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iFAST Corporation Ltd. and its Subsidiaries Company Registration No: 200007899C (Incorporated in the Republic of

iFAST Corporation Ltd. and its Subsidiaries

Company Registration No: 200007899C (Incorporated in the Republic of Singapore)

Unaudited Second Quarter and Half Year 2017 Financial Statements Announcement

Second Quarter 2017 Financial Statements and Dividend Announcement

1(a)(i)

An income statement and a statement of comprehensive income, for the group, together with a comparative statement for the corresponding period of the immediately preceding financial year.

Consolidated income statement for the second quarter and half year ended 30 June 2017

   

Group

Group

2Q17

2Q16

Change

1H17

1H16

Change

$'000

$'000

%

$'000

$'000

%

Revenue Commission and fee paid or payable to third party financial advisers

24,658

19,374

27.3

46,755

38,046

22.9

(12,708)

(9,691)

31.1

(23,634)

(19,010)

24.3

 

11,950

9,683

23.4

23,121

19,036

21.5

Other income Depreciation of plant and equipment Amortisation of intangible assets Staff costs Other operating expenses Results from operating activities

433

297

45.8

871

1,102

(21.0)

(313)

(389)

(19.5)

(624)

(776)

(19.6)

(638)

(357)

78.7

(1,217)

(585)

108.0

(4,773)

(4,756)

0.4

(9,615)

(9,312)

3.3

(4,113)

(3,370)

22.0

(7,817)

(7,174)

9.0

2,546

1,108

129.8

4,719

2,291

106.0

Finance income Finance cost Net finance income

156

205

(23.9)

360

454

(20.7)

(1)

(1)

NM

(1)

(1)

-

156

204

(23.5)

359

453

(20.8)

Share of results of associates, net of tax

(113)

(47)

140.4

(244)

(51)

378.4

Profit before tax Tax expense Profit for the period

2,589

1,265

104.7

4,834

2,693

79.5

(435)

(128)

239.8

(720)

(305)

136.1

2,154

1,137

89.4

4,114

2,388

72.3

Profit attributable to:

Owners of the Company Non-controlling interests Profit for the period

2,206

1,143

93.0

4,216

2,394

76.1

(52)

(6)

766.7

(102)

(6)

1,600.0

2,154

1,137

89.4

4,114

2,388

72.3

(1) amount less than $1,000

NM denotes not meaningful.

1(a)(i)

An income statement and a statement of comprehensive income, for the group, together with a comparative statement for the corresponding period of the immediately preceding financial year. (Cont’d)

Consolidated statement of comprehensive income for the second quarter and half year ended 30 June 2017

Profit for the period

Other comprehensive income Items that are or may be reclassified subsequently to profit or loss:

Net change in fair value of available-for-sale financial assets Net change in fair value of available-for-sale financial assets reclassified to profit or loss Foreign currency translation differences for foreign operations Share of other comprehensive income of associates Other comprehensive income for the period, net of tax Total comprehensive income for the period

Attributable to:

Owners of the Company

Non-controlling interests

Total comprehensive income for the period

NM denotes not meaningful.

 

Group

 

Group

2Q17

2Q16

Change

1H17

1H16

Change

$'000

$'000

%

$'000

$'000

%

2,154

1,137

89.4

4,114

2,388

72.3

(2)

268

NM

491

(81)

NM

(116)

(95)

22.1

(313)

(141)

122.0

(161)

(142)

13.4

(689)

(648)

6.3

-

-

NM

3

-

NM

(279)

31

NM

(508)

(870)

(41.6)

1,875

1,168

60.5

3,606

1,518

137.5

1,927

1,177

63.7

3,712

1,527

143.1

(52)

(9)

477.8

(106)

(9)

1,077.8

1,875

1,168

60.5

3,606

1,518

137.5

1(a)(ii) Breakdown and explanatory notes to income statement.

   

Group

 

Group

2Q17

2Q16

Change

1H17

1H16

Change

$'000

$'000

%

$'000

$'000

%

Profit for the period is arrived at after charging / (crediting) the following:

Other income

- Investment income

(355)

(263)

35.0

(709)

(496)

42.9

- Government grant

(35)

(30)

16.7

(114)

(212)

(46.2)

- Gain on acquisition of a subsidiary

-

-

NM

-

(262)

NM

- Gain on derecognition of an associate

(19)

-

NM

(19)

-

NM

- Miscellaneous income

(24)

(4)

500.0

(29)

(132)

(78.0)

Interest income

(433)

(297)

45.8

(871)

(1,102)

(21.0)

- from cash and cash equivalents

(103)

(79)

30.4

(187)

(191)

(2.1)

- from investment in financial assets

(53)

(126)

(57.9)

(173)

(263)

(34.2)

(156)

(205)

(23.9)

(360)

(454)

(20.7)

Operating lease expense Unrealised exchange loss, net Plant and equipment written off Equity-settled share-based payment transactions, included in staff costs Equity-settled share-based payment transactions, included in commission and fee paid or payable to third party financial advisers Gain on redemption in investment in available-for-sale financial assets, included in investment income Dividend income on investment in available-for-sale financial assets, included in investment income Net gain on held-for-trading financial assets, included in investment income

1,539

1,239

24.2

3,043

2,760

10.3

44

86

(48.8)

128

350

(63.4)

19

-

NM

19

-

NM

337

501

(32.7)

727

880

(17.4)

83

83

-

166

166

-

(116)

(95)

22.1

(313)

(141)

122.0

(166)

(163)

1.8

(341)

(345)

(1.2)

(64)

-

NM

(37)

-

NM

NM denotes not meaningful.

1(b)(i) A

statement

of

financial

position

(for

the

issuer

and

group),

together

with

a

comparative statement as at the end of the immediately preceding financial year.

Assets Plant and equipment Intangible assets and goodwill Subsidiaries Associates Other investment Prepayments Club membership Total non-current assets

Current tax receivables Other investments Trade and other receivables Prepayments Cash at bank and in hand Money market funds Total current assets

Held under trust Client bank accounts Client ledger balances

Total assets

Equity Share capital Reserves Equity attributable to owners of the Company Non-controlling interests Total equity

Liabilities Deferred tax liabilities Finance lease liabilities Total non-current liabilities

Trade and other payables Finance lease liabilities Current tax payables Total current liabilities

Total liabilities

Total equity and liabilities

Group

Company

As at

As at

30-Jun-17

31-Dec-16

30-Jun-17

31-Dec-16

$'000

$'000

$'000

$'000

2,593

2,187

60

51

11,178

10,375

8,077

7,367

-

-

49,555

48,313

1,703

1,829

2,017

2,017

63

-

63

-

414

302

-

-

11

11

11

11

15,962

14,704

59,783

57,759

19

80

-

-

26,729

32,127

26,364

32,127

33,605

24,091

4,851

2,135

2,092

1,662

72

94

23,505

20,974

3,429

3,595

2,215

1,490

-

-

88,165

80,424

34,716

37,951

182,721

156,078

-

-

(182,721)

(156,078)

-

-

-

-

-

-

104,127

95,128

94,499

95,710

64,840

64,147

64,840

64,147

14,431

14,299

24,858

16,041

79,271

78,446

89,698

80,188

122

150

-

-

79,393

78,596

89,698

80,188

562

481

297

196

16

19

-

-

578

500

297

196

23,278

15,524

4,504

15,326

5

4

-

-

873

504

-

-

24,156

16,032

4,504

15,326

24,734

16,532

4,801

15,522

104,127

95,128

94,499

95,710

1(b)(ii) Aggregate amount of group’s borrowings and debt securities.

Amount repayable in one year or less, or on demand

As at

30-Jun-17

$'000

Group

As at

31-Dec-16

$'000

Finance lease liabilities

Secured

5

Unsecured

-

Amount repayable after one year

Secured

4

Unsecured

-

As at

30-Jun-17

$'000

Group

As at

31-Dec-16

$'000

Finance lease liabilities

Details of any collateral

Secured

16

Unsecured

-

Secured

19

Unsecured

-

The finance lease liabilities as at 30 June 2017 are secured by the leased assets.

1(c) A statement of cash flows (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year.

Cash flows from operating activities Profit for the period Adjustments for:

Depreciation of plant and equipment Amortisation of intangible assets Equity-settled share-based payment transactions Dividend income on investment in available-for-sale financial assets Gain on redemption of investment in available-for-sale financial assets Net gain on held-for-trading financial assets Share of results of associates, net of tax Dividend income on investment in associates Unrealised exchange loss, net Plant and equipment written off Gain on acquisition of a subsidiary Gain on derecognition of an associate Net finance income Tax expense

Change in trade and other receivables Change in trade and other payables Cash generated from operations Tax paid Interest received Interest paid Net cash from operating activities

Cash flows from investing activities Purchase of plant and equipment Purchase of intangible assets Acquisition of and additional investment in associates Dividend from associates Purchase of investment in financial assets Proceeds from redemption of investment in financial assets Dividends received from investment in available-for-sale financial assets Acquisition of subsidiary, net of cash acquired Net cash from / (used in) investing activities

Cash flows from financing activities Proceeds from exercise of share options Purchase of treasury shares Proceeds from shares issued to non-controlling interests of subsidiary Repayment of finance lease liabilities Dividends paid to owners of the Company Net cash used in financing activities

Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Effect of exchange rate fluctuations on cash held Cash and cash equivalents at end of the period

(1) amount less than $1,000

Group

2Q17

2Q16

$'000

$'000

2,154

1,137

-

313

389

638

357

420

584

(166)

(163)

(116)

(95)

(64)

-

113

47

(9)

(5)

44

86

19

-

-

-

(19)

-

(156)

(204)

435

128

3,606

2,261

(8,696)

726

7,259

353

2,169

3,340

(219)

(286)

157

255

(1)

 

-

2,107

3,309

(834)

(310)

(1,122)

(1,141)

(160)

(1,273)

-

-

(17,120)

(12,716)

19,820

15,158

8

5

-

-

592

(277)

655

47

(252)

(616)

-

2,414

(1)

(1)

(3,759)

(3,735)

(3,357)

(1,891)

(658)

1,141

26,480

27,128

(102)

(172)

25,720

28,097

Group

1H17

1H16

$'000

$'000

4,114

2,388

624

776

1,217

585

893

1,046

(341)

(345)

(313)

(141)

(37)

-

244

51

(18)

(10)

128

350

19

-

-

(262)

(19)

-

(359)

(453)

720

305

6,872

4,290

(8,608)

807

6,512

(2,148)

4,776

2,949

(212)

(379)

350

506

(1)

-

4,913

3,076

(1,079)

(692)

(1,768)

(2,174)

(160)

(1,273)

17

10

(30,010)

(17,081)

36,022

20,071

13

18

(702)

(1,013)

2,333

(2,134)

693

80

(548)

(616)

78

2,414

(2)

(1)

(3,759)

(3,735)

(3,538)

(1,858)

3,708

(916)

22,464

29,520

(452)

(507)

25,720

28,097

1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year.

 

Group

 

Attributable to owners of the Company

 
 

Foreign

 

Share

Fair value

currency

Share option

Performance

Equity

Reserve for

Accumulated

Total

Non-controlling

Total equity

capital

reserve

translation

reserve

share reserve

reserve

own shares

profits

interests

 

reserve

 

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

At 1 January 2017

64,147

12

(535)

1,496

2,250

(2,010)

(2,531)

15,617

78,446

150

78,596

Total comprehensive income for the period Profit for the period

-

-

-

-

-

-

-

4,216

4,216

(102)

4,114

Other comprehensive income Net change in fair value of available-for-sale financial assets Net change in fair value of available-for-sale financial assets reclassified to profit or loss Foreign currency translation differences for foreign operations Share of other comprehensive income of associates Total other comprehensive income Total comprehensive income for the period

-

491

-

-

-

-

-

-

491

-

491

-

(313)

-

-

-

-

-

-

(313)

-

(313)

-

-

(685)

-

-

-

-

-

(685)

(4)

(689)

-

(1)

3

-

-

-

-

-

3

-

3

-

178

(682)

-

-

-

-

-

(504)

(4)

(508)

-

178

(682)

-

-

-

-

4,216

3,712

(106)

3,606

Transactions with owners, recorded directly in equity Contributions by and distributions to owners Share options exercised Purchase of treasury shares Treasury shares re-issued One-tier tax-exempt 2016 final dividend paid of 0.75 cents per share One-tier tax-exempt interim dividend paid of 0.68 cents per share Equity-settled share-based payment transactions Total contributions by and distribution to owners

693

-

-

-

-

-

-

-

693

-

693

-

-

-

-

-

-

(548)

-

(548)

-

(548)

-

-

-

-

(785)

-

540

245

-

-

-

-

-

-

-

-

-

-

(1,970)

(1,970)

-

(1,970)

-

-

-

-

-

-

-

(1,789)

(1,789)

-

(1,789)

-

-

-

90

637

-

-

-

727

-

727

693

-

-

90

(148)

-

(8)

(3,514)

(2,887)

-

(2,887)

Changes in ownership interests in subsidiaries Issue of shares to non-controlling interests of subsidiary Total changes in ownership interests in subsidiaries

-

-

-

-

-

-

-

-

-

78

78

-

-

-

-

-

-

-

-

-

78

78

Total transactions with owners

693

-

-

90

(148)

-

(8)

(3,514)

(2,887)

78

(2,809)

At 30 June 2017

64,840

190

(1,217)

1,586

2,102

(2,010)

(2,539)

16,319

79,271

122

79,393

(1) amount less than $1,000

1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year. (Cont’d)

 

Group

 

Attributable to owners of the Company

 
 

Foreign

 

Share

Fair value

currency

Share option

Performance

Equity

Reserve for

Accumulated

Total

Non-controlling

Total equity

capital

reserve

translation

reserve

share reserve

reserve

own shares

profits

interests

 

reserve

 

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

At 1 January 2016

62,546

(833)

(606)

1,306

826

(4,161)

-

17,481

76,559

-

76,559

Total comprehensive income for the period Profit for the period

-

-

-

-

-

-

-

2,394

2,394

(6)

2,388

Other comprehensive income

 

Net

change in fair value of available-for-sale financial change in fair value of available-for-sale financial

assets assets reclassified to profit or loss

-

(81)

-

-

-

-

-

-

(81)

-

(81)

Net

-

(141)

-

-

-

-

-

-

(141)

-

(141)

Foreign currency translation differences for foreign operations

-

-

(645)

-

-

-

-

-

(645)

(3)

(648)

Total other comprehensive income Total comprehensive income for the period

-

(222)

(645)

-

-

-

-

-

(867)

(3)

(870)

-

(222)

(645)

-

-

-

-

2,394

1,527

(9)

1,518

Transactions with owners, recorded directly in equity Contributions by and distributions to owners Share options exercised Purchase of treasury shares

80

-

-

-

-

-

-

-

80

-

80

-

-

-

-

-

-

(616)

-

(616)

(616)

One-tier tax-exempt

One-tier tax-exempt

2015 final dividend paid of 0.75 cents per share interim dividend paid of 0.68 cents per share

-

-

-

-

-

-

-

(1,959)

(1,959)

-

(1,959)

-

-

-

-

-

-

-

(1,776)

(1,776)

-

(1,776)

Equity-settled share-based payment transactions Total contributions by and distribution to owners

-

-

-

191

689

-

-

-

880

-

880

80

-

-

191

689

-

(616)

(3,735)

(3,391)

-

(3,391)

Changes in ownership interests in subsidiaries Issue of shares to non-controlling interests of subsidiary Total changes in ownership interests in subsidiaries

-

-

-

-

-

2,151

-

2,151

263

2,414

-

-

-

-

-

2,151

-

-

2,151

263

2,414

Total

transactions with owners

80

-

-

191

689

2,151

(616)

(3,735)

(1,240)

263

(977)

At 30 June 2016

62,626

(1,055)

(1,251)

1,497

1,515

(2,010)

(616)

16,140

76,846

254

77,100

1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year. (Cont’d)

Company

 

Attributable to owners of the Company

 

Share capital

Fair value

Share option

Performance

Reserve for

Accumulated

Total equity

reserve

reserve

share reserve

own shares

profits

$'000

$'000

$'000

$'000

$'000

$'000

$'000

At 1 January 2017

64,147

12

1,496

2,250

(2,531)

14,814

80,188

Total comprehensive income for the period Profit for the period

-

-

-

-

-

12,321

12,321

Other comprehensive income Net change in fair value of available-for-sale financial assets Net change in fair value of available-for-sale financial assets reclassified to profit or loss Total other comprehensive income Total comprehensive income for the period

-

464

-

-

-

-

464

-

(313)

-

-

-

-

(313)

-

151

-

-

-

-

151

-

151

-

-

-

12,321

12,472

Transactions with owners, recorded directly in equity Contributions by and distributions to owners Share options exercised Purchase of treasury shares Treasury shares re-issued Issue of ordinary shares Share issuance expenses One-tier tax-exempt 2016 final dividend paid of 0.75 cents per share One-tier tax-exempt interim dividend paid of 0.68 cents per share Equity-settled share-based payment transactions Total contributions by and distribution to owners

693

-

-

-

-

-

693

-

-

-

-

(548)

-

(548)

-

-

-

(785)

540

245

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(1,970)

(1,970)

-

-

-

-

-

(1,789)

(1,789)

-

-

15

637

-

-

652

693

-

15

(148)

(8)

(3,514)

(2,962)

Total transactions with owners

693

-

15

(148)

(8)

(3,514)

(2,962)

At 30 June 2017

64,840

163

1,511

2,102

(2,539)

23,621

89,698

1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year. (Cont’d)

Company

 

Attributable to owners of the Company

 

Share capital

Fair value

Share option

Performance

Reserve for

Accumulated

Total equity

reserve

reserve

share reserve

own shares

profits

$'000

$'000

$'000

$'000

$'000

$'000

$'000

At 1 January 2016

62,546

(833)

1,306

826

-

15,723

79,568

Total comprehensive income for the period Profit for the period

-

-

-

-

-

6,124

6,124

Other comprehensive income Net change in fair value of available-for-sale financial assets Net change in fair value of available-for-sale financial assets reclassified to profit or loss Total other comprehensive income Total comprehensive income for the period

-

(81)

-

-

-

-

(81)

-

(141)

-

-

-

-

(141)

-

(222)

-

-

-

-

(222)

-

(222)

-

-

-

6,124

5,902

Transactions with owners, recorded directly in equity Contributions by and distributions to owners Share options exercised Purchase of treasury shares One-tier tax-exempt 2015 final dividend paid of 0.75 cents per share One-tier tax-exempt interim dividend paid of 0.68 cents per share Equity-settled share-based payment transactions Total contributions by and distribution to owners

80

-

-

-

-

-

80

-

-

-

-

(616)

-

(616)

-

-

-

-

-

(1,959)

(1,959)

-

-

-

-

-

(1,776)

(1,776)

-

-

191

689

-

-

880

80

-

191

689

(616)

(3,735)

(3,391)

Total transactions with owners

80

-

191

689

(616)

(3,735)

(3,391)

At 30 June 2016

62,626

(1,055)

1,497

1,515

(616)

18,112

82,079

1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State the number of shares that may be issued on conversion of all the outstanding convertibles, if any, against the total number of issued shares excluding treasury shares and subsidiary holdings of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. State also the number of shares held as treasury shares and the number of subsidiary holdings, if any, and the percentage of the aggregate number of treasury shares and subsidiary holdings held against the total number of shares outstanding in a class that is listed as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year.

The number of shares in issue in the Company as at 30 June 2017 excluding treasury shares and subsidiary holdings was 263,378,532 ordinary shares (31 March 2017: 262,475,515 ordinary shares). The movements in the Company’s share capital during the second quarter ended 30 June 2017 were as follows:

As at 31 March 2017 Exercise of share options Vesting of performance shares Purchase of treasury shares As at 30 June 2017

Number of

ordinary shares

262,475,515

1,238,617

23,600

(359,200)

263,378,532

Share Option Schemes 2003 and 2013 (“iFAST SOS”)

The number of outstanding share options under the iFAST SOS was as follows:

Number of

share options

As at 31 March 2017 Share options granted Exercised Forfeited As at 30 June 2017

As at 31 March 2017 Share options granted Exercised Forfeited As at 30 June 2017
As at 31 March 2017 Share options granted Exercised Forfeited As at 30 June 2017
As at 31 March 2017 Share options granted Exercised Forfeited As at 30 June 2017
As at 31 March 2017 Share options granted Exercised Forfeited As at 30 June 2017

7,226,054

-

(1,238,617)

(15,750)

5,971,687

As at 30 June 2017, the number of outstanding share options under the iFAST SOS was 5,971,687 (30 June 2016: 11,161,246).

iFAST Corporation Performance Share Plan (“iFAST PSP”)

The number of outstanding performance shares granted but not vested under iFAST PSP was as follows:

Number of

performance

shares

As at 31 March 2017 Performance shares granted but not vested Vested Forfeited As at 30 June 2017

2,556,200

2,052,400

(23,600)

(194,200)

4,390,800

On 1 April 2017 and 1 May 2017, the Company granted 1,919,600 and 132,800 performance shares pursuant to the iFAST PSP respectively. As at 30 June 2017, the number of outstanding performance shares granted but not vested under the iFAST PSP was 4,390,800 (30 June 2016:

3,256,500).

Treasury shares and subsidiary holdings

The number of shares held as treasury shares was as follows:

As at 31 March 2017 Purchased by way of on-market acquisition Purchased by way of off-market acquisition Re-issued As at 30 June 2017

Number of

treasury shares

2,533,600

359,200

-

(23,600)

2,869,200

During 2Q17, the Company acquired 359,200 (2Q16: 565,700) ordinary shares in the Company by way of on-market purchases. As at 30 June 2017, 2,869,200 (30 June 2016: 565,700) treasury shares were held by the Company that may be re-issued upon the exercise of share options under the iFAST SOS and upon the vesting of performance shares under the iFAST PSP.

As at 30 June 2017, the treasury shares held represented 1.1% (30 June 2016: 0.2%) of the total number of issued shares excluding treasury shares.

The Company has no subsidiary holdings as at 30 June 2017 and 30 June 2016.

1(d)(iii)To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year.

Total number of issued shares excluding treasury shares

As at

30-Jun-17

263,378,532

1(d)(iv)A statement showing all sales, transfers, cancellation and/or use of as at the end of the current financial period reported on.

As at

31-Dec-16

262,223,415

treasury shares

During 2Q17, the Company transferred 23,600 treasury shares for the fulfilment of share awards vested under the iFAST PSP. The total value of the treasury shares transferred was $0.02 million.

1(d)(v) A statement showing all sales, transfers, cancellation and/or use of subsidiary holdings as at the end of the current financial period reported on.

There were no sales, transfer, cancellation and/or use of subsidiary holdings as at 30 June

2017.

2. Whether the figures have been audited, or reviewed and in accordance with which auditing standard or practice.

The figures have not been audited or reviewed by the Group’s external auditors.

3. Where the figures have been audited or reviewed, the auditors’ report (including any qualifications or emphasis of a matter).

Not applicable.

4. Whether the same accounting policies and methods of computation as in the issuer’s most recently audited annual financial statements have been applied.

The financial information have been prepared in accordance with the same accounting policies and methods of computation adopted in the audited financial statements of the last financial year, except for those disclosed under paragraph 5 below.

5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change.

The Group and the Company have adopted the new and revised Singapore Financial Reporting Standards ("FRS") and Interpretations of FRS ("INT FRS") that are effective for annual period 1 January 2017. The adoption of these FRSs and INT FRSs did not have any significant effect on the financial statements of the Group and the Company.

6. Earnings per ordinary share of the group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends.

2Q17

2Q16

1H17

1H16

(i)

Based on weighted average number of ordinary shares on issue

-

Weighted average number of ordinary shares

263,090,137

260,952,801

262,709,610

260,994,634

Basic earnings per share (cents)

0.84

0.44

1.60

0.92

(ii)

On a fully diluted basis of ordinary shares

-

Adjusted weighted average number of ordinary shares

267,077,594

267,870,168

266,998,406

268,338,859

Diluted earnings per share (cents)

0.83

0.43

1.58

0.89

7.

Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuers at the end of the (a) current financial period reported on and (b) immediately preceding financial year.

Net asset value per ordinary share (cents)

Group

30-Jun-17

31-Dec-16

30.10

29.92

Company

30-Jun-17

31-Dec-16

34.06

30.58

8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group’s business. It must include a discussion of the following: -

(a) any significant factors that affected the turnover, costs, and earnings of the

group for the current financial period reported on, including (where applicable)

seasonal or cyclical factors; and

(b) any material factors that affected the cash flow, working capital, assets or

liabilities of the group during the current financial period reported on.

Consolidated Income Statement

Revenue

Following an encouraging first quarter this year (“1Q17”), the Group achieved revenue of $24.66 million for the second quarter ended 30 June 2017 (“2Q17”), which was 27.3% higher than the second quarter last year (“2Q16”) and 11.6% higher than 1Q17. Revenue of $46.76 million for the financial period ended 30 June 2017 (“1H17”) was 22.9% higher than the same period last year

(“1H16”).

The year-on-year (“YoY”) and quarter-on-quarter (“QoQ”) increases in 2Q17 were due mainly to the growth of the Group’s business and Asset Under Administration (“AUA”) in the period, contributed by the Group’s continuing efforts to broaden the range and depth of its investment products and services in the recent years, and also benefiting from improved market sentiment from the second half of 2016.

The Group’s AUA grew 21.1% Year-on-Year (“YoY”) to reach a new record of $6.81 billion as at 30 June 2017.

Breaking down by geographical segment, Singapore operation is still the major contributor of the Group’s revenue. The revenue in Singapore operation grew 25.2% YoY in 2Q17 and 22.7% YoY in 1H17, which was mainly contributed by increases in investment subscription amounts (including transfer-in amounts) in unit trusts ("UTs"), bonds, exchange-traded funds (“ETFs”) and stocks in the period. Following that Singapore launched a new FSMOne platform allowing investors in Singapore to invest in multiple products, including stocks, ETFs, bonds, MAPS (My Assisted Portfolio Solution) and insurance products, via one account, in December 2016, Singapore successfully admitted as a Trading Member of Singapore Exchange Securities Trading Limited (“SGX-ST”) and a Clearing Member of The Central Depository (Pte) Limited (“CDP”) and launched its SGX stockbroking service in June 2017. The AUA of Singapore operation grew 15.9% YoY as at 30 June 2017.

In Malaysia, the significant growth of business and AUA contributed to the significant increases in revenue of 74.5% YoY in 2Q17 and 58.1% YoY in 1H17. The AUA of Malaysia operation grew 46.6% YoY as at 30 June 2017.

In Hong Kong, benefiting from continuing efforts to broaden the range and depth of its investment products and services, the net inflows of investments from customers grew 563.8% YoY and 78.5% QoQ in 2Q17 and the AUA of HK operation grew 27.2% YoY as at 30 June 2017. This resulted in increases in revenue of 27.0% YoY in 2Q17 and 15.1% YoY in 1H17.

China business is still in the early stages of building the iFAST brand among potential clients and investment practitioners in China’s wealth management industry. Besides focusing on growing the onshore Chinese market, China operation also contributes to the Group by introducing offshore Chinese markets to investors in China, especially through the Group’s Hong Kong and Singapore markets. However, the gross revenue in China operation declined in 2Q17. This was because there were some ad-hoc contributions received from institutional business in 2016, which has been negatively affected by local regulatory changes since the beginning of this year. Despite that, the net revenue in China operation still saw a significant YoY increase in both 2Q17 and 1H17, benefiting from the offshore Chinese markets growing increasingly over the period.

 

Group

 

Group

2Q17

2Q16

Change

1H17

1H16

Change

$'000

$'000

%

$'000

$'000

%

Singapore

17,736

14,168

25.2

33,860

27,601

22.7

Hong Kong

4,947

3,896

27.0

9,327

8,101

15.1

Malaysia

1,876

1,075

74.5

3,330

2,106

58.1

24,559

19,139

28.3

46,517

37,808

23.0

China

99

235

(57.9)

238

238

-

Total revenue

24,658

19,374

27.3

46,755

38,046

22.9

Commission and fee paid or payable to third party financial advisers

Commission and fee paid or payable to third party financial advisers increased by 31.1% from $9.69 million in 2Q16 to $12.71 million in 2Q17 and 24.3% from $19.01 million in 1H16 to $23.63 million in 1H17. The increase was in line with the increase in revenue from Business-to-Business (“B2B”) business in the period.

Net revenue

Net revenue represents revenue earned by the Group after commission and fee paid or payable to third party financial advisers. The net revenue of $11.95 million for 2Q17 was 23.4% higher than 2Q16, and the net revenue of $23.12 million for 1H17 was 21.5% higher than 1H16.

The following table shows the breakdown of the Group’s net revenue, by recurring and non- recurring basis. The Group’s business module gives a stream of reliable recurring revenue which is based on AUA. For 2Q17, 83.1% of net revenue is derived from recurring net revenue and 16.9% is from non-recurring net revenue. For 1H17, 83.7% of net revenue is derived from recurring net revenue and 16.3% is from non-recurring net revenue.

 

Group

 

Group