Mm2 Asia : FY2022 Audit Opinion

MM2 ASIA LTD.

(Company Registration No.: 201424372N)

Incorporated in the Republic of Singapore (the "Company")

INDEPENDENT AUDITOR'S REPORT ON THE AUDITED FINANCIAL STATEMENT

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2022

The Board of Directors (the "Board") of the Company, and together with its subsidiaries, (collectively the "Group") wishes to announce that the independent auditor of the Company, Messrs Nexia TS Public Accounting Corporation (the "Independent Auditor") has rendered an unmodified audit opinion with a Material Uncertainty Related to Going Concern matter in their report (the "Independent Auditor's Report") on the audited financial statements of the Group and the Company for the financial year ended 31 March 2022 ("FY2022").

A copy of the Independent Auditor's Report, together with an extract of the relevant note to the audited financial statements FY 2022, are annexed to this announcement. For avoidance of doubt, the opinion of the Independent Auditor's Report on the FY2022 audited financial statements remains unqualified. In forming their audit opinion on the financial statements, the Independent Auditor has considered both the adequacy of the disclosures made in Note 4 to the financial statements and Management's use of the going concern basis of accounting in the preparation of the financial statements, which remain appropriate.

Notwithstanding the audit opinion from the Independent Auditor, the Directors based on transparency and good corporate governance, have disclosed the implications of the COVID-19 pandemic and the Management's actions and plans, as discussed below, to address the uncertainty events (refer to Notes 1 and 4 of the financial statements). The Directors, based on the reasons set out in Note 4, are of the opinion that there are no concerns on the Group's ability to operate as a going concern basis.

1. Ongoing recovery from the effect of the COVID-19 pandemic
   Even though the Group is in a net current liabilities position as at 31 March 2022 and has incurred a net loss for the current financial year, the financial metrics of the Group for the current financial year have improved when compared to that of the previous financial year. This is mainly due to the easing of the COVID-19 pandemic restrictions during the current financial year.
   The net current liabilities of the Group have decreased by approximately $43.2 million, while revenue grew by approximately 50% in the current financial year. Consequently, the Group's Earnings Before Interests, Taxes, Depreciation and Amortisation (EBITDA) has increased significantly by $23.59 million or 270% from $8.74 million in FY2021 to $32.33 million in FY2022 while net loss of the Group has decreased by approximately 58% in the current financial year, from a net loss of $99.51 million in FY2021 to a net loss of $42.09 million in FY2022. Cash flows from operating activities have also seen a significant increase of $24.1 million in the current financial year.
   Subsequent to the financial year end, with the easing from most of the COVID-19 pandemic restrictions, which includes the removal of seating capacity restrictions in cinema theatres and the lifting of the ban on large live entertainment events, Management is optimistic of the Group's performance for the next 12 months.
2. The following sources of funding are expected to be available to the Group for the next 12 months from the date of financial statements:
3. 1. On 23 March 2022, the Company has entered into placement agreements with placees for the allotment and issuance of 390 million placement shares in the capital of the Company at an issue price of $0.05 per placement share (the "Placement"). The aggregate consideration payable by placees is $19.5 million. As at reporting date, the Company has received advance payment of $9.75 million and this has been accounted as part of "Reserves" in equity within the Group's and Company's statements of financial position. The placement has been completed subsequent to the financial year end, on 4 April 2022, upon the receipt of the remaining placement funds of $9.75 million. Accordingly, on the same date, the Company has issued 390 million new ordinary shares to these placees.

1. On the respective dates of 12 May 2022, 6 June 2022 and 22 June 2022, mm Connect Pte. Ltd. ("mm Connect"), a wholly-owned subsidiary of the Company, has entered into convertible bond agreements with subscribers ("Bondholders") for issuance of unsecured convertible bonds in an aggregate of $12.0 million, carrying a coupon rate of 5% per annum and matures on the second anniversary of their respective dates of issue. These transactions were completed as at the date of this announcement.
2. On 16 June 2022, the Company has entered a term sheet with UOB Kay Hian Private Limited as arranger in relation to a proposed issue of exchangeable bonds ("Exchangeable Bonds") coupled with detachable warrants ("Warrants") by the Company (collectively known as "Proposed Issuance"). The Proposed Issuance remains subject to entry into definitive agreements after negotiations between the parties.
   The principal amount of Exchangeable Bonds is $54.0 million, with a coupon rate of 5% per annum and a tenure of two (2) calendar years from the issue date, which will automatically be extended for one (1) year in the event the Exchange Right is not exercised at the end of the 2 years tenure. The Exchangeable Bonds are issued together with 250 million Warrants, each carrying the right for a period of five (5) years from the issue date to subscribe for one new ordinary share in the Company at an exercise price of $0.065 per new share. If fully exercised, the consideration from issuance of the Warrants will amount to $16.25 million. The total funds expected to be raised from this Proposed Issuance amount to $70.25 million. The transaction is in progress as of the date of this announcement.
3. The Group has been engaging continually with various lenders since the last financial year ended 31 March 2021 to obtain letters of waiver on certain compliance requirements stipulated in the facility agreements, refinancing of its existing loans and/or to extend existing loans tenure. Subsequent to the financial year end, one of the financial institutions of the Company has agreed in principle to defer the loan repayments, specifically, the loan principal repayments totaling $21.93 million which are due within twelve (12) months from the current financial year end, has been deferred for another twelve (12) months. These refinancing exercises allow the Group to preserve sufficient working capital to sustain its recovery from the impact of the COVID-19 pandemic. Based on the Group's successful negotiation with the lenders in past and the current financial year, the Group is cautiously optimistic that the various lenders will continue to support the Group in the upcoming financial year. The negotiations on these corporate exercises with the lenders are still ongoing and continuing as at the date of this announcement.
4. Management will continue to implement comprehensive cost-containment measures, including but not limited to re-negotiation of the lease terms with the lessors.

Shareholders of the Company are advised to read the FY2022 Audited Financial Statements in full, as set out in its annual report 2022 (the "FY2022 AR"). The FY2022 AR will be available on the Company's website and SGXNet on 13 July 2022.

Shareholders and investors are reminded to exercise caution when dealing or trading in the securities of the Company and should consult their stockbrokers, bank managers, solicitors, accountants or other professional advisers if they are in doubt about the actions that they should take.

BY ORDER OF THE BOARD

Melvin Ang Wee Chye

Executive Chairman

13 July 2022

	NOTES TO THE	ANNEXURE
98
	ForFINANCIALthe Financial Year Ended 31STATEMENTSMarch 2022

• GOING CONCERN

The financial statements of the Group and the Company have been prepared on a going concern basis as the Group and the Company will be able to meet its liabilities as when they fall due. The Group incurred a net loss of $42,088,000 (2021: $99,512,000) for the financial year ended 31 March 2022. As of that date, the Group's current liabilities exceeded its current

assets by $76,293,000 (2021: $119,498,000). As disclosed in Note 1 - oronavirus isease 1 ( 1 ) mpact to the financial statements, the spread of the COVID-19 pandemic in the two preceding and current financial years have significantly affected the Group's operations. These conditions indicate the existence of material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern.

The Group and the Company have implemented several measures to weather through this current challenging environment. These efforts are ongoing as the Group and the Company continue to seek support from the vendors, landlords, shareholders and business partners to meet the challenges.

The directors of the Company are of the opinion that the going concern basis in preparing the consolidated financial statements under the going concern assumption for the financial year ended 31 March 2022 is appropriate based on the following:

1. Ongoing recovery from the effect of the COVID-19 pandemic
   Even though the Group is in a net current liabilities position as at 31 March 2022 and has incurred a net loss for the current financial year, the financial metrics of the Group for the current financial year have improved when compared to that of the previous financial year. This is mainly due to the easing of the COVID-19 pandemic restrictions during the current financial year.
   The net current liabilities of the Group have decreased by approximately $43.2 million, while revenue grew by approximately 50% in the current financial year. Consequently, the Group's Earnings Before Interests, Taxes, Depreciation and Amortisation (EBITDA) has increased significantly by $23.59 million or 270% from $8.74 million in FY2021 to $32.33 million in FY2022 while net loss of the Group has decreased by approximately 58% in the current financial year, from a net loss of $99.51 million in FY2021 to a net loss of $42.09 million in FY2022. Cash flows from operating activities have also seen a significant increase of $24.10 million in the current financial year.
   Subsequent to the financial year end, with the easing from most of the COVID-19 pandemic restrictions, which includes the removal of seating capacity restrictions in cinema theatres and the lifting of the ban on large live entertainment events, management is optimistic over of the Group's performance for the next 12 months.
2. The following sources of funding and also disclosed in Note 42 to the financial statements are expected to be available to the Group for the next 12 months from the date of financial statements:
3. 1. On 23 March 2022, the Company has entered into placement agreements with placees for the allotment and issuance of 390 million placement shares in the capital of the Company at an issue price of $0.05 per placement share (the "Placement"). The aggregate consideration payable by placees is $19.5 million. As at reporting date, the Company has received advance payment of $9.75 million and this has been accounted as part of "Reserves" in equity within the Group's and Company's statements of financial position. The placement has been completed subsequent to the financial year end, on 4 April 2022, upon the receipt of the remaining placement funds of $9.75 million. Accordingly, on the same date, the Company has issued 390 million new ordinary shares to these placees.
   2. On the respective dates of 12 May 2022, 6 June 2022 and 22 June 2022, mm Connect Pte. Ltd. ("mm Connect"), a wholly-owned subsidiary of the Company, has entered into convertible bond agreements with subscribers
      ("Bondholders") for issuance of unsecured convertible bonds in an aggregate of $12.0 million, carrying a coupon rate of 5% per annum and matures on the second anniversary of their respective dates of issue. These transactions were completed as at the date of this report.

MM2 ASIA LTD. I ANNUAL REPORT 2022

NOTES TO THE	99
ForFINANCIALthe Financial Year Ended 31STATEMENTSMarch 2022

GOING CONCERN (CONTIN ED)

1. The following sources of funding are expected to be available to the Group for the next 12 months from the date of financial statements (continued):
2. 1. On 16 June 2022, the Company has entered a term sheet with UOB Kay Hian Private Limited as arranger in relation to a proposed issue of exchangeable bonds ("Exchangeable Bonds") coupled with detachable warrants
      ("Warrants") by the Company (collectively known as "Proposed Issuance"). The Proposed Issuance remains subject to entry into definitive agreements after negotiations between the parties.
      The principal amount of Exchangeable Bonds is $54.0 million, with a coupon rate of 5% per annum and a tenure of two (2) calendar years from the issue date, which will automatically be extended for one (1) year in the event the Exchange Right is not exercised at the end of the 2 years tenure. The Exchangeable Bonds are issued together with 250 million Warrants, each carrying the right for a period of five (5) years from the issue date to subscribe for one new ordinary share in the Company at an exercise price of S$0.065 per new share. If fully exercised, the consideration from issuance of the Warrants will amount to $16.25 million. The total funds expected to raise from this Proposed Issuance amount to $70.25 million. The transaction is in progress as of the date of this report.
   2. The Group has been engaging continually with various lenders since the last financial year ended 31 March 2021 to obtain letters of waiver on certain compliance requirements stipulated in the facility agreements, refinancing of its existing loans and/or to extend existing loans tenure. Subsequent to the financial year end, one of the financial institutions of the Company has agreed in principle defer the loan repayment, specifically, the loan principal repayment totaling $21.93 million which are due within next twelve (12) months from the financial year end, has been deferred for another 12 months. These refinancing exercises allow the Group to preserve sufficient working capital to sustain its recovery from the impact of the COVID-19 pandemic. Based on the Group's successful negotiation with the lenders in past and the current financial year, the Group is cautiously optimistic that the various lenders will continue to support the Group in the upcoming financial years. The negotiations on these corporate exercise with the lenders are still ongoing and continuing as at the date of this report.
   3. Management will continue to implement comprehensive cost-containment measures, including but not limited to re-negotiation of the lease terms with the lessors.

The financial statements did not include any adjustments that may result in the event that the Group unable to continue as a going concern. In the event that the Group are unable to continue as a going concern, adjustments may have to be made to reflect the situation that assets may need to realised other than in the amounts at which are currently recorded in the statement of financial position. In addition, the Group may have to provide for further liabilities that might arise and to reclassify non-current assets and liabilities as current assets and liabilities respectively.

CONTENT AND MEDIA FOR ASIA I NOTES TO THE FINANCIAL STATEMENTS

INDEPENDENT	59
AUDITOR'S REPORT

to the Members of mm2 Asia Ltd.

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of mm2 Asia Ltd. (the "Company") and its subsidiaries (the "Group"), which comprise the consolidated statement of financial position of the Group and the statement of financial position of the Company as at 31 March 2022, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Companies Act 1967 (the "Act") and Singapore Financial Reporting Standards (International) ("SFRS(I)s") so as to give a true and fair view of the consolidated financial position of the Group and the financial position of the Company as at 31 March 2022 and of the consolidated financial performance, consolidated changes in equity and consolidated cash flows of the Group for the financial year ended on that date.

asis for pinion

We conducted our audit in accordance with Singapore Standards on Auditing ("SSAs"). Our responsibilities under those standards

are further described in the Auditor s esponsibilities for the Audit of the inancial tatements section of our report. We are

independent of the Group in accordance with the Accounting and Corporate Regulatory Authority ("ACRA") ode of rofessional onduct and thics for ublic Accountants and Accounting ntities ("ACRA Code") together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our opinion. aterial ncertainty elated to oing oncern

We draw attention to Note 4 of the financial statements, which indicates that the Group incurred a net loss of $42,088,000 (2021: $99,512,000) for the financial year ended 31 March 2022, and as of that date, the Group's current liabilities exceeded its current assets by $76,293,000 (2021: $119,498,000). In addition to Note 4, the Group has borrowings amounting to $154,394,000 (2021: $192,669,000) which are due within the next 12 months from the financial year ended 31 March 2022.

These events or conditions, along with other matters as set forth in Note 4 to the financial statements, indicate that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter. In forming our opinion on the financial statements, we have considered both the adequacy of the disclosures made in Note 4 and management's use of the going concern basis of accounting in preparation of the financial statements, which remain appropriate.

CONTENT AND MEDIA FOR ASIA I INDEPENDENT AUDITOR'S REPORT