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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Rcg Holdings | LSE:RCG | London | Ordinary Share | BMG739271085 | ORD SHS HKD0.01 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.625 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMRCG
RNS Number : 8132M
RCG Holdings Limited
30 August 2013
30 August 2013
RCG HOLDINGS LIMITED
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2013
RCG Holdings Limited (the "Company") (AIM: RCG, HKSE: 802) and its subsidiaries (collectively "RCG" or the "Group"), engage in businesses of biometric and RFID products, solution services, internet of mobile application and related accessories and commodities trading, today announces the unaudited interim results for the six months ended 30 June 2013.
FINANCIAL HIGHLIGHTS
-- Revenue increased by 4.6% to HK$421.1 million (GBP35.7 million) (1H 2012: HK$402.7 million (GBP32.9 million))
-- Gross profit decreased by 20.3% to HK$-228.7 million (GBP-19.4 million) (1H 2012: HK$-190.1 million (GBP-15.5 million))
-- Gross profit margin was -54.3% (1H 2012: -47.2%)
-- Operating loss of HK$260.7 million (GBP22.1 million) (1H 2012: HK$443.0 million (GBP36.2 million))
-- Loss per share of HK$0.43 (3.6 pence) per share (1H 2012: Loss per share of HK$0.96 (7.8 pence) per share)
OPERATIONAL HIGHLIGHTS
-- Realigning the core business by addressing core business sustainability, process reengineering and repositioning of the strength in its core competencies.
-- Maximizing potential across all core businesses via cost approach while forging strategic alliances to complement the Group's core competencies.
-- Refocusing and reviewing the portfolio mix of businesses within the Group, with the objective of maximising the returns of each investment.
SINCE PERIOD END
-- On 19 July 2013, the Company announced the resignation of Tan Sri Dato' Nik Hashim Bin Nik Ab. Rahman as the non-executive director and chairman of the board of the Company with immediate effect. Upon his resignation, he ceased to be a member of the audit and remuneration committees of the Company and also ceased to be the chairman of the Company's nomination committee.
-- On 28 August 2013, the Company announced that Mr. Zeng Min, an existing independent non- executive director of the Company, the chairman of the remuneration committee of the Company and a member of the nomination committee of the Company, was appointed as a member of audit committee of the Company with immediate effect.
Enquiries:
Hot Features
Premium
RCG Holdings Limited Tel: +852 2637 2800
Danny Chew, Acting Chief Executive
Officer
ir@rcg.tv
Smith & Williamson Corporate Finance
Limited
(Nominated adviser and broker)
Dr. Azhic Basirov / David Jones Tel: +44 (0) 20 7131 4000
ACTING CHIEF EXECUTIVE OFFICER'S STATEMENT
Dear Shareholders,
On behalf of the Company, I am pleased to present the Statement as the Acting CEO of RCG.
Business Environment
Economic prospects in the region remain fraught with uncertainty and are widely expected to remain weak. Nonetheless, with the gradual recovery of the American and Chinese economies, anchoring the regional economy, Asia is expected to expand at a commendable pace to emerge as the global growth leader in the near to medium term. Hence, it is expected that most economic sectors will remain relatively stable in the near to medium term.
It is against this backdrop that the Group needs to maintain a balanced portfolio of sustainable businesses, strategically and competitively positioned to take advantage of the evolving centre of economic activity towards the emerging Asian economies.
Financial and Business Review
For the first half of 2013 RCG has recorded a slight improvement, registering a net loss in its financials. The increase in turnover was largely attributed to contributions from additions, in particular of Commodity Trading. The Group has reported total revenue of HK$421.1 million representing a increase of 4.6% compared to the same period in 2012.
Emerging from this turbulent period, the Group has reflected on its strategic direction, values and culture. The Group's strategic direction will focus on firstly, restoring the credibility and confidence of our stakeholders and secondly, setting RCG on the path to establishing leading position in its core businesses.
The Group's strategic direction for all businesses segments is centered around the following key areas:
1. Realigning the core businesses
The Group is committed to stabilise its core businesses, and will ensure timely completion of existing projects by addressing urgent capability gaps and talent requirements. We have indentified the issues in our core businesses and are actively addressing them to turn the businesses around. We are also collaborating with strategic partners to strengthen our capabilities.
Currently, governance and controls within the Group are being enhanced by bolstering finance and legal controls and improving project monitoring and reporting.
2. Maximizing potential across all core businesses
The Group will continue to ensure that its businesses are performing optimally and strengthen their competitive positions by enhancing operational efficiencies. Central to this is an effort to inculcate a culture of thrift and cost-consciousness across the Group. The Group will also continue forging strategic alliances, whilst strengthening those that already exist, to complement the Group's core competencies.
3. Reviewing the portfolio mix of the businesses within the Group
The Group will evaluate the performance and competitive position of its existing businesses using relevant financial and strategic diagnostics. Each business will be evaluated based on its financial contribution to the Group's overall performance as well as their strategic fit within the Group's overall portfolio. This is to ensure that the Group's portfolio of business remains dynamic and strategically competitive by identifying businesses that we will expand, divest or incubate.
Board Change
During July 2013, Tan Sri Dato Nik Hashim Bin Nik Abdul Rahman had resigned as the Chairman and non-executive director of the Company due to his ill-health and advancing age. I would like to take this opportunity express our sincere gratitude for his valuable contribution to the Company during his tenure of office and wish him well in the future.
Thank You
My sincere appreciation goes to our shareholders, business partners and customers for their continued support of RCG as well as to the Group's management team and staff for their tireless dedication and efforts in developing the long term prospects of the Group.
Danny Chew Tean
Acting CEO
29 August 2013
MANAGEMENT DISCUSSION AND ANALYSIS
Business review
During the six months ended 30 June 2013, the Group recorded turnover of HK$421.1 million, representing an increase of 4.6% compared to the same period in 2012. The increase in turnover was attributable to contributions from new additions to the Group's diversified portfolio of businesses, in particular from Commodity Trading.
Gross margin for the six months ended 30 June 2013 was -54.3%, compared to -47.2% for the same period in 2012 due to a number of factors, in particular the continuing pricing strategy adopted by the Company to remain competitive in its segment coupled with the sales of old stock at a discount, to finance the current operations and projects of the Group. The Group reported a net loss of HK$259.8 million for the six months ended 30 June 2013, as a result of the reduction in gross margin.
Performance of business segments
The Group is international developer and solutions provider in the biometric, RFID and security industries and delivers high-performing, convenient security systems for enterprises and consumers. The Group's business is divided generally into four categories: "Trading of Security of Biometric Products", "Solutions, Projects and Services", "Internet and Mobile Applications and of Related Accessories" and "Commodities Trading".
The Group continues to believe that the "Internet of Mobile Application and Related Accessories" segment as a key growth area, in-line with the rapid growth of the mobile and gaming industry and in particular in Online gaming, Utilities Applications for IOS and Androids and Mass Advertising.
The Group's Trading of Security and Biometric Products segment consists of biometrics and RFID products for consumer applications. Whilst its Solutions, Projects and Services segment revolves around the delivery of developed software and equipments to enterprises.
The Group's Commodity Trading activities revolve around the trading of general commodities not limited to generally accepted common commodities like metal, ores, silks and so on. Trading is conducted on both open markets local and overseas; and also through private transactions.
Six months ended 30 June HK$ y-o-y
2013 (unaudited) 2012 (unaudited) growth
Business Segment HK$ m % HK$ m % %
Trading of Security
and
Biometric Products 151.8 36 398.1 98.9 -62
Solutions, Projects
and Services 0.4 0.1 2.5 0.6 -84
Internet and Mobile
Applications and
Related Accessories 27.7 6.6 2.1 0.5 1,219
Commodities Trading 241.2 57.3 - - N/A
Total Revenue 421.1 100.0 402.7 100.0 4.6
The key contributor to the Group's turnover as at 30 June 2013 was the Commodity Trading segment which contributed 57.3% of total turnover. Following that, revenue from the Trading of Security and Biometric Products segment in the six months ended 30 June 2013 was HK$151.8 million. This segment experienced a 62% decrease compared to HK$398.1 million in the same period in 2012 due to, the continue reduction in distribution sales in this segment.
The Solutions, Projects and Services business segment experienced a 84% revenue decrease from HK$2.5 million in the six months ended 30 June 2012 to HK$0.4 million in the six months ended 30 June 2013. (The decrease was attributable to the continuing evolution of the Group's strategy to continue to focus on long term projects, which have a longer completion period with steadier collection schedules.)
Geographical performance
In the first half of 2013, the Group continued to focus its business in the Asia Pacific region. The Group continued to work with distributors and dealers around the region. The majority of the Group's revenues are generated from these regions.
A breakdown of revenue based on geographies is presented in the table below.
Six months ended 30 June HK$ y-o-y
2013 (unaudited) 2012 (unaudited) growth
Geographical HK$ m % HK$ m % %
Segment
Asia Pacific 420.5 99.9 400.5 99.5 5.0
Middle East 0.6 0.1 2.2 0.5 -71.4
Total Revenue 421.1 100.0 402.7 100.0 4.6
Asia Pacific region had a slightly increase in revenue from HK$400.5 million in six months ended 30 June 2012 to HK$421.1 million in six months ended 30 June 2013. The majority of the revenue in Asia Pacific region was derived from Commodities Trading segment, which accounted for 57% of revenue reported.
Middle East region decreased 71.4% from HK$2.2 million in six months ended 30 June 2012 to HK$0.6 million in six months ended 30 June 2013.
Disposals
On 6 February 2013, the Board announced that during the period from 9 April 2012 to 6 February 2013, RCG China Limited ("RCG China"), a wholly foreign owned company established under the laws of the PRC on 14 September 2006 and an indirectly wholly-owned subsidiary of the Company, entered into the sale and purchase agreements with various purchasers pursuant to which RCG China agreed to sell and the purchasers agreed to purchase six office units located at No. 8 Haidian North Second Street, Zhong Guan Cun SOHO Zhong Guan Cun, Haidian District, Beijing, PRC, which were owned by the Group for an aggregate consideration of RMB39,404,350 (approximately HK$48,647,346).
On 27 March 2013, the Board announced that Sharp Asia International Limited ("Sharp Asia"), a wholly owned subsidiary of the Company, entered into an agreement with Mr. Chow Yik pursuant to which the Sharp Asia agreed to sell and the Mr. Chow Yik agreed to purchase the Group's 25% equity interest in I-Century Limited, a company incorporated in British Virgin Islands with limited liabilities, for an aggregate consideration of HK$29,000,000.
On 21 May 2013, the Board announced that RCG China Holdings Limited ("RCG China Holdings"), an indirect wholly owned subsidiary of the Company, entered into an agreement with Mr. Liu Ling Hao pursuant to which the RCG China Holdings agreed to sell and the Mr. Liu Ling Hao agreed to purchase the Group's 6% equity interest in Hero View Limited, a company incorporated in British Virgin Islands with limited liabilities, for an aggregate consideration of HK$20,000,000.
Financial review
Turnover
For the six months ended 30 June 2013, the Group reported total revenue of HK$421.1 million representing an increase of 4.6% compared to HK$402.7 million in the same period in 2012. The increase was mainly due to contributions from the Group's new segment, Commodities Trading.
Cost of sales
Cost of sales increased 9.6% from HK$592.8 million in the six months ended 30 June 2012 to HK$649.9 million in the same period in 2013. In terms of percentage of sales, the cost of sales increased from 147.2% in the six months ended 30 June 2012 to 154.3% in the six months ended 30 June 2013.
Gross loss and gross profit margin
Gross loss in the first half of 2013 was HK$228.7 million, as compared to gross loss of HK$190.1 million in the same period of 2012 resulting from increasingly competitive pricing due to an already competitive market and the disposal of old stock at a discount.
Other operating income
Other operating income increased from HK$4.7 million during the first half of 2012 to HK$6.8 million in the same period of 2013.
Administrative expenses
Administrative expenses decreased by 80.0% from HK$156.0 million in the first half of 2012 to HK$31.2 million in the same period in 2013 mainly attributable to lower related administrative expenses.
Selling and distribution costs
Selling and distribution costs decreased by 98.8% from HK$97.0 million in the six months ended 30 June 2012 to HK$1.2 million in the same period in 2013 due to decrease of 98.8% marketing cost incurred to create better market awareness of the Company's brand and products.
Finance costs
Finance costs during the first half of 2013 remained constant at HK$2.0 million from HK$2.0 million in the same period in 2012.
Loss before taxation
Loss before taxation for the six months ended 30 June 2013 was HK$262.6 million, compared to a loss before taxation of HK$445.0 million in the same period in 2012. The loss before taxation in the first half year in 2013 was attributable to lower margin.
Income tax credit
Income tax credit increased from HK$0.2 million in first half of 2012 to a HK$2.9 million in same period in 2013.
Loss for the period
The Group's loss for the period was HK$259.8 million compared to loss of HK$444.7 million in the same period in 2012.
Loss attributable to owners of the Company
Loss attributable to owners of the Company decreased from a loss of HK$473.1 million in the first half of 2012 to a loss of HK$257.8 million in the same period of 2013.
Loss attributable to the non-controlling interests
The loss attributable to the non-controlling interests of HK$2.0 million for six month ended 30 June 2013 (in the same period in 2012 the profit attributable to the minority interest was HK$28.4 million).
Review of the Group's financial position as at 30 June 2013
Liquidity and capital resources
The Group funds its operations with sales revenue from its operating activities. The Group also has cash inflows from interest income and collections. Key drivers in the Group's sources of cash are primarily the Group's sales, and their inflow depends on the Group's ability to collect payments. There have been no material changes in the Group's underlying drivers during the period under review.
The Group did not incur any capital expenditure during the six months ended 30 June 2013 (compared to HK$0.6 million in the first half of 2012).
The following table sets forth capital expenditure for the periods indicated:
Six months ended 30
June
2013 2012
HK$'000 HK$'000
Purchase of property, plant and equipment - 608
The Group has internal budgeting systems in place to ensure that if and when cash is committed to fund major expenditures there is sufficient cash flow to maintain the Group's daily operations and meet all of its contractual obligations.
As at 30 June 2013, the Group had a term loan facility amounting to HK$43.6 million secured by the pledging of a Malaysian property.
Save as disclosed above, there were no other charges on assets as at 30 June 2013.
The following sets forth the maturities of the Group's total borrowings as at the balance sheet date:
Six months ended 30
June
2013 2012
HK$'000 HK$'000
Total bank borrowings, secured, repayable
within one year 9,661 4,624
Total bank borrowings, secured, repayable
more than one year 34,042 44,400
Total 43,703 49,024
The Group had cash and cash equivalents of HK$78.4 million as of 30 June 2013 compared to HK$17.8 million as of 30 June 2012.
Gearing ratio
As at 30 June 2013, the Group's gearing ratio was approximately 0.047x, as compared to 0.020x as at 30 June 2012. The gearing ratio was calculated as the Group's total debt divided by its total capital. Debt of HK43.7 million is calculated as total borrowings (including short-term bank loans amounting HK$9.6 million, current portion of financing obligations amounting HK$0.1 million and long-term bank loans amounting HK$34.0 million). Total capital is calculated as total shareholder equity of HK$890.7 million plus debt.
Contingent Liabilities
As at 30 June 2013 and 2012, the Group had no contingent liabilities. The Company acted as a guarantor of its subsidiaries to secure interest-bearing borrowings, which amounting to approximately HK$43.7 million (2012: HK$49.0 million).
The carrying amount of the financial guarantee provision recognised in the Company's balance sheet was approximately HK$172,434 as at 30 June 2013. The financial guarantee contract was eliminated on consolidation.
Deposits, prepayments and other receivable
As at 30 June 2013, the Group's deposits, prepayments and other receivable was HK$37.3 million, as compared to HK$77.9 million as at 30 June 2012. The reduction was mainly attributable to the conversion of trade deposits into stocks to meet the operation needs of the Group.
Foreign exchange risk management
Certain of the Group's bank balances are denominated in Pounds, Ringgit, United States Dollars, United Arab Emirates Dirham and Renminbi, each of which is a currency other than the functional currency of the relevant group entities, which exposes it to foreign currency risk. The Group has not used any financial instruments to hedge against this currency risk. However, the Group monitors foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise.
Human Resources
As at 30 June 2013, in addition to the directors of the Company (the "Directors"), there were approximately 41 employees (31 December 2012: 48) of the Group stationed in the Group's offices in Hong Kong, Beijing, Shenzhen, Kuala Lumpur, Bangkok and Dubai. Total staff costs for the six months ended 30 June 2013 were HK$4.8 million, compared with HK$6.7 million in first half 2012. The saving was attributable to the Group's continuous efforts to reduce its overheads and re-allocate the project resources by increasing collaboration with third party partners, hence reducing the dependency on internal manpower needs.
The Group offers training and development courses for its employees to enhance the staff's working capabilities. Remuneration packages are linked to individual performance, the Group's business performance, and taking into consideration industry practices and market conditions, reviewed on an annual basis. Directors' remuneration is determined with reference to his duties and responsibilities with the Company, the Company's standards for emoluments and market conditions. Share options are also granted to eligible employees based on individual's performance as well as the Group's performance.
Management Outlook
In these trying times, the Company had set in motion plans and actions that thus far, have enabled the achievement of better results, as well as the provision of a stable platform for sustainability and growth. This can be attributed to dedicated and experienced leaders in a structure that provide close focus for its operations in each business segments, and the continuous supports of key partners.
Further development of talent within the Company's management teams, together with strategic investments in growth areas, will be key factors that will enable the Company to steer through the uncertainties in the coming months, that affect today's business environment and deliver the expectations of the Group's stakeholders.
The board of the Directors (the "Board") announces the unaudited condensed financial statements of the Group for the six months ended 30 June 2013. The condensed consolidated statement of profit or loss, condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows of the Group for the six months ended 30 June 2013, and condensed consolidated statement of financial position of the Group as at 30 June 2013, along with selected explanatory notes, are set out as follows:
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the six months ended 30 June 2013
2013 2012
Notes HK$'000 HK$'000
(Unaudited) (Unaudited)
Turnover 3 421,133 402,689
Cost of sales (649,863) (592,793)
Gross loss (228,730) (190,104)
Other operating income 4 6,808 4,716
Loss on disposals of investments properties (7,564) (2,311)
(Loss)/gain arising on change of fair
value of investment properties (490) 16
Share of result of an associate 3 133
Gain/(loss) arising on fair value of
financial assets
at fair value through profit or loss 1,723 (2,494)
Selling and distribution costs (1,190) (96,984)
Administrative expenses (31,213) (155,996)
Loss from operations (260,653) (443,024)
Finance costs (1,981) (1,957)
Loss before taxation 5 (262,634) (444,981)
Income tax credit 6 2,857 239
Loss for the period (259,777) (444,742)
Attributable to:
Owners of the Company (257,753) (473,146)
Non-controlling interests (2,024) 28,404
(259,777) (444,742)
Loss per share attributable to the owners
of the Company
- Basic and diluted (HK cents) 7 (43.1) (95.9)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2013
2013 2012
HK$'000 HK$'000
(Unaudited) (Unaudited)
Loss for the period (259,777) (444,742)
Other comprehensive income for the period:
Item that may be or are reclassified
subsequently to profit or loss:
Available-for-sale financial assets:
Gain/(loss) arising on change in fair
value 97 (4,310)
Exchange differences on translating
foreign operations
Exchange differences arising during
the period (5,221) 4,304
Reclassification adjustments upon disposal - (128)
(5,221) 4,176
(5,124) (134)
Total comprehensive income for the period (264,901) (444,876)
Attributable to:
Owners of the Company (262,877) (473,283)
Non-controlling interests (2,024) 28,407
264,901 444,876
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2013
Notes As at 30 As at 31
June December
2013 2012
HK$'000 HK$'000
(Unaudited) (Audited)
ASSETS
Non-current assets
Property, plant and equipment 9 144,695 157,813
Investment properties 24,563 57,765
Prepaid lease payments 18,513 19,221
Goodwill 10 62,017 62,017
Intangible assets 11 78,400 88,200
Interests in associates - 28,912
Available-for-sale financial assets 12 15,117 34,220
343,305 448,148
Current assets
Prepaid lease payments 201 208
Inventories 1,000 386,326
Financial assets at fair value through
profit and loss 5,455 3,732
Trade receivables 13 628,292 458,977
Deposits, prepayments and other receivables 14 37,252 4,997
Cash at bank and in hand 78,608 28,202
750,808 882,442
Total assets 1,094,113 1,330,590
EQUITY
Owners of the Company
Share capital 15 6,962 5,976
Reserves 883,703 1,113,788
890,665 1,119,764
Non-controlling interests 36,620 38,644
Total equity 927,285 1,158,408
LIABILITIES
Non-current liabilities
Interest-bearing borrowings 16 34,028 42,335
Obligations under finance leases 14 174
Deferred tax liabilities 14,761 17,698
48,803 60,207
Current liabilities
Trade payables 17 40,994 20,991
Accruals and other payables 67,327 74,817
Tax payable 43 912
Interest-bearing borrowings 16 9,593 4,685
Promissory note - 10,500
Obligations under finance leases 68 70
118,025 111,975
Total liabilities 166,828 172,182
Total equity and liabilities 1,094,113 1,330,590
Net current assets 632,783 770,467
Total assets less current liabilities 976,088 1,218,615
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2013
Attributable to the owners of the Company
Share Share Available- Employee Convertible Capital Translation Shares Legal Retained Sub-total Non- Total
capital premium for-sale share-based notes reserve reserve issuable reserve earnings controlling
Securities compensation reserve reserve interests
revaluation reserve
reserve
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
As at 1 January
2012 4,932 2,051,074 (34,242) 21,161 - (872) (21,317) 59,150 48 822,710 2,902,644 (28,919) 2,873,725
Total
comprehensive
income for
the
period - - (4,310) - - - 4,173 - - (473,146) (473,283) 28,407 (444,876)
Release of
share
issuable
reserve - - - - - - - (59,150) - 59,150 - - -
Lapse of share
options - - - (11,638) - - - - - 11,638 - - -
Acquisition of
subsidiary - - - - 4,162 - - - - - 4,162 41,265 45,427
Deferred tax
of
convertible
notes issue
for
acquisition
of
subsidiaries - - - - (686) - - - - - (686) - (686)
Disposal of
subsidiaries - - - - - - - - - - - 37 37
As at 30 June
2012 4,932 2,051,074 (38,552) 9,523 3,476 (872) (17,144) - 48 420,352 2,432,837 40,790 2,473,627
As at 1
January
2013 5,976 2,138,927 (39,292) 8,780 - (872) (13,427) - 48 (980,376) 1,119,764 38,644 1,158,408
Total
comprehensive
income for
the
period - - 97 - - - (5,221) - - (257,753) (262,877) (2,024) (264,901)
Placing of
shares 986 34,017 - - - - - - - - 35,003 - 35,003
Share issuing
expenses - (1,225) - - - - - - - - (1,225) - (1,225)
Lapse of share
options - - - (2,087) - - - - - 2,087 - - -
As at 30 June
2013 6,962 2,171,719 (39,195) 6,693 - (872) (18,648) - 48 (1,236,042) 890,665 36,620 927,285
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2013
2013 2012
HK$'000 HK$'000
(Unaudited) (Unaudited)
Cash flows from operating activities
Loss before taxation (262,634) (444,981)
Adjustments for:
Amortisation of intangible assets 9,800 42,754
Amortisation of prepaid lease payments 103 177
Gain on disposal of property, plant
equipment (1,714) (62)
Reversal of provision for obsolete stock - (574)
Reversal of impairment loss on trade (343) -
receivables
(Gain)/loss arising on fair value of
financial assets at fair value through
profit or loss (1,723) 2,494
Share of result of an associate (3) (133)
Loss on disposal of investment properties 7,564 2,311
Loss/(gain) arising on change in fair
value of investment properties 490 (16)
Gain on disposal of subsidiaries - (109)
Gain on disposal of an associate (84) -
Gain on disposal of available-for-sale (800) -
financial assets
Provision for obsolete stock 481 81,088
Depreciation 7,360 8,502
Bank interest income (77) (67)
Written-off of property, plant and equipment - 1,284
Interest on the interest-bearing borrowings 1,904 1,884
Operating cash flows before movements
in working capital (239,676) (305,448)
Decrease/(increase) in inventories 384,846 (213,350)
Increase in trade receivables (168,971) (37,500)
(Increase)/decreases in deposits, prepayments
and other receivables (16,255) 543,663
Increase/(decrease) in trade payables 20,003 (1,969)
Decrease in accruals and other payables (7,494) (18,501)
Cash used in operating activities (27,547) (33,105)
Bank interest income received 77 67
Income tax paid - (204)
Net cash used in operating activities (27,470) (33,242)
Cash flows from investment activities
Purchases of property, plant and equipment - (608)
Net cash received from acquisition of
a subsidiary - 2,087
Proceeds from disposal of investment
properties 25,870 3,967
Proceeds from disposal of property,
plant and equipment 4,722 19,170
Proceeds from disposal of an associates 3,000 -
Proceeds from disposal of available-for-sale 20,000 -
financial assets
Decrease in fixed assets - 24,671
Net cash generated from/(used in) investing
activities 53,592 49,287
Cash flows from financial activities
Interest expenses paid on interest-bearing
borrowings and bank overdrafts (1,904) (1,584)
Proceeds from placing of shares 33,778 -
Obligations under finance lessees repaid (157) (64)
Interest-bearing borrowings repaid (1,913) (28,771)
Net cash (used in)/generated from financing
activities 29,804 (30,419)
Net increase/(decrease) in cash and
cash equivalents for the period 55,926 (14,374)
Cash and cash equivalents at the beginning
of the period 28,205 27,928
Effect of foreign exchange rate changes (5,695) 4,217
Cash and cash equivalents at 30 June 78,436 17,771
Analysis of the balances of cash and
cash equivalents 78,608 17,943
Cash at bank and in hand
Fixed deposits (172)
Cash and cash equivalents at 30 June 78,436 17,771
NOTES TO THE FINANCIAL STATEMENTS
For the six months ended 30 June 2013
1. BASIS OF PREPARATION (a) Statement of compliance
These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standards (the "IAS") 34 Interim Financial Reporting and disclosure requirements set out in Appendix 16 of the Rule Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rule"). They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2012.
These unaudited condensed consolidated interim financial statements have been prepared under the historical cost convention, except for certain financial assets and financial liabilities, which are carried at fair values.
(b) Judgments and estimates
In preparing these interim unaudited condensed consolidate financial statement, management make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
The significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2012.
2. APPLICATION OF NEW INTERNATIONAL FINANCIAL REPORTING STANDARDS
The accounting policies used in these unaudited condensed consolidated interim financial statements are consistent with those followed in the preparation of the annual financial statements of the Group for the year ended 31 December 2012.
The Group had not early adopted the new and revised International Financial Reporting Standards (the "IFRs") that have been issued but are not yet effective during the period.
The Group is in the process of assessing the impact of the new and revised IFRSs upon initial application but has not yet in a position to state whether these new and revised IFRSs would have a significant impact on its results of operations and financial position.
3. SEGMENT INFORMATION
The chief operating decision-maker has been identified as the key management. This key management reviews the Group's internal reporting in order to assess performance and allocate resources. Key management has determined the operating segments based on these reports.
The key management considers the business from both a business and geographic perspective. From a business perspective, key management assesses the performance of Trading of Security & Biometric Products, Solutions, Projects and Services, Internet & Mobile's Application & Related Accessories and Commodities Trading operating segments.
- Trading of security & Biometric Products segment consists of biometrics and RFID products for consumer applications. Examples include the m-series fingerprint doorlocks and FX-Secure-Key. Also, it carries biometric and RFID products and components for commercial use, such as i-series and s-series fingerprint authentication devices, together with EL-1000 and XL-1000 controllers forming access control, r-series RFID readers and controllers and K-series multi-modal security devices combining facial recognition, fingerprint authentication, password and RFID. The Group predominantly sells to distributors, system integrators and security system providers.
- Solutions, Projects and Services segment makes bespoke system solutions for end-users using our internally developed software and hardware capabilities supported by our own and third party products as required.
- Internet & Mobile Applications & Related Accessoriessegment is mobile and gaming industry and in particular in Online gaming,
Utilities Applications for IOS, Translations business and Mass Advertising.
- CommodityTrading segment are trading of commodity goods.
The accounting policies of the reportable segments are the same as the Group's accounting policies. The keymanagement assessesthe performance of
the business segments based on a measure of gross loss. Segmentassets include all tangible, intangible assets and current assets with the exception of
other corporate assets. Segment liabilities include trade payables, accruals and other payables except of current and deferred tax liabilities, other corporate
liabilities attributable to the individual segments and other borrowings managed directly by the segments.
The following table presents the Group's turnover, segment results and other information for operating segmentsfor the six months ended 30 June 2013
and 30 June 2012 and segment assets and segment liabilities as at 30 June2013 and 31 December 2012:
Trading of Solutions, Internet Commodities Unallocated Total
Security & Projects & Mobile Trading
Biometric and Services Application
products & Related
Accessories
2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
Turnover -
external
sales 151,772 398,096 454 2,507 27,651 2,086 241,256 - - - 421,133 402,689
Segment results (234,364) (191,379) 414 425 4,681 850 539 - - - (228,730) (190,104)
Other operating
income 6,808 4,607 6,808 4,607
Loss on disposal
of investment
properties (7,564) (2,311) (7,564) (2,311)
(Loss)/gain
arising
on changes in
fair
value of
investments
properties (490) 16 (490) 16
Deprecation (5,899) (74) - - (200) - - - (1,261) (8,428) (7,360) (8,502)
Amortisation of
prepaid lease
payments - - - - - - - - (103) (177) (103) (177)
Amortisation of
intangible
assets - (37,115) - (5,639) (9,800) - - - - - (9,800) (42,754)
Gain/(loss)
arising
on fair value
of
financial
assets
at fair value
through
profit or loss 1,723 (2,494) 1,723 (2,494)
Unallocated
expenses (15,137) (201,305) (15,137) (201,305)
Finance costs (1,981) (1,957) (1,981) (1,957)
Loss before
taxation (18,005) (212,049) (262,634) (444,981)
Income tax credit 2,857 239 2,857 239
Loss for the
period (15,148) (211,810) (259,777) (444,742)
Segment assets 586,664 821,859 - - 158,674 169,593 24,369 4,069 324,406 335,070 1,094,113 1,330,591
Segment
liabilities 12,401 12,278 - - 4,166 4,615 23,903 4,063 126,358 151,229 166,828 172,185
Other segment
information:
Additions to
non-current
assets - - - - - - - - - 608 - 608
Deprecation (5,899) (74) - - (200) - - - (1,261) (8,428) (7,360) (8,502)
Amortisation
of
prepaid
lease
payments - - - - - - - - (103) (177) (103) (177)
Amortisation
of
intangible
assets - (37,115) - (5,639) (9,800) - - - - - (9,800) (42,754)
Gain/(loss)
arising
on fair
value of
financial
assets
at fair
value
through
profit or
loss - - - - - - - - 1,723 (2,494) 1,723 (2,494)
Geographical information
The Group operates in two principal geographical areas - Asia Pacific and Middle East. The following tables provide an analysis of the Group's turnover, by geographical areas, irrespective of the origin of the goods and services:
Turnover
2013 2012
HKD'000 HKD'000
Asia Pacific 420,540 400,591
Middle East 593 2,098
421,133 402,689
4. OTHER OPERATING INCOME
For the six months ended
30 June
2013 2012
HKD'000 HKD'000
Bank interest income 77 67
Rental income 1,432 728
Gain on disposal of property, plant and equipment 1,714 62
Gain on disposal of subsidiaries - 109
Gain on disposal of an associate (Note) 84 -
Gain on disposal of available-for-sale financial 800 -
assets
Reversal of impairment loss of trade receivables 343 -
Reversal of provision for obsolete stock - 574
Foreign exchange gain 340 3,052
Sundry income 2,018 124
6,808 4,716
Note:
During the six months ended 30 June 2013, the Group disposed 25% of equity interests in I-Century Limited, which carrying amount was approximately HK$28,916,000, at aggregate consideration of HK$29,000,000. For detail, please refer to the Company's announcements dated 27 March 2013 and 3 May 2013.
5. LOSS BEFORE TAXATION
Loss before taxation is arrived at after charging:
For the six months ended
30 June
2013 2012
HK$'000 HK$'000
Finance Costs
Bank charges 77 73
Interests on convertible notes - 41
Interests on promissory notes - 259
Interests on interest-bearing borrowings and
bank overdrafts wholly repayable within five
years 1,904 1,584
1,981 1,957
Other items
Cost of inventories sold 644,864 592,793
Depreciation 7,360 8,502
Amortisation of prepaid lease payments 103 177
Amortisation of intangible assets 9,800 42,754
Impairment loss on carrying amount of obsolete
stock (note) - 81,088
Note: Inventories are stated at lower of cost and net realizable value at the reporting date.
6. INCOME TAX CREDIT
For the six months ended
30 June
2013 2012
HK$'000 HK$'000
Current tax expenses in respect of the current 85 -
year - PRC
Deferred tax liabilities (2,942) (239)
(2,857) (239)
Hong Kong Profits Tax is calculated at 16.5% (2012: 16.5%) of the estimated assessable profits for the period.
No provision for Hong Kong Profits Tax and Malaysian Income Tax has been made for both periods as the Company and its subsidiaries have no assessable profits arising in Hong Kong and Malaysia respectively.
Malaysian Income Tax is calculated at the statutory tax rate of 25% (2012: 25%) of the estimated assessable profit for the period. The corporate tax
rate for companies with paid-up capital of Malaysian Ringgit 2.5 million and below at the beginning of the basis period for the years of
assessmentare as follows: The first Malaysian Ringgit 500,000 chargeable income is charged at the rate of 20% (2012: 20%) for the period and the
amount of chargeable income exceeding Malaysian Ringgit 500,000 is charged at the rate of 25% (2012: 25%) for the period. Taxation arising in other
jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
Deferred tax charges represent tax effects of change in fair value of investment properties and disposal of investment properties and the excess of
tax capital allowances over related depreciation of property, plant and equipment and intangible assets for the period ended 30 June 2013.
7. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share attributable to the owners of the Company is based on the following data:
Loss
For the six months ended
30 June
2013 2012
HK$'000 HK$'000
Loss for the purpose of basic and diluted loss
per share
Loss for the period attributable to owners
of the Company (257,753) (473,146)
Number of shares
For the six months ended
30 June
2013 2012
Weighted average number of ordinary shares
for the purpose of
basic loss per share 597,576,496 493,223,555
Effect of dilutive potential ordinary shares
Share option scheme - -
Convertible notes - -
Weighted average number of ordinary shares
for the purpose of
dilutive loss per share 597,576,496 493,223,555
For the period ended 30 June 2013 and 2012 diluted loss per share was not presented because the exercise of shareoption and conversion of all
outstanding convertible note consider would have anti-dilutive effect.
8. INTERIM DIVIDENDS
The directors of the Company do not recommend the payment of an interim dividend in respect of the period ended 30 June 2013 (2012: Nil).
9. PROPERTY, PLANT AND EQUIPMENT
During the six months ended 30 June 2013, the Group did not acquired any property, plant and equipment (year ended 31 December 2012:
approximately HK$2,006,000). Items of property, plant and equipment with a carryingamount of approximately HK$3,008,000 were disposed during
the six months ended 30 June 2013 (for year ended31December 2012: approximately HK$5,968,000), resulting in a gain on disposal of property, plant
and equipment approximately HK$1,714,000 (for year ended 31 December 2012: a loss on disposal of property, plant and equipment of approximately
HK$2,265,000).
10. GOODWILL
Six months Year ended
ended 30 June 31 December
2013 2012
HK$'000 HK$'000
Cost
As at the beginning of the period/year 195,296 154,479
Additional amounts recognised from business
combinations occurred during the period/year - 41,112
Disposal - (4,509)
Exchange alignment - 4,214
As at the end of the period/year 195,296 195,296
Accumulated impairment losses
As at the beginning of the period/year 133,279 133,574
Disposal - (4,509)
Exchange alignment - 4,214
As at the end of the period/year 133,279 133,279
Carrying amount
As at the end of the period/year 62,017 62,017
The carrying amount of goodwill allocated to cash-generating units ("CGUs") that are significant individually or in aggregate is as follows:
As at 30 June As at 31 December
2013 2012
HK$'000 HK$'000
Home business accessories 20,905 20,905
Provision of advertising and entertainment
application on mobile platforms 41,112 41,112
62,017 62,017
The Group tests goodwill for impairment at each reporting period, or more frequently if there are indications that goodwill might be impaired.
The recoverable amounts of the CGUs are determined from value-in-use calculations for 30 June 2013 and
31 December 2012. The key assumptions for the value-in-use
calculations are those regarding the discount rates and growth rates. The directors of the Company estimate discountrates using pre-tax rates that reflect current marketassessments of the time value of money and the risk specific to the CGUs. The growth rates are based on
pastperformance and its expectations for the development of the market.
The key assumptions used for value-in-use calculations are as follows:
Home business Provision of
accessories advertising
and entertainment
applications
on mobile platforms
As at 30 June 2013
Growth rate 3% 3%
Discount rate 17.05% 17.86%
As at 31 December 2012
Growth rate 3% 3%
Discount rate 13.52% 17.25%
For the period ended 30 June 2013, the directors of the company had assessed the recoverable amount of the CGUs that no impairment losses
(year ended 31 December 2012: HK$Nil) were recognised as the recoverable amount of the CGUs are less than the carrying amount of the CGUs.
The recoverable amounts of the CGUs are determined based on value-in-use
calculations. The calculations uses cash flow projections based on financial budgets approved by directors of the Company covering a five year
periods. Cash flows beyond the five year are extrapolated using the estimated growth rate, which does not exceed the projected long-term
average growth rate.
11. INTANGIBLE ASSETS
The director of the Company had assessed the recoverable amount of intangible assets for the period ended 30 June 2013. No impairment loss on
intangible assets was recognised for the period ended 30 June 2013 and 2012.
12. AVAILABLE-FOR-SALE FINANCIAL ASSETS
As at 30 June As at 31 December
2013 2012
HK$'000 HK$'000
Equity securities at cost
Unlisted outside Hong Kong 150,000 169,200
Equity securities at fair value
Listed outside Hong Kong 117 20
150,117 169,220
Impairment on unlisted equity securities (135,000) (135,000)
15,117 34,220
During the six months ended 30 June 2013, the Group disposal 6% of the issued share capital of Hero View Limitedwhich carrying amount was
approximately HK$19,200,000, disposed at consideration of HK$20,000,000. Therefore, a gain of approximately HK$800,000 was recognised.
Detail is set out in the Company's announcement dated 21May 2013.
Asat 30 June 2013, unlisted equity securities with carrying amount of HK$15,000,000 (31 December 2012: HK$34,200,000) were stated at cost less
impairment loss rather than at fair value.
The directors of the Company had assessed recoverable amount of unlisted equity securities outside Hong Kong by reference to the business
valuation performed by an independent valuer as at 30 June 2013, and no impairment loss was recognised for the period ended 30 June 2013
(year ended 31 December 2012: HK$3,707,000).
For listed equity securities, the fair value as determined based on the quoted market bid prices available on therelevant stock exchange.
13. TRADE RECEIVABLES
The aging analysis of the trade receivables is as follows:
As at 30 June As at 31 December
2013 2012
HK$'000 HK$'000
0-30 days 73,927 196,564
31-60 days 80,584 121,744
61-90 days 34,759 30,728
91-180 days 161 79,020
Over 180 days 1,166,244 772,521
1,355,675 1,200,577
Impairment loss on trade receivables (727,383) (741,600)
628,292 458,977
The Group has no significant concentrations of credit risk, with exposure spreads over a large number of customers.The trade receivables are
generally on 30-180 days credit terms.
The directors of the Company consider that the carrying amounts of trade receivables approximate to their fair values.
14. DEPOSITS, PREPAYMENTSAND OTHER RECEIVABLES
Included in deposits, prepayment and other receivables, amounts of approximately HK15,511,000 and HK$16,000,000 were prepayment of
commodity trading products and receivable for the disposal of an associate respectively.
15. SHARE CAPITAL
Number of shares Par value
As at 30 As at 31 As at 30 As at 31 December
June December June 2012
2013 2012 2013
HK$'000 HK$'000
Authorised
Ordinary shares of HK$0.01
each 9,000,000,000 9,000,000,000 90,000 90,000
Six months Year ended Six months Year ended
ended 30 31 December ended 30 31 December
June 2012 June 2012
2013 2013
Issued and fully paid
As at beginning of the
period/year 597,576,496 493,223,555 5,976 4,932
Placing of shares (Note) 98,600,000 - 986 -
Conversion of convertible
notes - 104,352,941 - 1,044
As at end of the period/year 696,176,496 597,576,496 6,962 5,976
Note: On 10 June 2013, the Company allotted and issued an aggregate of 98,600,000 shares by way of placing to independent investors at a
price of HK$0.355 (approximately 2.86 pence) per share.
16. INTEREST-BEARING BORROWINGS
As at 30 June As at 31 December
2013 2012
HK$'000 HK$'000
On demand or repayable:
Within one year 9,593 4,685
In the second to fifth years 26,421 14,056
Over fifth years 7,607 28,279
Total bank borrowings, secured 43,621 47,020
The bank borrowings bear interest at rates of 5.20% (31 December 2012: 5.20%) per annum for the six monthsended 30 June 2013.
The Malaysian Ringgit bank borrowings of approximately HK$43,621,000 (31 December 2012: HK$47,020,000) were secured the Group's land and
buildings in Malaysia with carrying values of approximately HK$109,150,000 as at 30 June 2013 (31 December 2012: land and buildings approximately
HK$113,933,000).
17. TRADE PAYABLES
The ageing analysis of the trade payables is as follows:
As at 30 June As at 31 December
2013 2012
HK$'000 HK$'000
0-30 days 28,252 6,999
31-60 days 194 1,702
61-90 days 57 14
Over 90 days 12,491 12,276
40,994 20,991
Trade payables are generally settled on 0-60 days terms. The Grouphas financial risk management policies in place to ensure that all payables are paid within the credit timeframe.
The directors of the Company consider that the carrying amounts of trade payables approximate to their fair values.
18. COMMITMENTS
The Grouphad no capital commitment as at 30 June 2013 and 31 December 2012.
19. CONTINGENT LIABILITIES
Asat 30 June 2013 and 2012, the Group had no significant contingent liabilities.
20. RELATED PARTY TRANSACTIONS
Save as disclosed elsewhere in these unaudited condensed consolidated interim financial statements, the Group had the following significant
related party transactions:
(a) The remuneration of directors and other members of key personnel during the period was as follows:
2013 2012
HK$'000 HK$'000
Salaries and bonus 1,005 2,072
Retirement scheme contribution - 33
1,005 2,105
21. SUBSEQUENT EVENTS
The Group had no significant events after the end of reporting period.
PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES
Neither the Company nor any of its subsidiaries purchased, redeemed or sold any of the Company's listed securities during the six months ended 30 June 2013.
DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES
As at 30 June 2013, none of the Directors of chief executives had any interests or short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance, Cap. 571 of the Laws of Hong Kong ("SFO")) as recorded in the register required to be kept by the Company under Section 352 of the SFO; or as otherwise notified to the Company and The Stock Exchange of Hong Kong Limited (the "HKSE") pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code").
SUBSTANTIAL SHAREHOLDERS' INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES
As at 30 June 2013, the following persons or companies (other than the Directors and chief executives) had interest or short positions in the shares and underlying shares as recorded in the register required to be kept by the Company pursuant to Section 336 of the SFO were as follows:
Long position in the ordinary shares of the Company
Name of Shareholders Capacity/ Number of Number of Total number Approximate
Nature of shares underlying of shares percentage
interest shares and underlying of issued
shares share capital
(Note 4)
Crossover
Global Limited Beneficial
(Note 1) owner 104,352,941 - 104,352,941 14.99%
Chan Chun Interest of
Fai (Note controlled
1) Corporation 104,352,941 - 104,352,941 14.99%
Interest of
Qin Chuhua controlled
(Note 1) corporation 104,352,941 - 104,352,941 14.99%
Interest of
Yang Zhijian controlled
(Note 1) corporation 104,352,941 - 104,352,941 14.99%
Veron International
Limited Beneficial
(Note 2) owner 65,662,832 - 65,662,832 9.43%
Kung Nina
(Estate of
Nina Kung
also known
as Nina T.H. Interest of
Wang) (Note controlled
2) corporation 65,662,832 - 65,662,832 9.43%
Lam Hok Chung
Rainier
(Note 2) Trustee 65,662,832 - 65,662,832 9.43%
Jong Yat Kit
(Note 2) Trustee 65,662,832 - 65,662,832 9.43%
Yu Sai Hung
(Note 3) Trustee 65,662,832 - 65,662,832 9.43%
The Offshore
Group Holdings
Limited (Note Beneficial
3) owner 53,515,556 - 53,515,556 7.69%
Chan Chun Interest of
Chuen (Note controlled
3) corporation 53,515,556 - 53,515,556 7.69%
Tam Miu Ching
(Note 3) Spousal interest 53,515,556 - 53,515,556 7.69%
Notes:
1. The entire issued share capital of Crossover Global Limited ("Crossover") is beneficially owned by three individuals, namely Mr. Chan Chun Fai, Mr. Qin Chuhua and Mr. Yang Zhijian at the percentage 45%, 29% and 26% respectively. Therefore, Mr. Chan Chun Fai, Mr. Qin Chuhua and Mr. Yang Zhijian are deemed to be interested in the 104,352,941 underlying shares held by Crossover under the SFO.
2. The entire issued share capital of Veron International Limited is beneficially owned by Ms. Kung Nina. Therefore, Ms. Kung Nina is deemed to be interested in the 65,662,832 shares held by Veron International Limited under the SFO. Mr. Lam Hok Chung Rainier and Mr. Jong Yat Kit solely as Joint and Several Administrators pendente lite of Estate of Ms. Nina Kung.
3. The entire issued share capital of The Offshore Group Holdings Limited ("Offshore") is beneficially owned by an individual, Mr. Chan Chun Chuen. Ms. Tam Miu Ching is the wife of Mr. Chan Chun Chuen. Therefore, Mr. Chan Chun Chuen and Ms. Tam Miu Ching are deemed to be interested in the 53,515,556 shares held by The Offshore Group Holdings Limited under the SFO.
4. Represents the approximate percentage of total issued shares as at 30 June 2013.
Save as disclosed above, no person (other than the Directors and chief executives, whose interests are set out in the paragraph headed "Directors' and chief executives' interests and short positions in shares, underlying shares and debentures") had registered an interest or short position in the shares or underlying shares of the Company as at 30 June 2013 that was required to be recorded pursuant to Section 336 of the SFO.
SHARE OPTION SCHEME AND POST LISTING SHARE OPTION SCHEME
A share option scheme (the "Pre-listing Scheme") was adopted by the Company on 28 June 2004 and was amended on 7 June 2006. The Pre-listing Scheme had been terminated on 10 February 2009. A post listing share option scheme (the "Post Listing Scheme") was adopted by the Company on 16 October 2008. Pursuant to an ordinary resolution passed at the annual general meeting of the Company held on 28 June 2013, the Post Listing Scheme was terminated and a new share option scheme (the "New Share Option Scheme") was adopted. Summary of principal terms of the Pre-listing Scheme and Post Listing Scheme were outlined in the Company's annual report for the year ended 31 December 2012 under the section "Directors' Report".
Share Option Scheme
Movements of the share options granted under the Pre-listing Scheme and Post Listing Scheme during the period ended 30 June 2013 are as follows:
Outstanding Granted Exercised Lapsed Cancelled Outstanding Date of Vesting Exercisable Exercise
at 1 during during during during at grant period period price
January the six the six the six the six 30 June
2013 months months months months 2013
ended ended ended ended
30 30 30 30
June June 2013 June June
2013 2013 2013
Other
employees
In
aggregate 35,000 - - - - 35,000 20.04.2005 3 years 20.04.2008-19.04.2015 34.5p
940,000 - - - - 940,000 29.04.2010 - 29.04.2010-28.03.2017 HK$8.21
(Note)
29.04.2010
900,000 - - 450,000 - 450,000 (Note) 1 year 29.04.2011-28.04.2020 HK$8.21
1,875,000 1,425,000
Note: The closing price of the shares immediately before 29 April 2010 is HK$8.10.
Other than as disclosed above, no other share option was granted, cancelled, lapsed or exercised pursuant to the Pre-listing Scheme, Post Listing Scheme and New Share Option Scheme of the Company during the period ended 30 June 2013.
Placing
On 30 May 2013, the Company entered into a placing agreement with Orient Securities Limited (the "Placing Agent"), pursuant to which the Company conditionally agreed to place, through the Placing Agent, up to a maximum of 98,600,000 new shares of the Company (the "Placing Shares"), on a best efforts basis to no fewer than six independent placees at a price of HK$0.355 per Placing Share (the "Placing Price") (the "Placing"). The Placing Price was determined after arm's length negotiations between the Company and the Placing Agent taking into account (i) the market sentiment; (ii) the financial results and future prospects of the Company; and (iii) the performance of the shares of the Company and its outlook to the potential investors. The Directors (including the independent non- executive Directors) considered that as a result of the Placing, the Company could improve liquidity in share trading, broaden its Shareholders' base and strengthen the Company's financial position. The Directors (including the independent non-executive Directors) considered that the terms of the Placing were normal commercial terms and were fair and reasonable, as far as the Company and the shareholders of the Company (the "Shareholders") are concerned, and the Placing was in the interests of the Company and the Shareholders as a whole.
The Placing Shares represented approximately 16.50% of the existing issued share capital of the Company and approximately 14.16% of the issued share capital of the Company as enlarged by the issue of 98,600,000 Placing Shares. The Placing was conditional under the Listing Committee of the HKSE granting the listing of, and permission to deal in, the Placing Shares. The Placing Shares would be allotted and issued pursuant to the General Mandate and the Placing was not subject to Shareholders' approval.
On 10 June 2013, the Company announced that all the conditions of the Placing have been fulfilled and the completion of the Placing took place on 10 June 2013. An aggregate of 98,600,000 Placing Shares, representing approximately 16.50% of the issued share capital of the Company as at 10 June 2013, were been successfully placed to more than six placees at a price of HK$0.355 (approximately GBP0.0296) per Placing Share. The net proceeds from the Placing amounted to approximately HK$33,777,895 (approximately GBP2,813,723) and were applied towards financing the Company's projects.
CORPORATE GOVERNANCE CODE
The Directors, where practicable for an organisation of the Group's size and nature, sought to comply with the UK Corporate Governance Code (the "UK Code"). The UK Code is the key source of corporate governance recommendations for UK listed companies. It consists of principles of good governance covering the following areas:
1. Directors; 2. Directors' Remuneration; 3. Accountability and Audit; 4. Relations with Shareholders; and 5. Institutional Investors.
In connection with the listing of the Company on the HKSE in February 2009, the Company adopted the code provisions set out in the Corporate Governance Code ("CG Code") contained in Appendix 14 to the Rules Governing the Listing of Securities on the HKSE (the "Hong Kong Listing Rules") as its additional code on corporate governance practices on 2 February 2009. The Company has complied with the CG Code throughout six months ended 30 June 2013, except for the deviation from code provisions A.2.1 and A.5.1 of the CG Code after the period which is explained in the following paragraph.
Under code provision A.5.1 of the CG Code, the nomination committee should be chaired by the chairman of the board or an independent non-executive director. On 19 July 2013, Tan Sri Dato' Nik Hashim Bin Nik Ab. Rahman has resigned as the chairman of the Board and the chairman of nomination committee of the Company. Therefore, the Company deviates from code provisions A.2.1 and A.5.1 of the CG Code. The Company also endeavour to identify suitable candidates for the position of chairman of the Board to comply with code provision A.2.1 of the CG Code.
DIRECTORS' DEALING IN THE COMPANY'S SECURITIES
The Company has adopted a code for Directors' dealings appropriate for a company whose shares are admitted to trading on AIM and takes all reasonable steps to ensure compliance by the Directors and any relevant employees. The Company also adopted the Model Code set out in Appendix 10 of the Hong Kong Listing Rules.
The Directors have confirmed, following a specific enquiry by the Company, that they fully complied with the required standard as set out in the Model Code throughout the six months ended 30 June 2013.
AUDIT COMMITTEE
During the six months ended 30 June 2013, the audit committee of the Company (the "Audit Committee") comprised of three members, namely Mr. Kwan King Wah acts as Chairman of the committee with Tan Sri Dato' Nik Hashim Bin Nik Ab. Rahman (resigned on 19 July 2013), a non- executive Director, and Mr. Pieter Lambert Diaz Wattimena, an independent non-executive Director, act as members. The arrangement of the Audit Committee was compliant with the Rule 3.21 of the Hong Kong Listing Rules. After the resignation of Tan Sri Dato' Nik Hashim Bin Nik Ab. Rahman as a member of the Audit Committee on 19 July 2013, the Company failed to meet the requirements set out in Rule 3.21 of the Hong Kong Listing Rules. On 28 August 2013, Mr. Zeng Min, an existing independent non-executive Director, was appointed as a member of Audit Committee.
The Audit Committee has reviewed with management the accounting principles and practices adopted by the Group, and discussed auditing, internal control and financial reporting matters including the review of the Company's unaudited financial statements for the six months ended 30 June 2013.
PUBLICATION OF INTERIM REPORT
The interim report will be published on the Company's website (www.rcg.tv), the Company's webpage on www.rcg.todayir.com and the Hong Kong Stock Exchange's website (www.hkex.com.hk).
By Order of the Board of
RCG Holdings Limited Li Jinglong
Director
Hong Kong, 29 August 2013
As at the date of this announcement, the Board comprises the following Directors: Executive Directors:
Li Jinglong Zhang Ligong Wang Zhongling
Independent Non-executive Directors: Pieter Lambert Diaz Wattimena Kwan King Wah
Zeng Min
For purpose of this announcement, the exchange rates are defined as following for the respective periods: 1H'2013: GBP1 to HK$11.80
1H'2012: GBP1 to HK$12.24
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR WGUQCRUPWUWU
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