CAPITAL VC LIMITED 首都創投有限公司 (Incorporated in the Cayman Islands with limited liability and carrying on business in Hong Kong as CNI VC Limited) (於開曼群島

Transcription

1 CAPITAL VC LIMITED 首都創投有限公司 (Incorporated in the Cayman Islands with limited liability and carrying on business in Hong Kong as CNI VC Limited) (於開曼群島註冊成立之有限公司 並以 CNI VC Limited 名稱在香港經營業務) Stock Code 股份代號 : Interim Report 2015/16 中期報告

2 BOARD OF DIRECTORS Executive Directors Mr. Kong Fanpeng Mr. Chan Cheong Yee Independent Non-executive Directors Mr. Lam Kwan Mr. Ong Chi King Mr. Lee Ming Gin AUDIT COMMITTEE Mr. Lam Kwan (Chairman) Mr. Ong Chi King Mr. Lee Ming Gin REMUNERATION COMMITTEE Mr. Ong Chi King (Chairman) Mr. Lam Kwan Mr. Lee Ming Gin NOMINATION COMMITTEE Mr. Ong Chi King (Chairman) Mr. Lam Kwan Mr. Lee Ming Gin COMPANY SECRETARY Mr. Chan Ka Yin AUTHORISED REPRESENTATIVES Mr. Kong Fanpeng Mr. Chan Ka Yin INVESTMENT MANAGER Insight Capital Management (HK) Limited 16A, Two Chinachem Plaza 135 Des Voeux Road Central Hong Kong PRINCIPAL BANKERS The Hongkong and Shanghai Banking Corporation Limited Hang Seng Bank Limited Insight Capital Management (HK) Limited 135 II 16 A Interim Report 2015/16 中期報告 1

3 2 首都創投有限公司 CAPITAL VC LIMITED AUDITOR Cheng & Cheng Limited Certified Public Accountants 10th Floor, Allied Kajima Building 138 Gloucester Road, Wanchai Hong Kong HONG KONG SHARE REGISTRAR AND TRANSFER OFFICE Tricor Tengis Limited Level 22, Hopewell Centre 183 Queen s Road East Hong Kong REGISTERED OFFICE Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY Cayman Islands Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY Cayman Islands PRINCIPAL PLACE OF BUSINESS IN HONG KONG Unit 2302, 23th Floor New World Tower 1 18 Queen s Road Central Hong Kong WEBSITE STOCK CODE

4 INTERIM FINANCIAL STATEMENTS The board of directors (the Board ) of Capital VC Limited (the Company ) hereby announces the unaudited consolidated results of the Company and its subsidiaries (the Group ) for the six months ended 31 March 2016 (the Period ). The unaudited condensed consolidated interim financial statements (the Interim Financial Statements ) have not been audited by the Company s independent auditor but have been reviewed by the Company s audit committee (the Audit Committee ). CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 31 MARCH 2016 Six months ended 31 March 31 December (unaudited) (unaudited) Notes Revenue 5 (199,741,056) 167,302,305 Other income 5,000,000 2,071 Administrative expenses (11,593,916) (4,415,920) Loss on fair change of avaliable-for-sale investment (8,000,000) Operating (loss)/profit (206,334,972) 154,888,456 Finance costs (823,517) (1,233,910) Share of result of an associate (3,637,868) 2,478,000 (Loss)/Profit before tax 7 (210,796,357) 156,132,546 Income tax 8 34,000,000 (25,500,000) (Loss)/Profit for the Period and total comprehensive income for the Period attributable to equity holders of the Company (176,796,357) 130,632,546 Dividend 9 (Restated) (Loss)/Earnings per share (HK cents) 10 basic (5.65) diluted N/A N/A There was no other comprehensive income during the six months ended 31 March 2016 and 31 December Interim Report 2015/16 中期報告 3

5 4 首都創投有限公司 CAPITAL VC LIMITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 MARCH March 30 September (unaudited) (audited) Notes NON-CURRENT ASSETS Plant and equipment 11 35,184,345 35,705,808 Interest in an associate 12 70,074,600 73,712,468 Available-for-sale investments ,384, ,384,000 Amounts receivable on disposal of available-for-sale investments 14 5,000, ,642, ,802,276 CURRENT ASSETS Financial assets at fair value through profit or loss ,471, ,276,147 Prepayments, deposits and other receivables 14 60,777, ,143,656 Amount due from an associate 12 30,595,174 95,842,223 Bank balances and cash 195,465, ,513, ,309,814 1,399,775,168

6 31 March 30 September (unaudited) (audited) Notes CURRENT LIABILITIES Other payables and accruals 4,071, ,949,702 NET CURRENT ASSETS 947,238,440 1,148,825,466 TOTAL ASSETS LESS CURRENT LIABILITIES 1,171,881,385 1,382,627,742 NON-CURRENT LIABILITIES Deferred tax liabilities 14,717,471 48,717,471 1,157,163,914 1,333,910,271 CAPITAL AND RESERVES Share capital 16 15,653,010 7,825,408 Reserves 1,141,510,904 1,326,084,863 1,157,163,914 1,333,910,271 NET ASSET VALUE PER SHARE Interim Report 2015/16 中期報告 5

7 6 首都創投有限公司 CAPITAL VC LIMITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 31 MARCH 2016 Total equity attributable Capital Investment to equity Share Share reduction revaluation Retained holders of the capital premium reserve reserve profits Company At 1 October 2015 (audited) 7,825, ,994,786 22,826,010 6,008, ,256,067 1,333,910,271 Total comprehensive income for the period (176,796,357) (176,796,357) Issue of shares under bonus issue 16(a) (Note 16(a)) 7,826,108 (7,826,108) Share issue expenses for bonus issue (40,000) (40,000) Exercise of warrants 16(b) (Note 16(b)) 1,494 88,506 90,000 At 31 March 2016 (unaudited) 15,653, ,217,184 22,826,010 6,008, ,459,710 1,157,163,914 At 1 July 2014 (audited) 956, ,653,990 22,826,010 66,775, ,211,484 Total comprehensive income for the period 130,632, ,632,546 Exercise of warrants 16(c) (Note 16(c)) 21,736 5,412,348 5,434,084 At 31 December 2014 (unaudited) 978, ,066,338 22,826, ,407, ,278,114

8 CONDENSED CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31 MARCH 2016 Six months ended 31 March 31 December (unaudited) (unaudited) NET CASH (USED IN)/FROM OPERATING (56,363,794) 74,748,266 ACTIVITIES NET CASH FROM/(USED IN) 60,266,100 (79,535,061) INVESTING ACTIVITIES NET CASH FROM FINANCING ACTIVITIES 50,000 5,434,084 NET INCREASE IN CASH AND CASH EQUIVALENTS 3,952, ,289 CASH AND CASH EQUIVALENTS AT 1 OCTOBER 2015 AND 1 JULY ,513, ,384,719 CASH AND CASH EQUIVALENTS AT 31 MARCH 2016 AND 31 DECEMBER 2014 Represented by Bank balances and cash 195,465, ,032,008 The notes on pages 8 to 17 form an integral part of this condensed Interim financial statements Interim Report 2015/16 中期報告 7

9 8 首都創投有限公司 CAPITAL VC LIMITED NOTES TO INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 MARCH GENERAL INFORMATION Capital VC Limited (the Company ) was incorporated in the Cayman Islands as an exempted company with limited liability under the Companies Law of the Cayman Islands. The address of its registered office is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands. The address of its principal place of business was Room 2302, 23/F, New World Tower 1, 18 Queen s Road Central, Hong Kong. The Company s shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited (the Stock Exchange ). These condensed consolidated interim financial information are presented in Hong Kong dollars, unless otherwise stated. 1. Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands BASIS OF PREPARATION OF FINANCIAL STATEMENTS The unaudited condensed consolidated financial statements ( Interim Financial Statements ) have been prepared in accordance with the applicable disclosure requirements of Appendix 16 to the Rules (the Listing Rules ) Governing the Listing of Securities on the Stock Exchange and Hong Kong Accounting Standard ( HKAS ) 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ) The Interim Financial Statements should be read in conjunction with the 2014/15 annual financial statements. The accounting policies and methods of computation used in the preparation of these condensed consolidated financial statements are consistent with those used in the annual financial statements for the fifteen months ended 30 September ACCOUNTING POLICIES The Company and its subsidiaries (the Group ) has adopted all the new and revised HKFRSs issued by the HKICPA that are relevant to its operations and effective for its accounting period beginning on 1 October HKFRSs comprise Hong Kong Financial Reporting Standards ( HKFRS ); HKAS; and Interpretations. The adoption of these new and revised HKFRSs did not result in significant changes to the Group s accounting policies, presentation of the Group s financial statements and amounts reported for the current period and prior years/period. 3. The Group has not applied the new HKFRSs that have been issued but are not yet effective. The Company has already commenced an assessment of the impact of these new HKFRSs but is not yet in a position to state whether these new HKFRSs would have a material impact on its results of operations and financial position.

10 4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENT In preparing the Interim Financial Statements, the significant judgements 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 for the fifteen months ended 30 September REVENUE Revenue represents the amounts received and receivable on investments, net gains on financial assets at fair value through profit or loss ( FVTPL ) and bank and other interest income during the Period as follows: 5. Six months ended 31 March 31 December (unaudited) (unaudited) Net (loss)/ profit on financial assets at FVTPL (201,525,141) 163,416,375 Interest income on amounts due from investee companies 1,776,797 3,883,182 Bank and other interest income 7,288 2,748 (199,741,056) 167,302,305 Interim Report 2015/16 中期報告 9

11 10 首都創投有限公司 CAPITAL VC LIMITED 6. SEGMENT INFORMATION The Group identifies operating segments and prepares segment information based on the regular reports reviewed by the chief operating decision maker for decisions about resources allocated to the Group s business components and for their review of the performance of those components. 6. The principal activity of the Group is investing in listed and unlisted companies. The Group has identified the operating and reportable segments as follows. Financial assets Investments in securities listed on Hong at FVTPL Kong Stock Exchange Available-for-sale Investments in unlisted securities investment Associate Investments in an entity which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture For the six months ended 31 March 2016 Investment Investment in financial in available- Investment assets for-sale in an at FVTPL investments associate Unallocated Total Segment revenue (201,525,141) 1,225, ,797 5,007,288 (194,741,056) Administrative expenses (11,593,916) (11,593,916) Segment result (201,525,141) 1,225, ,797 (6,586,628) (206,334,972) Share of result of an associate (3,637,868) (3,637,868)

12 6. SEGMENT INFORMATION (Continued) 6. For the six months ended 31 December 2014 Investment Investment in financial in available- Investment assets for-sale in an at FVTPL investments associate Unallocated Total Segment revenue 163,416,375 (6,901,070) 2,784,252 4, ,304,376 Administrative expenses (4,415,920) (4,415,920) Segment result 163,416,375 (6,901,070) 2,784,252 (4,411,101) 154,888,456 Share of result of an associate 2,478,000 2,478, (LOSS)/PROFIT BEFORE TAX 7. Six months ended 31 March 31 December (unaudited) (unaudited) The Group s (loss)/profit before tax has been arrived at after charging: Total staff costs (including directors remuneration) 1,859,988 1,348,700 Depreciation on plant and equipment 4,950, ,709 Operating lease charges on rented premises 514, ,002 Interest on borrowings 823,517 1,233,910 Interim Report 2015/16 中期報告 11

13 12 首都創投有限公司 CAPITAL VC LIMITED 8. INCOME TAX The amount of taxation (credited)/charged to the consolidated statement of comprehensive income represents: 8. Six months ended 31 March 31 December (unaudited) (unaudited) Income tax (credit)/expense (34,000,000) 25,500,000 As at 30 September 2015, the Group has unused tax losses of 7,253,980 available for offset against future profits. The unrecognised tax losses may be carried forward indefinitely. No provision for Hong Kong Profits Tax has been made for the six months ended 31 March ,253, DIVIDEND The directors did not recommend the payment of an interim dividend for the six months ended 31 March 2016 (six months ended 31 December 2014: Nil) (LOSS)/EARNINGS PER SHARE The calculations of basic (loss)/earnings per share are based on the Group s loss attributable to the equity holders of the Company for the Period of 176,796,357 (2014: Profit of 130,632,546) ,796, ,632,546 The basic (loss)/earnings per share is based on the weighted average number of 3,130,412,247 (2014 restated: 908,137,818) ordinary shares in issue for the Period. 3,130,412, ,137,818 There was no dilution effect on the basic (loss)/earnings per share for the six months ended 31 March 2016 and 31 December 2014 as there were no dilutive shares outstanding during the six months ended 31 March 2016 and 31 December PLANT AND EQUIPMENT During the Period, the Group acquired two motor vehicles at cost of approximately 1,342,000 in aggregate, and leasehold improvement for the vessel of approximately 3,088,000, for business purpose ,342,000 3,088,000

14 12. INTEREST IN AN ASSOCIATE March 30 September (unaudited) (audited) Cost of investment in an unlisted associate 4,500,000 4,500,000 Share of post-acquisition profit 65,574,600 69,212,468 70,074,600 73,712,468 Amount due from an associate 30,595,174 95,842,223 The amount due from an associate was unsecured, bearing interest at 8% per annum and repayable on demand. 8% As at 31 March 2016, the Group has interests in the following associate: Percentage Form of Place of Nominal value of equity business Class of incorporation of issued attributable to Name of associate structure shares held and operations share capital the Group Principal activities CNI Bullion Limited Incorporated Ordinary share Hong Kong 15,000,000 30% Provision of services on trading of 15,000,000 gold in Hong Kong gold market 13. AVAILABLE-FOR-SALE INVESTMENTS March 30 September (unaudited) (audited) Unlisted equity securities representing investments in private entities, at fair value 119,384, ,384,000 Interim Report 2015/16 中期報告 13

15 14 首都創投有限公司 CAPITAL VC LIMITED 14. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES The prepayments, deposits and other receivables of 60,777,504 as at 31 March 2016 (30 September 2015: 135,143,656) included receivables for two (30 September 2015: three) disposed availablefor-sale investments of 32,529,609 (30 September 2015: 52,304,595) and margin receivables generated from investment in financial assets at FVTPL of 16,739,426 as at 31 March 2016 (30 September 2015: 69,428,532). The balances bear interest at 5% per annum and repayable within one year from 31 March FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS ,777, ,143,656 32,529,609 52,304,595 16,739,426 69,428,5325% March 30 September (unaudited) (audited) Fair value Listed equity securities held for trading, listed in Hong Kong 664,471, ,276,147 The fair value of the Group s equity investments at fair value through profit or loss was determined based on the quoted market bid prices available on the relevant exchanges. 16. SHARE CAPITAL 16. Number of Number of ordinary ordinary shares of shares of Nominal each each value Authorised At 1 July 2014 and 31 December ,000,000, ,000,000 At 1 October 2015 and 31 March ,000,000, ,000,000 Issued and fully paid At 1 October 2015 Ordinary Shares of each ,565,081,441 7,825,408 Bonus issue (Note a) a 1,565,221,684 7,826,108 Exercise of warrants (Note b) b 298,779 1,494 At 31 March ,130,601,904 15,653,010 At 1 July 2014 Ordinary shares of each ,395, ,396 Exercise of warrants (Note c) c 21,736,337 21,736 At 31 December ,132, ,132

16 16. SHARE CAPITAL (Continued) Notes: 16. (a) At the extraordinary general meeting held on 11 December 2015, an ordinary resolution was passed for issuance of bonus shares. 1,565,221,684 ordinary shares of each were issued to shareholders on the basis of one bonus share for every then existing share as at the record date of 22 December (a) 1,565,221, (b) As a result of the bonus issue detailed in note (a) above, the exercise price of warrants was adjusted from 0.41 to 0.205, with effect from 23 December During the six months ended 31 March 2016, 158,536 warrants were exercised at a price of and 140,243 warrants were exercised at a price of 0.41 into 298,779 ordinary shares of the Company, in aggregate. (b) (a) , , ,779 (c) During the six months ended 31 December 2014, 21,736,337 warrants were exercised at a price of 0.25 into 21,736,337 ordinary shares of the Company. (c) 21,736, ,736, NET ASSET VALUE PER SHARE The calculation of net asset value per share is based on the net asset value of the Group as at 31 March 2016 of 1,157,163,914 (30 September 2015: 1,333,910,271) and on the number of 3,130,601,904 (30 September 2015: 1,565,081,441) ordinary shares in issue as at 31 March ,157,163,914 1,333,910,271 3,130,601,904 1,565,081, RELATED PARTY AND CONNECTED TRANSACTIONS (a) During the Period, significant transactions with related parties and connected parties are as follows: 18. (a) Six months ended 31 March 31 December (unaudited) (unaudited) Notes China Angel Fund Management (HK) Company Limited ( CAFM ) CAFM Investment management fee paid (i) 96,000 Insight Capital Management (HK) Limited Insight Capital Management 300, ,742 ( Insight HK ) (HK) LimitedInsight HK Investment management fee paid (ii) CNI Bullion Limited Interest income from (iii) 551,797 2,784,252 Interim Report 2015/16 中期報告 15

17 16 首都創投有限公司 CAPITAL VC LIMITED 18. RELATED PARTY AND CONNECTED TRANSACTIONS (Continued) (b) Compensation of key management personnel. The remuneration of directors and other members of key management during the Period was as follows: 18. (b) Six months ended 31 March 31 December (unaudited) (unaudited) Short-term benefits 1,130, ,000 Post-employment benefits 1,130, ,000 Notes: (i) Pursuant to an investment management agreement ( CAFM Agreement ) dated 31 May 2012 entered into between the Company and CAFM, CAFM agreed to provide the Company with investment management services (excluding general administrative services) commencing on 1 June Pursuant to its terms, the monthly investment advisory fee is 40,000. (i) CAFM CAFM CAFM 40,000 The Company and CAFM mutually agreed to terminate the CAFM Agreement with no penalty and/or compensation with effect from 13 September CAFMCAFM (ii) Pursuant to an investment agreement ( Insight HK Agreement ) dated 17 October 2014 entered into between the Company and Insight HK, Insight HK agreed to provide the Company with investment management services (excluding general administrative services) commencing on 21 October Pursuant to its terms, Insight HK Agreement is renewable automatically for successive periods of two years each upon expiry unless terminated by either the Company or Insight HK serving not less than 3 months prior notice in writing on the other party. Currently the monthly investment advisory fee is 50,000. (ii) Insight HK Insight HK Insight HK Insight HK Insight HK 50,000 (iii) The Group had 30% equity interest in CNI Bullion Limited at 31 March The term loan is unsecured, bears interest at 8% per annum and repayable on demand. (iii) 30% 8

18 19. PLEDGE OF ASSETS The Group has pledged its financial assets at fair value through profit or loss, which are 561,169,117 (30 September 2015: 738,561,777) to secure margin financing facilities obtained from regulated securities dealers ,169,117738,561, PENDING LITIGATION In HCA 1700/2011, since the legal representative of the Company filed the Defence on behalf of the Company in December 2011, for more than 4 years, the Plaintiff has not taken any further steps at all in respect of the proceedings. The said law suit involves a dishonoured cheque for the amount of 39,000,000 allegedly payable to the Plaintiff. It has always been the view of the Company s legal representative that the Plaintiff s claim is totally without ground. The Company has taken legal advice and has already given instructions to their legal representative to make an application to strike out the claim with costs, for (1) lack of merits of the claim, and (2) want of prosecution. 20. HCA ,000,000 (1)(2) Save as disclosed above, so far as the Board is aware, there are no litigation or arbitration proceedings made or threatened to be made against the Company, which would have a significant impact on the business or operations of the Company. No provision was made for the six months ended 31 March Interim Report 2015/16 中期報告 17

19 18 首都創投有限公司 CAPITAL VC LIMITED MANAGEMENT DISCUSSION AND ANALYSIS Financial Highlights For the six months ended 31 March 2016, the Group reported a negative turnover of approximately million (six months ended 31 December 2014: positive amount of million) and net loss attributable to equity holders of the Company of approximately million (six months ended 31 December 2014: profit of million). The changes in the Group s turnover and results are principally due to the unstable performance of listed securities held by the Group. The Group recorded a net loss on listed securities investment of approximately million in the six months ended 31 March 2016 (six months ended 31 December 2014: profit million). The result of CNI Bullion Limited shared to the Group changed from profit of approximately 2.5 million in the six months ended 31 December 2014 to loss of approximately 3.6 million in the Period. 199,700, ,300, ,800, ,600, ,500, ,400,000 2,500,000 3,600,000 As at 31 March 2016, the net asset value ( NAV ) of the Group was approximately 1,157.2 million (30 September 2015: 1,333.9 million), representing a decrease of approximately 13.2% over the Period. The NAV per share of the Group was (30 September 2015: ), which decreased by approximately 56.6% during the Period. In addition to the net loss attributable to equity holders of the Company of approximately million, the bonus issue on the basis of one bonus share for one share led to the decrease in the net asset value per share over the Period as well. 1,157,200,000 1,333,900, % % 176,800,000 Business Review and Prospect Following the stock market crash in late fiscal year 2014/15, the overall stock market in Hong Kong continued behaved unstable in the first half of fiscal year 2015/16. Hang Seng Index ( HSI ) experienced a sharp rebound in October 2015, rose from 20,846 as at the end of September 2015 to over 23,000 in October The lift-off, however, cannot sustain and HSI fell below 18,500 in February HSI eventually marked at 20,803 as at 31 March In such unstable market environment, the Group s listed securities performed not as good as previous years. Loss on listed investments of approximately million was recorded during the Period. 20,846 23,000 18,500 20, ,500,000

20 As mentioned in 2014/15 annual report of the Company, it was widely expected that, should economic performance in the US remain on track, the Federal Reserve would begin to remove excess liquidity gradually by tapering off Quantitative Easing sometime in near future. The Federal Reserve in December 2015 lifted rates for the first time in nearly a decade, but since then the US outlook has been clouded by a series of setbacks overseas. In their March meeting of 2016, the policymakers of the Federal Reserve halved their median forecast for the number of quarterpoint interest rate increases projected for this year to two. The pace of interest rate normalization is questioned. The price of gold twisted from the weak position in pervious years, and rose from around US$1,100 per ounce in September 2015 to over US$1,250 per ounce in March Even so, as the interest rate movement, together with the gold price, are difficult to predict, less transactions of bullion trading were recorded in the Period. As a result, a slight loss of 3.6 million was shared from the Group s associate CNI Bullion Limited during the Period. 1,100 1,250 3,600,000 Looking forward, we expect the investment environment in the US and other advance economies will be relatively stable. Anticipated mild and slow interest rate normalization will not cause significant influence of global investment market. In the East, as the China economy is maturing and a more sustainable development is desired, slower future growth levels are to be expected. The Directors will continue to adopt cautious measures to manage the Group s investment portfolio. Interim Report 2015/16 中期報告 19

21 20 首都創投有限公司 CAPITAL VC LIMITED LIQUIDITY, FINANCIAL RESOURCES, CHARGE ON ASSETS, GEARING, CAPITAL COMMITMENT AND CONTINGENT LIABILITIES There is no significant change in the Group s liquidity position over the Period and the Group s bank balances as at 31 March 2016 amounted to approximately million (As at 30 September 2015: approximately million). The Group s current ratio (as defined by current assets/current liabilities) maintained a satisfactory level of as at 31 March 2016 (30 September 2015: 5.6). The Board believes that the Group has sufficient resources to satisfy its working capital requirements. 195,500, ,500, During the Period, the Group maintained low level of gearing ratio (as defined by total liabilities/total assets) (31 March 2016: 1.6%; 30 September 2015: 18.3%), and the Group had no material commitment and contingent liabilities as at 31 March %18.3% FOREIGN CURRENCY FLUCTUATION The Group has a number of investment projects in the PRC and may be subject to a certain degree of investment return risk. In spite of this, the Board believes that foreign exchange risks are minimal as the Group mainly uses Hong Kong dollars to carry out its business transactions. SIGNIFICANT ACQUISITION AND DISPOSAL OF SUBSIDIARIES During the Period the Company does not have any significant acquisition and disposal of subsidiaries. HUMAN RESOURCES As at 31 March 2016, the Group had 5 employees, excluding the directors of the Company. Total staff costs excluding Directors remuneration amounted to approximately 0.9 million. They perform clerical, research, business development and administrative functions for the Group. The Group s remuneration policies are in line with the prevailing market practice and the staff remuneration is determined on the basis of the performance and experience of individual employees. 900,000

22 CAPITAL STRUCTURE During the six months ended 31 March 2016, the Company issued 158,536 shares at each per share and 140,243 shares at 0.41 each per share due to the exercise of warrants and 1,565,221,684 shares were issued to the shareholders on the basis of one bonus share for every then existing share as at the record date of 22 December The number of the Company s issued shares increased from 1,565,081,441 to 3,130,601,904 during the Period , ,243 1,565,221,684 1,565,081,4413,130,601,904 DIRECTORS AND CHIEF EXECUTIVES INTERESTS IN SECURITIES As at 31 March 2016, none of the Directors or the chief executive of the Company had or were deemed to have any Discloseable Interests or Short Position in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the Securities and Futures Ordinance ( SFO ) (including interests or short positions which they are taken or deemed to have under such provisions of the SFO), or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules. XV XV Interim Report 2015/16 中期報告 21

23 22 首都創投有限公司 CAPITAL VC LIMITED SUBSTANTIAL SHAREHOLDERS As at 31 March 2016, the parties (other than the directors and chief executive of the Company) which had interest or short position in the shares and underlying shares of the Company as recorded in the register required to be kept under section 336 of the SFO, or to be disclosed to the Company under provisions of Divisions 2 and 3 of Part XV of the SFO, were as follows: 336 XV23 Number of ordinary Shareholding Name shares held percentage Lung Chung Chi 407,980, % Save as disclosed above, the directors were not aware of any other person who had any interest or short position in the shares and underlying shares of the Company which would fall to be disclosed under Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company under section 336 of the SFO as at 31 March XV SHARE OPTION SCHEME Pursuant to an ordinary resolution passed by shareholders of the Company at the annual general meeting on 10 December 2013, the Company adopted a new share option scheme (the Scheme ). Under the Scheme, the directors of the Company may, at their absolute discretion, invite any employee (full-time or parttime), director, consultant or advisor of any member of the Group, or any substantial shareholder of any member of the Group, or any distributor, contractor, supplier, agent, customer, business partner or service provider of any member of the Group, or any company wholly owned by one or more persons belonging to any of the above classes to subscribe for shares in the Company representing up to a maximum of 10% of the shares in issue on date of the aforesaid annual general meeting. 10% During the Period, there was no share options were granted, cancelled, exercised or lapsed pursuant to the Scheme.

24 PURCHASE, REDEMPTION OR SALE OF LISTED SECURITIES OF THE COMPANY Neither the Company nor any of its subsidiaries repurchased, redeemed or sold any of the Company s listed securities during the six months ended 31 March AUDIT COMMITTEE The Audit Committee comprises three independent nonexecutive directors, namely, Mr. Lam Kwan, Mr. Ong Chi King and Mr. Lee Ming Gin with written terms of reference in compliance. The Audit Committee has reviewed with management the accounting principles and practices adopted by the Company, and discussed internal control and financial reporting matters including the review of the unaudited interim results for the six months ended 31 March DISCLOSURE OF DIRECTORS INFORMATION UNDER THE RULE 13.51B(1) OF THE LISTING RULES Mr. Chan Cheong Yee was appointed as an executive director of China Trends Holdings Limited (stock code: 8171), the shares of which are listed on the Growth Enterprise Market ( GEM ) of the Stock Exchange with effect from 14 February B(1) 8171 Mr. Ong Chi King was appointed as an executive director of Deson Construction International Holdings Limited (stock code: 8268), the shares of which are listed on GEM with effect from 21 December MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS The Company has adopted the Model Code for Securities Transactions by Directors of Listed Companies ( Model Code ) as set out in Appendix 10 to the Listing Rules. The Company has made specific enquiry to all directors regarding any non compliance with the Model Code during the Period and they all confirmed that they have fully complied with the required standard set out in the Model Code. 10 Interim Report 2015/16 中期報告 23

25 24 首都創投有限公司 CAPITAL VC LIMITED CODE OF CORPORATE GOVERNANCE PRACTICE During the Period, the Company has complied with the code provisions in the Code of Corporate Governance Practice (the CGP Code ) contained in Appendix 14 to the Listing Rules, except the deviations from the CGP Code as described below: 14 CGP Code provision A.2.1 stipulates that the roles of chairman and chief executive should be separate and should not be performed by the same person. Decisions of the Company are made collectively by the executive directors. The Board believes that this arrangement enables the Company to make and implement decisions promptly, and thus achieve the Company s objectives efficiently and effectively in response to the changing environment. The Board also believes that the Company already has a strong corporate governance structure in place to ensure effective oversight of management. A.2.1 CGP Code provision A.4.1 requires that non-executive directors should be appointed for a specific term and subject to reelection. Currently all non-executive directors, including independent nonexecutive directors, have no specific term of appointment but they are subject to retirement by rotation in accordance with the articles of association of the Company. As such, the Company considers that sufficient measures have been taken to serve the purpose of this code provision. A.4.1 Pursuant to CGP Code provision A.6.7, independent nonexecutive directors and other non-executive directors should attend general meetings. An Independent Non-executive Director could not attend the annual general meeting held on 3 February 2016 due to other business commitments. A.6.7 On behalf of the Board Chan Cheong Yee Executive Director Hong Kong, 10 May 2016

26 CAPITAL VC LIMITED 首都創投有限公司