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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 |
TIDMRCG
RNS Number : 5473D
RCG Holdings Limited
31 March 2014
31 March 2014
RCG Holdings Limited
("RCG" or the "Company" and together with its subsidiaries, the "Group")
Preliminary Results for the Year Ended 31 December 2013
The board of directors (the "Board") of RCG Holdings Limited (the "Company") is pleased to announce the audited consolidated results of the Company and its subsidiaries (collectively, "RCG" or the "Group") for the year ended 31 December 2013 together with comparative figures for the year ended 31 December 2012 as follows:
Summary
-- Revenues decreased by 54.4% to HK$466.3 million (FY 2012: HK$1,022.6 million) -- Gross margin: -48.8% (FY 2012: -62.8%)
-- Adjusted loss before taxation (pre amortisation charge) HK$289.4 million (FY 2012: adjusted loss before tax: HK$879.8 million)
-- Loss before taxation of HK$945.9 million (FY 2012: Loss before taxation of HK$1,845.8 million)
-- Adjusted Loss per share (pre amortisation charge) of HK$0.41 (FY 2012: adjusted loss per share HK$1.48)
Operational Highlights
Continued re-examination of the Group's value propositions and focus on the alignment of the Group's businesses to meet the challenges ahead.
On 19 July 2013, the Company announced the resignation of Tan Sri Dato' Nik Hashim Bin Nik Ab. Rahman as non-executive Director, chairman of the Board, member of the audit committee and the remuneration committee of the Company and chairman of the nomination committee of the Company with effect from 19 July 2013.
On 28 August 2013, the Company announced the appointment of Mr. Zeng Min as a member of audit committee of the Company with effect from 28 August 2013.
On 1 November 2013, the Company announced the resignation of Mr. Danny Chew Tean as acting chief executive officer of the Company and the appointment of Mr. Wang Zhongling, an existing executive Director as acting chairman and acting chief executive officer of the Company with effect from 1 November 2013.
On 2 December 2013, the Company announced the promotion of Mr. Wang Zhongling to chief executive officer of the Company with effect from 2 December 2013.
On 7 March 2014, the Company announced the following changes:
(a) Mr. Liu Wen has been appointed as independent non-executive Director and chairman of the Board, the chairman of the nomination committee of the Company and a member of the audit committee and remuneration committee of the Company.
(b) Mr. Wang Zhongling has stepped down as acting chairman of the Board but remains as executive Director and chief executive officer of the Company.
(c) Mr. Pieter Lambert Diaz Wattimena has resigned as independent non-executive Director and ceased to be a member of audit committee and remuneration committee of the Company.
(d) Mr. Kwan King Wah has been appointed as a member of remuneration committee of the Company. (e) Mr. Sim Kay Wah, Kenny has been appointed as chief financial officer of the Company.
Enquiries:
RCG Holdings Limited Tel: +852 2637 2800
Wang Zhongling, Chief Executive Officer
ir@rcg.tv
Smith & Williamson Corporate Finance Limited Tel: +44 (0) 20 7131 4000
(Nominated adviser and broker)
Dr. Azhic Basirov / David Jones / Ben Jeynes
CHAIRMAN'S STATEMENT
Dear Shareholders,
On behalf of the Board of Directors, I am pleased to present the Group's annual results for the year ended 31 December 2013, which consists of reporting on the activities, results and strategies of RCG.
Business environment
The continued slow momentum in growth experienced in the global economy, especially the American and the Chinese economies, saw investors continue in a risk averse manner and readjusting their market confidence in all sectors, in particular the related Asian markets.
Against this economic climate, the Group will continue to reexamine its value propositions and focus on re-aligning its businesses to meet the challenges ahead.
Financial and business review
For the 2013 financial year, the Group reported total revenue of HK$466.3 million, which represents a reductions of 54.4% compared to the financial year of 2012. The key contributor to the Group in terms of turnover is the Commodity Trading Segment. Despite registering a net loss in its financials, the Group has recorded a slight improvement in financial performance.
Thank you
I would like to take this opportunity to express my sincere gratitude to our shareholders, business partners and customers for their continued support, 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.
Liu Wen
Chairman
28 March 2014
MANAGEMENT DISCUSSION AND ANALYSIS
Business review
The financial year of 2013 saw a continuation of the Group's long term consolidation strategy. This has resulted in revenue for the year ended 2013 decreasing by 54.4%, compared to the same period in 2012.
Group revenue was HK$466.3 million for the year ended 31 December 2013 compared to HK$1,022.6 million for the same period in 2012, as a result of continuous consolidation of its business units. Gross margin for the financial year ended 31 December 2013 was -48.8%, compared to -62.8% 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$942.1 million for the financial year ended 31 December 2013.
Performance of business segments
The Group is an international developer and solutions provider in the biometric, RFID and security industries and delivers high-performing, convenient security systems for enterprises and consumers. The Group's business is divided generally into four categories: "Trading of Security of Biometric Products", "Solutions, Projects and Services", "Internet and Mobile Applications and of Related Accessories" and "Commodities Trading".
The Group continues to believe that the "Internet of Mobile Application and Related Accessories" segment is a key growth area, in-line with the rapid growth of the mobile and gaming industry and in particular in Online gaming, Utilities Applications for IOS and Android and Mass Advertising.
The Group's Trading of Security and Biometric Products segment consists of biometrics and RFID products for consumer applications. Whilst its Solutions, Projects and Services segment revolves around the delivery of developed software and equipments to enterprises.
The Group's Commodity Trading activities revolve around the trading of general commodities not limited to generally accepted common commodities like metal, ores, silks and so on. Trading is conducted on both open markets local and overseas; and also through private transactions.
Year ended 31 December ------------------------------ ---------------------------- ------- y-o-y Operating Segment 2013 2012 growth ------------------------------ ------------ -------------- ------- HK$ m % HK$ m % % ------------------------------ ----- ----- ------- ----- ------- Trading & Security & Biometric Products 152.6 32.7 995.2 97.3 -84.7 ------------------------------ ----- ----- ------- ----- ------- Solution, Projects and Services 0.5 0.1 0.6 0.1 -16.7 ------------------------------ ----- ----- ------- ----- ------- Internet & Mobile Application & Related Accessories 55.1 11.8 22.7 2.2 142.7 ------------------------------ ----- ----- ------- ----- ------- Commodities Trading 258.1 55.4 4.1 0.4 6,195.1 ------------------------------ ----- ----- ------- ----- ------- Total Revenue 466.3 100.0 1,022.6 100.0 -54.4 ===== ===== ======= =====
The key contributor to the Group's turnover for the year ended 31 December 2013 was the Commodity Trading segment which contributed 55.4% of total turnover. Following that, revenue from the Trading of Security and Biometric Products segment in the financial year ended 31 December 2013 was HK$152.6 million. This segment experienced a 84.7% decrease compared to HK$995.2 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 16.7% revenue decrease from HK$0.6 million in the financial year ended 31 December 2012 to HK$0.5 million in the financial year ended 31 December 2013. The decrease was attributable to the continuing evolution of the Group's strategy to continue to focus on long term projects, which have a longer completion period with steadier collection schedules.
Geographical performance
The majority of the Group's revenues are generated from Southeast Asia.
A breakdown of revenue based on geographies is presented in the table below.
Year ended 30 June --------------------- -------------------------------------- --------- HK$ y-o-y Geographical Segment 2013 (unaudited) 2012 (unaudited) growth --------------------- ------------------ ------------------ --------- HK$ m % HK$ m % % --------------------- -------- -------- ---------- ------ --------- Southeast Asia 465.7 99.9 1,019.3 99.5 -54.3 --------------------- -------- -------- ---------- ------ --------- Middle East 0.6 0.1 3.3 0.5 -81.8 --------------------- -------- -------- ---------- ------ --------- Total Revenue 466.3 100.0 1,022.6 100.0 -54.4 ======== ======== ========== ====== =========
Revenue generated in the Asia Pacific region decreased from HK$1,019.3 million for the financial year ended 31 December 2012 to HK$465.7 million for the financial year ended 31 December 2013. The majority of Asia Pacific revenue was derived from the Commodities Trading segment, which accounted for 55.4% of revenue reported.
Middle East revenues decreased 81.8% from HK$3.3 million for the financial year ended 31 December 2012 to HK$0.6 million for the financial year ended 31 December 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 Mr. Chow Yik agreed to purchase the Group's 25% equity interest in I-Century Limited, a company incorporated in the 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 Mr. Liu Ling Hao agreed to purchase the Group's 6% equity interest in Hero View Limited, a company incorporated in the British Virgin Islands with limited liabilities, for an aggregate consideration of HK$20,000,000.
On 10 September 2013, the Board announced that during the period from 6 February 2013 to 10 September 2013, RCG China entered into the sale and purchase agreements with various purchasers pursuant to which RCG China agreed to sell and the purchasers agreed to purchase four 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 RMB36,204,350 (approximately HK$45,828,291).
The Group had on 27 December 2013 entered into an agreement to dispose its 3% equity interest in Xian Hui Investments Limited for a consideration of HK$12,000,000.
Financial review
Turnover
For the year ended 31 December 2013, the Group reported total revenue of HK$466.3 million representing a decrease of 54.4% compared to HK$1,022.6 million in 2012. The decrease was mainly due to the reduction in Trading of Security & Biometric Products sales, as part of the consolidation of the Group businesses.
Cost of sales
Cost of sales decreased 58.3% from HK$1,664.6 million in 2012 to HK$693.8 million in 2013. In terms of percentage of sales, the cost of sales decreased from 162.8% in 2012 to 149% in 2013.
Gross profit and gross profit margin
Gross loss in 2013 was HK$227.5 million, a decrease in gross losses of 64.6% compared to gross losses HK$642.0 million in 2012. The Group adjusted it pricing strategy in order to remain competitive and cleared, at a discount, non-current stock during the period under review, leading to a gross loss of 48.8% as compared to gross loss of 62.8% in 2012.
Other revenue and gains
Other revenue and gains reduced from HK$8.6 million in 2012 to HK$7.2 million in 2013 mainly attributable to a reduction in rental income following the property disposals and change in fair value of investment properties.
Administrative expenses
Administrative expenses decreased 51.1% from HK$161.5 million in 2012 to HK$79.0 million in 2013.
Selling and distribution costs
Selling and distribution costs decreased by 98.8% from HK$171.2 million in 2012 to HK$2.1 million in 2013.
Finance costs
Finance costs decreased from HK$4.8 million in 2012 to HK$3.8 million in 2013.
Loss before taxation
Loss before taxation for 2013 was HK$945.9 million, as compared to a loss before taxation of HK$1,845.8 million in 2012.
Taxation
Income tax expense decreased from expenses of HK$0.2 million in 2012 to credit of HK$3.8 million in 2013.
Loss for the year
The Group incurred a net loss of HK$942.1 million for the year ended 31 December 2013, compared to a net loss of HK$1,846.1 million in 2012.
Loss attributable to the owners of the Company.
Loss attributable to the owners of the Company decreased from HK$1,874.4 million in 2012 to HK$935.6 million in 2013.
Loss attributable to the non-controlling interests
Loss attributable to the minority interests of HK$6.5 million is related to the minority interests' share of the loss of Most Idea Limited in 2013 of HK$7.1 million.
Review of the Group's financial position as at 31 December 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 and rental income as well as certain short-term trade financing facilities in place which can be utilized if required. 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 year under review.
The Group incurred capital expenditure of HK$0.1 million during 2013 compared to HK$2.0 million in 2012. The capital expenditure was mainly used for the acquisition of property, plant and equipment and investment in research and development.
The following table sets out the capital expenditure for the years indicated:
Year ended 31 December ------------------------------------------ ------------------------ 2013 2012 ------------------------------------------ ----------- ----------- HK$'000 HK$'000 ------------------------------------------ ----------- ----------- Purchase of property, plant and equipment 23 2,006 =========== ===========
The Group has internal budgeting mechanisms in place to ensure that if and when cash is committed to fund major expenditures there is sufficient cash flow to maintain the Group's daily operations and meet all of its contractual obligations.
The following sets out the maturities of the Group's total borrowings as at the balance sheet date:
Year ended 31 December ----------------------------------------------------- ------------------------ 2013 2012 ----------------------------------------------------- ----------- ----------- HK$'000 HK$'000 ----------------------------------------------------- ----------- ----------- Total bank borrowings, secured, repayable within one year 9,240 4,685 ----------------------------------------------------- ----------- ----------- Total bank borrowings, secured, repayable more than one year 30,289 42,335 ----------------------------------------------------- ----------- ----------- Total 39,529 47,020 =========== ===========
The Group had cash and cash equivalents of HK$74.3 million as of 31 December 2013 compared to HK$28.2 million as of 31 December 2012.
Working Capital
Debtors and inventories have decreased by 96.8% and 100% in 2013 due principally to the reduction in sales and the disposal of non-current inventory. This is in line with the continued consolidation and realignment of the Group businesses.
Gearing ratio
As at 31 December 2013, the Group's gearing ratio was approximately 0.161x as compared to 0.041x as at 31 December 2012. The gearing ratio was calculated as the Group's total debt divided by its total capital. Debt of HK$39.7 million is calculated as total borrowings (including short-term bank loans amounting HK$9.3 million, the current portion of financing obligations amounting HK$0.1 million and long term bank loans amounting HK$30.3 million). Total capital is calculated as total shareholder equity of HK$245.9 million plus debt.
Contingent Liabilities
As at 31 December 2013, the Group had no outstanding contingent liabilities. There were also no contingent liabilities as 31 December 2012. The Company acted as a guarantor of its subsidiaries to secure interest-bearing borrowings, which amounted to approximately HK$0.2 million (2012: HK$0.2 million).
The carrying amount of the financial guarantee provision recognised in the Company's balance sheet was approximately HK$652,000 as at 31 December 2013, compared to HK$652,000 as at 31 December 2012. The financial guarantee contract was eliminated on consolidation.
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 31 December 2013, in addition to the Directors, there were around 41 employees (2012: 48) of the Group stationed in the Group's offices in Kuala Lumpur, Hong Kong, Beijing, Macau, Bangkok and Dubai. Total staff costs for the year ended 2013 were HK$8.7 million, compared with HK$13.2 million in 2012. The saving was attributable to the Group's continuous efforts to reduce its overheads and to re-allocate project resources by increasing collaboration with third party partners, reducing the dependency on internal manpower.
During the period, the Group offered training and development courses for its employees to enhance staff working capabilities. Remuneration packages are linked with individual's performance and the Group's business performance, and take into consideration industry practices and competitive 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
The Group's continuous efforts to consolidate and realign its businesses have enabled the Group to achieve a preliminary improvement in its financial position. The Group will continue to work towards, attaining a stable platform for sustainability and growth, with the dedication of experienced leadership in a structure that provides a close focus on operations in each business segment.
PURCHASE, SALE OR REDEMPTIONS OF THE COMPANY'S LISTED SECURITIES
On 30 May 2013, the Company entered into a placing agreement with Orient Securities Limited, 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, on a best efforts basis to no fewer than six independent placees at a price of HK$0.355 per placing share. The placing was completed on 10 June 2013. An aggregate of 98,600,000 placing shares has been successfully placed to more than six placees at a price of HK0.355 per placing share, raising gross proceeds of HK$35,003,000.
On 10 September 2013, the Company entered into a placing agreement with Tanrich Securities Company Limited, pursuant to which the Company conditionally agreed to place, through the placing agent, up to a maximum of 139,235,299 new shares of the Company, on a best efforts basis to no fewer than six independent placees at a price of HK$0.25 per placing share. The placing was completed on 26 September 2013. An aggregate of 139,230,000 placing shares has been successfully placed to more than six placees at a price of HK0.25 per placing share, raising gross proceeds of HK$34,807,500.
Save as disclosed herein, there was no purchase, sale or redemption by the Company, or any of its subsidiaries, of any listed securities of the Company during the year ended 31 December 2013.
Event after the year end
Acquisition
On 13 March 2014, the Board announced that after trading hours, Bio Tag International Limited, a wholly-owned subsidiary of the Company (the "Purchaser") and Wealthy Zone Limited, a company incorporated in the British Virgin Islands with limited liabilities (the "Vendor") entered into the sale and purchase agreement, pursuant to which, the Purchaser has conditionally agreed to acquire and the Vendor has conditionally agreed to sell, the 37,000 ordinary shares of US$1.00 each in Easy Ideas Limited, a company incorporated in the British Virgin Islands with limited liabilities (the "Target"), representing 74% of the issued share capital of the Target for a total consideration of HK$69,560,000 (approximately GBP5.4 million).
DIVIDEND
The Board maintains a cautious view and, having regard to the requirement to retain cash, has decided not to recommend a dividend in respect of the year ended 31 December 2013.
REVIEW BY AUDIT COMMITTEE
The Company established an audit committee (the "Audit Committee") on 28 June 2004 with written terms of reference, which was revised on 28 March 2012, in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules"). The Audit Committee comprised of members, namely Mr. Kwan King Wah, who acted as chairman of the committee, Tan Sri Dato' Nik Hashim Bin Nik Ab. Rahman, a non-executive Director, who resigned on 19 July 2013, Mr. Pieter Lambert Diaz Wattimena, an independent non-executive Director who resigned on 7 March 2014 and Mr. Liu Wen, an independent non-executive Director, who was appointed on 7 March 2014. 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 Listing Rules. On 28 August 2013, Mr. Zeng Min, an existing independent non-executive Director, was appointed as a member of Audit Committee. The arrangement of the Audit Committee is compliant with the rule 3.21 of the Listing Rules.
The Audit Committee has reviewed with the management and the Company's independent external auditors, HLB Hodgson Impey Cheng Limited ("HLB") the accounting principles and practices adopted by the Group and discussed auditing, internal control and financial reporting process including the review of the financial statements for the year ended 31 December 2013, which have been audited by HLB.
CORPORATE GOVERNANCE CODE
During the year ended 31 December 2013, the Directors, where practicable, for an organisation of the Group's size and nature sought to comply with the UK Corporate Governance Code ("the Code"). The Code is the key source of corporate governance recommendations for UK listed companies. It consists of principles of good governance covering the following areas: (i) Directors; (ii) Directors' remuneration; (iii) accountability and audit; (iv) relations with shareholders; and (v) institutional investors. The Company adopted the code provisions set out in the Corporate Governance Code ("CG Code") contained in Appendix 14 to the Listing Rules as its additional code on corporate governance practices. The Company has complied with the CG Code throughout the year ended 31 December 2013, except for the deviation from code provisions A.2.1 and A.5.1 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. On 1 November 2013, Mr. Wang Zhongling, an existing executive Director, was appointed as the acting chairman of the Board. The Company has been complying with code provision A.2.1 and A.5.1 of the CG Code since 7 March 2014 on which Mr. Wang Zhongling has stepped down as acting chairman of the Board and Mr. Liu Wen has been appointed as chairman of the Board and chairman of the nomination committee of the Company.
PUBLICATION OF RESULTS ANNOUNCEMENT AND ANNUAL REPORT
This announcement is published on the respective websites of the Company (www.rcg.tv) and The Stock Exchange of Hong Kong Limited (www.hkexnews.com.hk), and the investor relations webpage of the Company (www.rcg.todayir.com). The annual report 2013 will also be published on the aforesaid websites in due course.
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2013
2013 2012 -------------------------------------------- ----- -------- ---------- Notes HK$'000 HK$'000 -------------------------------------------- ----- -------- ---------- Turnover 5 466,280 1,022,625 -------------------------------------------- ----- -------- ---------- Cost of sales (693,783) (1,664,615) -------------------------------------------- ----- -------- ---------- Gross loss (227,503) (641,990) -------------------------------------------- ----- -------- ---------- Other revenue and gains 6 7,233 8,632 -------------------------------------------- ----- -------- ---------- Change on fair value of financial assets at fair value through profit or loss 11,874 (1,453) -------------------------------------------- ----- -------- ---------- Selling and distribution cost (2,106) (171,249) -------------------------------------------- ----- -------- ---------- Administrative expenses (79,002) (161,535) -------------------------------------------- ----- -------- ---------- Other operating expenses 7 (652,679) (873,320) -------------------------------------------- ----- -------- ---------- Loss from operations 7 (942,183) (1,840,915) -------------------------------------------- ----- -------- ---------- Finance costs 8 (3,763) (4,807) -------------------------------------------- ----- -------- ---------- Share of result of associates 3 (120) -------------------------------------------- ----- -------- ---------- Loss before taxation (945,943) (1,845,842) -------------------------------------------- ----- -------- ---------- Taxation 9 3,819 (246) -------------------------------------------- ----- -------- ---------- Loss for the year (942,124) (1,846,088) ======== ==========
* For identification purposes only
CONSOLIDATED INCOME STATEMENT (Continued)
For the year ended 31 December 2013
2013 2012 -------------------------------------- ----- -------- ---------- Notes HK$'000 HK$'000 -------------------------------------- ----- -------- ---------- Attributable to: -------------------------------------- ----- -------- ---------- Owners of the Company (935,625) (1,874,373) -------------------------------------- ----- -------- ---------- Non-controlling interests (6,499) 28,285 -------------------------------------- ----- -------- ---------- (942,124) (1,846,088) -------------------------------------- ----- ======== ========== Loss per share attributable to owners of the Company -------------------------------------- ----- -------- ---------- * Basic (HK cents) 10 (133.4) (314.7) -------------------------------------- ----- ======== ========== * Diluted (HK cents) 10 (133.4) (314.7) ======== ==========
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
For the year ended 31 December 2013
2013 2012 --------------------------------------------------------------------- -------- ---------- HK$'000 HK$'000 --------------------------------------------------------------------- -------- ---------- Loss for the year (942,124) (1,846,088) --------------------------------------------------------------------- -------- ---------- Other comprehensive loss for the year --------------------------------------------------------------------- -------- ---------- Items that may be reclassified to profit or loss: --------------------------------------------------------------------- -------- ---------- Available-for-sale financial assets: --------------------------------------------------------------------- -------- ---------- Change on fair value (1,814) (5,050) --------------------------------------------------------------------- -------- ---------- Reclassification adjustment relating to available-for-sales financial assets disposed during the year 2,200 - --------------------------------------------------------------------- -------- ---------- 386 (5,050) --------------------------------------------------------------------- -------- ---------- Exchange difference on translating foreign operations --------------------------------------------------------------------- -------- ---------- Exchange differences arising during the year (4,922) 8,079 --------------------------------------------------------------------- -------- ---------- Reclassification adjustments upon disposal - (128) --------------------------------------------------------------------- -------- ---------- (4,922) 7,951 --------------------------------------------------------------------- -------- ---------- (4,536) 2,901 --------------------------------------------------------------------- -------- ---------- Total comprehensive loss for the year (946,660) (1,843,187) --------------------------------------------------------------------- ======== ========== Attributable to: --------------------------------------------------------------------- -------- ---------- Owners of the Company (940,161) (1,871,473) --------------------------------------------------------------------- -------- ---------- Non-controlling interests (6,499) 28,286 --------------------------------------------------------------------- -------- ---------- (946,660) (1,843,187) ======== ==========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2013
2013 2012 -------------------------------------------------- ----- ------- --------- Notes HK$'000 HK$'000 -------------------------------------------------- ----- ------- --------- ASSETS -------------------------------------------------- ----- ------- --------- Non-current assets -------------------------------------------------- ----- ------- --------- Property, plant and equipment 106,251 157,813 -------------------------------------------------- ----- ------- --------- Investment properties - 57,765 -------------------------------------------------- ----- ------- --------- Prepaid lease payments 17,736 19,221 -------------------------------------------------- ----- ------- --------- Goodwill 39,717 62,017 -------------------------------------------------- ----- ------- --------- Intangible assets 12 68,600 88,200 -------------------------------------------------- ----- ------- --------- Interests in associates - 28,912 -------------------------------------------------- ----- ------- --------- Available-for-sale financial assets 13 406 34,220 -------------------------------------------------- ----- ------- --------- 232,710 448,148 -------------------------------------------------- ----- ------- --------- Current assets -------------------------------------------------- ----- ------- --------- Prepaid lease payments 194 208 -------------------------------------------------- ----- ------- --------- Inventories - 386,326 -------------------------------------------------- ----- ------- --------- Financial assets at fair value through profit or loss 15,606 3,732 -------------------------------------------------- ----- ------- --------- Trade receivables 14 14,826 458,977 -------------------------------------------------- ----- ------- --------- Deposits, prepayments and other receivables 15 54,031 4,997 -------------------------------------------------- ----- ------- --------- Cash at bank and on hand 74,343 28,202 -------------------------------------------------- ----- ------- --------- 159,000 882,442 -------------------------------------------------- ----- ------- --------- Total assets 391,710 1,330,590 -------------------------------------------------- ----- ======= ========= EQUITY -------------------------------------------------- ----- ------- --------- Owners of the Company -------------------------------------------------- ----- ------- --------- Share capital 8,354 5,976 -------------------------------------------------- ----- ------- --------- Reserves 237,568 1,113,788 -------------------------------------------------- ----- ------- --------- 245,922 1,119,764 -------------------------------------------------- ----- ------- --------- Non-controlling interests 32,145 38,644 -------------------------------------------------- ----- ------- --------- Total equity 278,067 1,158,408 ======= ========= 2013 2012 -------------------------------------- ----- ------- --------- Notes HK$'000 HK$'000 -------------------------------------- ----- ------- --------- LIABILITIES -------------------------------------- ----- ------- --------- Non-current liabilities -------------------------------------- ----- ------- --------- Interest-bearing borrowings 30,289 42,335 -------------------------------------- ----- ------- --------- Obligations under finance leases - 174 -------------------------------------- ----- ------- --------- Deferred tax liabilities 12,013 17,698 -------------------------------------- ----- ------- --------- 42,302 60,207 -------------------------------------- ----- ------- --------- Current liabilities -------------------------------------- ----- ------- --------- Trade payables 16 16,054 20,991 -------------------------------------- ----- ------- --------- Accruals and other payables 45,259 74,817 -------------------------------------- ----- ------- --------- Tax payables 763 912 -------------------------------------- ----- ------- --------- Interest-bearing borrowings 9,240 4,685 -------------------------------------- ----- ------- --------- Promissory note - 10,500 -------------------------------------- ----- ------- --------- Obligations under finance leases 25 70 -------------------------------------- ----- ------- --------- 71,341 111,975 -------------------------------------- ----- ------- --------- Total liabilities 113,643 172,182 -------------------------------------- ----- ------- --------- Total equity and liabilities 391,710 1,330,590 -------------------------------------- ----- ======= ========= Net current assets 87,659 770,467 -------------------------------------- ----- ======= ========= Total assets less current liabilities 320,369 1,218,615 ======= =========
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2013
2013 2012 ------------------------------------------------------------- -------- ---------- HK$'000 HK$'000 ------------------------------------------------------------- -------- ---------- Cash flows from operating activities ------------------------------------------------------------- -------- ---------- Loss before taxation (945,943) (1,845,842) ------------------------------------------------------------- -------- ---------- Adjustments for: ------------------------------------------------------------- -------- ---------- Amortisation of intangible assets 19,600 95,020 ------------------------------------------------------------- -------- ---------- Amortisation of prepaid lease payments 201 305 ------------------------------------------------------------- -------- ---------- Depreciation 12,159 16,977 ------------------------------------------------------------- -------- ---------- (Gain)/loss on disposal of property, plant and equipment (1,719) 2,265 ------------------------------------------------------------- -------- ---------- Loss on disposal of investment properties 13,400 2,311 ------------------------------------------------------------- -------- ---------- Gain on disposal of prepaid lease payments - (1,436) ------------------------------------------------------------- -------- ---------- Gain arising on change in fair value of investment properties - (2,770) ------------------------------------------------------------- -------- ---------- (Gain)/loss on disposal of subsidiaries - (109) ------------------------------------------------------------- -------- ---------- Gain on disposal of an associate (86) - ------------------------------------------------------------- -------- ---------- Loss on disposal of available-for-sale financial assets 2,200 - ------------------------------------------------------------- -------- ---------- Share of result of associates (3) 120 ------------------------------------------------------------- -------- ---------- Reversal of written down of inventories - (989) ------------------------------------------------------------- -------- ---------- Reversal of impairment loss on trade receivables (1,821) - ------------------------------------------------------------- -------- ---------- Written down of inventories 1,299 207,762 ------------------------------------------------------------- -------- ---------- Impairment loss on trade receivables 582,101 276,844 ------------------------------------------------------------- -------- ---------- Impairment loss on intangible assets - 381,412 ------------------------------------------------------------- -------- ---------- Impairment loss on available-for-sale financial assets - 3,707 ------------------------------------------------------------- -------- ---------- Impairment loss on goodwill 22,300 - ------------------------------------------------------------- -------- ---------- (Gain)/loss arising on fair value of financial assets at fair value through profit or loss (11,874) 1,453 ------------------------------------------------------------- -------- ---------- Bank interest income (273) (130) ------------------------------------------------------------- -------- ---------- Impairment loss on property, plant and equipment 31,379 1,284 ------------------------------------------------------------- -------- ---------- Interest expenses on interest-bearing borrowings and bank overdrafts, promissory note and finance leases 3,648 4,623 ------------------------------------------------------------- -------- ---------- Operating cash flows before movements in working capital (273,432) (857,193) ------------------------------------------------------------- -------- ---------- Decrease in inventories 385,027 66,365 ------------------------------------------------------------- -------- ---------- (Increase)/decrease in trade receivables (136,129) 137,935 ------------------------------------------------------------- -------- ---------- (Increase)/decrease in deposits, prepayments and other receivables (21,034) 616,578 ------------------------------------------------------------- -------- ---------- (Decrease)/increase in trade payables (4,937) 7,565 ------------------------------------------------------------- -------- ---------- (Decrease)/increase in accruals and other payables (30,058) 11,118 ------------------------------------------------------------- -------- ---------- Cash used in operations (80,563) (17,632) ------------------------------------------------------------- -------- ---------- Bank interest income received 273 130 ------------------------------------------------------------- -------- ---------- Income tax paid (1,874) (395) ------------------------------------------------------------- -------- ---------- Net cash used in operating activities (82,164) (17,897) -------- ---------- 2013 2012 ------------------------------------------------------------ ------- ------- HK$'000 HK$'000 ------------------------------------------------------------ ------- ------- Cash flows from investing activities ------------------------------------------------------------ ------- ------- Purchases of property, plant and equipment (23) (2,006) ------------------------------------------------------------ ------- ------- Decrease in fixed deposits - 25,287 ------------------------------------------------------------ ------- ------- Net cash receive for acquisition of a subsidiary and assets - 2,051 ------------------------------------------------------------ ------- ------- Proceeds from disposal of available-for-sale financial assets 20,000 - ------------------------------------------------------------ ------- ------- Proceeds from disposal of an associate 3,000 - ------------------------------------------------------------ ------- ------- Proceeds from disposal of prepaid lease payments - 15,734 ------------------------------------------------------------ ------- ------- Proceeds from disposal of investment properties 45,828 3,951 ------------------------------------------------------------ ------- ------- Proceeds from disposal of property, plant and equipment 1,994 3,703 ------------------------------------------------------------ ------- ------- Net cash generated from investing activities 70,799 48,720 ------------------------------------------------------------ ------- ------- Cash flows from financing activities ------------------------------------------------------------ ------- ------- Interest expenses paid on interest-bearing borrowings and bank overdrafts (3,648) (3,606) ------------------------------------------------------------ ------- ------- Issue of new shares 66,319 - ------------------------------------------------------------ ------- ------- Interest-bearing borrowings repaid, net (4,515) (32,646) ------------------------------------------------------------ ------- ------- Repayment of obligations under finance leases (212) (86) ------------------------------------------------------------ ------- ------- Net cash generated from/(used in) financing activities 57,944 (36,338) ------------------------------------------------------------ ------- ------- Net increase/(decrease) in cash and cash equivalents for the year 46,579 (5,515) ------------------------------------------------------------ ------- ------- Cash and cash equivalents at beginning of the year 28,025 27,929 ------------------------------------------------------------ ------- ------- Effect of foreign exchange rate changes (433) 5,611 ------------------------------------------------------------ ------- ------- Cash and cash equivalents at end of the year 74,171 28,025 ------------------------------------------------------------ ======= ======= Analysis of the balances of cash and cash equivalents: ------------------------------------------------------------ ------- ------- Cash at bank and on hand 74,343 28,202 ------------------------------------------------------------ ------- ------- Fixed deposits (172) (177) ------------------------------------------------------------ ------- ------- Cash and cash equivalents at end of the year 74,171 28,025 ======= =======
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2013
1. BASIS OF PREPARATION
The financial statements have been prepared under the historical cost basis, except for certain financial instruments which have been measured at fair values.
2. STATEMENT OF COMPLIANCE
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") issued by the International Accounting Standards Board. In addition, the financial statements include applicable disclosures required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and by the disclosure requirements of Hong Kong Companies Ordinance.
3. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS
The Group has applied the following new and revised IFRSs issued by the International Accounting Standard Board for the first time in the current year:
Amendments to IFRSs Annual Improvements to IFRSs 2009-2011 Cycle --------------------- ---------------------------------------------------------- Amendments to IFRS Disclosures - Offsetting Financial Assets and Financial 7 Liabilities --------------------- ---------------------------------------------------------- Amendments to IFRS Consolidated Financial Statements, Joint Arrangements 10, IFRS 11 and IFRS and Disclosure of Interests in Other Entities: Transition 12 Guidance --------------------- ---------------------------------------------------------- IFRS 10 Consolidated Financial Statements --------------------- ---------------------------------------------------------- IFRS 11 Joint Arrangements --------------------- ---------------------------------------------------------- IFRS 12 Disclosure of Interests in Other Entities --------------------- ---------------------------------------------------------- IFRS 13 Fair Value Measurement --------------------- ---------------------------------------------------------- IAS 19 (Revised 2011) Employee Benefits --------------------- ---------------------------------------------------------- IAS 27 (Revised 2011) Separate Financial Statements --------------------- ---------------------------------------------------------- IAS 28 (Revised 2011) Investments in Associates and Joint Ventures --------------------- ---------------------------------------------------------- Amendments to IAS Presentation of Items of Other Comprehensive Income 1 --------------------- ---------------------------------------------------------- Amendments to IAS Recoverable Amount Disclosures for Non-Financial 36 Assets --------------------- ---------------------------------------------------------- IFRIC - Int 20 Stripping Costs in the Production Phase of a Surface Mine
Except as described below, the application of the new and revised IFRSs in the current year has had no material impact on the Group's financial performance and positions for the current and prior years and/or disclosures set out in these consolidated financial statements.
Amendments to IAS 1 Presentation of Items of Other Comprehensive Income
The Group has applied the amendments to IAS 1 Presentation of Items of Other Comprehensive Income for the first time in the current year. The amendments to IAS 1 retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However, the amendments to IAS 1 require items of other comprehensive income to be grouped into two categories in the other comprehensive income section; (a) items that will not be reclassified subsequently to profit or loss and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis - the amendments do not change the option to present items of other comprehensive income either before tax or net of tax. The amendments have been applied retrospectively, and hence the presentation of items of other comprehensive income has been modified to reflect the changes. Other than the above mentioned presentation changes, the application of the amendments to IAS 1 does not result in any impact on profit or loss, other comprehensive income and total comprehensive income.
Amendments to IAS 36 Recoverable Amount Disclosures for Non-Financial Assets
The amendments to IAS 36 remove the requirement to disclose the recoverable amount of a cash generating unit (CGU) to which goodwill or other intangible assets with indefinite useful lives had been allocated when there has been no impairment or reversal of impairment of the related CGU. Furthermore, the amendments introduce additional disclosure requirements regarding the fair value hierarchy, key assumptions and valuation techniques used when the recoverable amount of an asset or CGU was determined based on its fair value less costs of disposal.
4. ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL REPORTING STANDARDS
The Group has not early applied the following new and revised IFRSs that have been issued but are not yet effective:
Amendments to IFRS Investment Entities(1) 10, IFRS 12 and IAS 27 -------------------- -------------------------------------------------------- Amendments to IAS Defined Benefit Plans: Employee Contributions(2) 19 -------------------- -------------------------------------------------------- Amendments to IFRS Mandatory Effective Date of IFRS 9 and Transition 9 Disclosures(3) and IFRS 7 -------------------- -------------------------------------------------------- Amendments to IAS Offsetting Financial Assets and Financial Liabilities(1) 32 -------------------- -------------------------------------------------------- Amendments to IAS Novation of Derivatives and Continuation of Hedge 39 Accounting(1) -------------------- -------------------------------------------------------- Amendments to IFRSs Annual Improvements to IFRSs 2010-2012 Cycle(4) -------------------- -------------------------------------------------------- Amendments to IFRSs Annual Improvements to IFRSs 2011-2013 Cycle(2) -------------------- -------------------------------------------------------- IFRS 9 Financial Instruments(3) -------------------- -------------------------------------------------------- IFRS 14 Regulatory Deferral Accounts(5) -------------------- -------------------------------------------------------- IFRIC - Int 21 Levies(1) (1) Effective for annual periods beginning on or after 1 January 2014 (2) Effective for annual periods beginning on or after 1 July 2014
(3) Available for application - the mandatory effective date will be determined when the outstanding phases of IFRS 9 are finalised
(4) Effective for annual periods beginning on or after 1 July 2014, with limited exceptions
(5) Effective for first annual IFRS financial statements beginning on or after 1 January 2016
The directors of the Company anticipate that the application of other new and revised IFRSs will have no material impact on the results and financial position of the Group.
5. TURNOVER AND SEGMENT INFORMATION
The chief operating decision-maker has been identified as the key management. The 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 Service, Internet & Mobile Application &Related Accessories and Commodity Trading operating segments.
- Trading of security & Biometric Products Segments consists of biometrics and RFID products for consumer applications. Examples include the m-series fingerprint door locks 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's Application & Related Accessories segment are mobile and gaming industry and in particular in Online gaming, Utilities Applications for IOS, Translations business and Mass Advertising
- Commodity Trading segment are trading of commodity good.
The key management assesses the performance of the operating segments based on a measure of gross profit. Segment assets include trade all tangible, intangible assets and current assets and 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 business segments:
Internet Trading & Mobiles of Security Solutions, Application & Biometric Projects & Related Commodities Products and Service Accessories Trading Unallocated Total ------------------- ------------------- ------------------ ----------------- ---------------- ------------------ --------------------- 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 152,557 995,204 443 576 55,145 22,776 258,135 4,069 - - 466,280 1,022,625 ------------------- -------- -------- ------- -------- ------- ------- ------- ------- ------- -------- -------- ---------- Segment results (233,992) (651,612) 403 373 5,260 9,243 826 6 - - (227,503) (641,990) ------------------- ======== ======== ======= ======== ======= ======= ======= ======= ------- -------- -------- ---------- Unallocated other operating income 7,233 8,523 7,233 8,523 ------------------- -------- -------- ------- -------- ------- ------- ------- ------- ------- -------- -------- ---------- Change on fair value of financial assets at fair value through profit or loss 11,874 (1,453) 11,874 (1,453) ------------------- -------- -------- ------- -------- ------- ------- ------- ------- ------- -------- -------- ---------- Depreciation (4,843) (10,822) (1,301) (3,328) (352) (166) - - (5,663) (2,661) (12,159) (16,977) ------------------- -------- -------- ------- -------- ------- ------- ------- ------- ------- -------- -------- ---------- Amortisation of prepaid lease payments - (100) - - - - - - (201) (205) (201) (305) ------------------- -------- -------- ------- -------- ------- ------- ------- ------- ------- -------- -------- ---------- Amortisation of intangible Assets - - - (85,220) (19,600) (9,800) - - - - (19,600) (95,020) ------------------- -------- -------- ------- -------- ------- ------- ------- ------- ------- -------- -------- ---------- Impairment loss on other Receivables - - - - ------------------- -------- -------- ------- -------- ------- ------- ------- ------- ------- -------- -------- ---------- Impairment loss on trade Receivables (528,101) (276,380) - - - (343) - - - (121) (582,101) (276,844) ------------------- -------- -------- ------- -------- ------- ------- ------- ------- ------- -------- -------- ---------- Impairment loss on available-for-sale financial assets - (3,707) - (3,707) ------------------- -------- -------- ------- -------- ------- ------- ------- ------- ------- -------- -------- ---------- Impairment loss on intangible assets - (203,904) - (177,508) - - - - - - - (381,412) ------------------- -------- -------- ------- -------- ------- ------- ------- ------- ------- -------- -------- ---------- Impairment loss on goodwill - - - - (22,300) - - - - - (22,300) - ------------------- -------- -------- ------- -------- ------- ------- ------- ------- ------- -------- -------- ---------- Provision for obsolete inventories (1,299) (207,762) (1,299) (207,762) ------------------- -------- -------- ------- -------- ------- ------- ------- ------- ------- -------- -------- ---------- Unallocated expenses (96,124) (224,088) (96,124) (224,088) ------------------- -------- -------- ------- -------- ------- ------- ------- ------- ------- -------- -------- ---------- Finance costs (3,763) (4,807) (3,763) (4,807) ------------------- -------- -------- ------- -------- ------- ------- ------- ------- ------- -------- -------- ---------- Loss before taxation (87,943) (436,281) (945,943) (1,845,842) ------------------- -------- -------- ------- -------- ------- ------- ------- ------- ------- -------- -------- ---------- Income tax expense 3,819 (246) 3,819 (246) ------------------- -------- -------- ------- -------- ------- ------- ------- ------- ------- -------- -------- ---------- Loss for the year (84,124) (436,527) (942,124) (1,846,088) ======= ======== ======== ==========
Geographical information
The Group operates in two principal geographical areas - Southeast Asia and the Middle East. The following tables provide an analysis of the Group's turnover, segment results and other information by geographical areas, irrespective of the origin of the goods and services:
Turnover Segment results --------------- ------------------ ------------------- 2013 2012 2013 2012 --------------- ------- --------- -------- -------- HK$'000 HK$'000 HK$'000 HK$'000 --------------- ------- --------- -------- -------- Southeast Asia 465,687 1,019,272 (227,686) (641,726) --------------- ------- --------- -------- -------- Middle East 593 3,353 183 (264) --------------- ------- --------- -------- -------- 466,280 1,022,625 (227,503) (641,990) ======= ========= ======== ========
Certain comparative figures have been represented to conform with the change of resources allocation in the current year.
Information about major customers
The Group's customer base includes 4 (2012:2) customers with whom transactions have individually exceeded 10% of the Group's revenue during the year ended 31 December 2013.
Revenue from major customers amounted to 10% or more of the Group's revenue, are set out below:
2013 2012 ----------- ------- ------- HK$'000 HK$'000 ----------- ------- ------- Customer A 76,333 213,497 ----------- ------- ------- Customer B 74,710 243,839 ----------- ------- ------- Customer C 62,045 - ----------- ------- ------- Customer D 53,813 - ----------- ------- ------- 266,901 457,336 ======= ======= 6. OTHER REVENUE AND GAINS 2013 2012 --------------------------------------------------- ------- ------- HK$'000 HK$'000 --------------------------------------------------- ------- ------- Other revenue --------------------------------------------------- ------- ------- Bank interest income 273 130 --------------------------------------------------- ------- ------- Rental income 2,575 2,358 --------------------------------------------------- ------- ------- Sundry income 759 465 --------------------------------------------------- ------- ------- 3,607 2,953 --------------------------------------------------- ------- ------- Other gains --------------------------------------------------- ------- ------- Gain arising on change in fair value of investment properties - 2,770 --------------------------------------------------- ------- ------- Reversal of impairment loss on trade receivables 1,821 - --------------------------------------------------- ------- ------- Gain on disposal of property, plant and equipment 1,719 - --------------------------------------------------- ------- ------- Gain on disposal of associate 86 - --------------------------------------------------- ------- ------- Gain on disposal of prepaid lease payments - 1,436 --------------------------------------------------- ------- ------- Reversal of written down of inventories - 989 --------------------------------------------------- ------- ------- Foreign exchange gain - 375 --------------------------------------------------- ------- ------- Gain on disposal of subsidiaries - 109 --------------------------------------------------- ------- ------- 3,626 5,679 --------------------------------------------------- ------- ------- Total 7,233 8,632 ======= ======= 7. LOSS FROM OPERATIONS
The loss from operations is stated after charging/(crediting):
2013 2012 -------------------------------------------------- ------- --------- HK$'000 HK$'000 -------------------------------------------------- ------- --------- Depreciation -------------------------------------------------- ------- --------- * Owned assets 12,091 16,851 -------------------------------------------------- ------- --------- * Assets held under finance leases 68 126 -------------------------------------------------- ------- --------- 12,159 16,977 -------------------------------------------------- ------- --------- Cost of inventories sold 686,474 1,664,615 -------------------------------------------------- ------- --------- Amortisation of prepaid lease payments 201 305 -------------------------------------------------- ------- --------- Amortisation of intangible assets 19,600 95,020 -------------------------------------------------- ------- --------- Impairment loss on property, plant and equipment* 31,379 1,284 -------------------------------------------------- ------- --------- (Gain)/loss on disposal of property, plant and equipment (1,719) 2,265 -------------------------------------------------- ------- --------- Loss on disposal of investment properties* 13,400 2,311 -------------------------------------------------- ------- --------- Impairment loss on trade receivables* 582,101 276,844 -------------------------------------------------- ------- --------- Impairment loss on available-for-sale financial assets* - 3,707 -------------------------------------------------- ------- --------- Impairment loss on intangible assets* - 381,412 -------------------------------------------------- ------- --------- Loss on disposal of available-for-sale financial assets* 2,200 - -------------------------------------------------- ------- --------- Impairment loss on goodwill* 22,300 - -------------------------------------------------- ------- --------- Written down of inventories* 1,299 207,762 -------------------------------------------------- ------- --------- Foreign exchange loss/(gain) 2,542 (375) -------------------------------------------------- ------- --------- Auditors' remuneration 6,000 6,000 -------------------------------------------------- ------- --------- Operating lease rentals in respect of premises 1,641 2,466 -------------------------------------------------- ------- --------- Staff costs, including directors' remuneration 8,698 13,151 ======= ========= * Items included in other operating expenses 8. FINANCE COSTS 2013 2012 ---------------------------------------------------- ------- ------- HK$'000 HK$'000 ---------------------------------------------------- ------- ------- Bank charges 115 184 ---------------------------------------------------- ------- ------- Interests on interest-bearing borrowings and bank overdrafts wholly repayable within five years 3,640 2,261 ---------------------------------------------------- ------- ------- Interests on interest-bearing borrowings and bank overdrafts wholly repayable over five years - 1,322 ---------------------------------------------------- ------- ------- Promissory note - 457 ---------------------------------------------------- ------- ------- Interest on convertible note - 560 ---------------------------------------------------- ------- ------- Interest on obligations under finance leases 8 23 ---------------------------------------------------- ------- ------- 3,763 4,807 ======= ======= 9. TAXATION 2013 2012 ---------------------------------------------------- ------- ------- HK$'000 HK$'000 ---------------------------------------------------- ------- ------- Current tax expense in respect of the current year: ---------------------------------------------------- ------- ------- * Hong Kong 643 1,208 ---------------------------------------------------- ------- ------- * PRC - - ---------------------------------------------------- ------- ------- * Malaysia 1,257 - ---------------------------------------------------- ------- ------- 1,900 1,208 ---------------------------------------------------- ------- ------- Reversal of deferred tax recognised in the current year (5,719) (962) ---------------------------------------------------- ------- ------- (3,819) 246 ======= ======= 10. LOSS PER SHARE
The calculation of basic loss per share for the year is based on the Group's loss attributable to owners of the Company of HK$935,625,000 (2012: net loss HK$1,874,373,000) and the weighted average number of ordinary shares in issue during the year of 701,325,866 (2012: 595,575,207).
During the year ended 31 December 2013 and 2012, the computation of diluted loss per share does not assume the exercise of the Company's outstanding share options because the exercise price of those share options was higher than the average market price for shares for the year. And so the diluted loss per share for the year ended 31 December 2013 and 2012 was the same as the basic loss per share as there was no diluting event during the current year.
11. DIVIDENDS
The directors of the Company do not recommend the payment of any dividend for the year ended 31 December 2013 (2012: Nil).
12. INTANGIBLE ASSETS Mobile applications Product software development Contract Logo and technology and design rights Total ------------------------------------ ------- ------------------- ------------ --------- --------- HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 ------------------------------------ ------- ------------------- ------------ --------- --------- Cost ------------------------------------ ------- ------------------- ------------ --------- --------- As at 1 January 2012 148 - 629,637 1,463,607 2,093,392 ------------------------------------ ------- ------------------- ------------ --------- --------- Disposal of subsidiaries - - - (264,286) (264,286) ------------------------------------ ------- ------------------- ------------ --------- --------- Additions arising from acquisitions of subsidiaries - 98,000 - - 98,000 ------------------------------------ ------- ------------------- ------------ --------- --------- As at 31 December 2012, 1 January 2013 and 31 December 2013 148 98,000 629,637 1,199,321 1,927,106 ------------------------------------ ======= =================== ============ ========= ========= Accumulated amortisation and impairment ------------------------------------ ------- ------------------- ------------ --------- --------- As at 1 January 2012 148 - 163,005 1,463,607 1,626,760 ------------------------------------ ------- ------------------- ------------ --------- --------- Amortisation for the year - 9,800 85,220 - 95,020 ------------------------------------ ------- ------------------- ------------ --------- --------- Disposal of subsidiaries - - - (264,286) (264,286) ------------------------------------ ------- ------------------- ------------ --------- --------- Impairment loss recognised during the year - - 381,412 - 381,412 ------------------------------------ ------- ------------------- ------------ --------- --------- At 31 December 2012 and 1 January 2013 148 9,800 629,637 1,199,321 1,838,906 ------------------------------------ ------- ------------------- ------------ --------- --------- Amortisation for the year - 19,600 - - 19,600 ------------------------------------ ------- ------------------- ------------ --------- --------- At 31 December 2013 148 29,400 629,637 1,199,321 1,858,506 ------------------------------------ ======= =================== ============ ========= ========= Carrying amounts ------------------------------------ ------- ------------------- ------------ --------- --------- At 31 December 2013 - 68,600 - - 68,600 ------------------------------------ ======= =================== ============ ========= ========= At 31 December 2012 - 88,200 - - 88,200 ======= =================== ============ ========= ========= 13. AVAILABLE-FOR-SALE FINANCIAL ASSETS As at As at 31 December 31 December 2013 2012 ----------------------------------------- ------------ ------------ HK$'000 HK$'000 ----------------------------------------- ------------ ------------ Equity securities at cost ----------------------------------------- ------------ ------------ Unlisted outside Hong Kong - 169,200 ----------------------------------------- ------------ ------------ Equity securities at fair value ----------------------------------------- ------------ ------------ Listed outside Hong Kong 406 20 ----------------------------------------- ------------ ------------ 406 169,220 ----------------------------------------- ------------ ------------ Impairment on unlisted equity securities - (135,000) ----------------------------------------- ------------ ------------ 406 34,220 ============ ============
During the year ended 31 December 2013, the Group disposal 6% of the issued share capital of Hero View Limited of which carrying amount of approximately HK$19,200,000, at a consideration of HK$20,000,000. Therefore, a gain of approximately HK$800,000 was recognised. Detail of which was set out in the Company's announcement dated 21 May 2013.
During the year ended 31 December 2013, the Group disposal 3% issued share capital of Xian Hui Investment Limited of which carrying amount approximately HK$15,000,000, at consideration of HK$12,000,000. Therefore a loss of approximately HK$3,000,000 was recognized.
For listed equity securities, the fair value as determined based on the quoted market bid prices available on the relevant stock exchange.
14. TRADE RECEIVABLES 2013 2012 ------------------------------------- ---------- --------- HK$'000 HK$'000 ------------------------------------- ---------- --------- 0-30 days 4,493 196,564 ------------------------------------- ---------- --------- 31-60 days 3,472 121,744 ------------------------------------- ---------- --------- 61-90 days 1,769 30,728 ------------------------------------- ---------- --------- 91-180 days 729 79,020 ------------------------------------- ---------- --------- Over 180 days 1,297,220 772,521 ------------------------------------- ---------- --------- 1,307,683 1,200,577 ------------------------------------- ---------- --------- Impairment loss on trade receivables (1,292,857) (741,600) ------------------------------------- ---------- --------- 14,826 458,977 ========== =========
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 day credit terms.
15. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES
Deposits, prepayments and other receivables are mainly comprise amount receivable for disposals of Xian Hui Investment Limited of approximately HK$12,000,000 and amount receivable for disposal of I-Century Limited of approximately HK$16,000,000.
16. TRADE PAYABLES 2013 2012 ------------- ------- ------- HK$'000 HK$'000 ------------- ------- ------- 0-30 days 118 6,999 ------------- ------- ------- 31-60 days 3,869 1,702 ------------- ------- ------- 61-90 days - 14 ------------- ------- ------- Over 90 days 12,067 12,276 ------------- ------- ------- 16,054 20,991 ======= =======
Trade payables are generally settled on 0-60 days terms. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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