits), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties. The Group's objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group's policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debts is not significant. For transactions that do not occur in the country of the relevant operating unit, the Group does not offer credit terms without the approval of the Senior Management. The Group considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. 91#92Notes to the FINANCIAL STATEMENTS [Note 28. Financial risk management objectives and policies (cont'd) (c) Credit risk (cont'd) The Group has determined the default event on a financial asset to be when the counterparty fails to make contractual payments, within 60 days when they fall due, which are derived based on the Group's historical information. The Group considers "low risk" to be an investment grade credit rating with at least one major rating agency for those investments with credit rating. To assess whether there is a significant increase in credit risk, the company compares the risk of a default occurring on the asset as at reporting date with the risk of default as at the date of initial recognition. The Group considers available reasonable and supportive forwarding-looking information which includes the following indicators: - Internal credit rating External credit rating Actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the borrower's ability to meet its obligations - Actual or expected significant changes in the operating results of the borrower - Significant increases in credit risk on other financial instruments of the same borrower Significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees or credit enhancements Significant changes in the expected performance and behaviour of the borrower, including changes in the payment status of borrowers in the group and changes in the operating results of the borrower. Regardless of the analysis above, a significant increase in credit risk is presumed if a debtor is more than 30 days past due in making contractual payment. The Group determined that its financial assets are credit-impaired when: There is significant difficulty of the issuer or the borrower - A breach of contract, such as a default or past due event It is becoming probable that the borrower will enter bankruptcy or other financial reorganisation There is a disappearance of an active market for that financial asset because of financial difficulty The Group categorises a loan or receivable for potential write-off when a debtor fails to make contractual payments more than 120 days past due. 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. Where loans and receivables have been written off, the company continues to engage enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in profit or loss. The following are credit risk management practices and quantitative and qualitative information about amounts arising from expected credit losses for each class of financial assets. 92 92#93Notes to the FINANCIAL STATEMENTS [Note 28. Financial risk management objectives and policies (cont'd) (c) Credit risk (cont'd) Trade receivables The Group provides for lifetime expected credit losses for external trade receivables using a provision matrix. The provision rates are determined based on the Group's historical observed default rates analysed in accordance to days past due by grouping of customers based on geographical region. The loss allowance provision as at 31 March 2020 and 31 March 2019 is determined as follows, and incorporates forward looking information such as forecast of economic conditions. Summarised below is the information about the credit risk exposure on the Group's trade receivables using provision matrix: 31 March 2020 Current $'000 1 to 30 days past due $'000 Gross carrying amount 28 1,005 31 to 60 days past due $'000 1,248 Loss allowance provision 28 1,005 1,248 31 March 2019 Gross carrying amount Loss allowance provision 61 to 90 days past due $'000 More than 90 days past due Total $'000 $'000 21 2,302 (16) (16) 5 2,286 1 to 30 days 31 to 60 days Current $'000 past due past due 61 to 90 days past due More than 90 days past due Total $'000 $'000 $'000 $'000 $'000 1,494 1,734 21 3,249 (16) (16) 1,494 1,734 5 3,233 Information regarding loss allowance movement of trade and other receivables are disclosed in Notes 12 and 13. Exposure to credit risk At the end of the reporting period, the Group's and the Company's maximum exposure to credit risk is represented by the carrying amount of each financial assets in the balance sheets. 93#94[Notes Notes to the FINANCIAL STATEMENTS 28. Financial risk management objectives and policies (cont'd) (c) Credit risk (cont'd) Credit risk concentration profile The Group determines concentrations of credit risk by monitoring the country and industry sector profile of its trade and other receivables on an ongoing basis. The credit risk concentration profile of the Group's trade and other receivables at the end of the reporting period is as follows: By country: Singapore Malaysia Taiwan Group 2020 $'000 % of total 2019 $'000% of total 2,095 33% 2,878 39% 1,420 23% 803 11% 2,782 44% 3,628 50% 6,297 100% 7,309 100% Financial assets that are neither past due nor impaired Trade and other receivables that are neither past due nor impaired are with creditworthy debtors with good payment record with the Group. Cash and deposits that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default. Financial assets that are either past due or impaired Information regarding financial assets that are either past due or impaired is disclosed in Notes 12 and 13. (d) Liquidity risk Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group's and the Company's exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group's and the Company's objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities. To manage liquidity risk, the Company also monitors its net operating cash flow and maintains an adequate level of cash and cash equivalents and secured committed funding facilities from financial institutions. In assessing the adequacy of these funding facilities, management reviews its working capital requirements regularly. The Group assessed the concentration of risk with respect to the refinancing of its debt and concluded it to be low. Access to sources of funding is sufficiently available and debt maturing within 12 months can be rolled over with existing lenders. 94#95Notes to the FINANCIAL STATEMENTS [Notes 28. Financial risk management objectives and policies (cont'd) (d) Liquidity risk (cont'd) The table below summarises the maturity profile of the Group's and the Company's financial assets and liabilities at the end of the reporting period based on contractual undiscounted payments. Group 2020 One to five years One year or less Total $'000 $'000 $'000 7,094 7,094 2,481 538 3,019 1,410 1,868 3,278 10,985 2,406 13,391 Financial assets Cash and bank balances Trade receivables Other receivables Total undiscounted financial assets Financial liabilities Trade and other payables Amounts due to directors Bills payable Bank borrowings 2,322 43 2,365 645 645 3,370 3,370 2,423 2,423 Lease liabilities 1,143 516 1,659 Total undiscounted financial liabilities 9,903 559 10,462 Total net undiscounted financial assets 1,082 1,847 2,929 2019 Financial assets Cash and bank balances Trade receivables Other receivables Total undiscounted financial assets Financial liabilities Trade and other payables Amounts due to directors Bills payable Bank borrowings Total undiscounted financial liabilities Total net undiscounted financial (liabilities)/assets 95 95 5,794 5,794 3,978 754 4,732 530 2,047 2,577 10,302 2,801 13,103 4,265 4,265 439 439 3,209 3,209 4,043 4,043 11,956 11,956 (1,654) 2,801 1,147#96Notes to the FINANCIAL STATEMENTS [Not 28. Financial risk management objectives and policies (cont'd) (d) Liquidity risk (cont'd) Company 2020 Financial assets Cash and bank balances Trade receivables Other receivables Total undiscounted financial assets Financial liabilities Trade and other payables Amounts due to directors Lease liabilities One year One to or less five years Total $'000 $'000 $'000 4,940 4,940 65 65 672 1,461 2,133 5,677 1,461 7,138 94 94 645 645 2 2 Total undiscounted financial liabilities 741 741 Total net undiscounted financial assets 4,936 1,461 6,397 2019 Financial assets Cash and bank balances Trade receivables Other receivables Total undiscounted financial assets Financial liabilities Trade and other payables Amounts due to directors Total undiscounted financial liabilities Total net undiscounted financial assets 96 1,802 1,802 649 128 777 237 2,047 2,284 2,688 2,175 4,863 168 168 439 439 607 607 2,081 2,175 4,256#97[Note Notes to the FINANCIAL STATEMENTS 28. Financial risk management objectives and policies (cont'd) (d) Liquidity risk (cont'd) The table below shows the contractual expiry by maturity of the Company's contingent liabilities and commitments. The maximum amount of the corporate guarantee contracts are allocated to the earliest period in which the guarantee could be called. One year One to or less $'000 five years $'000 Over five years Total $'000 $'000 29 29 Company 2020 Corporate guarantee 2019 Corporate guarantee Fair value of financial instruments 1,851 1,851 Fair value is the amount at which the instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm's length transaction, other than in a forced or liquidation sale. Fair values are obtained from quoted market prices, discounted cash flow models and option pricing models as appropriate. Financial instruments whose carrying amounts are reasonable approximation of fair value Management has determined that the carrying amounts of cash and bank balances (Note 14), trade receivables (Note 12), other receivables (Note 13), trade and other payables (Note 21), bills payable (Note 22), lease liabilities (Note 19) and bank borrowings (Note 23) at the end of the reporting period, based on their notional amounts, are reasonable approximations of their fair value, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period. There are no significant differences between the fair values and the carrying amounts of non-current trade and other receivables and bank borrowings. 97#98Notes to the FINANCIAL STATEMENTS [No 29. Fair value of financial instruments (cont'd) Categories of financial assets and financial liabilities Set out below are the carrying amounts of the Group's and the Company's financial assets and financial liabilities that are carried on the balance sheets: Assets Cash and bank balances (Note 14) Trade receivables (Note 12) Other receivables (Note 13) Total financial assets carried at amortised cost Liabilities Trade and other payables (Note 21) Amounts due to directors Bills payable (Note 22) Bank borrowings (Note 23) Lease liabilities (Note 19) Total financial liabilities carried at amortised cost 00 Group Company 2020 $'000 2019 $'000 2020 $'000 2019 $'000 7,094 3,019 3,278 5,794 4,732 2,577 4,940 1,802 2,133 777 2,284 13,391 13,103 7,138 4,863 2,365 645 4,265 94 168 439 645 439 3,370 3,209 2,373 4,022 1,634 2 10,387 11,935 741 607 30. Capital management Capital includes debt and equity items as disclosed in the table below. The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating in order to support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the financial years ended 31 March 2020 and 31 March 2019. An overseas subsidiary in Taiwan appropriates 10% of its net profit after tax according to the subsidiary's Articles of Incorporation as legal reserve. Such appropriations are proposed by the directors for approval by shareholders in the next financial year and given effect in the financial statements of that year. The legal reserve shall be appropriated each year until the accumulated reserve equals the paid-up capital of the subsidiary. This reserve can only be used to offset losses of the subsidiary. When the reserve has reached 50% of the share capital of the subsidiary, up to 50% of the legal reserve may be capitalised. The reserve is not available for dividend distribution. This internally imposed capital requirement has been complied with by the abovementioned subsidiary for the financial years ended 31 March 2020 and 31 March 2019. 98#99Notes to the FINANCIAL STATEMENTS No 30. Capital management (cont'd) The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group's aim is to keep the gearing ratio below 30%. The Group includes within net debt, bank borrowings, trade and other payables, lease liabilities, dividend and bills payable, less cash and bank balances. Capital includes equity attributable to the equity holders of the Company less the abovementioned legal reserve. Trade and other payables (Note 21) Bills payable (Note 22) Bank borrowings (Note 23) Lease liabilities (Note 19) Less: Cash and bank balances (Note 14) Net debt Equity attributable to equity holders of the Company Less: Legal reserve Total capital Capital and net debt Gearing ratio 31. Segment information Group 2020 2019 $'000 $'000 2,365 4,265 3,370 3,209 2,373 4,022 1,634 (7,094) (5,794) 2,648 5,702 42,999 39,103 (1,651) (1,533) 41,348 37,570 43,996 43,272 6% 13% The Group's geographical segments are based on the location of the Group's assets. Sales to external customers disclosed in geographical segments are based on the geographical location of its customers. The Group mainly imports and distributes apparel, sporting goods, footwear and accessories in each of the following locations and are independent from each other. 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. 99#100Notes to the FINANCIAL STATEMENTS [Note 31. Segment information (cont'd) Transfer prices between operating segments are on terms agreed mutually between the parties. Revenue and non-current assets information based on the geographical location of customers and assets respectively are as follows: 2020 Revenue: External customers Results: Interest income Singapore and Malaysia Taiwan $'000 $'000 Adjustments and eliminations $'000 Total Group $'000 25,530 25,530 6 5 11 Dividend income 5,571 (5,571) (a) Finance costs (4) (205) (209) Depreciation of property, plant and equipment (5) (1,200) (1,205) Depreciation of right-of-use assets (30) (1,021) (1,051) Share of results of associated company 4,000 4,000 Other non-cash expenses (149) (b) (149) Income tax expense (194) (413) (607) 9,309 1,316 (5,571) (a) 5,054 Segment profit Assets: Investment in associated company 25,735 25,735 Additions to property, plant and equipment 1,222 1,222 Segment assets 36,140 19,045 (1,578) (c) 53,607 Segment liabilities 893 9,844 (130) (d) 10,607 100#101Notes to the FINANCIAL STATEMENTS [Not 31. Segment information (cont'd) 2019 Revenue: External customers Results: Interest income Dividend income Finance costs Depreciation of property, plant and equipment Share of results of associated company Other non-cash expenses Income tax expense Segment profit Singapore and Malaysia $'000 Adjustments and Total Taiwan eliminations Group $'000 $'000 $'000 441 23,511 23,952 10 5 15 3,738 (3,738) (a) (73) (117) (190) (51) (1,230) (1,281) 4,760 4,760 50 49 (b) 99 (242) (393) (635) 6,378 1,127 (3,738) (a) 3,767 Assets: Investment in associated company 24,828 Additions to property, plant and equipment 1,652 Segment assets 35,601 17,249 (1,555) Segment liabilities 3,009 9,290 (107) 101 (၁) 24,828 1,652 51,295 (d) 12,192#102[Notes Notes to the FINANCIAL STATEMENTS 31. Segment information (cont'd) (a) The following item is deducted from segment profit to arrive at "profit for the year" presented in the consolidated statement of comprehensive income. Dividend income from subsidiaries and associated company 2020 2019 $'000 $'000 5,571 3,738 5,571 3,738 (b) Other non-cash expenses consist of allowance for impairment loss on trade and other receivables, property, plant and equipment written-off and de-recognition of leases as presented in the respective notes to the financial statements. (c) The following items are deducted from segment assets to arrive at total assets reported in the consolidated balance sheet: 2020 2019 $'000 $'000 Investment in subsidiaries 1,448 1,448 Inter-segment receivables 130 107 1,578 1,555 (d) The following items are deducted from segment liabilities to arrive at total liabilities reported in the consolidated balance sheet: 2020 2019 $'000 $'000 Inter-segment payables 130 107 130 107 102#103Notes to the FINANCIAL STATEMENTS [Notes 32. Dividends Declared and paid during the financial year: Dividends on ordinary shares: Group and Company 2020 2019 $'000 $'000 Final exempt (one-tier) dividend for 2019: 0.17 (2018: 0.40 cents) per share Interim exempt (one-tier) dividend for 2020: 0.50 cents (2019: 0.60 cents) per share 429 1,011 1,263 1,515 Proposed but not recognised as a liability as at 31 March: Dividends on ordinary shares, subject to shareholders' approval at the AGM: Final exempt (one-tier) dividend for 2020: 0.90 cents (2019: 0.17 cents) per share 2,274 429 33. Events occurring after the reporting period Effective from 15 April 2020, the Company changed its registered address from 10 Changi South Lane #07-01 Singapore 486162 to 51 Changi Business Park Central 2 #08-13, The Signature, Singapore 486066. Following the outbreak of the COVID-19 pandemic in early 2020, many countries have progressively announced mandatory lockdowns and restricted business openings. The Group's main operations are situated in Taiwan, which was largely unaffected by any lockdown or restrictions in business openings throughout the period subsequent to the year-end. The COVID-19 pandemic is expected to affect consumer sentiment and create volatility and uncertainty in the global economy. The Group has taken relevant actions to minimise the impact of the COVID-19 pandemic to its operations and will continue to pay close attention to developments and evaluate their impact on the financial position and operating results of the Group. 34. Authorisation of financial statements The financial statements for the year ended 31 March 2020 were authorised for issue in accordance with a resolution of the directors on 9 September 2020. 103#104Columbia#105STATISTICS OF SHAREHOLDINGS Distribution By Size of Shareholdings As At 26 August 2020. Size of Shareholdings No. of Shareholders % No. of Shares % 1 100 99 48 1.66 2,260 0.00 1,000 838 28.92 785,102 0.31 1,001 10,001 10,000 1,000,000 1,412 48.72 6,000,213 2.38 586 20.22 31,878,674 12.62 1,000,001 and above 14 0.48 213,963,234 84.69 Tatal 2,898 100.00 252,629,483 100.00 No. Name 1 No. of Shares % 234569 7 8 RAFFLES NOMINEES (PTE) LIMITED CITIBANK NOMINEES SINGAPORE PTE LTD GOH CHING WAH PHILLIP SECURITIES PTE LTD GOH LEE CHOO LEH BEE HOE DB NOMINEES (SINGAPORE) PTE LTD CHONG SIEN THYE ALBERT 97,785,354 38.71 77,557,093 30.70 17,354,656 6.87 4,034,040 1.60 3,203,700 1.27 2,707,300 1.07 2,047,000 0.81 1,716,369 0.68 9 UOB KAY HIAN PTE LTD 1,514,629 0.60 10 CHEW AH KONG 1,304,700 0.52 11 NG CHUEN GUAN 1,241,000 0.49 12 DBS NOMINEES PTE LTD 1,229,641 0.49 13 UNITED OVERSEAS BANK NOMINEES PTE LTD 1,189,552 0.47 14 CHIAM HOCK POH 1,078,200 0.43 15 RHB SECURITIES SINGAPORE PTE LTD 918,000 0.36 16 LIM AND TAN SECURITIES PTE LTD 876,000 0.35 17 GUAT SENG HONG 641,000 0.25 18 19 LAI TET WOON 20 MAYBANK KIM ENG SECURITIES PTE. LTD ESTATE OF KHOO KWANG MENG, DECEASED 601,068 0.24 556,000 0.22 540,000 0.21 Total: 218,095,302 86.34 105#106[SUBSTANT SUBSTANTIAL SHAREHOLDINGS No. Name of director Direct Interest % of Shares Deemed Interest % of Shares 1 Goh Ching Lai 75,395,477* 29.84 114,855,040* 45.46 2 Goh Ching Wah 57,500,386* 22.76 132,750,131 52.55 3 Goh Ching Huat 57,354,654* 22.70 132,895,863* 52.61 Based on the information available to the Company as at 26 August 2020, approximately 24.70% of the issued ordinary shares of the Company is held by the public therefore, Rule 723 of the Manual issued by the Singapore Exchange Securities Trading Limited is complied with. *By virtue of the Section 7 of the Companies Act, Cap 50, brothers - Goh Ching Lai, Joe, Goh Ching Wah, George and Goh Ching Huat, Steven are deemed to have interests in the each other's shares. 106#107Notice Of Annual GENERAL MEETING Notice NOTICE IS HEREBY GIVEN that the Twenty-Ninth Annual General Meeting of the Company will be held by way of electronic means on Thursday, 24 September 2020 at 9.30 a.m. to transact the following business:- AS ORDINARY BUSINESS 1. To receive and consider the Audited Financial Statements of the Company for the financial year ended 31 March 2020 and the Directors' Report and the Auditors Report thereon. 2. To declare a Final tax exempt (one-tier) dividend of 0.9 Singapore cents per ordinary share for the year ended 31 March 2020. 3. To re-elect Mr Goh Ching Lai, retiring by rotation, pursuant to Article 89 of the Company's Constitution. 4. To re-elect Mr Wong King Kheng, retiring by rotation, pursuant to Article 89 of the Company's Constitution. (Resolution 1) (Resolution 2) (Resolution 3) Mr Wong King Kheng, if re-elected will remain as an Independent Director as well as Chairman of the Audit Committee, and a Member of the Remuneration and Nominating Committees; and will be considered independent for the purpose of Rule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited. 5. To re-appoint Messrs Ernst & Young LLP as auditors of the Company and to authorise the Directors to fix their remuneration. AS SPECIAL BUSINESS To consider and, if thought fit, to pass the following ordinary resolutions with or without modifications:- 6. Approval of Non-Executive Directors' fees To approve the payment of Directors' fees of S$104,500/- to Non-Executive Directors for the financial year ended 31 March 2020 (2019: S$104,500/-). 7. Authority to allot and issue shares (Resolution 4) (Resolution 5) (Resolution 6) (a) "That, pursuant to Section 161 of the Companies Act, Chapter 50, and the listing rules of the Singapore Exchange Securities Trading Limited, approval be and is hereby given to the Directors of the Company at any time to such persons and upon such terms and for such purposes as the Directors may in their absolute discretion deem fit, to: (i) issue shares in the capital of the Company whether by way of rights, bonus or otherwise; (b) (ii) make or grant offers, agreements or options that might or would require shares to be issued or other transferable rights to subscribe for or purchase shares (collectively, "Instruments") including but not limited to the creation and issue of warrants, debentures or other instruments convertible into shares; (iii) issue additional Instruments arising from adjustments made to the number of Instruments previously issued in the event of rights, bonus or capitalisation issues; and (Notwithstanding the authority conferred by the shareholders may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while the authority was in force, provided always that (i) the aggregate number of shares to be issued pursuant to this resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this resolution) does not exceed 50% of the Company's issued share capital, of which the aggregate number of shares (including shares to be issued in pursuance of Instruments made or granted pursuant to this resolution) to be issued other than on a pro rata basis to shareholders of the Company does not exceed 20% of the issued share capital of the Company, and for the purpose of this resolution, the issued share capital shall be the Company's issued share capital at the time this resolution is passed, after adjusting for; 107#108[Notice Of Annual GENERAL MEETING a) new shares arising from the conversion or exercise of convertible securities, or new shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time this resolution is passed provided the options or awards were granted in compliance with Part VIII of Chapter 8 of the Listing Manual of the Singapore Exchange Securities Trading Limited, and c) any subsequent consolidation or subdivision of the Company's shares, and such authority shall, unless revoked or varied by the Company at a general meeting, continue in force until the conclusion of the next Annual General Meeting or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier." (Resolution 7) 8. To transact any other ordinary business which may be properly transacted at an Annual General Meeting. BY ORDER OF THE BOARD Lotus Isabella Lim Mei Hua Company Secretary Singapore. 9 September 2020 Explanatory Notes:- (Please see Explanatory Note 1) 1. The ordinary resolution in item no. 6 is to authorise the Directors of the Company from the date of the above Meeting until the next Annual General Meeting to issue shares and convertible securities in the Company up to an amount not exceeding in aggregate 50 percent of the issued share capital of the Company of which the total number of shares and convertible securities issued other than on a pro-rata basis to existing shareholders shall not exceed 20 percent of the issued share capital of the Company at the time the resolution is passed, for such purposes as they consider would be in the interests of the Company. This authority will, unless revoked or varied at a general meeting, expire at the next Annual General Meeting of the Company. Important Notes:- 1.Pre-Registration: The AGM is being convened, and will be held, by way of electronic means pursuant to the COVID-19 (Temporary Measures) (Alternative Arrangements for Meetings for Companies, Variable Capital Companies, Business Trusts, Unit Trusts and Debenture Holders) Order 2020. Alternative arrangements relating to, among others, attendance, submission of questions in advance and or/voting by proxy at the AGM are set out in this notice of AGM. This notice of AGM may be accessed at the URLS https://www.sgx.com/securities/equities/008#Company%Announcements. Members will not be able to attend the AGM physically. Members who wish to participate at the AGM may watch the AGM proceedings via a live audio-visual webcast or live audio-only stream ("Live Webcast"). To do so, members must pre-register their details including full name, NRIC/Passport/Company Registration No., contact number and email address on the Company's AGM pre-registration website at the URL https://on.skr.ma/ossia-agm before 9.30am on Monday, 21 September 2020 ("Registration Deadline") for the Company to verify their status as members. Verified members will receive an email by 9.30am on Wednesday, 23 September 2020 containing instructions to access the Live Webcast. Members must not forward the link or their log-in details to third persons who are not members or who are not entitled to attend the AGM proceedings. Members who do not receive an email by 9.30am on Wednesday, 23 September 2020 but have registered before the Registration Deadline should contact Frederick Ng by email to [email protected]. 108#109Notice Notice Of Annual GENERAL MEETING 2. Submission of Questions: The Company will not be addressing any questions raised by the members during the Meeting. Members who have any substantial and relevant questions in relation to any agenda item of this notice, shall submit their queries to the Company in advance, by Monday, 21 September 2020 on the Company's AGM pre-registration website at the URL https://on.skr.ma/ossia-agm. The Company will endeavor to upload the Company's responses to substantial and relevant queries from members on the SGXNet by Wednesday, 23 September 2020. 3. Submission of Proxy Form: Members will not be able to vote through the Live Webcast and voting is only through submission of proxy form. If a member (whether individual or corporate) wishes to exercise his/her/its voting rights at the AGM, he/she/it must appoint Chairman of the Meeting as his/her/its proxy to vote on his/her/its behalf at the AGM. In appointing Chairman of the Meeting as proxy, a member (whether individual or corporate) must give specific instructions as to voting, or abstentions from voting, in the proxy form, failing which, the appointment of Chairman of the Meeting as proxy for that resolution will be treated as invalid. The accompanying proxy form for the AGM is made available with this notice of AGM on the SGXNet at the URL https://www.sgx.com/securities/equities/008#Company%20Announcements on the same day. For CPF or SRS investors who wish to appoint Chairman of the Meeting as their proxy, they should approach their CPF and/or SRS Approved Nominees to submit their votes at least seven (7) working days before the AGM, i.e. by 5.00 p.m. on Monday, 14 September 2020. The instrument appointing Chairman of the Meeting as proxy must be: (a) (b) deposited at the office of the Company's Singapore Share Transfer Agent, Tricor Barbinder Share Registration Services, 80 Robinson Road, #11-02, Singapore 068898; or emailed to [email protected] (recommended), in either case, not less than 48 hours before the time appointed for holding the AGM, i.e. by 9.30 a.m. on Tuesday, 22 September 2020. Any incomplete/improperly completed proxy form (including proxy form which is not appointing "Chairman of the Meeting" as proxy) will be rejected by the Company. A member who wishes to submit an instrument of proxy must first download, complete and sign the proxy form, before submitting it by post to the address provided above, or scanning and sending it by email to the email address provided above. In view of the current COVID-19 situation and the related safe distancing measures which may make it difficult for members to submit completed proxy forms by post, members are strongly encouraged to submit completed proxy forms electronically via email. 109#110Notice Notice Of Annual GENERAL MEETING The Company shall be entitled to reject the instrument appointing Chairman of the Meeting as proxy if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing Chairman of the Meeting as proxy (including any related attachment) (such as in the case where the appointor submits more than one instrument appointing Chairman of the Meeting as proxy). In addition, in the case of members whose shares are entered against their names in the Depository Register, the Company may reject any instrument appointing Chairman of the Meeting as proxy lodged if such members are not shown to have shares entered against their names in the Depository Register as at 72 hours before the time appointed for the AGM, as certified by The Central Depository (Pte) Limited to the Company. 4. Annual Report and other documents: The annual report for the financial year ended 31 March 2020 which was issued on 9 September 2020 can be accessed from the SGXNet at the URL https://www.sgx.com/securities/equities/008#Company%20Announcements. No printed copies will be sent to members. PERSONAL DATA POLICY Where a member of the Company submits an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the AGM and/or any adjournment thereof, a member of the Company (i) consents to the collection, use and disclosure of the member's personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its agents) of proxies and representatives appointed for the AGM (including any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the AGM (including any adjournment thereof), and in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the "Purposes"), (ii) warrants that where the member discloses the personal data of the member's proxy(ies) and/or representative(s) to the Company (or its agents), the member has obtained the prior consent of such proxy(ies) and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/or representative(s) for the Purposes, and (iii) agrees that the member will indemnify the Company in respect of any penalties, liabilities, claims, demands, losses and damages as a result of the member's breach of warranty. 110#111OSSIA INTERNATIONAL LIMITED (Incorporated in the Republic of Singapore) (Company Registration No. 199004330K) PROXY FORM ANNUAL GENERAL MEETING 1. The Annual General Meeting ("AGM") will be held by electronic means pursuant to the COVID-19 (Temporary Measures) (Alternative Arrangements for Meetings for Companies, Variable Capital Companies, Business Trusts, Unit Trusts and Debenture Holders) Order 2020. 2. Alternative arrangements relating to attendance at the AGM via electronic means, submission of questions in advance of the AGM, addressing of substantial and relevant questions before or at the AGM & voting by appointing the Chairman of the Meeting as proxy at the AGM, are set out in the Notice of AGM dated 9 September 2020. 3. Due to the current COVID-19 restriction orders in Singapore, a member will not be able to attend the AGM in person. A member (whether individual or corporate) must appoint the Chairman of the Meeting as his/her/its proxy to attend, speak & vote on is/her/its behalf at the AGM if such member wishes to exercise his/her/its voting rights at the AGM. 4. For investors who have used their CPF/SRS monies buy shares in the Company, this proxy form is not valid for use and shall be ineffective for all intents and purposes if used or purported to be used by them. 5. CPF/SRS investors are requested to contact their respective Agent Banks for any queries they may have with regard to the appointment of the Chairman of the Meeting as the proxy. Please read the notes overleaf which contain instructions on, inter alia, the appointment of the Chairman of the Meeting as a member's proxy to attend, speak and vote on his/her/its behalf at the AGM. * I/We of (Address) (Name) (NRIC/Passport No) being *a member/members of Ossia International Limited (the "Company"), hereby appoint the Chairman of the Meeting as my/our proxy to vote for me/us at the Annual General Meeting of Straco Corporation Limited (the "Company") to be held by electronic means on Thursday, 24 September 2020 at 9.30 a.m., and at any adjournment thereof. We have indicated with an "X" in the appropriate box against each item below how I/we wish the Chairman of the Meeting as my/our proxy to vote, or to abstain from voting. PROXY FORM No. Ordinary Resolutions For Against Abstain** 1 To receive and consider the Audited Financial Statements of the Company for the financial year ended 31 March 2020 and the Directors' Statement and Auditors' Report thereon. 2 To declare a Final tax exempt (one-tier) dividend of 0.9 Singapore cents per ordinary share for the year ended 31 March 2020. 3 To re-elect Mr Goh Ching Lai as a Director pursuant to Article 89 of the Company's Constitution. 4 To re-elect Mr. Wong King Kheng as a Director, pursuant to Article 89 of the Company's Constitution. 5 6 To re-appoint Messrs Ernst & Yong LLP as auditors of the Company and to authorise the Directors to fix their remuneration. Approval of Non-Executive Directors' Fees. 7 To authorise Directors to issue shares pursuant to Section 161 of the companies Act, Cap 50. Note: Voting will be conducted by poll. If you wish the Chairman of the Meeting as your proxy to cast all your votes "For" or "Against" a resolution, please indicate with an "X" in the "For" or "Against" box provided in respect of that resolution. Alternatively, please indicate the number of votes "For" or "Against" in the "For" or "Against" box provided in respect of that resolution. If you wish the Chairman of the Meeting as your proxy to abstain from voting on a resolution, please indicate with an "X" in the "Abstain" box provided in respect of that resolution. Alternatively, please indicate the number of ordinary shares that the Chairman of the Meeting as your proxy is directed to abstain from voting in the "Abstain" box provided in respect of that resolution. In the absence of specific directions in respect of a resolution, the appointment of the Chairman of the Meeting as your proxy for that resolution will be treated as invalid. Dated this day of Signature(s) of Member(s)/ Common Seal IMPORTANT. Please Read Notes before Completing this Proxy Form 2020 111 Total number of Shares in: No. of Shares held (a) CDP Register (b) Register of Members#112Notes:- 1. This instrument appointing a proxy or proxies must be under the hand of the appointer or his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed under its common seal or under the hand of its attorney or duly authorised officer. 2. Due to the current Covid-19 restriction orders in Singapore, a member will not be able to attend the Annual General Meeting in person. A member (whether individual or corporate) must appoint the Chairman of the Meeting as his/her/its proxy to attend, speak and vote on his/her/its behalf at the Annual General Meeting if such member wishes to exercise his/her/its voting rights at the Annual General Meeting. 3. The instrument appointing proxy or proxies, together with the power of attorney or other authority (if any) under which it is signed, or notarially certified copy thereof, may be (a) deposited at the office of the Company's Share Registrar, Tricor Barbinder Share Registration Services at 80 Robinson Road, #11-02 Singapore 068898, or (b) submitted by email to [email protected] (recommended) not later than 48 hours before the time set for the Annual General Meeting. In view of the current COVID-19 situation and the related safe distancing measures which may make it difficult for members to submit completed proxy forms by post, members are strongly encouraged to submit completed proxy forms electronically via email. 4. A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (maintained by The Central Depository (Pte) Limited), he should insert that number of shares. If the member has shares registered in his name in the Register of Members (maintained by or on behalf of the Company), he should insert the number of shares. If the member has shares entered against his name in the Depository Register and shares registered in his name in the Register of Members of the Company, he should insert the aggregate number of shares. If no number of shares is inserted, this form of proxy will be deemed to relate to all the shares held by the member. 5. The Company shall be entitled to reject the instrument appointing the Chairman as proxy if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of members of the Company whose shares are entered against their names in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if such members are not shown to have shares entered against their names in the Depository Register 48 hours before the time appointed for holding the Annual General Meeting as certified by The Central Depository (Pte) Limited to the Company. PERSONAL DATA PRIVACY By submitting an instrument appointing a proxy(ies) and/or representative(s), the member accepts and agrees to the personal data privacy terms set out in the Notice of Annual General Meeting dated 9 September 2020. The Company Secretary OSSIA INTERNATIONAL LIMITED c/o Tricor Barbinder Share Registration Services (A divison o Tricor Singapore Pte Ld.) 80 Robinson Road #11-02 Singapore 068898 112 AFFIX STAMP#113TRUE RELIGION® ひ OSSIA OFFICES SINGAPORE Ossia International Limited 51 Changi Business Park Central 2, #08-13 The Signature, Singapore 486066 Tel: (65) 6543 1133 Fax: (65) 6543 5800 MALAYSIA Alstyle Marketing Sdn Bhd No. 5, Jalan Suria Park 1, Suria Industrial Park, kawasan Perindustrian Kg. Baru balakong, 43300 Seri Kembangan Selangor Darul Ehsan Malaysia Tel: 603 8964 9422 Fax: 603 8964 9522 TAIWAN Great Alps Industry Co. Ltd 11F, No. 32, Section 3, Bade Road, Songshan District, Taipei City 10559 Taiwan, ROC Tel: (886-2) 2570 0918 Fax: (886-2) 2570 1911#11451 Changi Business Park Central 2, #08-13 The Signature, Singapore 486066 Tel: (65) 6543 1133 Fax: (65) 6543 5800 KANGOL