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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 8/30/22 AMTD Digital Inc. 20-F 4/30/22 150:15M Donnelley … Solutions/FA |
Document/Exhibit Description Pages Size
1: 20-F Annual or Annual-Transition Report by a Foreign HTML 4.19M
Non-Canadian Issuer
2: EX-2.4 Plan of Acquisition, Reorganization, Arrangement, HTML 128K
Liquidation or Succession
3: EX-4.17 Instrument Defining the Rights of Security Holders HTML 73K
4: EX-8.1 Opinion of Counsel re: Tax Matters HTML 45K
7: EX-13.1 Annual or Quarterly Report to Security Holders HTML 41K
8: EX-13.2 Annual or Quarterly Report to Security Holders HTML 41K
5: EX-12.1 Statement re: the Computation of Ratios HTML 46K
6: EX-12.2 Statement re: the Computation of Ratios HTML 45K
14: R1 Cover Page HTML 123K
15: R2 Consolidated Statements Of Profit Or Loss And HTML 109K
Other Comprehensive Income
16: R3 Consolidated Statements Of Financial Positions HTML 118K
17: R4 Consolidated Statements Of Changes In Equity HTML 84K
18: R5 Consolidated Statements Of Changes In Equity HTML 44K
(Parenthetical)
19: R6 Consolidated Statements Of Cash Flow HTML 148K
20: R7 General HTML 67K
21: R8 Group Reorganization HTML 52K
22: R9 Adoption of New Financial Reporting Framework and HTML 68K
New and Revised Standards in Issue But Not Yet
Effective
23: R10 Basis of Preparation and Presentation of HTML 179K
Consolidated Financial Statements and Significant
Accounting Policies
24: R11 Key Sources Of Estimation Uncertainty HTML 52K
25: R12 Revenue HTML 129K
26: R13 Operating Segments HTML 153K
27: R14 Changes In Fair Value On Financial Assets Measured HTML 51K
At FVTPL
28: R15 Other Income HTML 59K
29: R16 Other Gains And Losses, Net HTML 56K
30: R17 Income Tax Expense HTML 73K
31: R18 Profit for the Year HTML 58K
32: R19 Earnings Per Share HTML 60K
33: R20 Acquisition of a Subsidiary HTML 71K
34: R21 Goodwill HTML 51K
35: R22 Intangible Assets HTML 89K
36: R23 Property, Plant And Equipment HTML 66K
37: R24 Financial Assets at Fair Value Through Profit or HTML 55K
Loss
38: R25 Accounts and Other Receivables HTML 71K
39: R26 Accounts and Other Payables HTML 51K
40: R27 Contract Liabilities HTML 58K
41: R28 Deferred Tax Liability HTML 50K
42: R29 Share Capital HTML 106K
43: R30 Non-Controlling Interests HTML 57K
44: R31 Capital Risk Management HTML 45K
45: R32 Financial Instruments HTML 204K
46: R33 Related Party Disclosures HTML 64K
47: R34 Share-Based Compensation HTML 64K
48: R35 Reconciliation of Liabilities Arising from HTML 64K
Financing Activities
49: R36 Other Commitment HTML 46K
50: R37 Regulatory Requirement HTML 44K
51: R38 Events After the Reporting Period HTML 51K
52: R39 Approval of Consolidated Financial Statements HTML 44K
53: R40 Basis of Preparation and Presentation of HTML 204K
Consolidated Financial Statements and Significant
Accounting Policies (Policies)
54: R41 General (Tables) HTML 61K
55: R42 Revenue (Tables) HTML 128K
56: R43 Operating Segments (Tables) HTML 143K
57: R44 Changes In Fair Value On Financial Assets Measured HTML 49K
At FVTPL (Tables)
58: R45 Other Income (Tables) HTML 59K
59: R46 Other Gains And Losses, Net (Tables) HTML 55K
60: R47 Income Tax Expense (Tables) HTML 72K
61: R48 Profit for the Year (Tables) HTML 57K
62: R49 Earnings Per Share (Tables) HTML 59K
63: R50 Acquisition of a Subsidiary (Tables) HTML 69K
64: R51 Goodwill (Tables) HTML 47K
65: R52 Intangible Assets (Tables) HTML 90K
66: R53 Property, Plant And Equipment (Tables) HTML 68K
67: R54 Financial Assets at Fair Value Through Profit or HTML 49K
Loss (Tables)
68: R55 Accounts and Other Receivables (Tables) HTML 64K
69: R56 Accounts and Other Payables (Tables) HTML 50K
70: R57 Contract Liabilities (Tables) HTML 59K
71: R58 Deferred Tax Liability (Tables) HTML 50K
72: R59 Share Capital (Tables) HTML 105K
73: R60 Non-Controlling Interests (Tables) HTML 56K
74: R61 Financial Instruments (Tables) HTML 192K
75: R62 Related Party Disclosures (Tables) HTML 58K
76: R63 Share-Based Compensation (Tables) HTML 58K
77: R64 Reconciliation of Liabilities Arising from HTML 63K
Financing Activities (Tables)
78: R65 General - Additional information (Detail) HTML 57K
79: R66 General - Summary of Detailed Information of HTML 82K
Groups Principal Subsidiaries (Detail)
80: R67 Group Reorganization - Additional Information HTML 63K
(Details)
81: R68 Basis of Preparation and Presentation of HTML 56K
Consolidated Financial Statements and Significant
Accounting Policies - Additional information
(Detail)
82: R69 Key Sources Of Estimation Uncertainty - Additional HTML 47K
Information (Detail)
83: R70 Revenue - Summary of Disaggregation of Revenue HTML 83K
from Contracts with Customers (Detail)
84: R71 Revenue - Summary of Transaction Price Allocated HTML 52K
To The Remaining Performance Obligation For
Contracts With Customers (Detail)
85: R72 Revenue - Additional Information (Detail) HTML 52K
86: R73 Operating Segments - Summary of Reportable HTML 86K
Segments (Detail)
87: R74 Operating Segments - Additional Information HTML 61K
(Detail)
88: R75 Operating Segments - Summary of Revenue from HTML 59K
Customers (Detail)
89: R76 Operating Segments - Summary of Revenue from HTML 43K
Customers (Parenthetical) (Detail)
90: R77 Changes In Fair Value On Financial Assets Measured HTML 44K
At FVTPL - Summary Of Changes In Fair Value
(Detail)
91: R78 Changes In Fair Value On Financial Assets Measured HTML 49K
At FVTPL - Additional Information (Detail)
92: R79 Other Income - Summary Of Other Income (Detail) HTML 49K
93: R80 Other Income - Summary Of Other Income HTML 43K
(Parenthetical) (Detail)
94: R81 Other Gains And Losses, Net - Summary Of Other HTML 51K
Gains And Losses Net (Detail)
95: R82 Income Tax Expense - Summary of income Tax HTML 52K
Expenses (Detail)
96: R83 Income Tax Expense - Additional Information HTML 58K
(Detail)
97: R84 Income Tax Expense - Summary Of Effective Income HTML 66K
Tax Rate Reconciliation (Detail)
98: R85 Income Tax Expense - Summary Of Effective Income HTML 43K
Tax Rate Reconciliation (Parenthetical) (Detail)
99: R86 Profit for the Year - Summary of Profit for the HTML 53K
Year (Detail)
100: R87 Earnings Per Share - Summary of the Basic and HTML 50K
Diluted Earnings Per Share Attributable to Owners
of the Company (Details)
101: R88 Acquisition of a Subsidiary - Additional HTML 78K
Information (Detail)
102: R89 Acquisition of a Subsidiary - Summary of HTML 47K
Consideration Transferred (Detail)
103: R90 Acquisition of a Subsidiary - Summary of Assets HTML 57K
Acquired and Liabilities Recognized at the Date of
Acquisition (Detail)
104: R91 Acquisition of a Subsidiary - Summary of Goodwill HTML 51K
Arising on Acquisition (Detail)
105: R92 Acquisition of a Subsidiary - Summary of Cash HTML 47K
Inflow on Acquisition (Detail)
106: R93 Goodwill - Schedule of Goodwill (Detail) HTML 46K
107: R94 Goodwill - Schedule of Goodwill (Parenthetical) HTML 43K
(Detail)
108: R95 Goodwill - Additional Information (Detail) HTML 53K
109: R96 Intangible Assets - Summary of Detailed HTML 74K
Information About Intangible Assets (Detail)
110: R97 Intangible Assets - Additional Information HTML 56K
(Detail)
111: R98 Intangible Assets - Summary of Intangible Assets HTML 48K
with Indefinite Useful Life (Detail)
112: R99 Property, Plant And Equipment - Summary of HTML 63K
Detailed Information About Property Plant and
Equipment (Detail)
113: R100 Property, Plant And Equipment - Summary of HTML 45K
Estimated Useful Lives of Property Plant and
Equipment (Detail)
114: R101 Financial Assets at Fair Value Through Profit or HTML 49K
Loss - Summary of Financial Assets at Fair Value
through Profit or Loss Explanatory (Detail)
115: R102 Financial Assets at Fair Value Through Profit or HTML 60K
Loss - Summary of Financial Assets at Fair Value
through Profit or Loss Explanatory (Parenthetical)
(Detail)
116: R103 Accounts and Other Receivables - Summary of HTML 69K
Detailed Information of Accounts and Other
Receivables (Detail)
117: R104 Accounts and Other Receivables - Summary of HTML 57K
Detailed Information of Accounts and Other
Receivables (Parenthetical) (Detail)
118: R105 Accounts and Other Receivables - Additional HTML 56K
Information (Detail)
119: R106 Accounts and Other Payables - Summary of Accounts HTML 50K
and Other Payables (Detail)
120: R107 Accounts and Other Payables - Additional HTML 42K
Information (Detail)
121: R108 Contract Liabilities - Summary of Contract HTML 50K
Liabilities (Detail)
122: R109 Contract Liabilities - Additional information HTML 43K
(Detail)
123: R110 Contract Liabilities - Summary of Revenue HTML 45K
Recognized from Contract Liabilities (Detail)
124: R111 Deferred Tax Liability - Summary of Deferred Tax HTML 48K
Liability Recognized and Movements (Detail)
125: R112 Share Capital - Schedule of Issued share capital HTML 95K
(Detail)
126: R113 Share Capital - Schedule of Issued share capital HTML 164K
(Parenthetical) (Detail)
127: R114 Non-Controlling Interests - Summary of HTML 64K
Non-Controlling Interests (Detail)
128: R115 Non-Controlling Interests - Summary of HTML 51K
Non-Controlling Interests (Parenthetical) (Detail)
129: R116 Financial Instruments - Summary of Categories of HTML 50K
financial instruments (Detail)
130: R117 Financial Instruments - Summary of entity internal HTML 64K
credit risk grading assessment (Detail)
131: R118 Financial Instruments - Summary of Credit Risk HTML 69K
Exposures of the Financial Assets, Which are
Subject to ECL Assessment (Detail)
132: R119 Financial Instruments - Summary of Maturity HTML 67K
analysis for Nonderivative Financial Liabilities
(Detail)
133: R120 Financial Instruments - Summary of Financial HTML 67K
Assets that are Measured at Fair Value on a
Recurring Basis (Detail)
134: R121 Financial Instruments - Summary of Financial HTML 72K
Assets that are Measured at Fair Value on a
Recurring Basis (Parenthetical) (Detail)
135: R122 Financial Instruments - Summary of Reconciliation HTML 69K
of Level 3 fair value measurements (Detail)
136: R123 Financial Instruments - Additional Information HTML 78K
(Detail)
137: R124 Related Party Disclosures - Summary of Disclosure HTML 72K
of Transactions Between Related Parties (Detail)
138: R125 Related Party Disclosures - Additional Information HTML 54K
(Detail)
139: R126 Share-Based Compensation - Summary of Non-vested HTML 57K
Shares and RSUs Movement (Detail)
140: R127 Share-Based Compensation - Additional Information HTML 58K
(Detail)
141: R128 Reconciliation of Liabilities Arising from HTML 59K
Financing Activities - Summary of Changes in
Liabilities Arising from Financing Activities
(Detail)
142: R129 Reconciliation of Liabilities Arising from HTML 51K
Financing Activities - Summary of Changes in
Liabilities Arising from Financing Activities
(Parenthetical) (Detail)
143: R130 Other Commitment - Additional Information (Detail) HTML 58K
144: R131 Regulatory Requirement - Additional Information HTML 45K
(Detail)
145: R132 Events After the Reporting Period - Additional HTML 76K
Information (Detail)
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| Form 20-F |
i ☐ |
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
i ☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
i ☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
i ☐ |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| Title of Each Class |
Trading Symbol |
Name of Each Exchange on Which Registered | ||
i American depositary shares, each representing 0.4 Class A ordinary shares, par value US$0.0001 per share i Class A ordinary shares, par value US$0.0001 per share* |
i HKD |
i New York Stock Exchange |
* |
i Not for trading, but only in connection with the listing of American depositary shares on the New York Stock Exchange. |
Large accelerated filer |
☐ |
Accelerated filer |
☐ |
i Non-accelerated filer |
☒ | |||||
Emerging growth company |
i ☒ | |||||||||
U.S. GAAP ☐ |
i International Financial Reporting Standards as issued by the |
Other ☐ | ||
International Accounting Standards Board ☒ |
Page |
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2 |
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4 |
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ITEM 1. |
7 |
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ITEM 3. |
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ITEM 4. |
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ITEM 4A. |
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ITEM 12. |
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ITEM 15. |
129 |
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ITEM 16A. |
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ITEM 16B. |
130 |
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ITEM 16C. |
131 |
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ITEM 16D. |
131 |
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ITEM 16E. |
131 |
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ITEM 16F. |
131 |
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ITEM 16G. |
131 |
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ITEM 16H. |
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ITEM 16I. |
132 |
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ITEM 17. |
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ITEM 18. |
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ITEM 19. |
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135 |
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| • | “ADRs” refers to the American depositary receipts that evidence the ADSs; |
| • | “ADSs” refers to our American depositary shares, every five of which represents two Class A ordinary shares; |
| • | “AMTD Group” refers to the Controlling Shareholder and its subsidiaries; |
| • | “China” or “PRC” refers to the People’s Republic of China; |
| • | “Class A ordinary shares” refers to our Class A ordinary shares of par value US$0.0001 each; |
| • | “Class B ordinary shares” refers to our Class B ordinary shares of par value US$0.0001 each; |
| • | “Controlling Shareholder” refers to AMTD Group Company Limited, a British Virgin Islands company; |
| • | “HK$” or “Hong Kong dollars” refers to the legal currency of Hong Kong; |
| • | “Hong Kong” refers to the Hong Kong Special Administrative Region of the People’s Republic of China; |
| • | “NYSE” refers to the New York Stock Exchange; |
| • | “SEC” refers to the United States Securities and Exchange Commission; |
| • | “S$” or “Singapore dollars” refers to the legal currency of Singapore; |
| • | “SEHK” refers to the Stock Exchange of Hong Kong Limited; |
| • | “SGX-ST” refers to the Singapore Exchange Securities Trading Limited; |
| • | “shares” or “ordinary shares” refers to our Class A ordinary shares and Class B ordinary shares; |
| • | “US$” or “U.S. dollars” refers to the legal currency of the United States; and |
| • | “we,” “us,” “our company,” or “our” refers to AMTD Digital Inc., a Cayman Islands exempted company with limited liability, and its subsidiaries. |
| • | our goals and strategies; |
| • | our future business development, financial condition and results of operations; |
| • | the trends in, expected growth and market size of the financial services industry in Hong Kong; |
| • | expected changes in our revenues, costs or expenditures; |
| • | our expectations regarding demand for and market acceptance of our products and services; |
| • | competition in our industry; |
| • | our proposed use of proceeds; |
| • | government policies and regulations relating to our industry; |
| • | fluctuations in general economic and business conditions in China, Singapore, and globally; and |
| • | assumptions underlying or related to any of the foregoing. |
ITEM 1. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. |
KEY INFORMATION |
A. |
[Reserved] |
B. |
Capitalization and Indebtedness |
C. |
Reasons for the Offer and Use of Proceeds |
D. |
Risk Factors |
| • | The PRC government’s significant authority to intervene in or influence the mainland China operations of an offshore holding company at any time could limit our ability to transfer or use our cash outside of China, and otherwise result in material adverse change in our operations and the value of the ADSs. |
| • | Uncertainties arising from the legal system in mainland China, including uncertainties regarding the interpretation and enforcement of laws in mainland China and the possibility that regulations and rules can change quickly with little advance notice, could hinder our ability to offer or continue to offer the ADSs, result in a material adverse change to our business operations, and damage our reputation, which would materially and adversely affect our financial condition and results of operations and cause the ADSs to significantly decline in value or become worthless. |
| • | The PCAOB is currently unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections over our auditor deprives our investors with the benefits of such inspections. |
| • | The ADSs will be prohibited from trading in the United States under the HFCAA in 2024 if the PCAOB is unable to inspect or fully investigate auditors located in mainland China and Hong Kong, or in 2023 if proposed changes to the law are enacted. The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment. |
| • | Although we do not have any material operation in mainland China and plan to emphasize Southeast Asia as our core future area of growth, we face risks and uncertainties associated with the complex and evolving laws and regulations in mainland China and as to whether and how the recent PRC government statements and regulatory developments, such as those relating to data and cyberspace |
| security and anti-monopoly concerns, would apply to us. Should these statements or regulatory actions apply to us in the future, or if we expand our business operations into mainland China leveraging our fusion-in program, through AMTD SpiderNet ecosystem or in some other ways such that we become subject to them to a greater extent, our ability to conduct our business, invest into mainland China as foreign investments or accept foreign investments, or list on a U.S. or other overseas exchange may be restricted. For example, if the recent PRC regulatory actions on data security or other data-related laws and regulations were to apply to us, we could become subject to certain cybersecurity and data privacy obligations, including the potential requirement to conduct a cybersecurity review for our public offerings at a foreign stock exchange, and the failure to meet such obligations could result in penalties and other
regulatory actions against us and may materially and adversely affect our business, financial condition, and results of operations. |
| • | As we do not currently have any material operation or maintain any office or personnel in mainland China and have not collected, stored, or managed any personal information in mainland China, we believe that we are not required to obtain any permission from PRC authorities to operate and issue our securities to foreign investors as of the date of this annual report, including permissions requirements from the CSRC or CAC. However if (i) we inadvertently concluded that certain permissions or approvals are not required, or (ii) applicable laws, regulations, or interpretations thereof change and we become subject to the requirement of additional permissions or approvals in the future, we may have to expend significant time and costs to procure them. If we are unable to do so, on commercially reasonable terms, in a timely manner or otherwise, we may become subject to sanctions imposed by the PRC authorities, which could include
fines and penalties, proceedings against us, and other forms of sanctions, and our ability to conduct our business, invest into mainland China as foreign investments or accept foreign investments, or list on a U.S. or other overseas exchange may be restricted, and our business, reputation, financial condition, and results of operations may be materially and adversely affected. |
| • | We operate in the emerging, dynamic, and competitive digital financial services industry, which makes it difficult for investors to evaluate our future prospects, and we cannot assure you that our current or future strategies will be successfully implemented or will generate sustainable profit. |
| • | We have a limited operating history and experience in our SpiderNet ecosystem solutions business, which makes it difficult to evaluate our business. We cannot assure you that the market for our services will develop as we expect or that we will be able to maintain the growth rate that we have experienced to date. |
| • | We and our Controlling Shareholder have a limited operating history and experience in the newly developed digital banking business in Asia, which makes it difficult to evaluate our business. We cannot assure you that the digital banking initiatives of our Controlling Shareholder and our company will develop or succeed as we expect. |
| • | We face additional risks as we offer new products and services, transact with a broader array of clients and counterparties, and expose ourselves to new geographical markets. |
| • | If we fail to develop market leading products or provide satisfactory services to address the rapidly evolving market in a timely manner, and if we are not able to implement successful enhancements and new features for our products and services, we may not be able to attract or retain clients. |
| • | Failure to maintain and enlarge our AMTD SpiderNet ecosystem including our client base or strengthen client engagement may adversely affect our business and results of operations. |
| • | Failure to obtain, renew, or retain licenses, permits, or approvals may affect our ability to conduct or expand our business. |
| • | We are subject to extensive and developing regulatory requirements, and noncompliance with or changes to these regulatory requirements may affect our business operations and financial results. |
| • | AMTD Digital Inc. is not an operating company but a holding company incorporated in the Cayman Islands, and this structure involves unique risks to investors. We may rely on dividends from our subsidiaries for our cash requirements, including any payment of dividends to our shareholders. The ability of our subsidiaries to pay dividends to us may be restricted by the debt they incur on their own behalf or laws and regulations applicable to them. Our digital investments business is subject to liquidity risks, and we may need additional financing but may not be able to obtain it on favorable terms or at all. All of these may impose liquidity risks on us and adversely affect our ability to pay dividends to our shareholders. See “Item 5. Operating
And Financial Review And Prospects—B. Liquidity and Capital Resources—Holding Company Structure,” “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—Our digital investment business is subject to liquidity risks,” and “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—We may need additional financing but may not be able to obtain it on favorable terms or at all.” |
| • | We have limited experience operating as a stand-alone public company. |
| • | Our financial information included in this annual report may not be representative of our financial condition and results of operations if we had been operating as a stand-alone company. |
| • | We may not continue to receive the same level of support from our Controlling Shareholder. |
| • | The trading price of the ADSs has been volatile and could continue to fluctuate significantly, which could result in substantial losses to you. |
| • | An active public market may not develop for the ADSs on the NYSE, and you may not be able to resell the ADSs at or above the price you paid, or at all. |
| • | You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions against us or our directors and officers named in this annual report based on foreign laws |
| • | maintain the value proposition of AMTD SpiderNet ecosystem; |
| • | build a well-recognized and respected brand; |
| • | acquire and/or operate existing or future digital financial licenses; |
| • | establish and expand our client base; |
| • | maintain and enhance our relationships with our business partners; |
| • | attract, retain, and motivate talented employees; |
| • | anticipate and adapt to changing market conditions and competitive landscape; |
| • | manage our future growth; |
| • | ensure that the performance of our products and services meets client expectations; |
| • | maintain or improve our operational efficiency; |
| • | navigate a complex and evolving regulatory environment; |
| • | defend ourselves in any legal or regulatory actions against us; |
| • | enhance our technology infrastructure and maintain the security of our system and the confidentiality of the information provided and utilized across our system; |
| • | avoid and remedy operating errors as a result of human or system errors; and |
| • | identify and address conflicts of interest. |
| • | enrich the AMTD SpiderNet ecosystem; |
| • | identify business synergies and enhance connectivity for our clients; |
| • | enrich our content offerings; |
| • | retain existing clients and attract new clients; |
| • | offer customized and comprehensive services tailored to corporates’ needs throughout their lifecycles; |
| • | upgrade existing technology and infrastructure and develop new technologies; |
| • | successfully compete with other companies that are currently in, or may in the future enter, our industry or similar industries; and |
| • | observe and strategize on the latest market trends. |
| • | we may have insufficient experience or expertise in offering new products and services and dealing with inexperienced counterparties and clients may harm our reputation; |
| • | we may be subject to stricter regulatory scrutiny, or increasing exposure to credit risks, market risks, compliance risks, and operational risks; |
| • | we may be unable to provide clients with adequate levels of service for our new products and services; |
| • | our new products and services may not be accepted by our clients or meet our profitability expectations; and |
| • | our new products and services may be quickly copied by our competitors so that its attractiveness to our clients may be diluted. |
| • | our ability to continually innovate our technologies to keep pace with rapid technological changes; |
| • | our ability to continually innovate our solutions in response to evolving client demands and expectations and intense market competition; |
| • | our ability to customize solutions for our clients; |
| • | client satisfaction with our solutions, including any new solutions that we may develop, and the competitiveness of our pricing and payment terms; and |
| • | the effectiveness of our solutions in helping our clients improve efficiency, enhance service quality, and reduce costs. |
| • | ever changing global environment, including changes in U.S. and international trade policies; |
| • | challenges associated with relying on local partners in markets that are not as familiar to us, including joint venture partners to help us establish our business; |
| • | difficulties managing operations in new regions, including complying with the various regulatory and legal requirements; |
| • | different approval or licensing requirements; |
| • | recruiting sufficient suitable personnel in new markets; |
| • | challenges in providing services and solutions as well as support in these new markets; |
| • | challenges in attracting business partners and clients; |
| • | potential adverse tax consequences; |
| • | foreign exchange losses; |
| • | limited protection for intellectual property rights; |
| • | inability to effectively enforce contractual or legal rights; and |
| • | local political, regulatory and economic instability or wars, civil unrest, and terrorist incidents. |
| • | Indemnification arrangements with our Controlling Shareholder. |
| for liabilities incurred (including legal defense costs) in connection with any third party claim if it is ultimately determined that we are obligated to indemnify our Controlling Shareholder with respect to such third party claim. |
| • | Non-competition arrangements with our Controlling Shareholder.non-competition agreement under which our Controlling Shareholder agrees not to compete with us in our digital financial services, SpiderNet ecosystem solutions, digital media, content, and marketing, and digital investments businesses, except for owning non-controlling equity interest in any company competing with us. We agree not to compete with our Controlling Shareholder in the respective businesses then conducted by our Controlling Shareholder, except that we may own non-controlling equity interests in any company competing with our Controlling Shareholder. |
| • | Employee recruiting and retention. non-competition agreement and have a non-solicitation arrangement with our Controlling Shareholder that restricts us and our Controlling Shareholder from hiring any of each other’s employees. |
| • | Our board members or executive officers may have conflicts of interest. |
| • | Sale of shares or assets in our company. lock-up period and subject to certain restrictions under relevant securities laws and stock exchange rules, as well as other relevant restrictions, our Controlling Shareholder may decide to sell all or a portion of our shares that it holds to a third party, including to one of our competitors, thereby giving that third party substantial influence over our business and our affairs. In addition, our Controlling Shareholder may decide, or be obligated under any of its applicable debt covenant, to sell all or a portion of our shares or our assets in the event of default of our Controlling Shareholder or any of its controlling shareholders under any applicable debt or other obligations or otherwise becomes insolvent. Such a sale
of our shares or our assets could be contrary to the interests of our employees or our other shareholders. In addition, our Controlling Shareholder may also discourage, delay, or prevent a change in control of our company, which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of the ADSs. |
| • | Allocation of business opportunities. |
| • | Developing business relationships with our Controlling Shareholder’s competitors. |
| • | regulatory developments affecting us or our industry; |
| • | variations in our revenue, profit, and cash flow; |
| • | changes in the economic performance or market valuations of other financial services firms; |
| • | actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; |
| • | changes in financial estimates by securities research analysts; |
| • | detrimental negative publicity about us, our services, our officers, directors, Controlling Shareholder, other beneficial owners, our business partners, or our industry; |
| • | announcements by us or our competitors of new service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; |
| • | additions to or departures of our senior management; |
| • | litigation or regulatory proceedings involving us, our officers, directors, or Controlling Shareholders; |
| • | release or expiry of any transfer restrictions on our outstanding shares or the ADSs; and |
| • | sales or perceived potential sales of additional ordinary shares or ADSs. |
| • | we have instructed the depositary that we wish a discretionary proxy to be given; |
| • | we reasonably do not know of any substantial opposition to the matter to be voted on at the meeting; and |
| • | the matter to be voted on at the meeting is not materially adverse to the interests of shareholders. |
| • | the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; |
| • | the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; |
| • | the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and |
| • | the selective disclosure rules by issuers of material nonpublic information under Regulation FD. |
ITEM 4. |
INFORMATION ON THE COMPANY |
A. |
History and Development of the Company |
B. |
Business Overview |
| • | Digital Financial Services. one-stop, cross-market and intelligent digital financial services for retail and corporate clients in Asia. We possess and are in the process of applying for some of the most scarce digital financial licenses in Asia and provide a variety of digital financial services. |
| • | SpiderNet Ecosystem Solutions. |
| • | Digital Media, Content, and Marketing |
| • | Digital Investments. |
| • | Deposit . |
| • | Personal Loan . |
| • | Virtual Credit Card . |
| • | Fund Transfer . Airstar Bank offers inter-bank fund transfer services through Faster Payment System and Real Time Gross Settlement with no service fee charged. |
| • | Corporate Services . Airstar Bank will provide integrated services to corporates covering a full range of corporate operations, including transaction settlement services, payroll services, transfers, and remittance. To facilitate tailor-made credit and financing services for corporates, Airstar Bank will adopt blockchain technology to gain real-time access to the corporate’s information, such as cash flows, sales and purchase transactions, and inventory information. |
| • | Cross Border Remittance . |
| • | Near Field Communication (NFC) Payment . |
| • | Comprehensive Corporate Solutions . |
| • | Personal Lifestyle Banking . |
| • | Property Risk . all-risk and construction all-risk solutions that may include relevant insurance products underwritten by our insurance partners. |
| • | Liability Risk . |
| • | Financial Loss Risk . |
| • | Personal Risk . |
| • | Comprehensive Risk Identification . In consultation with clients, we leverage our expertise in the insurance industry to conduct a comprehensive analysis and determination of total risk exposure and risk tolerance. For insurable risks, we also conduct a mapping of existing risk coverage across industries, types, and geographical regions. |
| • | Optimal Solution and Coverage Structure Design . Based on our extensive knowledge in the insurance industry, we conduct tailored consultation and optimal insurance program structure and solution design to meet the demands of clients. |
| • | Insurance Placement for Insurable Risks . |
| • | a stable financial system; |
| • | safe and sound financial intermediaries; |
| • | safe and efficient financial infrastructure; |
| • | fair, efficient and transparent organized markets; |
| • | transparent and fair-dealing intermediaries and offerors; and |
| • | well-informed and empowered consumers. |
| • | grant licenses, authorization, approvals or registrations to those who meet the relevant criteria to be licensed, authorized, approved or registered, as the case may be, under the IA, and can demonstrate fitness and propriety; |
| • | monitor the ongoing compliance of regulated entities, and their officers and shareholders (where applicable), with business conduct and other requirements; |
| • | maintain online a public register of insurance entities (the MAS Financial Institutions Directory); and |
| • | develop regulatory policies. |
| • | the applicant’s track record (which should be at least 3 years in respect of the type of insurance broking business it intends to carry on in Singapore), financial soundness and reputation; |
| • | whether the applicant has well-developed business plans that reflect the risk profile of the business; and |
| • | the fitness and propriety of the applicant, its directors and chief executive officer, and all its substantial shareholders and broking staff, or the relevant persons. |
| • | the IA, and its subsidiary legislation, including the Insurance (Intermediaries) Regulations, or the IIR; |
| • | Notice 501 Quarterly Statement on Ageing of Premiums Owing to Insurers; |
| • | Notice 502 Minimum Standards and Continuing Professional Development for Insurance Brokers and Their Broking Staff; |
| • | Notice 504 Reporting of Misconduct of Broking Staff by Insurance Brokers; |
| • | Notice 505 Reporting of Suspicious Activities and Incidents of Fraud; |
| • | Notice 506 Notice on Technology Risk Management; |
| • | Notice 507 Cyber Hygiene; |
| • | Notice 117 Training and Competency Requirement: Health Insurance; |
| • | Notice 120 Disclosure and Advisory Process Requirements For Accident and Health Insurance Products; |
| • | Guidelines on Criteria for the Registration of an Insurance Broker [Guideline No. IA/II-G04]; |
| • | Guidelines on Standards of Conduct for Insurance Brokers [Guideline No. IA/II-G01]; |
| • | Guidelines on Market Conduct and Service Standards for Insurance Brokers [Guideline No. IA/II-G02]; |
| • | Guidelines on Fit and Proper Criteria [Guideline No. FSG-G01], or the Fit and Proper Guidelines; |
| • | Guidelines on Risk Management Practices; |
| • | Guidelines on Outsourcing; |
| • | Notice FAA-N06 on Prevention of Money Laundering and Countering the Financing of Terrorism—Financial Advisers; and |
| • | Guidelines to Notice FAA-N06 on Prevention of Money Laundering and Countering the Financing of Terrorism. |
| • | maintain minimum paid-up share capital of S$300,000 (see regulation 3(3) of the IIR); |
| • | maintain a standalone non-hybrid professional indemnity insurance policy of at least $1 million, under which the deductible allowed shall not be more than 20% of its paid-up capital (if the registered insurance broker is in its first financial year of operation) or 20% of its net asset value as at the end of its preceding financial year (in any other case) (see regulation 4(3) of the IIR); |
| • | payment of annual fee of $7,000 to the MAS by January 1 every year (see section 35ZA(1) of the IA and regulation 16(1)(a) of the IIR); |
| • | maintain net asset value of not less than 50% of the minimum paid-up share capital (see section 35ZC of the IA and regulation 5 of the IIR); |
| • | maintain an insurance broking premium account with a licensed bank for monies received from or on behalf of an insured or intending insured for or on account of an insurer in connection with a contract of insurance or proposed contract of insurance or from or on behalf of an insurer for or on account of an insured or intending insured (see section 35ZD(1) of the IA and regulation 7(1) of the IIR); |
| • | maintain a register of its broking staff containing the prescribed particulars (see regulation 9 of the IIR); |
| • | submit the prescribed returns to the MAS within 5 months of the end of each financial year (see section 36(1) of the IA and regulation 10 of the IIR); |
| • | maintain proper records (see section 36(2) of the IA); |
| • | appoint an auditor and audit financial statements (see sections 36(4) and (5) of the IA); |
| • | certain business conduct requirements set out in the FAA, including the requirement to disclose material product information, the prohibition against making false or misleading statements, establishing and maintaining a remuneration framework (see section 23(4) of the FAA); and |
| • | implement appropriate policies and procedures for compliance with the requirements under Notice FAA-N06 on Prevention of Money Laundering and Countering the Financing of Terrorism—Financial Advisers. |
| • | domestic and international rankings of the applicant by factors such as premiums and assets; |
| • | past and present credit ratings by international rating agencies, including Standard and Poor’s, A.M Best, Moody’s, and Fitch; |
| • | track record, financial soundness, and reputation of the applicant, including the applicant’s compliance with its home regulations. In assessing this criteria, MAS will consult the applicant’s home supervisory authority; |
| • | experience in product innovation, use of alternative business distribution channels, and expertise in specialist and niche fields; |
| • | well-developed business strategy and detailed plans that reflect the risk profile of the business; |
| • | robust risk management systems and processes that are commensurate with the size and complexity of the business; and |
| • | fitness and propriety of the applicant, any director or key executive person, all of its substantial shareholders, and all persons having effective control of the applicant. |
| • | the IA, and its subsidiary legislation, including the Insurance (Valuation and Capital) Regulations, or the I(VC)R; |
| • | Notice 106 Appointment of Director, Chairman and Key Executive Person; |
| • | Notice 211 Minimum and Best Practice Training and Competency Standards for Direct General Insurers; |
| • | Notice 117 Training and Competency Requirement: Health Insurance; |
| • | Notice 120 Disclosure and Advisory Process Requirements For Accident and Health Insurance Products; |
| • | Notice 318 Market Conduct Standards for Direct Life Insurer as a Product Provider; |
| • | Notice 306 Market Conduct Standards for Life Insurers Providing Financial Advisory Services as defined under the Financial Advisers Act; |
| • | Notice 307 Investment-Linked Policies; |
| • | Notice 321 Direct Purchase Insurance Products; |
| • | Notice 122 Asset & Liability Exposures for Insurers; |
| • | Notice 125 Investments of Insurers; |
| • | Notice 101 Maintenance of Insurance Funds; |
| • | Notice 133 Valuation and Capital Framework for Insurers; |
| • | Notice 129 on Insurance Returns (Accounts and Statements); |
| • | Notice 132 Cyber Hygiene; |
| • | Notice 314 Prevention of Money Laundering and Countering the Financing of Terrorism—Life Insurers; |
| • | Notice 123 Reporting of Suspicious Activities and Incidents of Fraud; |
| • | Guidelines on Standards of Conduct for Marketing and Distribution Activities by Financial Institutions [Guideline No. FSG-G02]; |
| • | Guidelines on Market Conduct and Service Standards for Direct General Insurers [Guideline No. ID 1/03]; |
| • | Guidelines to MAS Notice 314 Notice on Prevention of Money Laundering and Countering the Financing of Terrorism—Life Insurers; |
| • | Guidelines on Implementation of Insurance Fund Concept [Guideline No. ID 1/09]; |
| • | Guidelines on Prevention of Money Laundering and Countering the Financing of Terrorism—Direct General Insurance Business, Reinsurance Business, and Direct Life Insurance Business (Accident & Health Policies); |
| • | Guidelines on Risk Management Practices for Insurance Business—Core Activities; |
| • | Guidelines on Risk Management Practices for Insurance Business—Insurance Fraud Risk; |
| • | Guidelines on Risk Management Practices; |
| • | Guidelines on Outsourcing; and |
| • | Fit and Proper Guidelines. |
| • | maintain minimum paid-up ordinary share capital of S$5 million or S$10 million, depending on the type of insurance business being carried on (see regulations 3 and 5(1) of the I(VC)R); |
| • | establish and maintain the relevant insurance funds, and pay into an insurance fund all receipts of the insurer properly attributable to the business to which the fund relates (including the income of the fund) (see Section 17 of the IA, regulation 17 of the I(VC)R and Notice 101); |
| • | comply with fund solvency requirements and capital adequacy requirements (see regulation 4 of the I(VC)R and Notice 133); |
| • | obtain prior MAS approval before acquiring or holding a major stake in any corporation (see section 30B of the IA); |
| • | comply with corporate governance rules in the Insurance (Corporate Governance) Regulations 2013; |
| • | maintain proper records (see section 36(2) of the IA); |
| • | prepare and submit prescribed returns to the MAS within the relevant time frames (see section 36(3) of the IA and Notice 129); |
| • | appoint an auditor and audit financial statements (see sections 36(3A) of the IA); |
| • | comply with Notice 125 in relation to its investment activities and investments of insurance funds and shareholders’ funds; |
| • | comply with business conduct requirements set out in Notice 318 (in relation to life business), Notice 120 (in relation to accident and health insurance products), Notice 307 (in relation to investment linked policies), Notice 321 (in relation to direct purchase life insurance) and 306 (in relation to providing financial advisory services on life insurance); and |
| • | implement appropriate policies and procedures for compliance with the requirements under Notice 314 Prevention of Money Laundering and Countering the Financing of Terrorism—Life Insurers and Guidelines on Prevention of Money Laundering and Countering the Financing of Terrorism—Direct General Insurance Business, Reinsurance Business, and Direct Life Insurance Business (Accident & Health Policies). |
| • | grant a capital markets services license to those who meet the relevant criteria to be licensed under the SFA, and can demonstrate fitness and propriety; |
| • | monitor the ongoing compliance of regulated entities, and their officers, representatives and shareholders (where applicable), with business conduct and other requirements; |
| • | maintain online a public register of capital markets services providers (the MAS Financial Institutions Directory); and |
| • | develop regulatory policies. |
| • | fitness and propriety of the applicant, its shareholders and directors; |
| • | track record and management expertise of the applicant and its parent company or major shareholders; |
| • | ability to meet the minimum financial requirements prescribed under the SFA; |
| • | strength of internal risk management and compliance systems; and |
| • | business model/plans and projections and the associated risks. |
| • | the SFA, and its subsidiary legislation, including the Securities and Futures (Licensing and Conduct of Business) Regulations (“SF(LCB)R”), and Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licenses) Regulations (“SF(FMR)R”); |
| • | Notice SFA 04-N09 Minimum Entry and Examination Requirements for Representatives of Holders of Capital Markets Services License and Exempt Financial Institutions; |
| • | Notice SFA 04-N13 Risk Based Capital Adequacy Requirements for Holders of Capital Markets Services Licenses; |
| • | Notice SFA 04-N12 Sale of Investment Products; |
| • | Notice SFA 04-N11 Reporting of Misconduct of Representatives by Holders of Capital Markets Services License and Exempt Financial Institutions; |
| • | Notice CMG-N01 on Reporting of Suspicious Activities and Incidents of Fraud; |
| • | Notice SFA 04-N02 to Capital Markets Intermediaries on Prevention of Money Laundering and Countering the Financing of Terrorism; |
| • | Notice CMG-N02 Technology Risk Management; |
| • | Notice CMG-N03 Cyber Hygiene; |
| • | Guidelines on Criteria for the Grant of a Capital Markets Services License Other Than for Fund Management and Real Estate Investment Trust Management [Guideline No. SFA 04-G01]; |
| • | Guidelines on the Regulation of Short Selling [Guideline No. SFA 07A-G01]; |
| • | Guidelines to Notice SFA 04-N02 on Prevention of Money Laundering and Countering the Financing of Terrorism—Capital Markets Intermediaries; |
| • | CMI 01/2011 Due Diligence Checks and Documentation in Respect of the Appointment of Appointed, Provisional, and Temporary Representatives; |
| • | Guidelines on Risk Management Practices; |
| • | Guidelines on Outsourcing; and |
| • | Fit and Proper Guidelines. |
| • | maintain base capital of S$50,000 to S$5 million (depending on the type of capital markets products, and whether the holder is a member of an approved exchange or clearing house, or an introducing broker) (see section 86(3) of the SFA and regulation 3 and the First Schedule, SF(FMR)R); |
| • | payment of annual fee of S$2,000 to S$8,000, depending on the type of capital markets products offered and whether the holder is or is not a member of the Singapore Exchange Securities Trading Limited (see section 85 of the SFA and regulation 6 and the Third Schedule of the SF(LCB)R); |
| • | not reduce its paid-up ordinary share capital or paid-up irredeemable and non-cumulative preference share capital without the prior written approval of the MAS (see regulation 20, SF(FMR)R); |
| • | comply with the financial resources requirements and not permit it to fall below its total risk requirement (see Part III of SF(FMR)R and risk based capital adequacy requirements under MAS Notice SFA 04-N13); |
| • | maintain a register of interests in listed specified products (see regulation 4 of SF(LCB)R); |
| • | comply with the rules on customer’s moneys and assets, including rules on segregation and disclosure (see Part III of the SF(LCB)R); |
| • | maintain proper books and records (see regulation 39 of the SF(LCB)R); |
| • | provide statements of account and contract notes to customers, and comply with other disclosure requirements under SF(LCB)R; |
| • | comply with trading standards and rules under the SF(LCB)R, such as not divulging information relating to a customer’s orders except in certain circumstances (see regulation 47, SF(LCB)R); and |
| • | implement appropriate policies and procedures for compliance with the requirements under Notice SFA 04-N02 to Capital Markets Intermediaries on Prevention of Money Laundering and Countering the Financing of Terrorism. |
| • | at least one entity in the applicant group (being the proposed digital bank and every of its 20% controllers) has three or more years of track record in operating an existing business in the technology or e-commerce field; |
| • | the following persons are fit and proper: (i) applicant group and their directors; (ii) substantial shareholders and 12% controllers of the proposed digital bank; and (iii) directors and executive officers of the proposed digital bank; |
| • | demonstrate ability to meet the applicable minimum paid-up capital requirement at the onset and the minimum capital funds requirement on an ongoing basis. This can be done by submitting a written confirmation from shareholders of the proposed digital bank on commitment of funds; |
| • | provide clear value proposition, incorporating the innovative use of technology to serve customer needs and reach under-served segments of the Singapore market; |
| • | demonstrate that the proposed digital bank’s business model is sustainable. The applicant must provide a five-year financial projection of the proposed digital bank, which must show a path towards profitability. The assumptions of the financial projection must be reviewed by an external and independent expert; |
| • | submit a feasible plan that can facilitate the orderly exit of the proposed digital bank; and |
| • | shareholders of the proposed digital bank commit to providing a letter of responsibility and a letter of undertaking that MAS may require in respect of the operations of the proposed digital bank. |
| • | the BA, and its subsidiary legislation, including the Banking Regulations (“BR”) and the Banking (Corporate Governance) Regulations 2005 (“B(CG)R”); |
| • | Notice 637 on Risk Based Capital Adequacy Requirements for Banks Incorporated in Singapore; |
| • | Notice 758 Minimum Cash Balance; |
| • | Notice 649 Minimum Liquid Assets and Liquidity Coverage Ratio; |
| • | Notice 656 Exposures to Single Counterparty Groups for Banks Incorporated in Singapore; |
| • | Notice 639A Exposures and Credit Facilities to Related Concerns; |
| • | Notice 643 Transactions with Related Parties; |
| • | Notice 610 Submission of Statistics and Returns; |
| • | Notice 615 Appointment of Auditors; |
| • | Notice 609 Auditors’ Reports and Additional Information to be Submitted with Annual Accounts; |
| • | Notice 644 Technology Risk Management; |
| • | Notice 655 Cyber Hygiene; |
| • | Notice 626 Prevention of Money Laundering and Countering the Financing of Terrorism – Banks; |
| • | Guidelines for Operation of Wholesale Banks; |
| • | Guidelines for E-Payments User Protection; |
| • | Guidelines on Corporate Governance; |
| • | Guidelines on Risk Management Practices; |
| • | Guidelines on Outsourcing; |
| • | Guidelines to Notice 626 on Prevention of Money Laundering and Countering the Financing of Terrorism—Banks; and |
| • | Fit and Proper Guidelines. |
| • | maintain minimum paid-up capital of S$100 million (see Regulation 6A(1), BR); |
| • | maintain only one physical place of business (see paragraph 5, Guidelines for Operation of Wholesale Banks and Section IV (Requirements and Permissible Activities for DWB), Eligibility Criteria and Requirements for Digital Banks); |
| • | not to operate Singapore dollars savings accounts, except with the prior approval of MAS (see paragraph 2(a), Guidelines for Operation of Wholesale Banks); |
| • | only accepting Singapore dollars fixed deposits, provided the initial and outstanding deposits are at least S$250,000 at all times (see paragraph 2(c), Guidelines for Operation of Wholesale Banks); |
| • | not to operate interest-bearing Singapore dollars current accounts where the customer is a natural person and a resident of Singapore, except with the prior approval of MAS (see paragraph 2(d), Guidelines for Operation of Wholesale Banks); |
| • | only offering Singapore dollars current accounts (which can be interest-bearing) for business uses, including to sole proprietors and partnerships (see page 8, Eligibility Criteria and Requirements for Digital Banks); |
| • | not to grant unsecured credit facilities to retail individuals (see Section IV (Requirements and Permissible Activities for DWB), Eligibility Criteria and Requirements for Digital Banks); |
| • | comply with risk-based capital adequacy, minimum cash balance, minimum liquid assets and liquidity coverage ratio requirements under Notices 637, 758 and 649; |
| • | comply with privacy obligations with respect to customer information (see section 47, BA); |
| • | appoint auditors, audit financial statements and submit annual accounts under Notice 615 and MAS 609; and |
| • | implement appropriate policies and procedures for compliance with the requirements under Notice 626 on Prevention of Money Laundering and Countering the Financing of Terrorism—Banks. |
| • | honesty, integrity and reputation; |
| • | competence and capability; and |
| • | financial soundness. |
| • | conducting risk assessments and risk mitigation; |
| • | conducting customer due diligence (including enhanced due diligence), ongoing monitoring and screening; |
| • | relying on third parties; |
| • | recordkeeping; |
| • | suspicious transaction reporting; and |
| • | internal policies, compliance, audit and training. |
| • | obtain consent for the collection, use or disclosure of personal data; |
| • | have reasonable purposes for the collection, use or disclosure of personal data and notify the individuals concerned of these purposes; |
| • | allow individuals to access and correct their personal data; |
| • | take care of personal data, which relates to ensuring accuracy, protecting personal data (including protection in the case of transfers of personal data outside of Singapore) and not retaining personal data longer than necessary for legal or business purposes, and to serve the purpose for which it was collected; and |
| • | make appropriate notifications of certain data breaches. |
| • | negotiating or arranging a contract of insurance; |
| • | inviting or inducing a person to enter into a contract of insurance (or attempting to do so); |
| • | inviting or inducing a person to make a material decision in relation to a contract of insurance (or attempting to do so); and |
| • | giving regulated advice. |
| 1. | have the minimum education standard of a bachelor degree from a recognized university or tertiary education institution, an insurance qualification specified by the HKIA from time to time and published on the HKIA’s website, or other equivalent qualifications; and |
| 2. | possess experience commensurate with the nature and scale of business of the insurance broker company concerned and the level of responsibilities to be carried out. The general expectation will be a minimum of 5 years’ experience in the insurance industry, including at least 2 years of management experience. |
(A) |
Capital and Net Assets |
(B) |
Professional Indemnity Insurance |
| 1. | two times the aggregate insurance brokerage income in the 12 consecutive months immediately preceding the date of commencement of the professional indemnity insurance cover, up to a maximum of HK$75,000,000; or |
| 2. | HK$3,000,000. |
| (C) | Keeping of Separate Client Accounts |
| (D) | Keeping Proper Books and Accounts |
| • | it must establish and maintain proper controls and procedures for securing compliance with the conduct requirements set out in section 90 by the broker company and the licensed technical representatives (broker) appointed by the broker company; |
| • | it must use its best endeavors to secure observance with the controls and procedures established under section 92(1)(a) by the licensed technical representatives (broker) appointed by the broker company; |
| • | it must ensure that its responsible officer has sufficient authority within the broker company for carrying out the responsibilities set out in section 92(2); and |
| • | it must provide its responsible officer with sufficient resources and support for carrying out the responsibilities set out in section 92(2). |
| • | Principle 1—purpose and manner of collection of personal data; |
| • | Principle 2—accuracy and duration of retention of personal data; |
| • | Principle 3—use of personal data; |
| • | Principle 4—security of personal data; |
| • | Principle 5—information to be generally available; and |
| • | Principle 6—access to personal data. |
| • | the right to be informed by a data user whether the data user holds personal data of which the individual is the data subject; |
| • | if the data user holds such data, to be supplied with a copy of such data; and |
| • | the right to request correction of any data they consider to be inaccurate. |
C. |
History and Development of the Company |
| (1) | AMTD Group Company Limited beneficially owns 50.6% of the issued and outstanding shares of AMTD IDEA Group by directly holding 39.5% and, through its subsidiaries including AMTD Assets Alpha Group and AMTD Education Group, indirectly holding 11.1%, of the issued and outstanding shares of AMTD IDEA Group. |
| • | administrative support; |
| • | marketing and branding support; |
| • | technology support; and |
| • | provision of office space and facilities. |
D. |
Property, Plants and Equipment |
ITEM 4A. |
UNRESOLVED STAFF COMMENTS |
ITEM 5. |
OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
A. |
Operating Results |
For the Year Ended April 30, |
||||||||||||||||||||||||||||
2021 |
2022 |
|||||||||||||||||||||||||||
HK$ |
% |
HK$ |
% |
HK$ |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
| Revenue |
||||||||||||||||||||||||||||
| Digital financial services business income |
9,869 | 5.9 | 11,721 | 6.0 | 11,798 | 1,503 | 6.0 | |||||||||||||||||||||
| SpiderNet ecosystem solutions business income |
157,678 | 94.1 | 184,095 | 94.0 | 184,627 | 23,530 | 93.7 | |||||||||||||||||||||
| Corporate |
— | — | — | — | 533 | 68 | 0.3 | |||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total |
167,547 |
100.0 |
195,816 |
100.0 |
196,958 |
25,101 |
100.0 |
|||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
For the Year Ended April 30, |
||||||||||||||||||||||||||||
2021 |
2022 |
|||||||||||||||||||||||||||
HK$ |
% |
HK$ |
% |
HK$ |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
| Revenue |
167,547 |
100.0 |
195,816 |
100.0 |
196,958 |
25,101 |
100.0 |
|||||||||||||||||||||
| Employee benefits expense |
(15,168 | ) | (9.1 | ) | (48,026 | ) | (24.5 | ) | (72,426 | ) | (9,230 | ) | (36.8 | ) | ||||||||||||||
| Advertising and promotion expense |
— | * | — | (2,547 | ) | (1.3 | ) | (4,066 | ) | (518 | ) | (2.1 | ) | |||||||||||||||
| Premises and office expenses |
(4,737 | ) | (2.8 | ) | (5,230 | ) | (2.7 | ) | (5,772 | ) | (736 | ) | (2.9 | ) | ||||||||||||||
| Legal and professional fee |
(1,952 | ) | (1.2 | ) | (6,850 | ) | (3.5 | ) | (23,456 | ) | (2,989 | ) | (11.9 | ) | ||||||||||||||
| Depreciation and amortization |
— | — | (4,896 | ) | (2.5 | ) | (6,596 | ) | (841 | ) | (3.3 | ) | ||||||||||||||||
| Other expenses |
(1,649 | ) | (1.0 | ) | (3,323 | ) | (1.7 | ) | (3,165 | ) | (403 | ) | (1.7 | ) | ||||||||||||||
| Changes in fair value on financial assets measured at fair value through profit or loss (“FVTPL”) |
43,592 | 26.0 | 70,291 | 35.9 | 132,032 | 16,827 | 67.0 | |||||||||||||||||||||
| Other income |
— | — | 1,323 | 0.7 | 6,755 | 860 | 3.5 | |||||||||||||||||||||
| Other gains and losses, net |
(5,586 | ) | (3.3 | ) | (306 | ) | (0.2 | ) | 4,746 | 605 | 2.4 | |||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Profit before tax |
182,047 |
108.6 |
196,252 |
100.2 |
225,010 |
28,676 |
114.2 |
|||||||||||||||||||||
| Income tax expense |
(23,715 | ) | (14.1 | ) | (24,611 | ) | (12.6 | ) | (23,614 | ) | (3,009 | ) | (12.0 | ) | ||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Profit for the year |
158,332 |
94.5 |
171,641 |
87.6 |
201,396 |
25,667 |
102.2 |
|||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Item that may be reclassified subsequently to profit or loss: |
||||||||||||||||||||||||||||
| Exchange differences arising on translation of foreign operation |
— | — | 828 | 0.4 | (823 | ) | (105 | ) | (0.4 | ) | ||||||||||||||||||
| Other comprehensive income (expense) for the year/period |
— | — | 828 | 0.4 | (823 | ) | (105 | ) | (0.4 | ) | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total comprehensive income for the year |
158,332 |
94.5 |
172,469 |
88.0 |
200,573 |
25,562 |
101.8 |
|||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| * | The advertising and promotion expense for the fiscal years ended April 30, 2020 was insignificant and included in other expenses. |
For the Year Ended April 30, |
||||||||||||||||
2021 |
2022 |
|||||||||||||||
HK$ |
HK$ |
HK$ |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
| Digital Financial Services |
||||||||||||||||
| Segment revenue |
9,869 | 11,721 | 11,798 | 1,503 | ||||||||||||
| Segment results (1) |
4,765 | 1,084 | 951 | 121 | ||||||||||||
| SpiderNet Ecosystem Solutions |
||||||||||||||||
| Segment revenue |
157,678 | 184,095 | 184,627 | 23,530 | ||||||||||||
| Segment results (1) |
140,134 | 144,276 | 136,607 | 17,410 | ||||||||||||
| Corporate (including digital investments business and digital media, content, and marketing business) |
||||||||||||||||
| Segment revenue |
— | — | 533 | 68 | ||||||||||||
| Changes in fair value on financial assets measured at FVTPL |
43,592 | 70,291 | 132,032 | 16,827 | ||||||||||||
| Segment results (1) |
43,291 | 70,800 | 136,323 | 17,374 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total segment results |
188,190 |
216,160 |
273,881 |
34,905 |
||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| (1) | Segment result represents segment revenue and changes in fair value on financial assets measured at FVTPLs less direct cost attributable to the applicable segment. |
| • | Digital financial services. Our commission income from the digital financial services segment increased from HK$11.7 million for the fiscal year ended April 30, 2021 to HK$11.8 million (US$1.5 million) for the fiscal year ended April 30, 2022. The segment income remains stable during the fiscal year ended April 30, 2022. |
| • | SpiderNet ecosystem solutions. Our fee income from the SpiderNet ecosystem solutions segment increased from HK$184.1 million for the fiscal year ended April 30, 2021 to HK$184.6 million (US$23.5 million) for the fiscal year ended April 30, 2022, primarily due to our expansion of the SpiderNet ecosystem solutions business for the fiscal year ended April 30, 2022. |
| • | Corporate. Our digital media, content, and marketing services income from corporate segment increased from nil for the fiscal year ended April 30, 2021 to HK$0.5 million (US$68 thousand) for the fiscal year ended April 30, 2022, primarily due to commencement of the digital media, content, and marketing services during the fiscal year ended April 30, 2022. |
| Summary of investments | ||||||||||||||||||||||
| Name of investments |
Purchase price |
Carrying value |
Corresponding investment gains (losses) |
Key factors of fluctuation in gains (losses) | ||||||||||||||||||
As of April 30, |
For the Year Ended April 30, |
|||||||||||||||||||||
2022 |
2021 |
2022 |
||||||||||||||||||||
(HK$ in millions) |
||||||||||||||||||||||
| Investment A (technology-enabled health-care solutions platform) |
78.5 | 78.5 | 76.3 | (30.0 | ) | (2.2 | ) | In the fiscal year ended April 30, 2021, the fair value of the investment decreased by reference to the recent transaction price of shares issuance of the investee. In the fiscal year ended April 30, 2022, the fair value of the investment decreased mainly due to the financial and business performance of the investee. | ||||||||||||||
| Investment B (digital media platform) |
1.6 | 1.6 | 1.6 | — | — | The investment was acquired in April 2021. The fair value of the investment approximated its acquisition cost as of April 30, 2022. | ||||||||||||||||
| Investment C (card payment solutions) |
6.2 | 6.2 | 6.9 | — | 0.7 | The investment was acquired in November 2020. The fair value of the investment approximated its acquisition cost as of April 30, 2021 with reference to recent transaction price. In the fiscal year ended April 30, 2022, the fair value of the investment increased due to the financial and business performance of the investee. | ||||||||||||||||
| Investment D (cross-border payment platform) |
2.2 | 2.2 | 2.2 | — | — | The investment was acquired in December 2020. The fair value of the investment approximated acquisition cost as of April 30, 2021 and 2022. | ||||||||||||||||
| Investment E (digital format movie production) |
59.8 | 60.9 | 60.9 | 1.1 | — | The fair value of the investment remains stable at HK$60.9 million in the fiscal year ended April 30, 2022 by reference to the estimated box office performance. | ||||||||||||||||
| Summary of investments | ||||||||||||||||||||||
| Name of investments |
Purchase price |
Carrying value |
Corresponding investment gains (losses) |
Key factors of fluctuation in gains (losses) | ||||||||||||||||||
As of April 30, |
For the Year Ended April 30, |
|||||||||||||||||||||
2022 |
2021 |
2022 |
||||||||||||||||||||
(HK$ in millions) |
||||||||||||||||||||||
| Investment F (digital format movie production) |
16.5 | 18.8 | 0.7 | 2.3 | 2.9 | The fair value of the investment increased by HK$2.3 million in the fiscal year ended April 30, 2021 by reference to the estimated box office performance. The fair value of the investment increased by HK$2.9 million in the fiscal year ended April 30, 2022 by reference to the actual box office performance. During the fiscal year ended April 30, 2022, part of the investment was realized through cash settlement of HK$21.0 million. | ||||||||||||||||
| Investment G (digital format movie production) |
4.2 | 1.5 | 1.5 | (2.7 | ) | — | The fair value of the investment decreased by HK$2.7 million in the fiscal year ended April 30, 2021 by reference to the estimated box office performance. In the fiscal year ended April 30, 2022, the fair value of investment remained stable at HK$1.5 million by reference to the estimated box office performance. | |||||||||||||||
| Investment H (artificial intelligence technology services) |
19.6 | — | — | 55.1 | — | In the fiscal year ended April 30, 2021, the fair value increased mainly due to the financial and business performance of the investee. The investment was disposed in April 2021. | ||||||||||||||||
| Investment I (content-driven lifestyle platform) |
80.6 | 124.3 | — | 44.5 | 130.6 | The fair value of the investment increased by HK$44.5 million in the fiscal year ended April 30, 2021 due to the financial and business performance of the investee. In the fiscal year ended April 30, 2022, the investment was disposed resulting in a realized gain of HK$130.6 million. | ||||||||||||||||
| 269.2 | 294.0 | 150.1 | 70.3 | 132.0 | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||||
| • | Digital financial services. Our commission income from the digital financial services segment increased from HK$9.9 million for the fiscal year ended April 30, 2020 to HK$11.7 million for the fiscal year ended April 30, 2021, primarily due to the acquisition of PolicyPal during the fiscal year ended April 30, 2021. |
| • | SpiderNet ecosystem solutions. Our fee income from the SpiderNet ecosystem solutions segment increased from HK$157.7 million for the fiscal year ended April 30, 2020 to HK$184.1 million for the fiscal year ended April 30, 2021, primarily due to our expansion of the SpiderNet ecosystem solutions business and a 72.7% increase in the number of customers in the fiscal year ended April 30, 2021. |
| Summary of investments | ||||||||||||||||||||||
| Name of investments |
Purchase price |
Carrying value |
Corresponding investment gains (losses) |
Key factors of fluctuation in gains (losses) | ||||||||||||||||||
As of April 30, |
For the Year Ended April 30, |
|||||||||||||||||||||
2021 |
2020 |
2021 |
||||||||||||||||||||
(HK$ in millions) |
||||||||||||||||||||||
| Investment A (technology-enabled health-care solutions platform) |
78.5 | 108.5 | 78.5 | 28.0 | (30.0 | ) | During the fiscal year ended April 30, 2020, the fair value of the investment increased mainly due to the financial performance and business development of the investee. During the fiscal year ended April 30, 2021, the fair value decreased by reference to the recent transaction price of shares issuance of the investee. | |||||||||||||||
| Investment B (digital media platform) |
1.6 | — | 1.6 | — | — | The investment was acquired in April 2021. The fair value of the investment approximated its acquisition cost as of April 30, 2021. | ||||||||||||||||
| Investment C (card payment solutions) |
6.2 | — | 6.2 | — | — | The investment was acquired in November 2020. The fair value of the investment approximated its acquisition cost as of April 30, 2021 with reference to recent transaction price. | ||||||||||||||||
| Investment D (cross-border payment platform) |
2.2 | — | 2.2 | — | — | The investment was acquired in December 2020. The fair value of the investment approximated acquisition cost as of April 30, 2021. | ||||||||||||||||
| Investment E (digital format movie production) |
59.8 | — | 60.9 | — | 1.1 | The fair value of the investment increased by HK$1.1 million during the year ended April 30, 2021 by reference to the estimated box office performance. | ||||||||||||||||
| Investment F (digital format movie production) |
16.5 | — | 18.8 | — | 2.3 | The fair value of the investment increased by HK$2.3 million during the year ended April 30, 2021 by reference to the estimated box office performance. | ||||||||||||||||
| Investment G (digital format movie production) |
4.2 | — | 1.5 | — | (2.7 | ) | The fair value of the investment decreased by HK$2.7 million during the year ended April 30, 2021 by reference to the estimated box office performance. | |||||||||||||||
| Summary of investments | ||||||||||||||||||||||
| Name of investments |
Purchase price |
Carrying value |
Corresponding investment gains (losses) |
Key factors of fluctuation in gains (losses) | ||||||||||||||||||
As of April 30, |
For the Year Ended April 30, |
|||||||||||||||||||||
2021 |
2020 |
2021 |
||||||||||||||||||||
(HK$ in millions) |
||||||||||||||||||||||
| Investment H (artificial intelligence technology services) |
19.6 | 22.7 | — | (1.8 | ) | 55.1 | During the fiscal year ended April 30, 2020, the fair value decreased mainly due to the impact of market downturn caused by the COVID-19 on the investee’s performance. During the fiscal year ended April 30, 2021, the investment was disposed with realized gain of HK$55.1 million. | |||||||||||||||
| Investment I (content-driven lifestyle platform) |
80.6 | 77.5 | 124.3 | (1.0 | ) | 44.5 | The fair value of the investment decreased by HK$1.0 million during the year ended April 30, 2020 due to exchange rate fluctuation. During the fiscal year ended April 30, 2021, the fair value of the investment increased mainly due to the financial performance and business development of the investee. | |||||||||||||||
| Investment J (communication software) |
7.8 | — | — | 8.3 | — | The investment was fully disposed during the year ended April 30, 2020 with realized gain of HK$8.3 million. | ||||||||||||||||
| Investment K (digital financing solutions platform) |
7.8 | — | — | 10.1 | — | The investment was fully disposed during the year ended April 30, 2020 with realized gain of HK$10.1 million. | ||||||||||||||||
| 284.8 | 208.7 | 294.0 | 43.6 | 70.3 | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||||
B. |
Liquidity and Capital Resources |
For the Year Ended April 30, |
||||||||||||||||
2021 |
2022 |
|||||||||||||||
HK$ |
HK$ |
HK$ |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
| Summary Consolidated Cash Flow Data |
||||||||||||||||
| Net cash generated from operating activities |
213,755 | 82,901 | 79,891 | 10,182 | ||||||||||||
| Net cash (used in)/from investing activities |
(674,500 | ) | 128,167 | (382,986 | ) | (48,810 | ) | |||||||||
| Net cash from financing activities |
651,191 | 7,894 | — | — | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net increase/(decrease) in cash and cash equivalents |
190,446 | 218,962 | (303,095 | ) | (38,628 | ) | ||||||||||
| Cash and cash equivalents at beginning of the year |
5,764 | 196,210 | 416,420 | 53,071 | ||||||||||||
| Effect of foreign exchange rate changes |
— | 1,248 | (809 | ) | (103 | ) | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Cash and cash equivalents at end of the year |
196,210 | 416,420 | 112,516 | 14,340 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
C. |
Research and Development, Patents and Licenses, etc. |
D. |
Trend Information |
E. |
Critical Accounting Estimates |
ITEM 6. |
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
| A. | Directors and Senior Management |
| Directors and Executive Officers |
Age |
Position/Title | ||
| Timothy Wai Cheung Tong |
69 | Chairman of the Board of Directors and Independent Director | ||
| Feridun Hamdullahpur |
67 | Independent Director | ||
| Nimil Rajnikant Parekh |
59 | Independent Director | ||
| Joanne Shoveller |
61 | Independent Director | ||
| Frederic Lau |
70 | Director and President | ||
| 44 | Director and Chief Executive Officer | |||
| Xavier Ho Sum Zee |
48 | Chief Financial Officer |
| B. | Compensation |
| C. | Board Practices |
| • | selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; |
| • | reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; |
| • | reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; |
| • | discussing the annual audited financial statements with management and the independent registered public accounting firm; |
| • | reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; |
| • | annually reviewing and reassessing the adequacy of our audit committee charter; |
| • | meeting separately and periodically with management and the independent registered public accounting firm; and |
| • | reporting regularly to the board. |
| • | reviewing the total compensation package for our executive officers and making recommendations to the board with respect to it; |
| • | reviewing the compensation of our non-employee directors and making recommendations to the board with respect to it; and |
| • | periodically reviewing and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, and employee pension and welfare benefit plans. |
| • | recommending nominees to the board for election or re-election to the board, or for appointment to fill any vacancy on the board; |
| • | reviewing annually with the board the current composition of the board with regards to characteristics such as independence, age, skills, experience and availability of service to us; |
| • | selecting and recommending to the board the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself; and |
| • | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
| • | convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings; |
| • | declaring dividends and distributions; |
| • | appointing officers and determining the term of office of the officers; |
| • | exercising the borrowing powers of our company and mortgaging the property of our company; and |
| • | approving the transfer of shares in our company, including the registration of such shares in our share register. |
| D. | Employees |
| Function |
Number of Employees |
Percentage |
||||||
| Senior management |
4 | 8 | % | |||||
| Frontline staff |
35 | 70 | % | |||||
| Supporting staff |
11 | 22 | % | |||||
| |
|
|
|
|||||
| Total |
50 | 100 | % | |||||
| |
|
|
|
|||||
| E. | Share Ownership |
ITEM 7. |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
| A. | Major Shareholders |
| • | each of our directors and executive officers; and |
| • | each person known to us to own beneficially more than 5% of our ordinary shares. |
Class A Ordinary Shares |
Class B Ordinary Shares |
% of Beneficial Ownership† |
% of Aggregate Voting Power†† |
|||||||||||||
| Directors and Executive Officers:** |
||||||||||||||||
| Timothy Wai Cheung Tong |
— | — | — | — | ||||||||||||
| Feridun Hamdullahpur (1) |
— | — | — | — | ||||||||||||
| Nimil Rajnikant Parekh (1) |
— | * | * | * | ||||||||||||
| Joanne Shoveller (1) |
— | — | — | — | ||||||||||||
| Frederic Lau |
— | — | — | — | ||||||||||||
| — | — | — | — | |||||||||||||
| Xavier Ho Sum Zee |
— | — | — | — | ||||||||||||
| All directors and executive officers as a group |
— | 28,565 | 0.0 | 0.8 | ||||||||||||
| Principal Shareholder: |
||||||||||||||||
| AMTD IDEA Group (2) |
65,650,000 | 87.6 | 99.3 | |||||||||||||
| * | Less than 1% of our total ordinary shares on an as-converted basis outstanding as of the date of this prospectus |
| ** | Except as indicated otherwise below, the business address of our directors and executive officers is 25/F, Nexxus Building, 41 Connaught Road Central, Hong Kong. |
| † | For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the total number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days after the date of this annual report. |
| †† | For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class. Each holder of Class B ordinary shares is entitled to twenty votes per share, and each holder of our Class A ordinary shares is entitled to one vote per share on all matters submitted to them for a vote. Our Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by law. Our Class B ordinary shares are convertible at any time by the holder thereof into Class A ordinary shares on a one-for-one |
| (1) | The business address of Nimil Rajnikant Parekh is 138 Cecil Street, #13-02 Cecil Court, Singapore 069538. The business address of Dr. Feridun Hamdullahpur is University of Waterloo, 200 University Avenue, West Waterloo, Ontario, Canada N2L3G1. The business address of Joanne Shoveller is 9/F, 8O Bloor W, Toronto, ON M5S 2V1. |
| (2) | Represents 65,650,000 Class B ordinary shares held by AMTD IDEA Group, a Cayman Islands company whose registered address is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands. On February 23, 2022, 41,448,000 Class A ordinary shares held by AMTD IDEA Group were returned and canceled, and we issued the same number of Class B ordinary shares to AMTD IDEA Group. The board of directors of AMTD IDEA Group consists of Dr. Feridun Hamdullahpur, Dr. Timothy Tong, Dr. Annie Koh, Marcellus Wong, and Raymond Yung. AMTD IDEA Group is dual-listed on the NYSE and SGX, and is 50.6% owned by AMTD Group Company Limited, whose registered address is at the offices of Vistra (BVI) Limited, Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. Infinity Power Investments Limited, which is wholly-owned by Dr. Calvin
Choi, holds 32.5% of the issued and outstanding shares of AMTD Group Company Limited and is its largest shareholder. The registered address of Infinity Power Investments Limited is at the offices of |
| Vistra Corporate Services Center, Wickham Cay II, Road Town, Tortola, VG1110, British Virgin Islands. The board of directors of AMTD Group Company Limited consists of Dr. Calvin Choi, Marcellus Wong, Yu Gao, and Dr. Feridun Hamdullahpur. |
| B. | Related Party Transactions |
| C. | Interests of Experts and Counsel |
ITEM 8. |
FINANCIAL INFORMATION |
| A. | Consolidated Statements and Other Financial Information |
| B. | Significant Changes |
ITEM 9. |
THE OFFER AND LISTING |
| A. | Offer and Listing Details |
| B. | Plan of Distribution |
| C. | Markets |
| D. | Selling Shareholders |
| E. | Dilution |
| F. | Expenses of the Issue |
ITEM 10. |
ADDITIONAL INFORMATION |
| A. | Share Capital |
| B. | Memorandum and Articles of Association |
| • | the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer; |
| • | the instrument of transfer is in respect of only one class of shares; |
| • | the instrument of transfer is properly stamped, if required; |
| • | in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and |
| • | a fee of such maximum sum as the NYSE may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof. |
| • | the designation of the class or series; |
| • | the number of shares of the class or series; |
| • | the dividend rights, dividend rates, conversion rights, voting rights; and |
| • | the rights and terms of redemption and liquidation preferences. |
| • | authorize our board of directors to create and issue new classes or series of share (including preferred shares) and to designate the price, rights, preferences, privileges, and restrictions of such classes or series of shares without any further vote or action by our shareholders; |
| • | authorize our board of directors to re-designate and re-classify shares of any classes or series into any number of existing or new classes or series of shares (including classes or series of preferred shares); |
| • | authorize our board of directors to create and issue any new class or series of shares with such preferred or other rights, all or any of which may be greater than the rights of ordinary shares, at such time and on such terms as they may think appropriate; and |
| • | limit the ability of shareholders to requisition and convene general meetings of shareholders by requiring requisitioning shareholders to hold as of the date of deposit of the requisition shares that carry in aggregate not less than one-third of all votes attaching to all issued and outstanding shares of our company that as of the date of the deposit carry the right to vote at general meetings of our company. |
| • | does not have to file an annual return of its shareholders with the Registrar of Companies; |
| • | is not required to open its register of members for inspection; |
| • | does not have to hold an annual general meeting; |
| • | may issue shares with no par value; |
| • | may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance); |
| • | may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
| • | may register as a limited duration company; and |
| • | may register as a segregated portfolio company. |
| C. |
| D. | Exchange Controls |
| (a) | The ability to transfer funds by or to the Company in the form of repatriation of capital and remittance of profits; |
| (b) | The availability of cash and cash equivalents for use by the Company; and |
| E. | Taxation |
| • | No profit tax is imposed in Hong Kong in respect of capital gains from the sale of the ADSs. |
| • | Revenue gains from the sale of ADSs by persons carrying on a trade, profession or business in Hong Kong where the gains are derived from or arise in Hong Kong from the trade, profession or business will be chargeable to Hong Kong profits tax, which is currently imposed at the rate of 16.5% on corporations and at a maximum rate of 15% on individuals and unincorporated businesses. |
| • | Gains arising from the sale of ADSs, where the purchases and sales of ADSs are effected outside of Hong Kong such as, for example, on the NYSE, should not be subject to Hong Kong profits tax. |
| • | income accrued in or derived from Singapore; and |
| • | foreign sourced income received or deemed received in Singapore, unless otherwise exempted. |
| • | 75.0% of up to the first S$10,000 of a company’s chargeable income (excluding Singapore franked dividends); and |
| • | 50.0% of up to the next S$290,000 of a company’s chargeable income (excluding Singapore franked dividends). |
| • | banks and other financial institutions; |
| • | insurance companies; |
| • | pension plans; |
| • | cooperatives; |
| • | regulated investment companies; |
| • | real estate investment trusts; |
| • | broker-dealers; |
| • | traders that elect to use a mark-to-market |
| • | certain former U.S. citizens or long-term residents; |
| • | tax-exempt entities (including private foundations); |
| • | individual retirement accounts or other tax-deferred accounts; |
| • | persons liable for alternative minimum tax; |
| • | persons who acquire their ADSs or ordinary shares pursuant to any employee share option or otherwise as compensation; |
| • | investors that will hold their ADSs or ordinary shares as part of a straddle, hedge, conversion, constructive sale or other integrated transaction for U.S. federal income tax purposes; |
| • | investors that have a functional currency other than the U.S. dollar; |
| • | persons that actually or constructively own 10% or more of the ADSs or ordinary shares (by vote or value); or |
| • | partnerships or other entities taxable as partnerships for U.S. federal income tax purposes, or persons holding the ADSs or ordinary shares through such entities, |
| • | an individual who is a citizen or resident of the United States; |
| • | a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created in, or organized under the laws of the United States or any state thereof or the District of Columbia; |
| • | an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or |
| • | a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise validly elected to be treated as a U.S. person under the Code. |
| • | the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the ADSs or ordinary shares; |
| • | the amount allocated to the current taxable year and any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which we are classified as a PFIC (each, a “pre-PFIC year”), will be taxable as ordinary income; and |
| • | the amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for individuals or corporations, as appropriate, for that year, increased by an additional tax equal to the interest on the resulting tax deemed deferred with respect to each such taxable year. |
| K. | Dividends and Paying Agents |
| L. | Statement by Experts |
| M. | Documents on Display |
| N. | Subsidiary Information |
ITEM 11. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 12. |
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
| A. | Debt Securities |
| B. | Warrants and Rights |
| C. | Other Securities |
| D. | American Depositary Shares |
| Persons depositing or withdrawing shares or ADS holders must pay: |
For: | |
| US$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) | Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates | |
| US$0.05 (or less) per ADS | Any cash distribution to ADS holders | |
| Persons depositing or withdrawing shares or ADS holders must pay: |
For: | |
| A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs | Distribution of securities distributed to holders of deposited securities (including rights) that are distributed by the depositary to ADS holders | |
| US$0.05 (or less) per ADS per calendar year | Depositary services | |
| Registration or transfer fees | Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares | |
| Expenses of the depositary | Cable (including SWIFT) and facsimile transmissions (when expressly provided in the deposit agreement) Converting foreign currency to U.S. dollars | |
| Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes | As necessary | |
| Any charges incurred by the depositary or its agents for servicing the deposited securities | As necessary | |
ITEM 13. |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
ITEM 14. |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
ITEM 15. |
CONTROLS AND PROCEDURES |
ITEM 16A. |
AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16B. |
CODE OF ETHICS |
ITEM 16C. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
For the Year ended April 30, |
||||||||||||
2022 |
||||||||||||
HK$ |
HK$ |
US$ |
||||||||||
(in thousands) |
||||||||||||
| Audit Fees (1) |
5,285 | 6,748 | 860 | |||||||||
| Tax Fees (2) |
28 | 28 | 4 | |||||||||
| (1) | “Audit fees” represent the aggregate fees billed for each of the fiscal years listed for professional services rendered by our principal accountant for the audit of our annual consolidated financial statements and the review of interim condensed consolidated financial statements, including the audit fees relating to our initial public offering in 2022. |
| (2) | “Tax fees” represent the aggregate fees billed for professional services rendered by our principal external auditors for tax compliance. |
ITEM 16D. |
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16E. |
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
ITEM 16F. |
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
ITEM 16G. |
CORPORATE GOVERNANCE |
ITEM 16H. |
MINE SAFETY DISCLOSURE |
ITEM 16I. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
ITEM 17. |
FINANCIAL STATEMENTS |
ITEM 18. |
FINANCIAL STATEMENTS |
ITEM 19. |
EXHIBITS |
| * | Filed with this annual report on Form 20-F. |
| ** | Furnished with this annual report on Form 20-F. |
| AMTD Digital Inc. | ||
| By: |
/s/ Mark Chi Hang Lo | |
| Name: Mark Chi Hang Lo | ||
| Title: Chief Executive Officer | ||
| Date: August 30, 2022 | ||
Year ended April 30, |
||||||||||||||||
Notes |
2020 |
2021 |
2022 |
|||||||||||||
HK$ |
HK$ |
HK$ |
||||||||||||||
| Revenue from contracts with customers |
6 | i 167,547 | i 195,816 | i 196,958 | ||||||||||||
| Employee benefits expense |
( i 15,168 | ) | ( i 48,026 | ) | ( i 72,426 | ) | ||||||||||
| Advertising and promotion expense |
— | ( i 2,547 | ) | ( i 4,066 | ) | |||||||||||
| Premises and office expenses |
( i 4,737 | ) | ( i 5,230 | ) | ( i 5,772 | ) | ||||||||||
| Legal and professional fee |
( i 1,952 | ) | ( i 6,850 | ) | ( i 23,456 | ) | ||||||||||
| Depreciation and amortization |
— | ( i 4,896 | ) | ( i 6,596 | ) | |||||||||||
| Other expenses |
( i 1,649 | ) | ( i 3,323 | ) | ( i 3,165 | ) | ||||||||||
| Changes in fair value on financial assets measured at fair value through profit or loss (“FVTPL”) |
8 | i 43,592 | i 70,291 | i 132,032 | ||||||||||||
| Other income |
9 | — | i 1,323 | i 6,755 | ||||||||||||
| Other gains and losses, net |
10 | ( i 5,586 | ) | ( i 306 | ) | i 4,746 | ||||||||||
| |
|
|
|
|
|
|||||||||||
| Profit before tax |
i 182,047 | i 196,252 | i 225,010 | |||||||||||||
| Income tax expense |
11 | ( i 23,715 | ) | ( i 24,611 | ) | ( i 23,614 | ) | |||||||||
| |
|
|
|
|
|
|||||||||||
| Profit for the year |
12 | i 158,332 | i 171,641 | i 201,396 | ||||||||||||
| |
|
|
|
|
|
|||||||||||
| Item that may be reclassified subsequently to profit or loss: |
||||||||||||||||
| Exchange differences arising on translation of foreign operations |
— | i 828 | ( i 823 | ) | ||||||||||||
| |
|
|
|
|
|
|||||||||||
| Other comprehensive income (expense) for the year |
— | i 828 | ( i 823 | ) | ||||||||||||
| |
|
|
|
|
|
|||||||||||
| Total comprehensive income for the year |
i 158,332 | i 172,469 | i 200,573 | |||||||||||||
| |
|
|
|
|
|
|||||||||||
| Profit (loss) for the year attributable to: |
||||||||||||||||
| - Owners of the Company |
i 151,362 | i 177,865 | i 214,279 | |||||||||||||
| - Non-controlling interests |
i 6,970 | ( i 6,224 | ) | ( i 12,883 | ) | |||||||||||
| |
|
|
|
|
|
|||||||||||
| i 158,332 | i 171,641 | i 201,396 | ||||||||||||||
| |
|
|
|
|
|
|||||||||||
| Total comprehensive income (expense) for the year attributable to: |
||||||||||||||||
| - Owners of the Company |
i 151,362 | i 178,315 | i 213,859 | |||||||||||||
| - Non-controlling interest |
i 6,970 | ( i 5,846 | ) | ( i 13,286 | ) | |||||||||||
| |
|
|
|
|
|
|||||||||||
| i 158,332 | i 172,469 | i 200,573 | ||||||||||||||
| |
|
|
|
|
|
|||||||||||
| Earnings per share |
13 | |||||||||||||||
| - Basic (HK$) |
i 3.77 | i 3.36 | i 3.17 | |||||||||||||
| - Diluted (HK$) |
i 3.77 | i 3.36 | i 3.17 | |||||||||||||
| |
|
|
|
|
|
|||||||||||
As of April 30, |
||||||||||
Notes |
2021 |
2022 |
||||||||
HK$ |
HK$ |
|||||||||
| ASSETS |
||||||||||
| Non-current assets: |
||||||||||
| Goodwill |
15 | i 58,675 | i 58,675 | |||||||
| Property, plant and equipment |
17 | i 156 | i 126 | |||||||
| Intangible assets |
16 | i 40,411 | i 36,418 | |||||||
| Prepayments and other receivables |
19 | i 15,617 | i — | |||||||
| Financial assets at FVTPL |
18 | i 293,952 | i 150,134 | |||||||
| |
|
|
|
|||||||
| Total non-current assets |
i 408,811 | i 245,353 | ||||||||
| |
|
|
|
|||||||
| Current assets: |
||||||||||
| Accounts receivable |
19 | i 69,421 | i 39,545 | |||||||
| Prepayments and other receivables |
19 | i 19,163 | i 289,910 | |||||||
| Amount due from AMTD Group (as defined in note 1) |
27 | i 2,138,708 | i 2,522,653 | |||||||
| Fiduciary bank balances |
i 14,548 | i 11,669 | ||||||||
| Cash and cash equivalents |
i 416,420 | i 112,516 | ||||||||
| |
|
|
|
|||||||
| Total current assets |
i 2,658,260 | i 2,976,293 | ||||||||
| |
|
|
|
|||||||
| Total assets |
i 3,067,071 | i 3,221,646 | ||||||||
| |
|
|
|
|||||||
| EQUITY AND LIABILITIES |
||||||||||
| Current liabilities: |
||||||||||
| Clients’ monies held on trust |
i 9,111 | i 6,650 | ||||||||
| Accounts payable |
20 | i 111 | i 80 | |||||||
| Other payables and accruals |
20 | i 38,866 | i 27,043 | |||||||
| Contract liabilities |
21 | i 39,121 | i 41,523 | |||||||
| Income tax payable |
i 48,578 | i 31,810 | ||||||||
| |
|
|
|
|||||||
| Total current liabilities |
i 135,787 | i 107,106 | ||||||||
| |
|
|
|
|||||||
| Non-current liabilities: |
||||||||||
| Contract liabilities |
21 | i 31,192 | i 5,317 | |||||||
| Deferred tax liability |
22 | i 6,870 | i 5,771 | |||||||
| |
|
|
|
|||||||
| Total non-current liabilities |
i 38,062 | i 11,088 | ||||||||
| |
|
|
|
|||||||
| Total liabilities |
i 173,849 | i 118,194 | ||||||||
| |
|
|
|
|||||||
| Capital and reserves: |
||||||||||
| Share capital |
23 | i 52 | i 52 | |||||||
| Reserves |
i 2,867,984 | i 3,083,933 | ||||||||
| |
|
|
|
|||||||
| Equity attributable to owners of the Company |
i 2,868,036 | i 3,083,985 | ||||||||
| Non-controlling interests |
24 | i 25,186 | i 19,467 | |||||||
| |
|
|
|
|||||||
| Total equity |
i 2,893,222 | i 3,103,452 | ||||||||
| |
|
|
|
|||||||
| Total equity and liabilities |
i 3,067,071 | i 3,221,646 | ||||||||
| |
|
|
|
|||||||
Attributable to owners of the Company |
||||||||||||||||||||||||||||||||||||||||
Parent’s net investments |
Share capital |
Share premium |
Share-based payment reserve |
Exchange reserve |
Other reserve |
Retained earnings |
Equity |
Non- controlling interests |
Total |
|||||||||||||||||||||||||||||||
HK$ |
HK$ |
HK$ |
HK$ |
HK$ |
HK$ |
HK$ |
HK$ |
HK$ |
HK$ |
|||||||||||||||||||||||||||||||
(note) |
||||||||||||||||||||||||||||||||||||||||
| At May 1, 2019 |
i 95,004 | i — | i — | i — | i — | i — | i — | i 95,004 | i 27,110 | i 122,114 | ||||||||||||||||||||||||||||||
| Acquisition of non-controlling interests of subsidiaries (note 24) |
i 34,080 | — | — | — | — | — | — | i 34,080 | ( i 34,080 | ) | — | |||||||||||||||||||||||||||||
| Reorganization effect |
( i 129,084 | ) | i 29 | — | — | — | i 129,084 | — | i 29 | — | i 29 | |||||||||||||||||||||||||||||
| Exercise of warrants (note 23(iii)) |
— | i 1 | i 95,633 | — | — | — | — | i 95,634 | — | i 95,634 | ||||||||||||||||||||||||||||||
| Issuance of shares (note 23(ii)) |
— | i 8 | i 898,037 | — | — | — | — | i 898,045 | — | i 898,045 | ||||||||||||||||||||||||||||||
| Profit and total comprehensive income for the year |
— | — | — | — | — | — | i 151,362 | i 151,362 | i 6,970 | i 158,332 | ||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| i — | i 38 | i 993,670 | i — | i — | i 129,084 | i 151,362 | i 1,274,154 | i — | i 1,274,154 | |||||||||||||||||||||||||||||||
| Profit (loss) for the year |
— | — | — | — | — | — | i 177,865 | i 177,865 | ( i 6,224 | ) | i 171,641 | |||||||||||||||||||||||||||||
| Exchanges differences arising on translation of foreign operations |
— | — | — | — | i 450 | — | i — | i 450 | i 378 | i 828 | ||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total comprehensive income (expense) for the year |
— | — | — | — | i 450 | — | i 177,865 | i 178,315 | ( i 5,846 | ) | i 172,469 | |||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Acquisition of subsidiaries (note 14) |
— | i 1 | i 67,663 | — | — | — | — | i 67,664 | i 31,032 | i 98,696 | ||||||||||||||||||||||||||||||
| Issuance of shares (note 23(iv) and (viii)) |
— | i 13 | i 1,346,958 | — | — | — | — | i 1,346,971 | — | i 1,346,971 | ||||||||||||||||||||||||||||||
| Share-based compensation (note 28) |
— | — | — | i 932 | — | — | — | i 932 | — | i 932 | ||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| i — | i 52 | i 2,408,291 | i 932 | i 450 | i 129,084 | i 329,227 | i 2,868,036 | i 25,186 | i 2,893,222 | |||||||||||||||||||||||||||||||
| Profit (loss) for the year |
— | — | — | — | — | — | i 214,279 | i 214,279 | ( i 12,883 | ) | i 201,396 | |||||||||||||||||||||||||||||
| Exchanges differences arising on translation of foreign operations |
— | — | — | — | ( i 420 | ) | — | — | ( i 420 | ) | ( i 403 | ) | ( i 823 | ) | ||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total comprehensive (expense) income for the year |
— | — | — | — | ( i 420 | ) | — | i 214,279 | i 213,859 | ( i 13,286 | ) | i 200,573 | ||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Issuance of shares by a non-wholly owned subsidiary (note 16) |
— | — | — | — | — | i 342 | — | i 342 | i 444 | i 786 | ||||||||||||||||||||||||||||||
| Share-based compensation (note 28) |
— | — | — | i 1,748 | — | — | — | i 1,748 | i 7,123 | i 8,871 | ||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| i — | i 52 | i 2,408,291 | i 2,680 | i 30 | i 129,426 | i 543,506 | i 3,083,985 | i 19,467 | i 3,103,452 | |||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Note: | Parent’s net investment represented the contribution from the immediate holding company to the subsidiaries now comprising the Group prior to a series of group reorganizations (“Reorganization”). The parent’s net investment amounted to HK$ i 129,084 was transferred to other reserve upon
the completion of the Reorganization. |
Year ended April 30, |
||||||||||||
2021 |
2022 |
|||||||||||
HK$ |
HK$ |
HK$ |
||||||||||
OPERATING ACTIVITIES |
||||||||||||
Profit before tax |
i 182,047 | i 196,252 | i 225,010 | |||||||||
Adjustments for: |
||||||||||||
Bank and other interest income |
i — | ( i 143 | ) | ( i 5,793 | ) | |||||||
Depreciation of property, plant and equipment |
i — | i 47 | i 73 | |||||||||
Amortization of intangible assets |
i — | i 4,849 | i 6,523 | |||||||||
Recovery of accounts receivable written off |
i — | ( i 71 | ) | ( i 154 | ) | |||||||
Share-based payment |
i — | i 932 | i 8,871 | |||||||||
Changes in fair value on financial assets at FVTPL |
( i 43,592 | ) | ( i 70,291 | ) | ( i 132,032 | ) | ||||||
Change in fair value on derivative financial liabilities |
i 5,929 | i — | i — | |||||||||
Unrealized exchange gain |
i — | i — | ( i 3,138 | ) | ||||||||
Operating cash flows before movements in working capital |
i 144,384 | i 131,575 | i 99,360 | |||||||||
(Increase) decrease in fiduciary bank balances |
( i 4,268 | ) | i 6,735 | i 2,879 | ||||||||
Decrease (increase) in accounts receivable |
i 6,025 | ( i 58,338 | ) | i 29,875 | ||||||||
Decrease in prepayments and other receivables |
i 952 | i 12,478 | i 4,057 | |||||||||
Increase (decrease) in client’s monies held on trust |
i 6,864 | ( i 934 | ) | ( i 2,461 | ) | |||||||
(Decrease) increase in accounts payable |
( i 935 | ) | ( i 395 | ) | i 57 | |||||||
Increase (decrease) in other payables and accruals |
i 112 | ( i 18,040 | ) | i 11,078 | ||||||||
Increase (decrease) in contract liabilities |
i 60,631 | i 9,315 | ( i 23,473 | ) | ||||||||
Cash generated from operations |
i 213,765 | i 82,396 | i 121,372 | |||||||||
Profits tax (paid) refunded |
( i 10 | ) | i 505 | ( i 41,481 | ) | |||||||
Net cash generated from operating activities |
i 213,755 | i 82,901 | i 79,891 | |||||||||
INVESTING ACTIVITIES |
||||||||||||
Additions of financial assets at FVTPL |
i — | ( i 50,561 | ) | i — | ||||||||
Proceeds from disposal of financial assets at FVTPL |
i 318,059 | i 77,840 | i — | |||||||||
Consideration paid for acquisition of movie income right investments |
i — | i — | ( i 29,893 | ) | ||||||||
Receipt of return from movie income right investments |
i — | i — | i 20,899 | |||||||||
Acquisition of property, plant and equipment |
i — | ( i 173 | ) | ( i 44 | ) | |||||||
Acquisition of intangible assets |
i — | i — | ( i 1,770 | ) | ||||||||
Net cash inflows from acquisition of subsidiaries |
i — | i 20,729 | i — | |||||||||
Interest received |
i — | i 143 | i 315 | |||||||||
Repayment from a third party |
i 15,658 | i — | i — | |||||||||
Advance to AMTD Group |
( i 682,660 | ) | ( i 1,240,219 | ) | ( i 1,093,786 | ) | ||||||
Repayment from AMTD Group |
i 320,549 | i 883,474 | i 721,293 | |||||||||
Advance to fellow subsidiaries |
( i 1,155,271 | ) | ( i 758,095 | ) | i — | |||||||
Repayment from fellow subsidiaries |
i 509,165 | i 1,195,029 | i — | |||||||||
Net cash (used in) from investing activities |
( i 674,500 | ) | i 128,167 | ( i 382,986 | ) | |||||||
FINANCING ACTIVITIES |
||||||||||||
Advance from AMTD Group |
i 108,427 | i 95,475 | i — | |||||||||
Repayment to AMTD Group |
( i 212,820 | ) | ( i 24,162 | ) | i — | |||||||
Advance from fellow subsidiaries |
i 65,734 | i 15,477 | i — | |||||||||
Repayment to fellow subsidiaries |
( i 277,963 | ) | ( i 106,021 | ) | i — | |||||||
Repayment to a former fellow subsidiary |
( i 19,966 | ) | i — | i — | ||||||||
Proceeds from issue of shares |
i 898,074 | i 27,125 | i — | |||||||||
Proceeds from issue of warrants |
i 11,742 | i — | i — | |||||||||
Proceeds from exercise of warrants |
i 77,963 | i — | i — | |||||||||
Net cash from financing activities |
i 651,191 | i 7,894 | i — | |||||||||
Net increase (decrease) in cash and cash equivalents |
i 190,446 | i 218,962 | ( i 303,095 | ) | ||||||||
Cash and cash equivalents at beginning of the year |
i 5,764 | i 196,210 | i 416,420 | |||||||||
Effect of foreign exchange rate changes |
i — | i 1,248 | ( i 809 | ) | ||||||||
Cash and cash equivalents at end of the year |
i 196,210 | i 416,420 | i 112,516 | |||||||||
Represented by: |
||||||||||||
Cash and cash equivalents |
i 196,210 | i 416,420 | i 112,516 | |||||||||
| 1. | GENERAL |
| Name of principal subsidiaries |
Date of incorporation/ acquisition |
Place of incorporation/ establishment |
Issued and fully paid/ registered share capital |
Percentage of shareholdings at April 30, |
Principal activities | |||||||||||
| 2021 | 2022 | |||||||||||||||
| i i AMTD Risk Solutions Group Limited (“AMTD RSG”) / |
i i August 13, 2004 / | i i Hong Kong / | HK$ i i 300,000 / | i 100 | % | i 100 | % | i i Provision of digital financial services and SpiderNet ecosystem solutions services / | ||||||||
| i i AMTD Digital Media Limited (“AMTD DM”) (formerly known as AMTD Strategic Capital Limited) / |
i i August 13, 2004 / | i i Hong Kong / | HK$ i i 1 / | i 100 | % | i 100 | % | i i Provision of SpiderNet ecosystem solutions services / | ||||||||
| i i AMTD Principal Investment Solutions Group Limited (“AMTD PISG”) / |
i i July 27, 2016 / | i i BVI / | US$ i i 1 / | i 100 | % | i 100 | % | i i Investment holding / | ||||||||
| i i AMTD Direct Investment I Limited (“AMTD DI I”) / |
i i August 29, 2018 / | i i BVI / | US$ i i 1 / | i 100 | % | i 100 | % | i i Investment holding / | ||||||||
| i i AMTD Biomedical Investment Limited (“AMTD BI”) / |
i i July 28, 2017 / | i i BVI / | US$ i i 1 / | i 100 | % | i 100 | % | i i Investment holding / | ||||||||
| i i PolicyPal Pte. Ltd. (“PolicyPal”) / |
i i August 3, 2020 / | i i Singapore / | US$ i i 70 / | i 51 | % | i 51 | % | i i Provision of digital financial services / | ||||||||
| 1. | GENERAL - (CONTINUED) |
| 2. | GROUP REORGANIZATION |
| 1. | The Company was incorporated on September 12, 2019 by issuing i 1 share to AMTD Group. The Company then incorporated AMTD Digital Financial Holdings Limited (“AMTD DFH”), AMTD Digital Media Holdings Limited (“AMTD DMH”) and AMTD Digital Investments Holdings Limited (“AMTD DIH”) on October 22,
2019. In December 2019, the Company effected a i 1-to- i 10,000 |
| 2. | In December 2019, AMTD Group transferred its equity interest in (i) AMTD RS to AMTD DFH; (ii) AMTD DM to AMTD DMH; and (iii) AMTD DI I, AMTD Direct Investment III Limited (“AMTD DI III”), AMTD BI and AMTD IS to AMTD DIH. |
| 2. | GROUP REORGANIZATION - (CONTINUED) |
| 3. | ADOPTION OF NEW FINANCIAL REPORTING FRAMEWORK AND NEW AND REVISED STANDARDS IN ISSUE BUT NOT YET EFFECTIVE |
| Amendment to IFRS 16 |
COVID-19-Related Rent Concessions | |
| Amendment to IFRS 16 |
COVID-19-Related Rent Concessions beyond 30 June 2021 | |
| Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 |
Interest Rate Benchmark Reform – Phase 2 |
3. |
ADOPTION OF NEW FINANCIAL REPORTING FRAMEWORK AND NEW AND REVISED STANDARDS IN ISSUE BUT NOT YET EFFECTIVE - (CONTINUED) |
| IFRS 17 |
Insurance Contracts and the related Amendments 2 | |
| Amendments to IFRS 3 |
Reference to the Conceptual Framework 1 | |
| Amendments to IFRS 10 and IAS 28 |
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture 3 | |
| Amendments to IAS 1 |
Classification of Liabilities as Current or Non-current 2 | |
| Amendments to IAS 1 and IFRS Practice Statement 2 |
Disclosure of Accounting Policies 2 | |
| Amendments to IAS 8 |
Definition of Accounting Estimates 2 | |
| Amendments to IAS 12 |
Deferred Tax related to Assets and Liabilities arising from a Single Transaction 2 | |
| Amendments to IAS 16 |
Property, Plant and Equipment: Proceeds before Intended Use 1 | |
| Amendments to IAS 37 |
||
| Amendments to IFRS Standards |
Annual Improvements to IFRS Standards 2018-2020 1 |
1 |
Effective for annual periods beginning on or after 1 January 2022. |
2 |
Effective for annual periods beginning on or after 1 January 2023. |
3 |
Effective for annual periods beginning on or after a date to be determined. |
| 4. | BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES |
4.1 |
Basis of preparation of consolidated financial statements |
4. |
BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.1 |
Basis of preparation of consolidated financial statements - (Continued) |
4.2 |
Significant accounting policies |
(a) |
Basis of consolidation |
• |
has power over the investee; |
• |
is exposed, or has rights, to variable returns from its involvement with the investee; and |
• |
has the ability to use its power to affect its returns. |
4. |
BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
(a) |
Basis of consolidation - (Continued) |
(b) |
Business combinations or asset acquisitions |
4. |
BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
(b) |
Business combinations or asset acquisitions - (Continued) |
• |
deferred tax assets or liabilities, and assets or liabilities related to employee benefit arrangements are recognized and measured in accordance with IAS 12 Income Taxes Employee Benefits |
• |
liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with IFRS 2 Share-based Payment |
• |
assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations |
• |
lease liabilities are recognized and measured at the present value of the remaining lease payments (as defined in IFRS 16 Leases Right-of-use |
4. |
BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
(c) |
Goodwill |
| (d) | Fair value measurement |
4. |
BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
(d) |
Fair value measurement - (Continued) |
| • | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; |
| • | Level 2 inputs are inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and |
| • | Level 3 inputs are unobservable inputs for the asset or liability. |
| (e) | Revenue from contracts with customers |
4. |
BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
(e) |
Revenue from contracts with customers - (Continued) |
| (f) | Foreign currencies |
4. |
BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
(f) |
Foreign currencies - (Continued) |
| (g) | Employee benefits |
| (h) | Government grants |
(i) |
Share-based payments |
4. |
BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
(i) |
Share-based payments - (Continued) |
| (j) | Property, plant and equipment |
| (k) | Intangible assets |
4. |
BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
(k) |
Intangible assets - (Continued) |
| (l) | Impairment on property, plant and equipment and intangible assets other than goodwill |
4. |
BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
(l) |
Impairment on property, plant and equipment and intangible assets other than goodwill - (Continued) |
| (m) | Taxation |
4. |
BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
(m) |
Taxation - (Continued) |
| (n) | Financial instruments |
| 4. | BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
| (n) | Financial instruments - (Continued) |
| • | the financial asset is held within a business model whose objective is to collect contractual cash flows; and |
| • | the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. |
| • | the financial asset is held within a business model whose objective is achieved by both selling and collecting contractual cash flows; and |
| • | the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. |
| • | it has been acquired principally for the purpose of selling in the near term; or |
| • | on initial recognition it is a part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or |
| • | it is a derivative that is not designated and effective as a hedging instrument. |
| (i) | Amortized cost and interest income |
| 4. | BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
| (n) | Financial instruments - (Continued) |
| (i) | Amortized cost and interest income - (Continued) |
| (ii) | Financial assets at FVTPL |
| 4. | BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
| (n) | Financial instruments - (Continued) |
| (i) | Significant increase in credit risk |
| • | an actual or expected significant deterioration in the financial instrument’s external (if available) or internal credit rating; |
| • | significant deterioration in external market indicators of credit risk, e.g. a significant increase in the credit spread, the credit default swap prices for the debtor; |
| • | existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant decrease in the debtor’s ability to meet its debt obligations; |
| • | an actual or expected significant deterioration in the operating results of the debtor; |
| • | an actual or expected significant adverse change in the regulatory, economic, or technological environment of the debtor that results in a significant decrease in the debtor’s ability to meet its debt obligations. |
| 4. | BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
| (n) | Financial instruments - (Continued) |
| (i) | Significant increase in credit risk - (Continued) |
| (ii) | Definition of default |
| (iii) | Credit-impaired financial assets |
| (a) | significant financial difficulty of the issuer or the borrower; |
| (b) | a breach of contract, such as a default or past due event; |
| (c) | the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider; or |
| (d) | it is becoming probable that the borrower will enter bankruptcy or other financial reorganization. |
| (iv) | Write-off policy |
| 4. | BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
| (n) | Financial instruments - (Continued) |
| (iv) | Write-off policy - (Continued) |
| (v) | Measurement and recognition of ECL |
| • | Past-due status; |
| • | Nature, size and industry of debtors; and |
| • | External credit ratings where available. |
| 4. | BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
| (n) | Financial instruments - (Continued) |
(v) |
Measurement and recognition of ECL - (Continued) |
4. |
BASIS OF PREPARATION AND PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) |
4.2 |
Significant accounting policies - (Continued) |
(n) |
Financial instruments - (Continued) |
| (o) | Cash and cash equivalents |
| (p) | Fiduciary bank balances |
5. |
KEY SOURCES OF ESTIMATION UNCERTAINTY |
5. |
KEY SOURCES OF ESTIMATION UNCERTAINTY - (CONTINUED) |
| 6. | REVENUE |
(i) |
Disaggregation of revenue from contracts with customers |
Segments |
SpiderNet Ecosystem solutions |
Digital financial services |
Corporate | Total | ||||||||||||
| HK$ | HK$ | HK$ | HK$ | |||||||||||||
Types of services |
||||||||||||||||
SpiderNet ecosystem solutions services |
i 157,678 | i — | i — | i 157,678 | ||||||||||||
Insurance brokerage services |
i — | i 9,869 | i — | i 9,869 | ||||||||||||
Total |
i 157,678 | i 9,869 | i — | i 167,547 | ||||||||||||
Timing of revenue recognition |
||||||||||||||||
A point in time |
i — | i 9,869 | i — | i 9,869 | ||||||||||||
Over time |
i 157,678 | i — | i — | i 157,678 | ||||||||||||
Total |
i 157,678 | i 9,869 | i — | i 167,547 | ||||||||||||
Segments |
SpiderNet Ecosystem solutions |
Digital financial services |
Corporate | Total | ||||||||||||
| HK$ | HK$ | HK$ | HK$ | |||||||||||||
Types of services |
||||||||||||||||
SpiderNet ecosystem solutions services |
i 184,095 | i — | i — | i 184,095 | ||||||||||||
Insurance brokerage services |
i — | i 11,721 | i — | i 11,721 | ||||||||||||
Total |
i 184,095 | i 11,721 | i — | i 195,816 | ||||||||||||
Timing of revenue recognition |
||||||||||||||||
A point in time |
i — | i 11,721 | i — | i 11,721 | ||||||||||||
Over time |
i 184,095 | i — | i — | i 184,095 | ||||||||||||
Total |
i 184,095 | i 11,721 | i — | i 195,816 | ||||||||||||
| 6. | REVENUE - (CONTINUED) |
(i) |
Disaggregation of revenue from contracts with customers - (Continued) |
Segments |
SpiderNet Ecosystem solutions |
Digital financial services |
Corporate | Total | ||||||||||||
| HK$ | HK$ | HK$ | HK$ | |||||||||||||
Types of services |
||||||||||||||||
SpiderNet ecosystem solutions services |
i 184,627 | i — | i — | i 184,627 | ||||||||||||
Insurance brokerage services |
i — | i 11,798 | i — | i 11,798 | ||||||||||||
Digital media, content, and marketing services |
i — | i — | i 533 | i 533 | ||||||||||||
Total |
i 184,627 | i 11,798 | i 533 | i 196,958 | ||||||||||||
Timing of revenue recognition |
||||||||||||||||
A point in time |
i — | i 11,798 | i — | i 11,798 | ||||||||||||
Over time |
i 184,627 | i — | i 533 | i 185,160 | ||||||||||||
Total |
i 184,627 | i 11,798 | i 533 | i 196,958 | ||||||||||||
(ii) |
Transaction price allocated to the remaining performance obligation for contracts with customers |
SpiderNet ecosystem solutions income |
||||||||
2021 |
2022 |
|||||||
HK$ |
HK$ |
|||||||
Within one year |
i 173,924 | i 68,091 | ||||||
More than one year but not more than two years |
i 62,111 | i 5,317 | ||||||
More than two years |
i 5,317 | i — | ||||||
| i 241,352 | i 73,408 | |||||||
| 7. | OPERATING SEGMENTS |
7. |
OPERATING SEGMENTS - (CONTINUED) |
(a) |
The SpiderNet ecosystem solutions segment: The Group provides its institutional and corporate clients with exclusive, paid access to the AMTD SpiderNet ecosystem to enhance their investor communication, investor relations and corporate communication to potentially maximize their valuation; |
| (b) | The digital financial services segment: The Group provides primarily corporate clients with insurance brokerage services; and |
| (c) | Corporate: The Group includes in the Corporate category (i) the digital media, content, and marketing business in which the Group creates and promotes digital solutions content by investing in and developing multimedia channels to provide users and audiences access to content medium through a comprehensive library of traditional and digital movies, podcasts, webinars and live videos offered by content providers and online media platforms since May 2020; and (ii) the investments in innovative technology companies which operate digital non-financial license businesses through strategic investments. |
| SpiderNet ecosystem solutions |
Digital financial services |
Corporate | Consolidated | |||||||||||||
| HK$ | HK$ | HK$ | HK$ | |||||||||||||
| Segment revenues |
||||||||||||||||
| Revenue from external customers |
i 157,678 | i 9,301 | — | i 166,979 | ||||||||||||
| Revenue from related parties |
— | i 568 | — | i 568 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| i 157,678 | i 9,869 | — | i 167,547 | |||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Changes in fair value on financial assets measured at FVTPL |
— | — | i 43,592 | i 43,592 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Segment profits |
i 140,134 | i 4,765 | i 43,291 | i 188,190 | ||||||||||||
| Unallocated: |
||||||||||||||||
| Other gains and losses |
( i 5,586 | ) | ||||||||||||||
| Corporate expenses |
( i 557 | ) | ||||||||||||||
| |
|
|||||||||||||||
| Profit before tax |
i 182,047 | |||||||||||||||
| |
|
|||||||||||||||
| 7. | OPERATING SEGMENTS - (CONTINUED) |
| SpiderNet ecosystem solutions |
Digital financial services |
Corporate | Consolidated | |||||||||||||
| HK$ | HK$ | HK$ | HK$ | |||||||||||||
| Segment revenues |
||||||||||||||||
| Revenue from external customers |
i 176,628 | i 11,157 | — | i 187,785 | ||||||||||||
| Revenue from related parties |
i 7,467 | i 564 | — | i 8,031 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| i 184,095 | i 11,721 | — | i 195,816 | |||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Changes in fair value on financial assets measured at FVTPL |
— | — | i 70,291 | i 70,291 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Segment profits |
i 144,276 | i 1,084 | i 70,800 | i 216,160 | ||||||||||||
| Unallocated: |
||||||||||||||||
| Other gains and losses |
( i 306 | ) | ||||||||||||||
| Corporate expenses |
( i 19,602 | ) | ||||||||||||||
| |
|
|||||||||||||||
| Profit before tax |
i 196,252 | |||||||||||||||
| |
|
|||||||||||||||
SpiderNet ecosystem solutions |
Digital financial services |
Corporate |
Consolidated |
|||||||||||||
HK$ |
HK$ |
HK$ |
HK$ |
|||||||||||||
| Segment revenues |
||||||||||||||||
| Revenue from external customers |
i 171,827 | i 11,141 | i 533 | i 183,501 | ||||||||||||
| Revenue from related parties |
i 12,800 | i 657 | — | i 13,457 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| i 184,627 | i 11,798 | i 533 | i 196,958 | |||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Changes in fair value on financial assets measured at FVTPL |
— | — | i 132,032 | i 132,032 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Segment profits |
i 136,607 | i 951 | i 136,323 | i 273,881 | ||||||||||||
| Unallocated: |
||||||||||||||||
| Other income |
i 35 | |||||||||||||||
| Other gains and losses |
i 4,746 | |||||||||||||||
| Corporate expenses |
( i 53,652 | ) | ||||||||||||||
| |
|
|||||||||||||||
| Profit before tax |
i 225,010 | |||||||||||||||
| |
|
|||||||||||||||
| 7. | OPERATING SEGMENTS - (CONTINUED) |
| Note: | Non-current assets excluded financial instruments. |
2020 |
2021 |
2022 |
||||||||||
HK$ |
HK$ |
HK$ |
||||||||||
Customer A 1 |
i 38,911 | N/A | 2 |
— |
||||||||
Customer B 1 |
i 27,456 | — |
N/A | 2 | ||||||||
Customer C 1 |
i 22,701 | N/A | 2 |
N/A | 2 | |||||||
Customer D 1 |
i 22,044 | i 22,009 | N/A | 2 | ||||||||
Customer E 1 |
i 19,570 | N/A | 2 |
N/A | 2 | |||||||
Customer F 1 |
N/A | 2 |
N/A | 2 |
i 20,000 | |||||||
1 |
Revenue from SpiderNet ecosystem solutions segment |
2 |
Revenue by this customer is less than i 10% of the total revenue |
| 8. | CHANGES IN FAIR VALUE ON FINANCIAL ASSETS MEASURED AT FVTPL |
2020 |
2021 |
2022 |
||||||||||
HK$ |
HK$ |
HK$ |
||||||||||
Changes in fair value on financial assets at FVTPL |
i 43,592 | i 70,291 | i 132,032 | |||||||||
| 9. | OTHER INCOME |
2020 |
2021 |
2022 |
||||||||||
HK$ |
HK$ |
HK$ |
||||||||||
Bank and other interest income |
— | i 143 | i 5,793 | |||||||||
Government grant (note) |
— | i 1,176 | i 909 | |||||||||
Others |
— | i 4 | i 53 | |||||||||
| i — | i 1,323 | i 6,755 | ||||||||||
| Note: | During the years ended April 30, 2021 and 2022, the Group recognized government grants of HK$ i 1,176 and HK$ i 909,
respectively, in respect of COVID-19-related |
10. |
OTHER GAINS AND LOSSES, NET |
2020 |
2021 |
2022 |
||||||||||
HK$ |
HK$ |
HK$ |
||||||||||
Net exchange gain (loss) |
i 343 | ( i 377 | ) | i 4,592 | ||||||||
Recovery of accounts and other receivables written off |
— | i 71 | i 154 | |||||||||
Change in fair value on derivative financial liabilities (note 23(iii)) |
( i 5,929 | ) | — | — | ||||||||
| ( i 5,586 | ) | ( i 306 | ) | i 4,746 | ||||||||
| 11. | INCOME TAX EXPENSE |
| 2020 | 2021 | 2022 | ||||||||||
| HK$ | HK$ | HK$ | ||||||||||
Hong Kong Profits Tax |
||||||||||||
- Current tax |
i 23,715 | i 25,455 | i 24,995 | |||||||||
- Overprovision in prior years |
i — | ( i 20 | ) | ( i 282 | ) | |||||||
Deferred tax (note 22) |
i — | ( i 824 | ) | ( i 1,099 | ) | |||||||
| i 23,715 | i 24,611 | i 23,614 | ||||||||||
| 11. | INCOME TAX EXPENSE - (CONTINUED) |
| 2020 | 2021 | 2022 | ||||||||||
| HK$ | HK$ | HK$ | ||||||||||
| Profit before tax |
i 182,047 | i 196,252 | i 225,010 | |||||||||
| |
|
|
|
|
|
|||||||
| Tax at the domestic income tax rate of i 16.5% |
i 30,038 | i 32,382 | i 37,127 | |||||||||
| Tax effect of income not taxable for tax purpose |
( i 7,820 | ) | ( i 16,719 | ) | ( i 24,679 | ) | ||||||
| Tax effect of expenses not deductible for tax purpose |
i 2,310 | i 7,505 | i 7,869 | |||||||||
| Tax effect of tax losses not recognized |
i — | i 1,565 | i 3,559 | |||||||||
| Utilization of tax losses previously not recognized |
( i 809 | ) | i — | i — | ||||||||
| Overprovision in prior years |
i — | ( i 20 | ) | ( i 282 | ) | |||||||
| Effect of different tax rates of subsidiaries operating in other jurisdictions |
i — | ( i 70 | ) | i 20 | ||||||||
| Others |
( i 4 | ) | ( i 32 | ) | i — | |||||||
| |
|
|
|
|
|
|||||||
| Income tax expense for the year |
i 23,715 | i 24,611 | i 23,614 | |||||||||
| |
|
|
|
|
|
|||||||
| 12. | PROFIT FOR THE YEAR |
2020 |
2021 |
2022 |
||||||||||
HK$ |
HK$ |
HK$ |
||||||||||
| Directors’ emoluments |
||||||||||||
| Salaries, allowances and other benefits |
i 2,041 | i 4,420 | i 3,965 | |||||||||
| Retirement benefit scheme contributions (note) |
i 53 | i 68 | i 65 | |||||||||
| Staff costs |
||||||||||||
| Salaries, allowances and other benefits |
i 12,640 | i 42,311 | i 67,148 | |||||||||
| Retirement benefit scheme contributions (note) |
i 434 | i 1,227 | i 1,248 | |||||||||
| Depreciation and amortization |
— | i 4,896 | i 6,596 | |||||||||
| |
|
|
|
|
|
|||||||
| Note: | The Group operates a Mandatory Provident Fund Scheme and Central Provident Fund Scheme for all qualifying employees in Hong Kong and Singapore, respectively. The assets of the schemes are held separately from those of the Group, in funds under the control of trustees. |
| 13. | EARNINGS PER SHARE |
| Earnings figures are calculated as follows: |
2020 | 2021 | 2022 | |||||||||
| HK$ | HK$ | HK$ | ||||||||||
| Earnings for the purpose of basic and diluted earnings per share |
i 151,362 | i 177,865 | i 214,279 | |||||||||
| |
|
|
|
|
|
|||||||
| Number of shares |
2020 |
2021 |
2022 |
|||||||||
| Weighted average number of ordinary shares for the purpose of basic earnings per share |
i 40,152,697 | i 52,919,515 | i 67,579,432 | |||||||||
| Effect of dilutive potential ordinary shares -restricted ordinary shares and restricted shares unit (note 28) |
— | i 7,185 | i 28,492 | |||||||||
| |
|
|
|
|
|
|||||||
| Weighted average number of ordinary shares for the purpose of diluted earnings per share |
i 40,152,697 | i 52,926,700 | i 67,607,924 | |||||||||
| |
|
|
|
|
|
|||||||
| 14. | ACQUISITION OF A SUBSIDIARY |
HK$ |
||||
| Cash |
i 23,259 | |||
| Equity instruments issued |
i 67,664 | |||
| |
|
|||
| Total |
i 90,923 | |||
| |
|
|||
| 14. | ACQUISITION OF A SUBSIDIARY - (CONTINUED) |
HK$ |
||||
| Property, plant and equipment |
i 30 | |||
| Intangible asset |
i 45,260 | |||
| Accounts and other receivables |
i 293 | |||
| Bank balances and cash |
i 43,988 | |||
| Accounts and other payables |
( i 18,597 | ) | ||
| Deferred tax liabilities |
( i 7,694 | ) | ||
| |
|
|||
| i 63,280 | ||||
| |
|
|||
HK$ |
||||
| Consideration transferred |
i 90,923 | |||
| Plus: non-controlling interests (49% in PolicyPal) |
i 31,032 | |||
| Less: net assets acquired |
( i 63,280 | ) | ||
| |
|
|||
| Goodwill arising on acquisition |
i 58,675 | |||
| |
|
|||
HK$ |
||||
| Cash consideration paid |
( i 23,259 | ) | ||
| Less: cash and cash equivalents balances acquired |
i 43,988 | |||
| |
|
|||
| i 20,729 | ||||
| |
|
|||
| 14. | ACQUISITION OF A SUBSIDIARY - (CONTINUED) |
| 15. | GOODWILL |
| HK$ | ||||
| COST |
||||
| i — | ||||
| Arising in acquisition of PolicyPal (note 14) |
i 58,675 | |||
| |
|
|||
| At April 30, 2021 and 2022 |
i i 58,675 / | |||
| |
|
|||
| 16. | INTANGIBLE ASSETS |
Developed technology |
Brand name |
Total |
||||||||||
HK$ |
HK$ |
HK$ |
||||||||||
| COST |
||||||||||||
| i — | i — | i — | ||||||||||
| Acquired on acquisition of PolicyPal (note 14) |
i 45,260 | i — | i 45,260 | |||||||||
| |
|
|
|
|
|
|||||||
| i 45,260 | i — | i 45,260 | ||||||||||
| Additions |
i 1,176 | i 1,380 | i 2,556 | |||||||||
| Exchange adjustments |
|
|
( i 30 |
) |
|
|
i — |
|
|
|
( i 30 |
) |
| |
|
|
|
|
|
|||||||
| i 46,406 | i 1,380 | i 47,786 | ||||||||||
| |
|
|
|
|
|
|||||||
| AMORTIZATION |
||||||||||||
| i — | i — | i — | ||||||||||
| Charge for the year |
i 4,849 | i — | i 4,849 | |||||||||
| |
|
|
|
|
|
|||||||
| i 4,849 | i — | i 4,849 | ||||||||||
| Charge for the year |
i 6,460 | i 63 | i 6,523 | |||||||||
| Exchange adjustments |
|
|
( i 4 |
) |
|
|
i — |
|
|
|
( i 4 |
) |
| |
|
|
|
|
|
|||||||
| i 11,305 | i 63 | i 11,368 | ||||||||||
| |
|
|
|
|
|
|||||||
| CARRYING VALUE |
||||||||||||
| i 40,411 | i — | i 40,411 | ||||||||||
| |
|
|
|
|
|
|||||||
| i 35,101 | i 1,317 | i 36,418 | ||||||||||
| |
|
|
|
|
|
|||||||
| Developed technology | i 7 years | |
| Brand name | i 20 years |
| 17. | PROPERTY, PLANT AND EQUIPMENT |
| Computer equipment |
||||
| HK$ | ||||
| COST |
||||
| i — | ||||
| Acquisition of a subsidiary (note 14) |
i 30 | |||
| Additions |
i 173 | |||
| |
|
|||
| i 203 | ||||
| Additions |
i 44 | |||
| Exchange adjustments |
|
|
( i 7 |
) |
| |
|
|||
| i 240 | ||||
| |
|
|||
| DEPRECIATION |
||||
| i — | ||||
| Provided for the year |
i 47 | |||
| |
|
|||
| i 47 | ||||
| Provided for the year |
i 73 | |||
| Exchange adjustments |
|
|
( i 6 |
) |
| |
|
|||
| i 114 | ||||
| |
|
|||
| CARRYING VALUES |
||||
| i 156 | ||||
| |
|
|||
| i 126 | ||||
| |
|
|||
| Computer equipment |
i 5 years |
| 18. | FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS |
| 2021 | 2022 | |||||||
| HK$ | HK$ | |||||||
| Unlisted equity securities (note (i)) |
i 212,851 | i 87,043 | ||||||
| Movie income right investments (note (ii)) |
i 81,101 | i 63,091 | ||||||
| |
|
|
|
|||||
| i 293,952 | i 150,134 | |||||||
| |
|
|
|
|||||
| (i) | The Company classified certain equity securities as non-current when Company considered that these equity securities are held for long-term purposes and would realize their performance potential in the long run. During the year ended April 30, 2021, additions of financial assets at FVTPL of HK$ i 8,435 was paid
by AMTD Group on behalf of the Group. The amount due to AMTD Group were netted-off with amount due from AMTD Group during the year ended April 30, 2021 and details of which are set out in note 29. |
| During the year ended April 30, 2022, the Group disposed a financial asset measured at FVTPL to an independent third party with a gain of HK$ i 130,562 at consideration of HK$ i 254,951
which is recorded as consideration receivable on disposal of financial assets at FVTPL included in account and other receivables as of April 30, 2022 (note 19). The consideration receivable, in the form of a |
18. |
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - (CONTINUED) |
loan note from an independent third party, is unsecured, carries a fixed interest rate of i 1.2 % per month and repayable within one year. The related interest receivable of HK$ i 5,294
at April 30, 2022 was included in other receivables (note 19). |
(ii) |
As of April 30, 2021 and 2022, the financial assets at FVTPL of the Group includes movie income right agreements with a production house, which is an independent third party, of HK$ i 81,101 and HK$ i 63,091,
respectively. In accordance to the relevant agreements, the Group is entitled to certain percentage of the profit to be derived from the release of the films upon entering into the agreement. The Group may be required to further contribute to the film program due to the budget overruns. Any agreed further contribution to the film program due to the budget overruns of the film program by the Group will be added to the carrying amounts of financial assets. There was no further contribution during the year ended April 30, 2022. |
| 19. | ACCOUNTS AND OTHER RECEIVABLES |
| 2021 | 2022 | |||||||
| HK$ | HK$ | |||||||
| Commission receivable from insurance brokerage |
i 2,766 | i 1,577 | ||||||
| Accounts receivable arising from the SpiderNet ecosystem solutions business |
i 66,655 | i 37,968 | ||||||
| |
|
|
|
|||||
| Total accounts receivable |
i 69,421 | i 39,545 | ||||||
| |
|
|
|
|||||
| Consideration receivable on disposal of financial assets at FVTPL (note 18) |
— | i 258,176 | ||||||
| Prepayments (note (i)) |
i 8,158 | i 2,731 | ||||||
| Note receivables (note (ii)) |
i 4,165 | i 5,317 | ||||||
| Other receivables |
i 3,035 | i 8,716 | ||||||
| Deferred issue costs |
i 7,970 | i 14,970 | ||||||
| Prepayment for subscription of bond instrument (note (iii)) |
i 11,452 | i — | ||||||
| |
|
|
|
|||||
| Prepayments and other receivables |
i 34,780 | i 289,910 | ||||||
| |
|
|
|
|||||
| i 104,201 | i 329,455 | |||||||
| |
|
|
|
|||||
| Presented as: |
||||||||
| Current |
i 88,584 | i 329,455 | ||||||
| Non-current |
i 15,617 | i — | ||||||
| |
|
|
|
|||||
| i 104,201 | i 329,455 | |||||||
| |
|
|
|
|||||
| (i) | As of April 30, 2021 and 2022, prepayments mainly included employment incentive paid to the employees amounting to HK$ i 6,852 and HK$ i 1,541,
respectively, which are paid at the beginning of the employment contracts, and repayable by the employees on a pro rata basis upon early termination of the employment contracts. Such amounts are amortized over the relevant period on a straight line basis accordingly. |
| (ii) | As of April 30, 2021 and 2022, the amount represented note receivables from independent third parties. The balances are unsecured, carried at fixed interest rates ranged from i 5% to i 8%
and have original maturity of i 2 years. |
| (iii) | As of April 30, 2021, AMTD Group, the ultimate holding company, made a prepayment of HK$ i 11,452 on behalf of the Group to an independent third party to subscribe for its bond instrument. Such prepayment was transferred to AMTD Group to settle amount due to AMTD Group amounting to HK$ i 11,452
during year ended April 30, 2022. |
19. |
ACCOUNTS AND OTHER RECEIVABLES - (CONTINUED) |
| 20. | ACCOUNTS AND OTHER PAYABLES |
| 2021 | 2022 | |||||||
| HK$ | HK$ | |||||||
| Accounts payable arising from insurance brokerage |
i 111 | i 80 | ||||||
| Consideration payable for acquisition of movie income right investments |
i 29,893 | i — | ||||||
| Other payables and accruals |
i 1,003 | i 12,073 | ||||||
| Accrued issue cost |
i 7,970 | i 14,970 | ||||||
| |
|
|
|
|||||
| i 38,977 | i 27,123 | |||||||
| |
|
|
|
|||||
| 21. | CONTRACT LIABILITIES |
2021 |
2022 |
|||||||
HK$ |
HK$ |
|||||||
| SpiderNet ecosystem solutions income |
i 70,313 | i 46,840 | ||||||
| |
|
|
|
|||||
| Presented as: |
||||||||
| Current |
i 39,121 | i 41,523 | ||||||
| Non-current |
i 31,192 | i 5,317 | ||||||
| |
|
|
|
|||||
| i 70,313 | i 46,840 | |||||||
| |
|
|
|
|||||
| 2021 | 2022 | |||||||
| HK$ | HK$ | |||||||
| SpiderNet ecosystem solutions income |
||||||||
| Revenue recognized that was included in the contract liability balance at the beginning of the year |
i 35,722 | i 39,121 | ||||||
| |
|
|
|
|||||
| 22. | DEFERRED TAX LIABILITY |
| Intangible assets |
||||
| HK$ | ||||
| i — | ||||
| Acquisition of a subsidiary (note 14) |
i 7,694 | |||
| Credit to profit or loss (note 11) |
( i 824 | ) | ||
| |
|
|||
| i 6,870 | ||||
| Credit to profit or loss (note 11) |
( i 1,099 | ) | ||
| |
|
|||
| i 5,771 | ||||
| |
|
|||
| 23. | SHARE CAPITAL |
| Class A Ordinary shares | Class B Ordinary shares | Total | ||||||||||||||||||||||
| Number of shares |
Share capital |
Number of shares |
Share capital |
Number of shares |
Share capital |
|||||||||||||||||||
| HK$ | HK$ | HK$ | ||||||||||||||||||||||
| Ordinary shares of US$0.0001 each |
||||||||||||||||||||||||
| Authorized |
||||||||||||||||||||||||
| At April 30, 2021 and 2022 |
i 8,000,000,000 | i 6,200,000 | i 2,000,000,000 | i 1,550,000 | i 10,000,000,000 | i 7,750,000 | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Issued and fully paid |
||||||||||||||||||||||||
| At May 1, 2019 |
— | — | — | — | — | — | ||||||||||||||||||
| Issuance upon incorporation (note (i)) |
— | — | i 1 | — | i 1 | — | ||||||||||||||||||
| Share split (note (i)) |
— | — | i 9,999 | — | i 9,999 | — | ||||||||||||||||||
| Issuance of shares (note (ii)) |
i 9,500,000 | i 7 | i 38,790,000 | i 30 | i 48,290,000 | i 37 | ||||||||||||||||||
| Exercise of warrants (note (iii)) |
i 1,226,667 | i 1 | — | — | i 1,226,667 | i 1 | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| i 10,726,667 | i 8 | i 38,800,000 | i 30 | i 49,526,667 | i 38 | |||||||||||||||||||
| Issuance of shares (notes (iv) and (viii)) |
i 17,350,000 | i 13 | — | — | i 17,350,000 | i 13 | ||||||||||||||||||
| Share-based compensation (note (v)) |
i 38,710 | — | — | — | i 38,710 | — | ||||||||||||||||||
| Acquisitions of subsidiaries (note (vi)) |
i 702,765 | i 1 | — | — | i 702,765 | i 1 | ||||||||||||||||||
| Transfer of shares (note (vii)) |
i 14,598,000 | i 11 | ( i 14,598,000 | ) | ( i 11 | ) | — | — | ||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| i 43,416,142 | i 33 | i 24,202,000 | i 19 | i 67,618,142 | i 52 | |||||||||||||||||||
| Transfer of shares (note (ix)) |
( i 41,448,000 | ) | ( i 31 | ) | i 41,448,000 | i 31 | — | — | ||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| At April 30, 2022 (note (x)) |
i 1,968,142 | i 2 | i 65,650,000 | i 50 | i 67,618,142 | i 52 | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| (i) | Upon the incorporation of the Company in September 2019, the Company issued one ordinary share to the controlling shareholder. In December 2019, the Company effected a 1-to- i 10,000 |
| 23. | SHARE CAPITAL - (CONTINUED) |
| following which i one issued ordinary share was subdivided into i 10,000
ordinary shares and re-designated as Class B ordinary share. |
| (ii) | On December 18, 2019, the Company issued i 36,790,000 shares of Class B ordinary shares to the controlling shareholder at par value of US$ i 0.0001
(equivalent to approximately HK$ i 0.00078) for an aggregation consideration of US$ i 4
(equivalent to approximately HK$ i 29) in exchange for the equity in all the transferred subsidiaries as part of the reorganization. |
| (iii) | On December 19, 2019, the Company issued warrants to an independent third party for an aggregate consideration of US$ i 1,500 (approximately equivalent to HK$ i 11,742),
with a total exercise price of US$ i 10,000 (equivalent to approximately HK$ i 77,963) for i 3.23%
equity interest of the Company which was recognized as derivative financial liabilities. The changes in fair value of the warrants from date of issuance to date of exercise amounting to HK$ i 5,929 was recognized as a loss in the consolidated statement of profit or loss and other comprehensive income for the year ended April 30, 2020. On March 10,
2020, the warrant holder exercised the warrants in full and paid an amount of US$ i 10,000 (equivalent to approximately HK$ i 77,963) for i 1,226,667
shares of Class A ordinary shares. It resulted in the increase in share capital of HK$ i 1 and share premium of HK$ i 95,633. As at April 30, 2020, the
Company had i no warrants outstanding. |
| (iv) | Between May 13, 2020 and August 3, 2020, the Company issued i 350,000 shares of Class A ordinary shares to third party investors for an aggregate consideration of US$ i 3,500
(equivalent to approximately HK$ i 27,126). |
| (v) | On August 3, 2020, the Company granted i 38,710 shares of Class A ordinary shares with an aggregated grant date fair value of HK$ i 3,728,
which has a vesting period of i 3 years, to a personnel of the Company. Please see note 28 for details. |
| (vi) | The Company issued i 702,765 Class A ordinary shares to certain shareholders of PolicyPal, together with a cash consideration, in exchange for i 51%
of the equity interest of PolicyPal on August 3, 2020. Details of the acquisition of subsidiary are set out in note 14. |
| (vii) | On June 26, 2020, the then immediate holding company of the Company, AMTD Group, converted its i 14,598,000 Class B ordinary shares to Class A ordinary shares. AMTD Group then transferred its i 2,441,000
Class A ordinary shares to AMTD Assets Alpha Group, a fellow subsidiary of the Company, i 2,441,000 Class A ordinary shares to AMTD Education Group, a fellow subsidiary of the Company, and i 9,716,000
Class A ordinary shares to AMTD IDEA Group, respectively. |
| (viii) | On March 8, 2021, the Company issued i 8,500,000 Class A ordinary shares to AMTD Assets Alpha Group, a fellow subsidiary of the Company, and i 8,500,000
Class A ordinary shares to AMTD Education Group, a fellow subsidiary of the Company, for cash considerations of US$ i 85,000 (equivalent to approximately HK$ i 659,923)
and US$ i 85,000 (equivalent to approximately HK$ i 659,923),
respectively. |
| (ix) | On February 23, 2022, i 41,448,000 Class A ordinary shares of the Company held by AMTD IDEA Group were returned and canceled with i 41,448,000
Class B ordinary shares issued to AMTD IDEA Group. |
| 23. | SHARE CAPITAL - (CONTINUED) |
| (x) | The number of Class A ordinary shares of the Company at April 30, 2022 included i 38,710 unvested Class A ordinary shares as detailed in note 28. The outstanding and vested Class A ordinary shares of the Company at April
30, 2022 is i 1,929,432 shares. |
| 24. | NON-CONTROLLING INTERESTS |
| Share of net assets of subsidiaries |
||||
| HK$ | ||||
| At May 1, 2019 |
i 27,110 | |||
| Share of profit for the year |
i 6,970 | |||
| Acquisition of non-controlling interest of subsidiaries (note) |
( i 34,080 | ) | ||
| |
|
|||
| i — | ||||
| Share of loss for the year |
( i 6,224 | ) | ||
| Exchange differences arising on translation of foreign operations |
i 378 | |||
| Acquisition of subsidiaries (note 14) |
i 31,032 | |||
| |
|
|||
| i 25,186 | ||||
| Share of loss for the year |
( i 12,883 | ) | ||
| Exchange differences arising on translation of foreign operations |
( i 403 | ) | ||
| Issue of shares (note 16) |
i 444 | |||
| Share-based compensation (note 28) |
i 7,123 | |||
| |
|
|||
| i 19,467 | ||||
| |
|
|||
| Note: | As disclosed in note 2, in December 2019, AMTD Group acquired the remaining i 20.87% equity interests in AMTD SCG from non-controlling shareholders. AMTD Group then transferred i 100%
equity interests in AMTD RS, AMTD RSG, AMTD IS and AMTD PISG from AMTD SCG to the Company. The non-controlling interests amounting to HK$ i 34,080 which represented 20.87% of total net assets of AMTD RS, AMTD RSG, AMTD IS and AMTD PISG were reclassified into parent’s net investments as a deemed contribution from AMTD Group and constituted as non-cash transaction. |
| 25. | CAPITAL RISK MANAGEMENT |
| 26. | FINANCIAL INSTRUMENTS |
| a | Categories of financial instruments |
| 2021 | 2022 | |||||||
| HK$ | HK$ | |||||||
| Financial assets |
||||||||
| Financial assets at FVTPL |
i 293,952 | i 150,134 | ||||||
| Amortized cost |
i 2,646,297 | i 2,958,592 | ||||||
| |
|
|
|
|||||
| Financial liability |
||||||||
| Amortized cost |
i 48,088 | i 33,773 | ||||||
| |
|
|
|
|||||
| b. | Financial risk management objectives and policies |
| (i) | Currency risk |
| (ii) | Interest rate risk |
| 26. | FINANCIAL INSTRUMENTS - (CONTINUED) |
| b. | Financial risk management objectives and policies - (Continued) |
| (iii) | Other price risk |
| 26. | FINANCIAL INSTRUMENTS - (CONTINUED) |
| b. | Financial risk management objectives and policies - (Continued) |
| 26. | FINANCIAL INSTRUMENTS - (CONTINUED) |
| b. | Financial risk management objectives and policies - (Continued) |
| Internal credit rating |
Description |
Commission receivable from insurance brokerage and accounts receivable arising from the SpiderNet ecosystem solutions business |
Other financial assets | |||
| Normal risk |
i The counterparty has a low risk of default and usually settled within credit period | i Lifetime ECL-not credit-impaired | i 12-month ECL | |||
| Doubtful |
i There have been significant increases in credit risk since initial recognition through information developed internally or external resources |
i Lifetime ECL-not credit- impaired | i Lifetime ECL-not credit-impaired | |||
| Loss |
i There is evidence indicating the asset is credit-impaired | i Lifetime ECL-credit-impaired | i Lifetime ECL-credit-impaired | |||
| Write-off |
i There is evidence indicating that the debtor is in severe financial difficulty and the Group has no realistic prospect of recovery |
i Amount is written off | i Amount is written off | |||
| 26. | FINANCIAL INSTRUMENTS - (CONTINUED) |
| b. | Financial risk management objectives and policies - (Continued) |
| Notes | Internal credit rating |
12m ECL or lifetime ECL |
2021 Gross carrying amount |
2022 Gross carrying amount |
||||||||||
| HK$ | HK$ | |||||||||||||
| Financial assets at amortized costs |
||||||||||||||
| Commission receivable from insurance brokerage |
19 | (Note) | Lifetime ECL (provision matrix) | i 2,766 | i 1,577 | |||||||||
| Accounts receivable arising from the SpiderNet ecosystem solutions business |
19 | (Note) | Lifetime ECL - not credit-impaired |
i 66,655 | i 37,968 | |||||||||
| Consideration receivables |
19 | Normal risk | 12-month ECL |
— | i 258,176 | |||||||||
| Note receivables |
19 | Normal risk | 12-month ECL |
i 4,165 | i 5,317 | |||||||||
| Other receivables |
19 | Normal risk | 12-month ECL |
i 3,035 | i 8,716 | |||||||||
| Amount due from AMTD Group |
27 | Normal risk | 12-month ECL |
i 2,138,708 | i 2,522,653 | |||||||||
| Cash and cash equivalents |
Aa3 | 12-month ECL |
i 416,420 | i 112,516 | ||||||||||
| Fiduciary bank balances |
Normal risk | 12-month ECL |
i 14,548 | i 11,669 | ||||||||||
| |
|
|
|
|||||||||||
| i 2,646,297 | i 2,958,592 | |||||||||||||
| |
|
|
|
|||||||||||
| Note: | For commission receivable from insurance brokerage and accounts receivable arising from the SpiderNet ecosystem solutions business, the Group has applied the simplified approach in IFRS 9 to measure the loss allowance at lifetime ECL. The Group determines the ECL on commission receivable from insurance brokerage on a collective basis, grouped by internal credit rating. For accounts receivable arising from the SpiderNet ecosystem solutions business, the ECL is assessed on an individual basis. |
| 26. | FINANCIAL INSTRUMENTS - (CONTINUED) |
| b. | Financial risk management objectives and policies - (Continued) |
| Weighted average interest rate |
On demand or less than 1 month |
Total undiscounted cash flows |
Carrying amount |
|||||||||||||
| HK$ | HK$ | HK$ | ||||||||||||||
| Non-derivative financial liabilities |
||||||||||||||||
| Non-interest bearing |
||||||||||||||||
| Accounts payable |
i — | i 111 | i 111 | i 111 | ||||||||||||
| Clients’ monies held on trust |
i — | i 9,111 | i 9,111 | i 9,111 | ||||||||||||
| Consideration payable for acquisition of movie income right investments |
i — | i 29,893 | i 29,893 | i 29,893 | ||||||||||||
| Other payables and accruals |
i — | i 8,973 | i 8,973 | i 8,973 | ||||||||||||
| |
|
|
|
|
|
|||||||||||
| i 48,088 | i 48,088 | i 48,088 | ||||||||||||||
| |
|
|
|
|
|
|||||||||||
| Weighted average interest rate |
On demand or less than 1 month |
Total undiscounted cash flows |
Carrying amount |
|||||||||||||
| HK$ | HK$ | HK$ | ||||||||||||||
| Non-derivative financial liabilities |
||||||||||||||||
| Non-interest bearing |
||||||||||||||||
| Accounts payable |
i — | i 80 | i 80 | i 80 | ||||||||||||
| Clients’ monies held on trust |
i — | i 6,650 | i 6,650 | i 6,650 | ||||||||||||
| Other payables and accruals |
i — | i 27,043 | i 27,043 | i 27,043 | ||||||||||||
| |
|
|
|
|
|
|||||||||||
| i 33,773 | i 33,773 | i 33,773 | ||||||||||||||
| |
|
|
|
|
|
|||||||||||
| c. | Fair value measurements of financial instruments |
| 26. | FINANCIAL INSTRUMENTS - (CONTINUED) |
| c. | Fair value measurements of financial instruments - (Continued) |
(i) |
Fair value of the Group’s financial assets that are measured at fair value on a recurring basis |
| Financial assets |
Fair value as at |
Fair value hierarchy |
Valuation technique(s) and key inputs |
Significant unobservable input(s) | ||||||||||
2021 |
2022 |
|||||||||||||
HK$ |
HK$ |
|||||||||||||
| Financial assets at FVTPL - unlisted equity securities |
i 9,990 |
i 3,830 |
Level 2 |
i The fair values of unlisted equity investments are determined with reference to the recent transaction price of the investments. |
N/A | |||||||||
i 202,861 |
i 83,213 |
Level 3 |
i Market approach - the option pricing model (“OPM”) backsolve approach was used to calculate the implied equity value of the investee. Once an overall equity value was determined, amounts were allocated to the various classes of equity based on the security class preferences. The inputs to the OPM
backsolve approach are the recent transaction price for capital structure, probability of IPO, redemption and liquidation, the risk-free interest rate and expected volatility. |
i Expected volatility ranged from i 34.2% to i 68.5% and i 57.4% to i 68.6% as at April 30, 2021 and 2022, respectively, taking into account peer companies’ volatility used by market participants when pricing the investment (note (i)). / | ||||||||||
| Movie income right investments |
i 81,101 |
i 63,091 |
Level 3 |
i Income approach - in this approach, the discounted cash flow method was used to capture the present value of the expected future economic benefits to be derived from the investments in these movie income right |
i Discount rate, taking into account weighted average cost of capital determined using
a Capital Asset Pricing Model ranged | |||||||||
| 26. | FINANCIAL INSTRUMENTS - (CONTINUED) |
| c. | Fair value measurements of financial instruments - (Continued) |
(i) |
Fair value of the Group’s financial assets that are measured at fair value on a recurring basis - (Continued) |
| Financial assets |
Fair value as at |
Fair value hierarchy |
Valuation technique(s) and key inputs |
Significant unobservable input(s) | ||||||||||
2021 |
2022 |
|||||||||||||
HK$ |
HK$ |
|||||||||||||
investment, based on an appropriate discount rate. |
(note (ii)) and expected ticket sales performance and expected movie production costs. | |||||||||||||
| (i) | A change in the expected volatility used in isolation would result in a change in the fair value of the private equity investments. A i i i i 5 / / / %
increase/(decrease) in the expected volatility holding all other variables constant would result in a net (decrease)/increase in the carrying amount of the private equity investments by (HK$ )/HK$ i 1,317
and (HK$ i 850 )/HK$ |
| (ii) | A i i 5 / %
increase/(decrease) in the discount rate holding all other variables constant would (decrease)/increase the carrying amount of the movie income right investments by (HK$ i 5,384and 2022, respectively. |
| Unlisted investments classified as equity instruments at FVTPL |
Movie income right investments |
Total | ||||||||||
| HK$ | HK$ | HK$ | ||||||||||
| At May 1, 2020 |
i 131,232 | — | i 131,232 | |||||||||
| Total gains in profit or loss |
i 70,344 | i 647 | i 70,991 | |||||||||
| Transfer from Level 2 to Level 3 |
i 77,464 | — | i 77,464 | |||||||||
| Transfer from Level 3 to Level 1 |
( i 78,540 | ) | — | ( i 78,540 | ) | |||||||
| Purchases |
i 2,361 | i 80,454 | i 82,815 | |||||||||
| |
|
|
|
|
|
|||||||
| i 202,861 | i 81,101 | i 283,962 | ||||||||||
| Total gains in profit or loss |
i 129,101 | i 2,889 | i 131,990 | |||||||||
| Transfer from Level 2 to Level 3 |
i 6,202 | — | i 6,202 | |||||||||
| Receipt of investment return |
|
|
— |
|
|
|
( i 20,899 |
) |
|
|
( i 20,899 |
) |
| Disposals |
( i 254,951 | ) | — | ( i 254,951 | ) | |||||||
| |
|
|
|
|
|
|||||||
| i 83,213 | i 63,091 | i 146,304 | ||||||||||
| |
|
|
|
|
|
|||||||
| 26. | FINANCIAL INSTRUMENTS - (CONTINUED) |
| c. | Fair value measurements of financial instruments - (Continued) |
(i) |
Fair value of the Group’s financial assets that are measured at fair value on a recurring basis - (Continued) |
(ii) |
Fair value of financial assets and financial liabilities that are not measured at fair value on a recurring basis |
| 27. | RELATED PARTY DISCLOSURES |
| Relationship |
Nature of transactions |
2020 | 2021 | 2022 | ||||||||||
| HK$ | HK$ | HK$ | ||||||||||||
| i Immediate holding company/ultimate holding company (note (ii)) |
i Insurance brokerage services rendered | i 454 | i 477 | i 84 | ||||||||||
| i Immediate holding company/ultimate holding company (note (ii)) |
i SpiderNet ecosystem solutions services rendered | i — | i 7,467 | i 12,800 | ||||||||||
| i Immediate holding company/ultimate holding company (note (ii)) |
i Corporate expenses allocated | i 7,897 | i 6,227 | i 7,090 | ||||||||||
| i Fellow subsidiaries |
i Insurance brokerage services rendered | i 110 | i 87 | i 573 | ||||||||||
| i A fellow subsidiary |
i Disposal of an investment (note (i)) | i 317,102 | i — | i — | ||||||||||
| i A related company |
i SpiderNet ecosystem solutions service rendered | i — | i 5,000 | i — | ||||||||||
| |
|
|
|
|
|
|||||||||
| 27. | RELATED PARTY DISCLOSURES - (CONTINUED) |
| Notes: |
| (i) | On June 30, 2019, the Group disposed of an investment to a fellow subsidiary for cash consideration of HK$ i 317,102 to streamline the businesses of the respective entities. |
| (ii) | The amounts represent transactions with AMTD Group which was the immediate holding company of the Company before December 30, 2020 and is the ultimate holding company of the Company on and after December 30, 2020. |
| 28. | SHARE-BASED COMPENSATION |
| 28. | SHARE-BASED COMPENSATION - (CONTINUED) |
Non-vested RSUs of the Company outstanding |
Non-vested shares outstanding |
|||||||||||
Class A ordinary shares of the Company |
Ordinary shares of PolicyPal |
|||||||||||
| At May 1, 2020 |
i — | i — | i — | |||||||||
| Grant |
i — | i 38,710 | i — | |||||||||
| Vested |
i — | i — | i — | |||||||||
| |
|
|
|
|
|
|||||||
| i — | i 38,710 | i — | ||||||||||
| Grant |
i 17,540 | i — | i 5,827 | |||||||||
| Vested |
i — | i — | ( i 5,827 | ) | ||||||||
| |
|
|
|
|
|
|||||||
| i 17,540 | i 38,710 | i — | ||||||||||
| |
|
|
|
|
|
|||||||
| 29. | RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES |
| Amount due to AMTD Group |
Amounts due to fellow subsidiaries |
Amount due to a former fellow subsidiary |
Total | |||||||||||||
| HK$ | HK$ | HK$ | HK$ | |||||||||||||
| At May 1, 2019 |
i 3,202,600 | i 2,543,239 | i 19,966 | i 5,765,805 | ||||||||||||
| Financing cash flows |
( i 104,393 | ) | ( i 212,229 | ) | ( i 19,966 | ) | ( i 336,588 | ) | ||||||||
| Non-cash transaction (note) |
( i 2,816,925 | ) | ( i 385,490 | ) | i — | ( i 3,202,415 | ) | |||||||||
| |
|
|
|
|
|
|
|
|||||||||
| i 281,282 | i 1,945,520 | i — | i 2,226,802 | |||||||||||||
| Financing cash flows |
i 71,313 | ( i 90,544 | ) | i — | ( i 19,231 | ) | ||||||||||
| Non-cash transaction (note) |
( i 352,595 | ) | ( i 1,854,976 | ) | i — | ( i 2,207,571 | ) | |||||||||
| |
|
|
|
|
|
|
|
|||||||||
| At April 30, 2021 and 2022 |
i — | i — | i — |
i — | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Note: | Pursuant to the offsetting agreements described in note 27, amount due to AMTD Group and amounts due to fellow subsidiaries, which amounted to HK$ i 2,816,925 and HK$ i 385,490,
respectively, were transferred or netted-off with amounts due from AMTD Group and fellow subsidiaries under these agreements during the year ended April 30, 2020. Amount due to AMTD Group and amounts due to fellow subsidiaries, which amounted to HK$ i 352,595
and HK$ i 1,854,976, respectively, were netted-off with amounts due from AMTD Group and amounts due from fellow subsidiaries under these agreements during the year ended April 30, 2021. |
| 30. | OTHER COMMITMENT |
| 31. | REGULATORY REQUIREMENT |
32. |
EVENTS AFTER THE REPORTING PERIOD |
• |
On July 15, 2022, the Company completed the initial public offering and listing by way of issuance of i 6,400,000 Class A ordinary shares of the
Company on the NYSE under the stock code “HKD”, and which were presented by the American depository shares (each representing i 0.4 Class A ordinary share s of the Company) (“ADSs”). |
• |
On August 8, 2022, the over-allotment option was fully exercised and the Company issued additional i 960,000 Class A ordinary shares and which were presented by the ADSs. |
• |
On August 16, 2022, AMTD Group, AMTD IDEA Group and the Company jointly announced that AMTD IDEA Group had entered into certain agreements with AMTD Group and the Company (the “AMTD Assets Agreements”). Pursuant to the terms of the AMTD Assets Agreements, AMTD IDEA Group will acquir e i 100%
of the equity interest in AMTD Assets Group (“AMTD Assets”), which holds a f US$ i 268 global portfolio of premium whole building properties, from AMTD Group at a consideration o million which will be settled by newly issued Class B ordinary shares of AMTD IDEA Group. AMTD IDEA Group will subsequently transfer suc h i 100%
of the equity interest in AMTD Assets to the Group at consideration of S$ i 268 U million which will be settled by 515,385 newly issued Class B ordinary shares of the Company at US$ 520 per share (equivalent to a value of US$ i 208
per ADS). These transactions are considered to be acquisitions under common control and expected to close in September 2022 subject to certain closing conditions. Upon the completion of these transactions, AMTD Assets will be wholly owned by the Company and become a subsidiary of the Company, while AMTD IDEA Group will further increase its ownership interest in the Company to |
| 33. | APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS |
| This ‘20-F’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 8/31/24 | ||||
| 4/30/24 | ||||
| 12/31/23 | ||||
| 4/30/23 | ||||
| Filed on: | 8/30/22 | 6-K | ||
| 8/16/22 | 6-K | |||
| 8/8/22 | ||||
| 7/15/22 | 424B4, EFFECT | |||
| 7/14/22 | EFFECT | |||
| For Period end: | 4/30/22 | |||
| 4/29/22 | CORRESP, F-1/A | |||
| 2/23/22 | ||||
| 2/15/22 | ||||
| 2/4/22 | ||||
| 1/1/22 | ||||
| 12/31/21 | ||||
| 12/28/21 | ||||
| 12/27/21 | ||||
| 12/24/21 | ||||
| 12/16/21 | ||||
| 11/14/21 | ||||
| 11/1/21 | ||||
| 9/3/21 | ||||
| 9/1/21 | ||||
| 8/20/21 | ||||
| 7/31/21 | ||||
| 7/30/21 | ||||
| 7/6/21 | ||||
| 6/22/21 | ||||
| 6/10/21 | ||||
| 5/1/21 | ||||
| 4/30/21 | ||||
| 4/20/21 | ||||
| 3/30/21 | ||||
| 3/8/21 | ||||
| 12/31/20 | ||||
| 12/30/20 | ||||
| 12/18/20 | ||||
| 12/4/20 | ||||
| 8/3/20 | ||||
| 7/14/20 | ||||
| 6/26/20 | ||||
| 5/13/20 | ||||
| 5/1/20 | ||||
| 4/30/20 | ||||
| 3/13/20 | ||||
| 3/10/20 | ||||
| 1/15/20 | ||||
| 12/31/19 | ||||
| 12/19/19 | ||||
| 12/18/19 | ||||
| 10/22/19 | ||||
| 9/23/19 | ||||
| 9/12/19 | ||||
| 6/30/19 | ||||
| 6/28/19 | ||||
| 5/13/19 | ||||
| 5/8/19 | ||||
| 5/1/19 | ||||
| 9/24/18 | ||||
| 9/17/18 | ||||
| 8/29/18 | ||||
| 8/16/18 | ||||
| 6/6/18 | ||||
| 7/28/17 | ||||
| 7/27/16 | ||||
| 4/5/12 | ||||
| 2/15/08 | ||||
| 8/13/04 | ||||
| 1/1/04 | ||||
| 6/1/03 | ||||
| List all Filings | ||||
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 8/23/23 AMTD Digital Inc. 20-F 4/30/23 160:18M Donnelley … Solutions/FA |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 6/07/21 AMTD Digital Inc. F-1/A 5:7.9M Donnelley … Solutions/FA 5/20/21 AMTD Digital Inc. F-1 27:8.2M Donnelley … Solutions/FA |