Sing On Holdings Limited 成安控股有限公司 Incorporated in the Cayman Islands with limited liability) 於開曼群島註冊成立的有限公司) Stock Code 股份代號 1751 中期報告 2018 Interim Re

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1 Sing On Holdings Limited 成安控股有限公司 Incorporated in the Cayman Islands with limited liability) 於開曼群島註冊成立的有限公司) Stock Code 股份代號 1751 中期報告 2018 Interim Report

2 Contents 目錄 Corporate Information 公司 2 Financial Highlight 5 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income 6 Condensed Consolidated Statement of Financial Position Condensed Consolidated Statement of Changes in Equity 7 9 Condensed Consolidated Statement of Cash Flows 10 Notes to the Unaudited Condensed Consolidated Financial Statements 報 11 Management Discussion and Analysis 22 成安控股有限公司 二零一八年中期報告 1

3 Corporate Information 公司資料 BOARD OF DIRECTORS Executive Directors Mr. Cheung Shek On (Chairman and Chief Executive Officer) Mr. Chan Yuk Sing Non-Executive Director Mr. Kuan Hong Kin Daniel Independent Non-Executive Directors Mr. Chan Ngai Sang Kenny Mr. Chow Chun To Mr. Yam Chiu Fan Joseph AUDIT COMMITTEE Mr. Chow Chun To (Chairman) Mr. Chan Ngai Sang Kenny Mr. Yam Chiu Fan Joseph REMUNERATION COMMITTEE Mr. Chan Ngai Sang Kenny (Chairman) Mr. Cheung Shek On Mr. Chow Chun To NOMINATION COMMITTEE Mr. Cheung Shek On (Chairman) Mr. Chan Ngai Sang Kenny Mr. Chow Chun To AUTHORISED REPRESENTATIVES Mr. Cheung Shek On Mr. Chen Yeung Tak COMPANY SECRETARY Mr. Chen Yeung Tak 公司 2 Sing On Holdings Limited Interim Report 2018

4 Corporate Information 公司資料 HEADQUARTERS AND PRINCIPAL PLACE OF BUSINESS IN HONG KONG Flat B, G/F Fu Hop Factory Building 209 and 211 Wai Yip Street Kwun Tong, Kowloon Hong Kong CAYMAN ISLANDS PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE Estera Trust (Cayman) Limited Clifton House 75 Fort Street PO Box 1350 Grand Cayman KY Cayman Islands HONG KONG BRANCH SHARE REGISTRAR AND TRANSFER OFFICE Tricor Investor Services Limited Level 22, Hopewell Centre 183 Queen s Road East Hong Kong COMPLIANCE ADVISER Ample Capital Limited Unit A, 14/F Two Chinachem Plaza 135 Des Voeux Road Central Central, Hong Kong LEGAL ADVISER AS TO HONG KONG LAW David Fong & Co. Solicitors Unit A, 12th Floor, China Overseas Building 139 Hennessy Road Wanchai, Hong Kong B Estera Trust (Cayman) Limited Clifton House 75 Fort Street PO Box 1350 Grand Cayman KY Cayman Islands 有限公司 183 中 22 有限公司 中 中 期 14 A 139 中 12 A 成安控股有限公司 二零一八年中期報告 3

5 Corporate Information 公司資料 PRINCIPAL BANKERS Bank of China 1 Garden Road, Central Hong Kong OCBC Wing Hang Bank Limited 161 Queen s Road Central Hong Kong AUDITORS HLB Hodgson Impey Cheng Limited Certified Public Accountants 31/F, Gloucester Tower The Landmark 11 Pedder Street, Central Hong Kong WEBSITE STOCK CODE Sing On Holdings Limited Interim Report 2018

6 Financial Highlight 財務摘要 For the six months ended 30 June 2018, the operating results of the Group were as follows: Revenue amounted to approximately HK$87.8 million (2017: approximately HK$86.8 million), representing an increase of approximately 1.2% from the corresponding period of last year; Net profit amounted to approximately HK$10.3 million (2017: approximately HK$12.0 million), representing a decrease of approximately 14.2% from the corresponding period of last year; Basic and diluted earnings per share based on weighted average number of ordinary shares was approximately HK1.53 cents (2017: approximately HK1.79 cents); The Directors do not recommend the payment of an interim dividend for the six months ended 30 June 2018 (2017: Nil). 二零一八年 87.8 二零一 年 86.8 年 期 1.2% 10.3 二零一 年 12.0 年 期 14.2% 股 股 1.53 二零一 年 1.79 二零一八年 中期股 二零一 年 成安控股有限公司 二零一八年中期報告 5

7 INTERIM RESULTS The board (the Board ) of directors (the Directors ) of Sing On Holdings Limited ( the Company, together with subsidiaries of the Company, the Group ) is pleased to announce the unaudited condensed consolidated results of the Group for the six months ended 30 June 2018 (the Reporting Period ), together with the unaudited comparative figures for the corresponding period in 2017, as follows: Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended 30 June 2018 Six months ended 30 June Notes HK$ 000 HK$ 000 (Unaudited) (Unaudited) Revenue 3 87,793 86,752 Cost of sales (60,656) (59,810) Gross profit 27,137 26,942 Other income and net gains Administrative and other operating expenses (14,864) (11,995) Operating profit 12,354 14,997 Finance costs (104) Profit before income tax 12,354 14,893 Income tax expense 5 (2,065) (2,896) Profit and total comprehensive income for the period 10,289 11,997 Basic and diluted earnings per share HK cents HK cents Sing On Holdings Limited Interim Report 2018

8 Condensed Consolidated Statement of Financial Position 簡明綜合財務狀況表 As at 30 June 2018 於二零一八年六月三十日 30 June December 2017 二零一 年 二 一 Notes HK$ 000 HK$ 000 (Unaudited) (Audited) ASSETS Non-current assets Property, plant and equipment 17,480 15,020 Current assets Amounts due from customers for contract work 14,807 7,651 Trade and other receivables 8 73,358 65,101 Pledged bank deposit 10,040 10,014 Cash and bank balances 31,668 36, , ,170 Total assets 147, ,190 EQUITY Capital and reserves Share capital 股 6,720 6,720 Reserves 114, ,561 Total equity 121, ,281 成安控股有限公司 二零一八年中期報告 7

9 Condensed Consolidated Statement of Financial Position 簡明綜合財務狀況表 As at 30 June 2018 於二零一八年六月三十日 30 June December 2017 二零一 年十二月三十一日 Notes HK$ 000 HK$ 000 (Unaudited) (Audited) LIABILITIES Non-current liabilities Liabilities for long service payments Deferred taxation 1,532 1,620 2,407 2,341 Current liabilities Trade and other payables 9 19,669 19,014 Amounts due to directors Tax payable 3,685 1,532 23,376 20,568 Total liabilities 25,783 22,909 Total equity and liabilities 147, ,190 Net current assets 106,497 98,602 Total assets less current liabilities 123, ,622 8 Sing On Holdings Limited Interim Report 2018

10 Condensed Consolidated Statement of Changes in Equity 簡明綜合權益變動表 For the six months ended 30 June 2018 截至二零一八年六月三十日止六個月 Attributable to owners of the Company Share capital Share premium Merger reserve Retained earnings Total equity 合 權益 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Balance at 1 January 2017 二零一 年一 一 6,720 44,658 16,313 18,567 86,258 Profit and total comprehensive 期 income for the period 11,997 11,997 Balance at 30 June 2017 (unaudited) 二零一 年 6,720 44,658 16,313 30,564 98,255 Balance at 1 January 2018 二零一八年一 一 6,720 44,658 16,313 43, ,281 Profit and total comprehensive 期 income for the period 10,289 10,289 Balance at 30 June 2018 (unaudited) 6,720 44,658 16,313 53, ,570 成安控股有限公司 二零一八年中期報告 9

11 Condensed Consolidated Statement of Cash Flows 簡明綜合現金流量表 For the six months ended 30 June 2018 截至二零一八年六月三十日止六個月 Six months ended 30 June 二零一 年 HK$ 000 HK$ 000 (Unaudited) (Unaudited) Net cash generated from/ (used in) operating activities Net cash used in investing activities Net cash used in financing activities Net decrease in cash and cash equivalents 現金 393 (2,619) 現金 (5,129) (4,715) 現金 (4,114) 現金 現金 (4,736) (11,448) Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period 現金 現金 現金 現金 36,404 60,828 31,668 49, Sing On Holdings Limited Interim Report 2018

12 Notes to the Unaudited Condensed Consolidated Financial Statements 未經審核簡明綜合財務報表附註 For the six months ended 30 June 2018 截至二零一八年六月三十日止六個月 1 GENERAL INFORMATION The Company was incorporated in the Cayman Islands on 5 January 2015 as an exempted company with limited liability under the Companies Law of the Cayman Islands and its shares were listed on the GEM of The Stock Exchange of Hong Kong Limited (the Stock Exchange ) (the Listing ) on 16 December 2016 (the Listing Date ). The Company transferred its listing of shares to the Main Board of the Stock Exchange (the Main Board ) (the Transfer of Listing ) with effect from 12 June 2018 (the Date of Transfer of Listing ). The address of the Company s registered office is Clifton House, 75 Fort Street, PO Box 1350, Grand Cayman, KY1-1108, Cayman Islands and the Company s principal place of business is Flat B, G/F, Fu Hop Factory Building, 209 and 211 Wai Yip Street, Kwun Tong, Kowloon, Hong Kong. The Company is an investment holding company. The Group is principally engaged in the provision of concrete demolition services in Hong Kong and Macau mainly as a subcontractor. Pursuant to the reorganisation of the Group (the Reorganisation ) in connection with the Listing, the Company became the ultimate holding company of the companies now comprising the Group on 22 November Details of the Reorganisation are set out in the prospectus of the Company dated 29 November 2016 (the Prospectus ). 1 公司 二零一 年一 公司 成 有限公司 股 二零一 年 二 期 有限公司 GEM 二零一八年 二 期 公司 股 公司 Clifton House, 75 Fort Street, PO Box 1350, Grand Cayman, KY1-1108, Cayman Islands 公司 B 公司 控股公司 公司 二零一 年 一 二 二 成 公司 控股公司 公司 期 二零一 年 一 二 股 股 成安控股有限公司 二零一八年中期報告 11

13 Notes to the Unaudited Condensed Consolidated Financial Statements 未經審核簡明綜合財務報表附註 For the six months ended 30 June 2018 截至二零一八年六月三十日止六個月 2 BASIS OF PREPARATION The unaudited condensed consolidated financial statements for the six months ended 30 June 2018 of the Company have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards ( HKFRSs ) issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ). In addition, the unaudited condensed consolidated financial statements include applicable disclosures required by the Rules Governing the Listing of Securities on the Main Board of the Stock Exchange (the Listing Rules ) and by the Hong Kong Companies Ordinance. The accounting policies and basis of preparation adopted in the preparation of the unaudited condensed consolidated financial statements for the six months ended 30 June 2018 are consistent with those adopted in the annual financial statements of the Company for the year ended 31 December 2017, except for the adoption of the new and revised HKFRSs. Amendments to HKFRSs effective for accounting period beginning on or after 1 January 2018 do not have a material impact on the Group. The unaudited condensed consolidated financial statements should be read in conjunction with the Group s audited consolidated financial statements for the year ended 31 December 截至二零一八年六月三十日止六個月 截至二零一八年六月三十日止六個月 截至二零一 年十二月三十一日止年 年 一 二零一八年一月一日 截至二零一 年十二月三十一日止年 一 12 Sing On Holdings Limited Interim Report 2018

14 Notes to the Unaudited Condensed Consolidated Financial Statements 未經審核簡明綜合財務報表附註 For the six months ended 30 June 2018 截至二零一八年六月三十日止六個月 2 BASIS OF PREPARATION (CONTINUED) The unaudited condensed consolidated financial statements for the six months ended 30 June 2018 have not been audited by the Company s independent auditors, but have been reviewed by the Company s audit committee. The unaudited condensed consolidated financial statements for the six months ended 30 June 2018 are presented in Hong Kong dollars ( HK$ ), which is the same functional currency of the Company. 3 REVENUE Revenue and other income and net gains recognised during the period are as follows: 2 3 二零一八年 報 公司 公司 二零一八年 報 公司 期 Revenue Provision of concrete demolition services Six months ended 30 June 二零一 年 HK$ 000 HK$ 000 (Unaudited) (Unaudited) 未經審核 87,793 86,752 Other income and net gains Sundry income Gain on disposal of property, plant and equipment 成安控股有限公司 二零一八年中期報告 13

15 Notes to the Unaudited Condensed Consolidated Financial Statements 未經審核簡明綜合財務報表附註 For the six months ended 30 June 2018 截至二零一八年六月三十日止六個月 3 REVENUE (CONTINUED) The chief operating decision-maker has been identified as the board of the Company. The Board regards the Group s business as a single operating segment and reviews the consolidated financial statements accordingly. Geographical information The Group primarily operates in Hong Kong and Macau, and its revenue is derived from the following regions: 3 一 Six months ended 30 June 二零一 年 HK$ 000 HK$ 000 (Unaudited) (Unaudited) 未經審核 Revenue (by location of customers) Hong Kong 87,201 85,739 Macau 592 1,013 87,793 86,752 All of the Group s non-current assets are located in Hong Kong for both periods. 個 14 Sing On Holdings Limited Interim Report 2018

16 Notes to the Unaudited Condensed Consolidated Financial Statements 未經審核簡明綜合財務報表附註 For the six months ended 30 June 2018 截至二零一八年六月三十日止六個月 4 OPERATING PROFIT An analysis of the amounts presented as operating items charged/(credited) in the financial information is given below: 4 經 Six months ended 30 June 二零一 年 HK$ 000 HK$ 000 (Unaudited) (Unaudited) 未經審核 Staff cost, including directors 成 remuneration 19,394 22,633 Depreciation of owned assets 有 3,059 1,820 Depreciation of assets under finance lease 173 Gain on disposal of property, plant and equipment (39) 成安控股有限公司 二零一八年中期報告 15

17 Notes to the Unaudited Condensed Consolidated Financial Statements 未經審核簡明綜合財務報表附註 For the six months ended 30 June 2018 截至二零一八年六月三十日止六個月 5 INCOME TAX EXPENSE For the six months ended 30 June 2018 and 2017, Hong Kong profits tax has been provided at the rate of 16.5% on the estimated assessable profit arising in or derived from the jurisdictions in which the entities operate for the period. 5 截至二零一八年 二零一 年六月三十日止六個月 16.5% Six months ended 30 June 二零一 年 HK$ 000 HK$ 000 (Unaudited) (Unaudited) 未經審核 Current tax Hong Kong 2,153 1,860 Prior year tax Hong Kong 378 Deferred tax (88) 658 Income tax expense 2,065 2,896 6 DIVIDEND The Board does not recommend the payment of dividend for the six months ended 30 June 2018 (2017: Nil). 6 截至二零一八年六月三十日止六個月 二零一 年 16 Sing On Holdings Limited Interim Report 2018

18 Notes to the Unaudited Condensed Consolidated Financial Statements 未經審核簡明綜合財務報表附註 For the six months ended 30 June 2018 截至二零一八年六月三十日止六個月 7 EARNINGS PER SHARE 7 Six months ended 30 June 二零一 年 (Unaudited) (Unaudited) 未經審核 Profit attributable to owners of the Company (HK$ 000) 公司 有 10,289 11,997 Weighted average number of ordinary shares for the purpose of calculating basic earnings per share (in thousand) Basic earnings per share (HK cents) 股 股 股 股 672, , The diluted earnings per share is equal to the basic earnings per share as there were no dilutive potential ordinary share in issue during the six months ended 30 June 2018 (2017: Nil). 二零一八年 股 二零一 年 股 股 成安控股有限公司 二零一八年中期報告 17

19 Notes to the Unaudited Condensed Consolidated Financial Statements 未經審核簡明綜合財務報表附註 For the six months ended 30 June 2018 截至二零一八年六月三十日止六個月 8 TRADE AND OTHER RECEIVABLES 8 At 30 June 2018 HK$ 000 (Unaudited) 未經審核 At 31 December 2017 二零一 年十二月三十一日 HK$ 000 (Audited) Contract receivables 44,564 40,094 Retention receivables 20,396 18,264 Total trade receivables 64,960 58,358 Other receivables, deposits and prepayments 8,398 6,743 73,358 65,101 Notes: (a) Trade receivables are past due when a counterparty has failed to make a payment when contractually due. The credit period granted to customers is 14 to 60 days generally. Trade receivables are denominated in HK$. (a) 14 至 60 日 (b) The ageing analysis of the contract receivables based on invoice date is as follows: (b) 日 At 30 June 2018 HK$ 000 (Unaudited) 未經審核 At 31 December 2017 二零一 年十二月三十一日 HK$ 000 (Audited) 0 30 days 0 至 30 日 15,764 13, days 31 至 60 日 4,560 8, days 61 至 90 日 10,582 8, days 91 至 365 日 12,699 8,496 Over 365 days 365 日 ,564 40, Sing On Holdings Limited Interim Report 2018

20 Notes to the Unaudited Condensed Consolidated Financial Statements 未經審核簡明綜合財務報表附註 For the six months ended 30 June 2018 截至二零一八年六月三十日止六個月 8 TRADE AND OTHER RECEIVABLES (CONTINUED) Notes: (Continued) 8 (b) (Continued) (b) Contract receivables of approximately HK$28,591,000 (31 December 2017: HK$23,509,000) as at 30 June 2018 were past due but not impaired. These relate to trade receivables from a number of independent customers of whom there is no recent history of default and no provision has therefore been made. 二零一八年 28,591,000 二零一 年 二 一 23,509,000 期 期 有 At 30 June 2018 HK$ 000 (Unaudited) 未經審核 At 31 December 2017 二零一 年 二 一 HK$ 000 (Audited) 0 30 days ,464 7, days ,326 8, days ,119 2, days ,829 5,361 Over 365 days ,591 23,509 Retention receivables were not yet past due as at 30 June 2018, and were settled in accordance with the terms of respective contract. 二零一八年 期 (c) The other classes within trade and other receivables do not contain impaired assets. The Group does not hold any collateral as security. (c) 有 成安控股有限公司 二零一八年中期報告 19

21 Notes to the Unaudited Condensed Consolidated Financial Statements 未經審核簡明綜合財務報表附註 For the six months ended 30 June 2018 截至二零一八年六月三十日止六個月 9 TRADE AND OTHER PAYABLES 9 At 30 June 2018 HK$ 000 (Unaudited) 未經審核 At 31 December 2017 二零一 年十二月三十一日 HK$ 000 (Audited) Trade payables 13,871 11,514 Accruals and other payables 5,798 7,500 19,669 19,014 Notes: (a) Payment terms granted by suppliers are generally 15 to 90 days from the invoice date of the relevant purchases. However, the majority of credit terms granted are 30 days. (a) 日 15 至 90 日 30 日 The ageing analysis of trade payables based on the invoice date is as follows: 日 At 30 June 2018 HK$ 000 (Unaudited) 未經審核 At 31 December 2017 二零一 年十二月三十一日 HK$ 000 (Audited) 0 30 days 0 至 30 日 2,590 4, days 31 至 60 日 385 2, days 61 至 90 日 1, Over 90 days 90 日 8,916 3,185 13,871 11,514 (b) All trade and other payables are denominated in HK$. (b) 20 Sing On Holdings Limited Interim Report 2018

22 Notes to the Unaudited Condensed Consolidated Financial Statements 未經審核簡明綜合財務報表附註 For the six months ended 30 June 2018 截至二零一八年六月三十日止六個月 10 EVENTS AFTER THE END OF REPORTING PERIOD Pursuant to a special resolution passed at the extraordinary general meeting of the Company held on 22 August 2018, the Shareholders have approved to change the English name of the Company from Sing On Holdings Limited to Kingland Group Holdings Limited and the change of the dual foreign name in Chinese of the Company from 成安控股有限公司 to 控股有限公司 (the Change of Company Name ). The Company will update in relation to the Change of Company Name in due course. 10 報 公司 二零一八年八 二 二 股 股 公司 Sing On Holdings Limited Kingland Group Holdings Limited 公司 中 成安控股有限公司 控股有限公司 公司 公司 公司 成安控股有限公司 二零一八年中期報告 21

23 Management Discussion and Analysis 管理層討論與分析 BUSINESS REVIEW AND OUTLOOK The Group s principal activity is the provision of concrete demolition service in Hong Kong and Macau mainly as a subcontractor. Our services are mainly required in the removal of pieces or sections of concrete from concrete structures and the demolition of the entire concrete structures or buildings by applying a variety of methods, such as core drilling, sawing and crushing. Our services are required in many different situations including, among others, addition and alteration works and redevelopment projects in buildings, roads, tunnels and underground facilities. We have been operating in the concrete demolition industry in Hong Kong since We have also been providing concrete demolition services in Macau since We are a registered subcontractor for general demolition and others (concrete coring and saw cutting) works under the Subcontractor Registration Scheme of the Construction Industry Council and a Registered Minor Works Contractor at the Buildings Department. In general, our customers are main contractors in various types of construction and civil engineering projects in Hong Kong and construction projects in Macau. We undertake jobs in both public and private sectors. Public sector jobs refer to jobs which the main contractors are employed by the Hong Kong Government, the Macau Government or their respective related organisations or corporations, while private sector jobs refer to jobs that are not public sector jobs. 22 Sing On Holdings Limited Interim Report 2018

24 Management Discussion and Analysis 管理層討論與分析 BUSINESS REVIEW AND OUTLOOK (CONTINUED) Looking forward, the Directors consider that the future opportunities and challenges facing the Group will continue to be affected by the development of the policies of the Hong Kong Government as well as factors affecting the labour costs and material costs. According to the Budget of the Hong Kong Government, the Hong Kong Government will invest about HK$86.0 billion on infrastructure between 2017 and The amount was mainly derived from infrastructure investments especially for transportation and plans for increasing both land and housing. The Directors believe that the availability of private and public sector construction projects is expected to grow in the coming years, and with our experienced management team and reputation in the market, we can further strengthen our position as an established concrete demolition service provider by continuing to pursue the business strategies as set out in the Prospectus. FINANCIAL REVIEW During the Reporting Period, all of our Group s revenue was derived from concrete demolition business in Hong Kong and Macau. The Group s revenue for the Reporting Period was approximately HK$87.8 million, representing an increase of approximately 1.2% from approximately HK$86.8 million for the six months ended 30 June Such increase was mainly due to the relatively large scale jobs undertaken during the Reporting Period. 成 成 二零一 二零一八年 二零一 年 二零一八年 860 公 年有 股 一 報告期 有 報告期 87.8 二零一 年 % 有 報告期 成安控股有限公司 二零一八年中期報告 23

25 Management Discussion and Analysis 管理層討論與分析 FINANCIAL REVIEW (CONTINUED) Our Group s gross profit increased from approximately HK$26.9 million for the six months ended 30 June 2017 to approximately HK$27.1 million for the Reporting Period, and the gross profit margin for our Group decreased from approximately 31.0% for the six months ended 30 June 2017 to approximately 30.9% for the Reporting Period, which remained relatively stable. Administrative expenses increased by HK$2.9 million (representing an increase of approximately 24.2%) to HK$14.9 million for the Reporting Period, compared with HK$12.0 million for the six months ended 30 June 2017, which mainly due to the increase in legal and other professional fees for the Transfer of Listing amounted to approximately HK$1.9 million. Net profit decreased by HK$1.7 million to approximately HK$10.3 million in the Reporting Period compared to HK$12.0 million in the six months ended 30 June 2017 (representing a decrease of approximately 14.2%). By excluding the aforementioned non-recurring legal and other professional fees, the Group s profits attributable to owners of the Company for the Reporting Period would be approximately HK$12.2 million, which represented an increase of approximately HK$0.2 million or 1.7% when comparing with the six months ended 30 June Such increase was in line with the increase in revenue during the Reporting Period %30.9% %) %) % Sing On Holdings Limited Interim Report 2018

26 Management Discussion and Analysis 管理層討論與分析 FINANCIAL REVIEW (CONTINUED) Liquidity, financial resources and capital structure As at 30 June 2018, the Group s current ratio was approximately 5.6 compared to approximately 5.8 at 31 December The Group had total assets of approximately HK$147.4 million, which is financed by total liabilities and shareholders equity of approximately HK$25.8 million and HK$121.6 million, respectively. As at 30 June 2018, the Group had cash and bank balances of approximately HK$23.7 million (31 December 2017: approximately HK$36.4 million). The gearing ratio is calculated based on the total loans and borrowings divided by total equity as at the respective reporting date. As at 30 June 2018, the Group did not have any loans and borrowings (31 December 2017: Nil), as the Group had settled all finance lease liabilities after the Listing. The shares of the Company were successfully transferred from the GEM to the Main Board of the Stock Exchange on 12 June There has been no change in the capital structure of the Group during the Reporting Period. The share capital of the Group only comprises of ordinary shares. As at 30 June 2018, the Company s issued share capital was HK$6,720,000 and the number of its issued ordinary shares was 672,000,000 of HK$0.01 each. Capital commitments As at 30 June 2018, there were no significant capital commitments for the Group (31 December 2017: approximately HK$2.8 million). 二零一八年 5.6 二零一 年 二 一 股 二零一八年 23.7 二零一 年 二 一 36.4 報告 二零一八年 二零一 年 二 一 有 公司股 二零一八年 二 成 GEM 報告期 股 股 成 二零一八年 公司 股 6,720,000 股 672,000,000 股 股 0.01 二零一八年 二零一 年 二 一 2.8 成安控股有限公司 二零一八年中期報告 25

27 Management Discussion and Analysis 管理層討論與分析 COMPARISON OF BUSINESS OBJECTIVES WITH ACTUAL BUSINESS PROGRESS An analysis comparing the business objectives as set out in the Prospectus with the Group s actual business progress for the period from the Listing Date to 30 June 2018 is set out below: 與 Objectives Further enhancing our machineries Further strengthening our manpower Implementation Plan up to 30 June 2018 To purchase two sets of forklift, one set of loader, two motor vehicles and one set of remote controlled demolition robots To carry out recruitment including one project manager, one engineer, one safety officer, one site agent, one mechanic staff and one office staff To monitor and evaluate the performance of the new recruits Actual business progress up to 30 June 2018 Three sets of forklift, four motor vehicles and one set of remote controlled electrohydraulically demolition robot have been purchased A project manager, engineers, a team of site agents and operators (in which one of them has completed the construction safety supervisor course organised by the Construction Industry Council), a mechanic staff and office staffs have been recruited Appraisal is made to new recruits after probation period 26 Sing On Holdings Limited Interim Report 2018

28 Management Discussion and Analysis 管理層討論與分析 COMPARISON OF BUSINESS OBJECTIVES WITH ACTUAL BUSINESS PROGRESS (CONTINUED) 與 Objectives Leasing an additional warehouse Reserving more capital to satisfy our potential customers requirement for performance bond Settlement of finance lease liabilities Implementation Plan up to 30 June 2018 To carry out preparatory work, including but not limited to site visits and conducting negotiation with relevant landlord and/or estate agent, and enter into tenancy agreement for the warehouse 限 To finance the deposit required for securing performance bond following the award of jobs to us 中 有 To repay certain finance leases in an one-off manner Actual business progress up to 30 June 2018 Two additional warehouses have been rented A pledged deposit of approximately HK$10 million has been reserved to satisfy our potential customers requirement for performance bond 10 Finance lease liabilities amounted to HK$4.0 million has been settled and approximately HK$104,000 interest has been paid 一 ,000 成安控股有限公司 二零一八年中期報告 27

29 Management Discussion and Analysis 管理層討論與分析 USE OF PROCEEDS AND COMPARISON OF BUSINESS OBJECTIVES WITH ACTUAL BUSINESS PROGRESS The net proceeds from the Listing on the Listing Date was approximately HK$33.1 million, after deducting listing related expenses. The actual net proceeds from the Listing was different from the estimated net proceeds of approximately HK$25.0 million as set out in the Prospectus and approximately HK$34.1 million as set out in the announcement of the Company in relation to the allotment result dated 14 December 2016 (the Allotment Result Announcement ). The Group adjusted the use of proceeds in the same manner and in the same proportion as shown in the Allotment Result Announcement, which is (i) approximately 29.2% of the net proceeds, representing approximately HK$9.7 million for further enhancing our machineries, (ii) approximately 29.7% of the net proceeds, representing approximately HK$9.8 million for further strengthening our manpower, (iii) approximately 6.3% of the net proceeds, representing approximately HK$2.1 million for leasing an additional warehouse, (iv) approximately 22.5% of the net proceeds, representing approximately HK$7.4 million for reserving more capital to satisfy our potential customers requirements for performance bond, (v) approximately 10.6% of the net proceeds, representing HK$3.5 million for settlement of finance lease liabilities, and (vi) approximately 1.7% of the net proceeds, representing HK$0.6 million for working capital. 與 (i) 29.2% 9.7 (ii) 29.7% 9.8 (iii) 6.3% 2.1 (iv) 22.5% 7.4 (v) 10.6% 3.5 (vi) 1.7% Sing On Holdings Limited Interim Report 2018

30 Management Discussion and Analysis 管理層討論與分析 USE OF PROCEEDS AND COMPARISON OF BUSINESS OBJECTIVES WITH ACTUAL BUSINESS PROGRESS (CONTINUED) An analysis of the utilisation of the net proceeds from the Listing Date up to 30 June 2018 is set out below: 與 期 二零一八年 Adjusted use of proceeds in the same manner as stated in the Prospectus Planned use of net proceeds as stated in the Prospectus up to 30 June 2018 Actual use of net proceeds up to 30 June 2018 HK$ million HK$ million HK$ million Further enhancing our machineries 一 Further strengthening our manpower 一 Leasing an additional warehouse Reserving more capital to satisfy our potential customers requirement for performance bond Settlement of finance lease liabilities Working capital 成安控股有限公司 二零一八年中期報告 29

31 Management Discussion and Analysis 管理層討論與分析 Significant investments, material acquisitions or disposals of subsidiaries and associated companies Save as disclosed herein, there was no significant investment, material acquisition and disposal of subsidiaries and associated companies by the Company during the Reporting Period. There was no specific plan for material investments or capital assets as at 30 June Foreign Exchange Exposure Since the Group generated most of the revenue and incurred most of the costs in Hong Kong dollars for the Reporting Period, there was no significant exposure to foreign exchange rate fluctuations and the Group had not maintained any hedging policy against the foreign currency risk. Charge over the Group s assets A pledged deposit of approximately HK$10 million has been reserved to satisfy our potential customers requirement for performance bond. Contingent Liabilities As at 30 June 2018, the Group did not have any significant contingent liabilities (31 December 2017: Nil) Sing On Holdings Limited Interim Report 2018

32 Management Discussion and Analysis 管理層討論與分析 Employees and emolument policies The Group has 103 full-time employees as at 30 June 2018 (31 December 2017: 112 full-time employees). The staff costs, including Directors emoluments, of the Group were approximately HK$19.4 million for the Reporting Period as compared to HK$22.6 million for the six months ended 30 June The remuneration committee of the Company (the Remuneration Committee ) will review and determine the remuneration and compensation packages of the Directors with reference to their responsibilities, workload, time devoted to the Group and the performance of the Group. The Directors and other employees who have made valuable contribution to the Group may also receive options to be granted under the share option scheme of the Company adopted on 22 November 2016 (the Share Option Scheme ). 二零一八年 有 103 二零一 年 二 一 112 報告期 成 19.4 二零一 年 成 22.6 公司 報 公司 二零一 年 一 二 二 股 股 股 成安控股有限公司 二零一八年中期報告 31

33 Management Discussion and Analysis 管理層討論與分析 DISCLOSURE OF INTERESTS Directors and Chief Executives Interest and Short Position in Shares, Underlying Shares and Debentures As at 30 June 2018, the interests and short positions of the Directors and chief executives of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of Securities and Futures Ordinance ( SFO )) which were notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO), or which were recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules (the Model Code ), to be notified to the Company and the Stock Exchange, were as follows: XV XV (i) Long positions in ordinary shares of the Company (i) Name of director Nature of interest Number of shares held/ interested in Percentage of shareholding 分 Mr. Cheung Shek On Mr. Chan Yuk Sing Interest in a controlled corporation (Note 1) 1 Interest in a controlled corporation (Note 2) 2 189,000, % 189,000, % 32 Sing On Holdings Limited Interim Report 2018

34 Management Discussion and Analysis 管理層討論與分析 DISCLOSURE OF INTERESTS (CONTINUED) Directors and Chief Executives Interest and Short Position in Shares, Underlying Shares and Debentures (Continued) (i) Long positions in ordinary shares of the Company (Continued) (i) Notes: 1. Mr. Cheung Shek On ( Mr. Cheung ) beneficially owns 100% of the issued share capital of Sino Continent Holdings Limited ( Sino Continent ) which in turn owns 189,000,000 ordinary shares of the Company. By virtue of the SFO, Mr. Cheung is deemed to be interested in the same number of the shares of the Company held by Sino Continent. 1. 安 有 Sino Continent Holdings Limited Sino Continent 股 Sino Continent 有 189,000,000 股 公司 股 期 有 Sino Continent 有 公司 股 中 2. Mr. Chan Yuk Sing ( Mr. Chan ) beneficially owns 100% of the issued share capital of Supreme Voyage Limited ( Supreme Voyage ) which in turn owns 189,000,000 ordinary shares of the Company. By virtue of the SFO, Mr. Chan is deemed to be interested in the same number of the shares of the Company held by Supreme Voyage. 2. 成 有 Supreme Voyage Limited Supreme Voyage 股 Supreme Voyage 有 189,000,000 股 公司 股 期 有 Supreme Voyage 有 公司 股 中 (ii) Short positions in ordinary shares of the Company (ii) Save as disclosed above, as at 30 June 2018, there is no interests or short positions of the Directors and chief executives of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of SFO). 二零一八年 公司 公司 期 XV 股 股 中 有 成安控股有限公司 二零一八年中期報告 33

35 Management Discussion and Analysis 管理層討論與分析 SUBSTANTIAL SHAREHOLDERS INTERESTS AND SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY So far as the Directors are aware, as at 30 June 2018, other than the director and chief executive of the Company, the following persons/entities have an interest or a short position in the shares or the underlying shares of the Company as recorded in the register of the Company required to be kept under section 336 of the SFO: 336 (i) Long positions in ordinary shares of the Company: (i) Name of shareholder Nature of interest Number of shares held/ interested in Long/short position Percentage of shareholding 分 Sino Continent Beneficial owner 189,000,000 Long % Sino Continent Supreme Voyage Beneficial owner 189,000,000 Long % Supreme Voyage Applewood Developments Limited Beneficial owner 126,000,000 Long 18.75% Applewood Developments Limited Ms. Luk Pui Kei Peggy Interest of spouse (Note 1) 189,000,000 Long % 1 Ms. Cho Bik Nung Interest of spouse (Note 2) 189,000,000 Long % 2 Mr. Kwok Shun Tim Interest in a controlled 126,000,000 Long 18.75% corporation (Note 3) 3 Ms. Yip Nga Wan Interest of spouse (Note 4) 126,000,000 Long 18.75% 4 34 Sing On Holdings Limited Interim Report 2018

36 Management Discussion and Analysis 管理層討論與分析 SUBSTANTIAL SHAREHOLDERS INTERESTS AND SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY (CONTINUED) (i) Long positions in ordinary shares of the Company: (Continued) (i) Notes: 1. Ms. Luk Pui Kei Peggy, the spouse of Mr. Cheung, is deemed under the SFO to be interested in all the shares of the Company in which Mr. Cheung is deemed to be interested. 1. 期 有 有 公司股 中 2. Ms. Cho Bik Nung, the spouse of Mr. Chan, is deemed under the SFO to be interested in all the shares of the Company in which Mr. Chan is deemed to be interested. 2. 期 有 有 公司股 中 3. Mr. Kwok beneficially owns 100% of the issued share capital of Applewood Developments Limited ( Applewood Developments ). By virtue of the SFO, Mr. Kwok is deemed to be interested in the same number of the shares of the Company held by Applewood Developments. 3. 有 Applewood Developments Limited Applewood Developments 股 期 有 Applewood Developments 有 公司 股 中 4. Ms. Yip Nga Wan, the spouse of Mr. Kwok, is deemed under the SFO to be interested in all the shares of the Company in which Mr. Kwok is deemed to be interested. 4. 期 有 有 公司股 中 (ii) Short positions in shares of the Company: (ii) Save as disclosed above, as at 30 June 2018, the Directors are not aware of any other persons/entities who had, or were deemed or taken to have any interests or short position in any shares or underlying shares of the Company as recorded in the register required to be kept under section 336 of the SFO. 二零一八年 公司股 股 中 有 有 期 336 成安控股有限公司 二零一八年中期報告 35

37 Management Discussion and Analysis 管理層討論與分析 COMPETING INTERESTS The Directors are not aware of any business or interest of the Directors nor the controlling shareholder of the Company nor any of their respective associates (as defined in the Listing Rules) that compete or may compete with the business of the Group and any other conflicts of interest which any such person has or may have with the Group during the Reporting Period. INTEREST OF COMPLIANCE ADVISOR As at 30 June 2018, as notified by the Company s compliance advisor, Ample Capital Limited (the Compliance Advisor ), except for the compliance advisor agreement entered into between the Company and the Compliance Advisor dated 23 November 2016, neither the Compliance Advisor nor its directors, employees or its close associates (as defined under the Listing Rules) had any interests in relation to the Company which is required to be notified to the Company. PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES OF THE COMPANY Neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company s listed securities during the Reporting Period. 36 Sing On Holdings Limited Interim Report 2018

38 Management Discussion and Analysis 管理層討論與分析 CORPORATE GOVERNANCE PRACTICE The Company has applied the principles and code provisions in the Corporate Governance Code and Corporate Governance Report (the Code ) as set out in Appendix 15 to the Rules Governing the Listing of Securities on GEM of the Stock Exchange (the GEM Listing Rules ) and Appendix 14 to the Listing Rules. In the opinion of the Board, the Company has complied with the Code during the Reporting Period except the following deviation: Provision A.2.1 of the Code stipulates that the roles of chairman and chief executive should be separate and should not be performed by the same individual. Mr. Cheung Shek On is the Chairman and the chief executive officer of our Company. In view that Mr. Cheung has been operating and managing our Group since our establishment, our Board believes that it is in the best interest of our Group to have Mr. Cheung taking up both roles for effective management and business development. In addition, major decisions are made after consultation with the Board and appropriate Board committees, as well as senior management. The Board is therefore of the view that there are adequate safeguards in place to ensure the balance of power and authority within the Company. CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS The Company has adopted the required standard of dealings set out in Rules 5.48 to 5.67 of the GEM Listing Rules and the Model Code as set out in Appendix 10 to the Listing Rules as the code of conduct regarding securities transactions by the Directors (the Code of Conduct ) in respect of the shares of the Company. The Company has made specific enquiry to all Directors, and all Directors have confirmed that they have fully complied with the required standard of dealings set out in the Code of Conduct during the Reporting Period. 管 公司 GEM GEM 報告 公司 報告期 一 A.2.1 一 安 公司 成 一 有 公司 限 公司 GEM 公司股 公司 有 報告期 一 成安控股有限公司 二零一八年中期報告 37

39 Management Discussion and Analysis 管理層討論與分析 DIVIDENDS The Board did not recommend payment of interim dividend to shareholders of the Company for the Reporting Period (2017: Nil). SHARE OPTION SCHEME The Company has adopted the Share Option Scheme on 22 November The principal terms of the Share Option Scheme is summarised in Appendix IV to the Prospectus. The Share Option Scheme will remain valid and effective following the Transfer of Listing and will be implemented in full with the requirements under Chapter 17 of the Listing Rules. No share option has been granted, exercised, cancelled or lapsed under the Share Option Scheme since the adoption of the Share Option Scheme and there was no share option outstanding as at 30 June AUDIT COMMITTEE The Company has established an audit committee (the Audit Committee ) on 22 November 2016 with its written terms of reference in compliance with paragraphs C3.3 and C3.7 of the Code. The primary duties of the Audit Committee are to review and supervise the financial reporting process and internal control system of the Group, nominate and monitor external auditors and to provide advices and comments to the Board on matters related to corporate governance. The Audit Committee consists of three members, namely Mr. Chow Chun To, Mr. Chan Ngai Sang Kenny and Mr. Yam Chiu Fan Joseph, all being independent non-executive Directors. The Audit Committee has reviewed the unaudited condensed consolidated financial statements of the Group for the Reporting Period. 17 C3.3 C Sing On Holdings Limited Interim Report 2018

40 Management Discussion and Analysis 管理層討論與分析 CHANGE IN DIRECTORS INFORMATION Change in the information of the Directors of the Company, since the disclosure made in 2017 annual report of the Company, that are required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules is set out below: Changes in Directors emoluments With effect from 1 September 2018, the salaries, allowances and benefits in kind of Mr. Cheung Shek On, the executive Director, has been increased from HK$1,716,000 per annum to HK$2,436,000 per annum. With effect from 1 September 2018, the salaries, allowances and benefits in kind of Mr. Chan Yuk Sing, the executive Director, has been increased from HK$1,680,000 per annum to HK$2,400,000 per annum. With effect from 1 September 2018, the fee of Mr. Kuan Hong Kin Daniel, the non-executive Director, has been increased from HK$180,000 per annum to HK$204,000 per annum. With effect from 1 September 2018, the fee of Mr. Chan Ngai Sang Kenny, the independent non-executive Director, has been increased from HK$216,000 per annum to HK$240,000 per annum. With effect from 1 September 2018, the fee of Mr. Chow Chun To, the independent nonexecutive Director, has been increased from HK$216,000 per annum to HK$240,000 per annum. 公司二零一 年年報 13.51B(1) 公司 二零一八年 一 安 年 1,716,000 年 2,436,000 二零一八年 一 成 年 1,680,000 年 2,400,000 二零一八年 一 年 180,000 年 204,000 二零一八年 一 年 216,000 年 240,000 二零一八年 一 年 216,000 年 240,000 成安控股有限公司 二零一八年中期報告 39

41 Management Discussion and Analysis 管理層討論與分析 With effect from 1 September 2018, the fee of Mr. Yam Chiu Fan Joseph, the independent nonexecutive Director, has been increased from HK$216,000 per annum to HK$240,000 per annum. Such emoluments have been recommended by the Remuneration Committee and approved by the Board, with reference to prevailing market conditions and to their respective duties and responsibilities at the Company. Save as disclosed above, there is no other information required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules. 216, , B(1) By order of the Board Sing On Holdings Limited Cheung Shek On Chairman Hong Kong, 24 August 2018 As at the date of this report, the executive Directors are Mr. Cheung Shek On and Mr. Chan Yuk Sing; the non-executive Director is Mr. Kuan Hong Kin Daniel; and the independent non-executive Directors are Mr. Chan Ngai Sang Kenny, Mr. Chow Chun To and Mr. Yam Chiu Fan Joseph. 40 Sing On Holdings Limited Interim Report 2018

42 Sing On Holdings Limited 成安控股有限公司