ISEC Healthcare : Annual Report 2021

SEEING THE

POTENTIAL

ANNUAL

2021 REPORT

CONTENTS

• 01 ISEC BY THE NUMBERS

• 02 MESSAGE TO SHAREHOLDERS

• 04 FINANCIAL REVIEW

• 06 BOARD OF DIRECTORS

• 13 EXECUTIVE OFFICERS

• 15 CORPORATE SOCIAL RESPONSIBILITY

• 17 FINANCIAL CONTENTS

This Annual Report has been reviewed by the Company's sponsor, PrimePartners Corporate Finance Pte. Ltd. (the "Sponsor"). It has not been examined or approved by the Singapore Exchange Securities Trading Limited (the "Exchange") and the Exchange assumes no responsibility for the contents of this document, including the correctness of any of the statements or opinions made or reports contained in this document.

The contact person for the Sponsor is Ms Gillian Goh, 16 Collyer Quay, #10-00 Income at Raffles, Singapore 049318, [e-mail].

CORPORATE PROFILE

ISEC Healthcare Ltd. ("ISEC Healthcare" and together with its subsidiaries, the "Group") is an established regional provider of a comprehensive suite of medical eye care services with ambulatory surgical centres.

Backed by more than 10 years of track record, the ISEC brand possesses strong brand equity and is recognised for its world-class and high quality eye care services. In Malaysia, the Group operates medical eye care centres in Kuala Lumpur, Malacca, Penang, Johor and Sibu. In Singapore, ISEC Eye Pte. Ltd. ("ISEC Eye") provides specialist medical ophthalmology services to Asia Pacific Eye Centre located in Singapore's Gleneagles Hospital. To further expand its reach in the neighbourhood hub, the Group had in early 2021 set up an eye service centre within the premises of one of its general practice clinics in Yew Tee to provide eye checks and related services. In 2019, the Group expanded into the Myanmar market with the opening of ISEC Myanmar Company Limited ("ISEC Myanmar").

Led by a team of specialist doctors, who are also opinion leaders in their respective sub-specialty fields, the Group provides patients with attentive and advanced treatments at its well-equipped eye centres that are fitted with state- of-the-art ophthalmic equipment and facilities. Besides investing in the latest medical technologies, its doctors undergo continuous professional development and medical education to offer patients with the highest standards of ophthalmic care.

In 2016, the Group expanded its healthcare services to include general medical services and procedural services with the acquisition of JLM Companies1 comprising four clinics located in the heartlands of Singapore. The Group further expanded this business segment in 2018 with the acquisition of a 25.0% stake in I Medical & Aesthetics Pte. Ltd., increasing its portfolio of general practitioner clinics from four to five.

In 2019, ISEC Healthcare became a subsidiary of Aier Eye International (Singapore) Pte. Ltd. ("Aier Eye") following its acquisition of a 56.53% stake in ISEC Healthcare2. Aier Eye is a wholly-owned subsidiary of China's Aier Eye Hospital Group Co., Ltd. that is listed on the Shenzhen Stock Exchange.

ISEC Healthcare was listed on the Catalist board of the Singapore Exchange Securities Trading Limited on 28 October 2014.

• 1 JLM Companies consist of JL Medical (Bukit Batok) Pte. Ltd., JL Medical (Sembawang) Pte. Ltd., JL Medical (Woodlands) Pte Ltd. and JL Medical (Yew Tee) Pte. Ltd..

• 2 Based on 532,348,544 Shares in issue excluding 386,400 treasury shares as at 20 December 2019.

01

ISEC HEALTHCARE LTD.

ANNUAL REPORT 2021

ISEC BY THE NUMBERS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021

• (1) Asia Pacific Eye Centre in Gleneagles Hospital, Singapore.

• (2) Procedures performed in medical eye care centres in Malaysia.

• (3) Comprises 4 clinics from JLM Companies and 1 clinic from associate company - I Medical & Aesthetics Pte. Ltd.

• (4) Comprises 4 general practitioners from JLM Companies and 2 general practitioners from associate company - I Medical & Aesthetics Pte. Ltd.

ANNUAL REPORT 2021

02

ISEC HEALTHCARE LTD.

MESSAGE TO SHAREHOLDERS

THEME: SEEING THE POTENTIAL

DEAR SHAREHOLDERS

It is an honour for me to address you for the first time as the Non-Executive Chairman of ISEC Healthcare. I would like to start by thanking my predecessor, Mr Sitoh Yih Pin, for chairing the Board of Directors since the Group's listing in 2014. During his tenure, Mr Sitoh made many valuable contributions to ISEC Healthcare including setting high standards in corporate governance as its first Chairman and stewarding the Group through the height of the COVID-19 pandemic.

On behalf of the Group, I wish Mr Sitoh good health and success in all his future endeavours. I look forward to working closely with my fellow directors to continue building on the foundation he has laid.

UPCOMING CORPORATE DEVELOPMENTS Business and lifestyle activities have picked up steadily after more than two years of the global economy operating in "COVID-19 mode". This included the formation of more vaccinated travel lanes ("VTL") between countries and the easing of safe management measures in the markets where we have operations.

In the year that ended 31 December 2021 ("FY2021"), ISEC Healthcare came back strongly with a 55% year-on-year ("YoY") increase in net profit to S$6.9 million as compared to S$4.5 million in the preceding year. This was on the back of revenue growth of 11% to S$40.5 million during a year that saw an increase in patient visits in tandem with the easing of COVID-19 restrictions across our core markets of Singapore and Malaysia.

Although both top and bottom lines in FY2021 were still weaker than the pre-COVID 19 levels achieved in the financial year ended 31 December 2019 ("FY2019"), we are cautiously optimistic that the operating environment will continue to improve gradually in the months ahead, and we will prepare ourselves to benefit from the upswing.

ANNUAL REPORT 2021

03

ISEC HEALTHCARE LTD.

MESSAGE TO SHAREHOLDERS

Accordingly, we have stepped up our expansion activities in FY2022. We will plant the ISEC brand for the first time in Kuching, Sarawak, with the expected opening of ISEC Kuching in the second half of 2022. Renovations have already commenced on the upcoming premises.

We are expanding our operations in Penang and expect to move into our newly acquired property by the second half of 2022 after renovations are complete. The new property is larger, with a larger parking area, and can cater to more doctors compared to our current property, which can only hold three eye specialists.

Meanwhile, we have entered into a letter of offer for the proposed acquisition of one floor in a commercial building in Kuala Lumpur and aim to conclude negotiations with the relevant party by the second quarter of 2022. The new premise is more than two times bigger and will enable us to offer additional and improved facilities compared to the existing clinic. We will keep shareholders updated of our progress through further announcements on SGXNET as and when there are material updates.

Once operational, our new clinics are expected to contribute positively to our topline.

GEOGRAPHICAL REVIEW

In FY2021, all three of our markets outperformed the preceding year and contributed higher revenues.

Our Singapore operations recorded a 23% increase in revenue, from S$7.3 million in FY2020 to S$9.0 million in FY2021. This was helped by the country's robust vaccination programme that led to the relaxation of COVID-19 measures and an increase in patient visits.

In Malaysia, revenue increased by S$1.8 million, or 6%, from S$28.7 million in FY2020 to S$30.5 million in FY2021. Although the first half of the year was affected by the reinstatement of the country's Movement Control Order, our operations recovered quickly in the second half when restrictions were eased.

Revenue from our Myanmar operations recorded very encouraging growth, increasing S$0.4 million in FY2020 to S$1.0 million in FY2021. The increase in sales is mainly attributable to the increase in patient visits during the year because of the establishment of an offsite satellite clinic in one of the hospitals in Yangon, which commenced operation in February 2021. It reflected the success of our move to attract more patients to visit our ISEC Myanmar main clinic centre and, meanwhile, aimed to improve the ISEC branding recognition in the local market.

The Group sees huge potential for growth in our existing markets and also in our target markets across the region.

Going forward, ISEC Healthcare will focus on strengthening its presence in its core markets of Malaysia and Singapore while looking for suitable opportunities in China, Vietnam and Myanmar. At the same time, the Group will also pursue suitable investments that are synergistic in nature and in line with the Group's business strategies.

We continue to believe the region's ageing population, and the increasing awareness about the benefits of seeking early treatment for ophthalmology issues, will drive ongoing demand for the specialised services that we provide. As such, we intend to stay focused on enhancing the professional skills of our team and to improve on our services and providing a better clinical environment so that we can continue to provide best-in-class patient care.

To remain at the forefront of our field, we will continue to add to our medical team and to provide opportunities for them to upgrade their professional skills, which will enable us to uphold the high quality patient care that our brand is recognised for.

APPRECIATION

On behalf of the Group, I would like to thank all shareholders for your trust in our ability to deliver results. In line with the improvement in performance, the Board of Directors is pleased to propose a final dividend of 0.30 Singapore cents per share, which including the interim dividend of 0.75 Singapore cents per share declared for the financial period ended 30 September 2021, totalling 1.05 Singapore cents per share in respect of FY2021 (FY2020: 0.8 Singapore cents per share).

I would like to thank our management team and medical staff for working hand-in-hand to navigate the challenging environment brought on by COVID-19 over the last two years. Through your joint efforts, we were able to serve our patients and meet their needs quickly when COVID-19 restrictions were eased and we were able to end FY2021 with better results.

Finally, I would like to thank our business partners and patients for your support and my fellow Directors on the Board for guiding the Group during the year.

CHONG WENG HOE

Non-Executive Chairman and Independent Director