880265_Imperium Group_.indb

Transcription

1 Interim Report 2017

2 CORPORATE INFORMATION BOARD OF DIRECTORS Executive Directors Mr. Cheng Ting Kong (Chairman) Ms. Yeung So Mui Mr. Luk Wai Keung Mr. Leung Kwok Yin Independent Non-Executive Directors Mr. Fung Tze Wa Mr. Ting Wong Kacee Mr. Tse Ting Kwan AUDIT COMMITTEE Mr. Fung Tze Wa (Chairman) Mr. Ting Wong Kacee Mr. Tse Ting Kwan REMUNERATION COMMITTEE Mr. Ting Wong Kacee (Chairman) Mr. Fung Tze Wa Mr. Tse Ting Kwan NOMINATION COMMITTEE Mr. Tse Ting Kwan (Chairman) Mr. Fung Tze Wa Mr. Ting Wong Kacee COMPANY SECRETARY Mr. Ip Ka Ki AUDITORS RSM Hong Kong 29th Floor Lee Garden Two 28 Yun Ping Road Causeway Bay Hong Kong

3 CORPORATE INFORMATION 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 HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS IN HONG KONG Room 2408, 24/F, China Merchants Tower, Shun Tak Centre, Connaught Road Central, Sheung Wan, Hong Kong PRINCIPAL BANKERS In Hong Kong: The Hongkong and Shanghai Banking Corporation Limited In the PRC: Bank of China Bank of Hangzhou Co., Limited CAYMAN ISLANDS PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE Maples Fund Services (Cayman) Limited PO Box 1093, Boundary Hall, Cricket Square Grand Cayman, KY Cayman Islands Maples Fund Services (Cayman) Limited P.O. Box 1093, Boundary Hall, Cricket Square 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 STOCK CODE INVESTOR RELATIONS For other information relating to the Company, please contact Corporate Communications Department website: ir@776.hk ir@776.hk 2 Imperium Group Global Holdings Limited Interim Report 2017

4 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the six months ended 30 June 2017 The board (the Board ) of directors (the Directors ) of Imperium Group Global Holdings Limited (the Company ) is pleased to announce the unaudited results of the Company and its subsidiaries (collectively, the Group ) for the six months ended 30 June 2017, together with the unaudited comparative figures for the corresponding period in 2016 as follows: Unaudited Six months ended 30 June Note HK$ 000 HK$ 000 REVENUE 77,145 69,752 Cost of goods sold (72,474) (65,043) Gross profit 4,671 4,709 Other income 4 1,661 1,271 Distribution costs (1,924) (889) Administrative expenses (10,136) (9,807) Other operating expenses (229) LOSS FROM OPERATIONS (5,728) (4,945) Finance costs (821) (587) LOSS BEFORE TAX (6,549) (5,532) Income tax expense 5 (16) LOSS FOR THE PERIOD (6,565) (5,532) Other comprehensive loss: Items that may be subsequently reclassified to profit or loss: Exchange differences arising on translating foreign operations 1,541 (1,253) Total comprehensive loss for the period (5,024) (6,785) LOSS PER SHARE Basic (HK cents) 7 (2.29) (1.93)

5 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 30 June 2017 Unaudited Audited 30 June December 2016 Note Non-current assets Property, plant and equipment 8 12,487 15,232 Investment properties 16,913 15,901 Intangible asset ,900 31,633 Current assets Inventories 37,224 22,471 Loan receivables 9 60,000 22,000 Trade receivables 10 15,822 19,903 Due from a related company 4,737 4,737 Deposits, other receivables and prepayments 8,473 5,923 Cash and bank balances 54,790 96, , ,091 Current liabilities Trade and other payables and accruals 11 44,747 51,232 Due to a related company 12 5,154 Current tax liabilities Bank borrowings 36,575 11,113 81,565 68,319 NET CURRENT ASSETS 99, ,772 TOTAL ASSETS LESS CURRENT LIABILITIES 129, ,405 Non-current liabilities Deferred tax liabilities 1,716 1,716 NET ASSETS 127, ,689 CAPITAL AND RESERVES Share capital 13 2,872 2,872 Reserves 124, ,817 TOTAL EQUITY 127, ,689 4 Imperium Group Global Holdings Limited Interim Report 2017

6 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the six months ended 30 June 2017 Six months ended 30 June (unaudited) (unaudited) Total equity of the Group at 1 January 132, ,608 Changes in equity during the period: Exchange differences arising on translating on foreign operations 1,541 (1,253) Loss for the period (6,565) (5,532) Total comprehensive loss for the period (5,024) (6,785) Total equity of the Group at 30 June 127, ,

7 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the six months ended 30 June 2017 Six months ended 30 June (unaudited) (unaudited) Net cash (used in)/from operating activities (66,131) 87,628 Net cash from/(used in) investing activities 480 (557) Net cash from/(used in) financing activities 24,641 (7,958) NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT 1 JANUARY EFFECT OF FOREIGN EXCHANGE RATE CHANGES (41,010) 79,113 96,057 42,537 (257) (1,509) CASH AND CASH EQUIVALENTS AT 30 JUNE 54, ,141 ANALYSIS OF CASH AND CASH EQUIVALENTS Cash and bank balances 54, ,141 6 Imperium Group Global Holdings Limited Interim Report 2017

8 1. GENERAL AND BASIS OF PREPARATION 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 is Room 2408, 24/F., China Merchants Tower, Shun Tak Centre, Connaught Road Central, Sheung Wan, Hong Kong. The Company s shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited (the Stock Exchange ). 1. Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands The Company is an investment holding company. The condensed consolidated financial information are presented in Hong Kong dollars ( HK$ ) and all values are rounded to the nearest thousand except when otherwise indicated, which is the Company s functional and presentation currency. In the opinion of the Directors, Power Ocean Holdings Limited, a company incorporated in the British Virgin Islands, is the immediate parent and Mr. Chau Cheok Wa and Mr. Cheng Ting Kong are the ultimate controlling parties of the Company. The condensed consolidated financial information have been prepared in accordance with Hong Kong Accounting Standard ( HKAS ) 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ) as well as with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the Listing Rules )

9 2. PRINCIPAL ACCOUNTING POLICIES The condensed consolidated financial statements have been prepared on the historical cost basis, except for certain properties and financial instruments, which are measured at fair value, as appropriate. 2. Except as described below, the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 30 June 2017 are the same as those followed in the preparation of the Group s annual financial statements for the year ended 31 December Application of a new amendments to Hong Kong Financial Reporting Standards ( HKFRSs ) In the current period, 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 year beginning on 1 January HKFRSs comprise Hong Kong Financial Reporting Standards ( HKFRS ); HKAS and Interpretations. The following standards have been adopted by the Group for the first time for the financial period beginning on 1 January 2017: Amendments to HKAS 7 Amendments to HKAS 12 Disclosure Initiative Recognition of deferred tax assets for unrealised losses 7 12 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 condensed consolidated financial statements and amounts reported for the current period and prior years. The Group has not early applied new and revised HKFRSs that have been issued but are not yet effective for the financial period beginning on 1 January The Directors anticipate that the new and revised HKFRSs will be adopted in the Group s condensed consolidated financial statements when they become effective. The Group is in the process of assessing, where applicable, the potential effect of all new and revised HKFRSs that will be effective in future periods but is not yet in a position to state whether these new and revised HKFRSs would have a material impact on its results of operations and financial position. 8 Imperium Group Global Holdings Limited Interim Report 2017

10 3. SEGMENT INFORMATION Information reported to the Executive directors of the Company, being the chief operating decision maker, for the purposes of resource allocation and assessment of segment performance focuses on types of goods delivered. For management purposes, the Group has three reportable segments, stainless steel furnishings, property investment and money lending. 3. Information about reportable segment revenue, profit or loss and assets: 2017 Stainless steel furnishings Property investment Money lending Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 Six months ended 30 June 2017 (unaudited) Revenue from external customers 74, ,225 77,145 Intersegment revenue Segment (loss)/profit (4,234) 156 1,643 (2,435) Interest revenue 974 2,225 3,199 Interest expense (821) (821) Depreciation (1,875) (32) (1,907) Income tax expense (16) (16) Additions to segment non-current assets Other material non-cash item: Fair value change of investment properties As at 30 June 2017 Segment assets 78,298 25,962 68, ,

11 3. SEGMENT INFORMATION (Continued) Stainless steel furnishings Property investment Money lending Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 Six months ended 30 June 2016 (unaudited) Revenue from external customers 69, ,752 Intersegment revenue Segment loss (842) (149) (991) Interest revenue Interest expense (587) (587) Depreciation (927) (927) Additions to segment non-current 2,531 2,531 assets Other material non-cash item: Fair value change of investment properties (229) (229) As at 31 December 2016 Segment assets 68,127 24,582 23, ,246 Reconciliations of segment assets: 30 June 2017 (unaudited) 31 December 2016 (audited) Assets Total assets of reportable segment 172, ,246 Unallocated corporate assets 38,227 86,478 Consolidated total assets 210, , Imperium Group Global Holdings Limited Interim Report 2017

12 3. SEGMENT INFORMATION (Continued) Reconciliation of reportable segment revenue and results: 3. Six months ended 30 June (unaudited) (unaudited) Revenue Total revenue of reportable segments 77,145 69,752 Elimination of intersegment revenue Consolidated revenue 77,145 69,752 Profit or loss Total loss of reportable segments (2,435) (991) Unallocated corporate income 26 1,139 Unallocated corporate expenses (4,156) (5,680) Consolidated loss for the period (6,565) (5,532) 4. OTHER INCOME 4. Six months ended 30 June (unaudited) (unaudited) Fair value gain on investment property 661 Interest income Investment income 919 Net exchange gain Others 39 1,661 1,

13 5. INCOME TAX EXPENSE Hong Kong Profits Tax has been provided at 16.5% (2016: 16.5%) on the estimated assessable profits for the period. Under the Law of the PRC on Enterprise Income Tax and Implementation Rules, the statutory tax rate of PRC subsidiaries is 25% (2016: 25%), except for (Ningbo JF Metal Products Co., Ltd.), a subsidiary of the Company which was recognised as a small and thin profit enterprise during the period under relevant enterprise income tax rules and regulations and is subject to preferential enterprise income tax at 20%. Tax charge on profits assessable elsewhere have been calculated at the rates of tax prevailing in the countries in which the Group operates, based on existing legislation, interpretations and practices in respect thereof. 6. DIVIDEND No dividend was paid, declared or proposed during the period. The Directors have determined that no dividend will be paid in respect of the interim period (2016: Nil). 7. LOSS PER SHARE The calculation of basic loss per share is based on the following: % 16.5% 6. 25% 25% 20% 7. Six months ended 30 June (unaudited) (unaudited) Loss Loss attributable to owners of the Company, used in the basic loss per share calculation (6,565) (5,532) Six months ended 30 June (unaudited) (unaudited) Number of shares Weighted average number of ordinary shares used in basic loss per share calculation 287,206, ,206, Imperium Group Global Holdings Limited Interim Report 2017

14 8. PROPERTY, PLANT AND EQUIPMENT During the six months ended 30 June 2017, the Group had additions to property, plant and equipment in the amount of approximately HK$494,000 (2016: approximately HK$2,531,000). The Group has no material disposal of property, plant and equipment on both periods. 9. LOAN RECEIVABLES The maturity profile of loan receivables at the reporting date is analysed by the remaining periods to their contractual maturity dates at follows: ,000 2,531, June 2017 (unaudited) 31 December 2016 (audited) Within one year 60,000 22, TRADE RECEIVABLES The Group normally granted customers with credit terms of 30 to 90 days. The aging analysis of the Group s trade receivables, based on the invoice date, and net of allowance, is as of follows: June 2017 (unaudited) 31 December 2016 (audited) 0 30 days ,776 19, days Over 90 days Total 15,822 19,

15 11. TRADE AND OTHER PAYABLES AND ACCRUALS June 2017 (unaudited) 31 December 2016 (audited) Trade payables 11,659 15,136 Other payables and accruals 33,088 36,096 44,747 51,232 The Group normally obtains credit terms ranging from 30 to 90 days from its suppliers. The aging analysis of the Group s trade payables, based on invoice date, is as follows: June 2017 (unaudited) 31 December 2016 (audited) 0 30 days ,283 10, days ,367 4, days Over 90 days Total 11,659 15, DUE TO A RELATED COMPANY The balance is unsecured, interest-free and has no fixed repayment terms Imperium Group Global Holdings Limited Interim Report 2017

16 13. SHARE CAPITAL 13. Number of shares 000 HK$ 000 Ordinary shares of HK$0.01 each: Authorised: January 2016 (audited), 31 December 2016 (audited) and 30 June 2017 (unaudited) 5,000,000 50,000 Issued and fully paid: 1 January 2016 (audited), 31 December 2016 (audited) and 30 June 2017 (unaudited) 287,206 2, OPERATING LEASE COMMITMENTS The Group as lessee 14. The Group had commitments for future minimum lease payments under non-cancellable operating leases in respect of leasehold land and buildings which full due as follow: 30 June 2017 (unaudited) 31 December 2016 (audited) Within one year 1,518 1,774 In the second to fifth years, inclusive 6,073 5,954 After five years 5,314 5,954 12,905 13,

17 The Group as lessor The Group s total future minimum lease payments under noncancellable operating leases are receivables as follows: 30 June 2017 (unaudited) 31 December 2016 (audited) Within one year 885 In the second to fifth years inclusive 2,806 2,040 Over five years 2,776 4,365 6,467 6, FAIR VALUE MEASUREMENTS Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following disclosures of fair value measurements use a fair value hierarchy that categorises into three levels the inputs to valuation techniques used to measure fair value: 15. Level 1 inputs: Level 2 inputs: Level 3 inputs: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date. inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. unobservable inputs for the asset or liability. The Group s policy is to recognise transfers into and transfers out of any of the three levels as of the date of the event or change in circumstances that caused the transfer. 16 Imperium Group Global Holdings Limited Interim Report 2017

18 15. FAIR VALUE MEASUREMENTS (Continued) (a) Disclosure of level in fair value hierarchy at 30 June 2017 and 31 December 2016: 15. (a) Fair value measurements using: Level 3 30 June 2017 (unaudited) 31 December 2016 (audited) Recurring fair value measurements: Investment property Residential unit Hong Kong 7,000 6,600 Commercial units the PRC 9,913 9,301 16,913 15,901 (b) Reconciliation of assets measured at fair value based on level 3: (b) 30 June December 2016 Investment properties (unaudited) (audited) 1 January 15,901 16,985 Subsequent expenditure 9,355 Total gains/(losses) recognised in profit or loss (#) (#) 661 (9,890) Exchange realignment 351 (549) 30 June/31 December 16,913 15,901 (#) Include gains/(losses) for assets held at end of reporting period (#) 661 (9,890)

19 15. FAIR VALUE MEASUREMENTS (Continued) (b) (Continued) The total gains or losses recognised in profit or loss including those for assets held at end of reporting period are presented in other income (2016: other operating expenses) in the condensed consolidated statement of profit or loss and other comprehensive income. 15. (b) (c) Disclosure of valuation process used by the Group and valuation techniques and inputs used in fair value measurements at 30 June 2017 and 31 December 2016: (c) The Group s financial controller is responsible for the fair value measurements of assets and liabilities required for financial reporting purposes, including level 3 fair value measurements. The financial controller reports directly to the Board for these fair value measurements. Discussions of valuation processes and results are held between the financial controller and the Board at least twice a year. For level 3 fair value measurements, the Group will normally engage external valuation experts with the recognised professional qualifications and recent experience to perform the valuations. Key unobservable inputs used in level 3 fair value measurements are mainly: Price index difference (estimated based on private domestic price indices by class published by Rating and Valuation Department of the Government of the Hong Kong Special Administrative Region) Floor level difference (estimated based on actual data) Size difference (estimated based on actual data) View difference (estimated based on valuation experts in-house database) Building age difference (estimated based on actual data) Market quote adjustment factor (estimated based on valuation experts in-house database) 18 Imperium Group Global Holdings Limited Interim Report 2017

20 15. FAIR VALUE MEASUREMENTS (Continued) (c) Description (Continued) Level 3 fair value measurements Valuation technique Unobservable inputs Range Range 15. (c) Effect on fair value for increase of inputs Fair value 30 June 2017 (unaudited) HK$ 000 Fair value 31 December 2016 (audited) HK$ 000 % Investment property Residential unit located in Hong Kong Market comparable approach Price index difference 1.18% to 9.15% (2016: 0% to 2.65%) 1.18% 9.15% 0% 2.65% Floor difference -5.5% to 5.5% (2016: -4.5% to 4.5%) -5.5% 5.5% -4.5% 4.5% Size difference -0.92% to 7.76% (2016: 0.91% to 4.39%) -0.92% 7.76% 0.91% 4.39% View difference 5% to 0% (2016: 0% to 5%) -5% 0% 0% 5% Increase 7,000 6,600 Increase Increase Increase Building age 0% (2016: 0% to 2%) 0%0% 2% Investment property Commercial units located in the PRC Market comparable approach Market quote adjustment factor -5% (2016: -5%) Decrease 9,913 9,301-5%-5% Floor difference -35% to 45% (2016: -35% to 45%) -35% 45% -35% 45% Decrease There were no changes in the valuation techniques used as at 30 June 2017 and 31 December

21 16. RELATED PARTY TRANSACTIONS In addition to those related party transactions and balances disclosed elsewhere in the condensed financial statements, the Group had the following transactions and balances with related parties during the period: 16. (a) Key management personnel compensation (a) The key management personnel of the Group comprise all Directors. Details of their emoluments were disclosed as follows: Six months ended 30 June (unaudited) (unaudited) Directors remuneration 1, Imperium Group Global Holdings Limited Interim Report 2017

22 16. RELATED PARTY TRANSACTIONS (Continued) (b) Transactions with related parties 16. (b) Six months ended 30 June (unaudited) (unaudited) Rental income from (Ningbo JF Furniture Co., Limited*) Interest income from (Ningbo JF Furniture Co., Limited*) Processing charges paid to (Ningbo JF Furniture Co., Limited*) Purchase from (Ningbo JF Furniture Co., Limited*) ,086 1,751 License fees paid to A.C.R. Equipment Supplies Limited Rental expenses paid to (Ningbo JF Furniture Co., Limited*) Senior management 45 An executive Director, Mr. Leung Kwok Yin has beneficial interests in above companies

23 16. RELATED PARTY TRANSACTIONS (Continued) (c) Balance with related parties Due from a related company 16. (c) 30 June 2017 (unaudited) 31 December 2016 (audited) JF Household Furnishings (BVI) Limited 4,737 4,737 Due to a related company 30 June 2017 (unaudited) 31 December 2016 (audited) (Ningbo JF Furniture Co., Limited*) 5,154 * for identification purpose only * 22 Imperium Group Global Holdings Limited Interim Report 2017

24 MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL REVIEW The Group s revenue for the six months ended 30 June 2017 amounted to approximately HK$77.1 million, representing an increase of approximately 10.6% over the corresponding period of Such increase is due to the increase of selling price of household products and there is an income arising from money lending business. 77,100, % Gross profit margin of the Group decreased 0.7% to approximately 6.1% for the six months ended 30 June 2017 was mainly due to the higher materials costs and increase of depreciation expenses during the period. 0.7% 6.1% Other income increased from approximately HK$1.3 million for the six months ended 30 June 2016 to approximately HK$1.7 million for the six months ended 30 June 2017, mainly due to the increase in fair value gain on investment property and interest income from a related company. 1,300,000 1,700,000 Distribution costs increased from approximately HK$1.0 million for the six months ended 30 June 2016 to approximately HK$1.9 million for the six months ended 30 June 2017, mainly due to the increase in declaration charge and transportation cost. Administrative expenses increased from approximately HK$9.8 million for the six months ended 30 June 2016 to approximately HK$10.1 million for the six months ended 30 June 2017, mainly due to the increase in staff costs and rental expenses. BUSINESS REVIEW AND OUTLOOK Household products business During 2017, market condition remains challenging as the slow growth in China economy. Besides, the rising of staff costs and intense competition also deteriorates to household market in China. The revenue from household products business for the six months ended 30 June 2017 was approximately HK$74,480,000 (2016: approximately HK$69,641,000), representing a slightly increase of 6.9%. The segment loss for the reporting period was approximately HK$4,234,000 (2016: approximately HK$842,000). The reduction in gross margin was mainly due to the higher material costs and the increase of depreciation expenses after the production base migrated to the periphery area of Yuyao City. 1,000,000 1,900,000 9,800,000 10,100,000 74,480,000 69,641, % 4,234,000842,000 The Group will take active measure to strengthen its operational efficiency, reduce the cost of production and improve the product mix in order to improve the gross profit margin and increase the market share

25 MANAGEMENT DISCUSSION AND ANALYSIS Property investment business The Group has diversified its business by acquired investment properties in Hong Kong and PRC for rental purpose. The Group s revenue from property investment business during the reporting period was approximately HK$440,000 (2016: approximately HK$111,000). It attributes to the Group has leased out the hotel to an independent third party for operation in the second half of The segment profit was approximately HK$156,000 (2016: segment loss of approximately HK$149,000), mainly due to change of fair value gain on investment property which is non-cash in nature. Money lending business To diversify the Group s business and broaden the Group s source of income, the Group is now engaged in money lending business which provides customers with a wide range of loan products and services to meet their financial needs. The Group s revenue from money lending business during the period was approximately HK$2,225,000 (2016: Nil). The segment profit of approximately HK$1,643,000 (2016: Nil). Future prospects Looking forward, the Group will from time to time to the business opportunities that can broaden the income base of the Group and create the maximum returns to the shareholders. LIQUIDITY, FINANCIAL RESOURCES, FUNDING AND TREASURY POLICY As at 30 June 2017, the Group had cash and bank balances of approximately HK$54.8 million (as at 31 December 2016: approximately HK$96.1 million) and short-term bank borrowings of approximately HK$36.6 million (as at 31 December 2016: approximately HK$11.1 million) respectively. As at 30 June 2017, the Group had current assets of approximately HK$181.0 million (31 December 2016: HK$171.1 million) and current liabilities of approximately HK$81.6 million (31 December 2016: HK$68.3 million). GEARING RATIO As at 30 June 2017, the Group s gearing ratio, which was derived from the total borrowings to total assets, increased to 17.4% from that of 5.5% as at 31 December CAPITAL STRUCTURE The share capital of the Company comprises of ordinary shares only. 440, , , ,000 2,225,000 1,643,000 54,800,000 96,100,000 36,600,000 11,100, ,000, ,100,000 81,600,000 68,300, %17.4% 24 Imperium Group Global Holdings Limited Interim Report 2017

26 MANAGEMENT DISCUSSION AND ANALYSIS MATERIAL ACQUISITION AND DISPOSAL Save as disclosed, the Group did not have any material acquisition and disposal for the six months ended 30 June DIVIDENDS The Board has resolved not to declare an interim dividend for the six months ended 30 June 2017 (2016: Nil). FOREIGN EXCHANGE EXPOSURE Most of the trading transactions, assets and liabilities of the Group were denominated in Renminbi, United States dollars and Hong Kong dollars. CONTINGENT LIABILITIES As at 30 June 2017, the Group had no material contingent liabilities. EMPLOYEES AND REMUNERATION POLICY As at 30 June 2017, the Group employed 492 staff in the PRC and Hong Kong. The Group s remuneration to employees, including Directors emoluments, amounted to approximately HK$16,577,000 for the period. The Group reviews employee remuneration annually and rewards its employee with reference to the length of services and performance. The Group also grants share options and bonuses to employees of the Group at the discretion of the Directors and based on the financial performance of the Group. DIRECTORS INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY OR ITS ASSOCIATED CORPORATIONS As at 30 June 2017, none of the Directors and the chief executives of the Company nor each of their respective associates (as defined under the Listing Rules), had or was deemed to have any interests or short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) ( SFO ) which (a) were required, to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of the Part XV of the SFO (including interests and short positions which the Directors were taken or deemed to have under such provisions of the SFO); or (b) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules, to be notified to the Company and the Stock Exchange. As at 30 June 2017, none of the Directors have options to subscribe for shares in the Company ,577, XV (a)xv7 8 (b)352 (c)

27 MANAGEMENT DISCUSSION AND ANALYSIS SUBSTANTIAL SHAREHOLDERS As at 30 June 2017, the following substantial shareholders had interests or short positions in the shares or the underlying shares of the Company as recorded in the register required to be kept under section 336 of the SFO. Other than the interests disclosed below, the Directors were not aware of any other persons who had interests or short positions in the shares or the underlying shares of the Company as recorded in the register required to be kept under section 336 of the SFO: Name of Substantial Shareholders Number of shares interested in Capacity Approximate percentage of the total issue capital of the Company (Note 3) 3 Power Ocean Holdings Limited (Note 1&2) 179,407,488 Beneficial owner 62.46% 1 2 Chau Cheok Wa (Note 1) 179,407,488 Interest through a controlled corporation 62.46% 1 Cheng Ting Kong (Note 2) 179,407,488 Interest through a controlled corporation 62.46% 2 Notes: 1. According to the record in the register kept under section 336 of the SFO, Power Ocean Holdings Limited, which 50% of issued share capital is owned by Mr. Chau Cheok Wa and he is therefore deemed to be interested in 179,407,488 shares of the Company. 2. According to the record in the register kept under section 336 of the SFO, Power Ocean Holdings Limited, which 50% of issued share capital is owned by Mr. Cheng Ting Kong and he is therefore deemed to be interested in 179,407,488 shares of the Company. 3. The percentage has been adjusted based on the total number of shares of the Company in issue as at 30 June 2017 (i.e.287,206,000 shares) % 179,407, % 179,407, ,206,000 SHARE OPTION AND SHARE OPTION SCHEME The Company s share option scheme (the Scheme ) was adopted pursuant to the shareholder s resolution passed on 26 November No options granted under the Scheme since its adoption are still outstanding. During the six months ended 30 June 2017, no share option were granted, exercised and lapsed. 26 Imperium Group Global Holdings Limited Interim Report 2017

28 MANAGEMENT DISCUSSION AND ANALYSIS DIRECTORS INTERESTS IN CONTRACTS No contract of significance to which the Company or any of its subsidiaries or its holding company, was a party and in which a Director had a material interest, whether directly or indirectly, subsisted at the end of the period under review or any time during the period under review save and except for the transactions disclosed as connected and/or related party transactions in accordance with the requirements of the Listing Rules and accounting principles generally accepted in Hong Kong. PURCHASE, SALE OR REDEMPTION OF SHARES Neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company s shares for the six months ended 30 June CORPORATE GOVERNANCE In the opinion of the Directors, save as disclosed below, the Company has complied with the code provisions as set out in the Corporate Governance Code and Corporate Governance Report ( CG Code ) set out in Appendix 14 of the Listing Rules throughout the six months ended 30 June Under the CG Code provision E.1.2, the chairman of the Board should attend the annual general meeting ( AGM ) and invite the chairman of audit, remuneration and nomination committee to attend. However, in the AGM held on 2 June 2017 ( 2017 AGM ), the chairman of the Board was unable to attend the meeting as he had to attend to other business commitments. He then appointed an executive Director to chair the 2017 AGM on his behalf and answer any question from the shareholders concerning the Company s corporate governance. As provided for in the CG Code provision A.6.7, independent non-executive directors should attend general meetings and develop a balanced understanding of the views of shareholders. An independent non-executive Director, Mr. Ting Wong Kacee, was unable to attend the 2017 AGM due to other business commitments. Under the Code Provision A.2.1 of the CG Code, the roles of chairman and chief executive should be separate and should not be performed by the same individual. Following the resignation from the post of Ms. Yeung So Lai as executive Director and chief executive officer of the Company on 1 August 2016 in order to devote more time on her personal engagements, the role of chief executive officer were shared among the members of the Board during the reporting period. There is no time schedule to change this structure, as the Directors consider that this structure provides the Group with consistent leadership in the Company s decision making process and operational efficiency. The Board shall review this arrangement from time to time to ensure appropriate and timely action is taken to meet changing circumstances. The Company reviews its corporate governance practices from time to time to ensure compliance with the CG Code. E.1.2 A.6.7 A

29 MANAGEMENT DISCUSSION AND ANALYSIS AUDIT COMMITTEE The Company has established an Audit Committee with written terms of reference in accordance with the Listing Rules. The primary duties of the Audit Committee are to review the Company s interim and annual reports and accounts and to provide advice and comments thereon to the Board. The Audit Committee is also responsible for reviewing internal control procedures of the Group. The Audit Committee comprises of three independent non-executive Directors, namely Mr. Fung Tze Wa (Chairman), Mr. Ting Wong Kacee and Mr. Tse Ting Kwan. The Audit Committee has reviewed the unaudited condensed financial statements for the six months ended 30 June CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, as amended from time to time (the Model Code ), set out in Appendix 10 to the Listing Rules as its code of conduct regarding securities transactions of the directors of the Company. On specific enquiries made, all directors have confirmed that they have complied with the required standard as set out in the Model Code during the six months ended 30 June Employees who are likely to be in possession of unpublished price sensitive information of the Company are also subject to compliance with guidelines on no less exacting terms than the Model Code. APPROVAL OF INTERIM REPORT The interim report were approved and authorised for issue by the Board on 31 August Hong Kong, 31 August 2017 By order of the Board Imperium Group Global Holdings Limited Cheng Ting Kong Chairman 28 Imperium Group Global Holdings Limited Interim Report 2017

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