TIDMPAQ
RNS Number : 9533Z
PAQ International Holdings Limited
30 September 2009
PAQ INTERNATIONAL HOLDINGS LIMITED
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2009
Chairman's Statement
I report on the financial results for PAQ International Holdings Limited (the
"Company" or "PAQ") and its subsidiaries (collectively referred to as the
"Group") for the six months ended 30 June 2009. PAQ is an AIM listed designer
and manufacturer of branded and Original Equipment Manufacturer ("OEM")
"softwear" for electronic products and accessories.
Operational Review
This has been a challenging six months with business around the world suffering
as a consequence of the banking collapse over the last quarter of 2008. Our
operating performance was adversely affected and the Group experienced an
operating loss for the six months ended 30 June 2009.
The decrease in trade is mainly attributable to a reduction in orders from the
Group's overseas customers who were likewise adversely affected and who
consequentially adopted a more cautious, approach in their purchase orders.
A major customer, Circuit City Stores Inc, filed for bankruptcy this year and
they were previously one of our largest customers in the US market. Therefore,
without their continuing custom the Group's revenues in the US has been
significantly reduced. Also, the Group was subject to litigation concerning
intellectual property which has now been dismissed although it has taken some
time to resume normal client relationships in Europe given the uncertainty that
the litigation created. More generally, trading has been weak across all markets
and products.
The Board has decided to defer any substantial capital outlay required to expand
the Group's entry into the People's Republic of China (PRC) market as
anticipated until market conditions justify such a move. The Group did spend
HK$3.2m for additional PPM (Property, Plant and Machinery) to fabricate new
moulds as required by customers. The Group's current focus is to reduce costs
and defer or terminate expansion plans until the turnover and profits of the
Group allow such actions to become feasible as the Board is confident that the
market will improve in the second half of 2009.
Meanwhile, the Board has explored ways of expanding the Group's operations by
entering into licensing arrangements which will bring benefits to the Group with
relatively low costs incurred.
This strategy is coming close to fruition and we have entered into and are in
the process of concluding a series of joint venture agreements with Fobazo.com
A/S (Denmark) ("Fobazo"). Fobazo owns exclusive rights to the promotion of some
of the world's most famous names in football. Also, the Group is negotiating
sub - licensing and franchise agreements that should begin to make a financial
contribution to the Group in the coming year.
Financial Review
PAQ's revenue during the first half of the year 2009 was HK$13.54m as opposed to
HK$44.43 m for the first half of 2008. This is a significant reduction of
approximately 70% Whilst Gross Profit margins fell noticeably to 8% during this
period in comparison to 18% in 2008 following increases in both production and
operating costs in the PRC.
As a result, the Company recorded a loss after tax of approximately HK$3.7m in
the first half of 2009 against a profit of HK$3.4m for the same period in 2008.
Working Capital Review
The Group's capital expenditure during the first half of 2009 was HK$3.2m on
additional Plant, Property and Machinery for new moulds as many customers were
not prepared to pay for the mould fees for the development of new models for
production. However, the Group does believe that incurring such costs
nevertheless does provide a competitive advantage against our competitors.
Management expects to continue incurring capital expenditure at a similar
level for the remainder of 2009. The Group finances its capital expenditure
requirements primarily with cash generated from its operations.
The Group has internal budgeting systems in place to ensure that if and when
cash is committed to fund major expenditures there is sufficient cash flow to
maintain the Group's daily operations and meet all of its contractual
obligations.
Although the Group has consistently maintained a very liquid position, banking
facilities have nevertheless been put in place for contingency purposes. As at
30 June 2009, the Group had trade financing facilities amounting to HK$10.5m, a
term loan facility amounting to HK$1m and a revolving credit line for working
capital purposes amounting to HK$1.8m. The total undrawn portion of these
facilities is HK$1.8m.
The interest rates for the trade financing line range from 5.75% to 6.25% and
this facility is denominated in Hong Kong Dollars. The term loan facility
carries interest at a rate of 5.75% and is also denominated in Hong Kong
Dollars. The revolving credit line has an interest rate of 1% plus HIBOR and is
denominated in Hong Kong Dollars. It is rolled-over monthly for working capital
financing.
The Group's accounting policy regarding bad debts is to provision at year end
any payments which have not been settled by the customer within 360 days. Due to
the global financial crisis a number of our customers have extended their
payment period, therefore, our receivables collection period has increased from
152 days to 448 days. The Group has extended payment terms to those customers
with whom they have maintained long working relationships. The group has
received HK$5m from the outstanding receivables as at 30 June 2009 during July
and August. We are confident that the outstanding receivable amounts will
continue to decrease as a result of payments from our customers in the fourth
quarter of year 2009. Finally, The Group is continuing its efforts to recover
HK$9.6m bad debt that was reported in our year ended 31 December 2008.
The Group currently has no other material external debt financing in place. If
and when the Group decides to raise any finance in the future, it expects to be
able to utilise a variety of options, including debt financing and access to the
capital markets, where necessary and available.
The Group has an overdraft facility of HK$11m as of 30 June 2009 compared with a
HK$7.5m overdraft as of 30 June 2008. The increase was due to the purchase of
plant and machinery of HK$3.2m. Going forward, the Directors believe that the
Group's liquidity requirements for the foreseeable future can be satisfied;
however, the Board is monitoring this situation very closely.
Contingent Liabilities
As at 30 June 2009, the Group had no contingent liabilities and also the Group
has no bad debts.
Net Current Liabilities
The net current liabilities reported of $9.1M shows a marked deterioration from
the net current assets of $6.4m reported on 30 June 2008.
The net current liabilities position is being managed according to the ability
of the Group to service its working capital as set out above. The Group does
expect the second half of 2009 to improve the working capital position.
Related Transactions
In comparison with 2008, amounts due from related companies increased by
HK10,000 which was in relation to PAQ Concept Ltd. This represents the
incorporation fee and is temporary recorded in the books as an amount due from a
related company and will be recognized as investment to subsidiary and
eliminated in consolidated accounts by the year end.
Dividend
The Directors are not recommending payment of an interim dividend.
Outlook and Future Prospects
The Board is now prioritizing the strategy of licensing and joint venture
arrangements and we are looking to enhance the PAQ brand by leveraging on our
historical manufacturing strengths in cases and bags for electronics products
and accessories. We will continue to develop our expertise in producing high
quality, reliable and innovative products. The Group will also strengthen its
design and development capabilities to further raise its brand profile to
distinguish itself from other product suppliers.
The Board believes that the joint venture and licensing strategies referred to
above have the potential to generate significant publicity, brand recognition
and revenue in the lead up to the World Cup in South Africa in 2010.
Despite signs of a global recovery, we remain prudent in the current market
condition and we are currently working with our customers towards developing
strategies that reflect the deteriorating conditions in some markets such as
reducing stock inventories and producing cheaper range of bags while deferring
the implementation of any contracts that may incur a substantial financial
outlay. Notwithstanding the current poor market conditions, the Board is
confident of the long term prospects of the Group.
Issue of Equity
During the period the Group has attracted further investment from a strategic
investor, Noah Concept Limited. The investor subscribed to 3.15% or HK$1.5m of
new ordinary shares in the Company.
Appreciation
Finally, on behalf of the Board, I would like to thank our customers, suppliers
and shareholders for their continued support of the Group and I would also like
to recognize the hard work from the management team and our highly dedicated
team of employees for their respective contributions to the Group.
Kelvin Kwong Chi Yau
Chairman and Chief Executive Officer
30 September 2009
Note: A copy of the interim accounts for the six months ended 30 June 2009 will
be available on www.paq-intl.com
Contact
+----------------------------------------+----------------------------------+
| Kelvin Yau, Chief Executive | +(852) 9135 1811 |
+----------------------------------------+----------------------------------+
| PAQ International Holdings | |
+----------------------------------------+----------------------------------+
| www.paq-intl.com | |
+----------------------------------------+----------------------------------+
| Dominique Doussot/David | +44 (0) 207 060 1760 |
| Newton/Jonathan Evans | |
+----------------------------------------+----------------------------------+
| Zimmerman Adams International Ltd | |
+----------------------------------------+----------------------------------+
PAQ International Holdings Limited
Unaudited consolidated income statement
For the six months ended 30 June 2009
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| | | | | Six months ended 30 June | | Year ended 31 |
| | | | | | | Dec |
+------------+------------+--------+------+---------------------------------+-+------------------+
| | | |Note | 2009 | | 2008 | | 2008 |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| | | | | HK$'000 | | HK$'000 | | HK$'000 |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| | | | | (unaudited) | | (unaudited) | | (audited) |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| | | | | | | | | |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| Revenue | | | 3 | 13,538 | | 44,432 | | 76,319 |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| Cost of sales | | | -12,454 | | -36,452 | | -64,923 |
+-------------------------+--------+------+-------------+--+----------------+-+------------------+
| | | | | | | | | |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| Gross profit | | 3 | 1,084 | | 7,980 | | 11,396.00 |
+-------------------------+--------+------+-------------+--+----------------+-+------------------+
| | | | | | | | | |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| Other income | | | 112 | | 5,663 | | 6,621.00 |
+-------------------------+--------+------+-------------+--+----------------+-+------------------+
| Distribution costs | | | -172 | | -1,493 | | -2,733.00 |
+-------------------------+--------+------+-------------+--+----------------+-+------------------+
| Administrative expenses | | | -2,276 | | -3,386 | | -8,698.00 |
+-------------------------+--------+------+-------------+--+----------------+-+------------------+
| Other expenses | | | -2,036 | | -4,473 | | -15,409.00 |
+-------------------------+--------+------+-------------+--+----------------+-+------------------+
| Finance costs | |4(a) | -449 | | -292 | | -655 |
+-------------------------+--------+------+-------------+--+----------------+-+------------------+
| | | | | | | | | |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| (Loss) / Profit before | | 4 | -3,737 | | 3,999 | | -9,478.00 |
| tax | | | | | | | |
+-------------------------+--------+------+-------------+--+----------------+-+------------------+
| | | | | | | | | |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| Income tax expenses | | 5 | - | | -506 | | 0 |
+-------------------------+--------+------+-------------+--+----------------+-+------------------+
| | | | | | | | | |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| (Loss) / Profit and total | | -3,737 | | 3,493 | | -9,478.00 |
| comprehensive income for the | | | | | | |
| period | | | | | | |
+----------------------------------+------+-------------+--+----------------+-+------------------+
| | | | | | | | | |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| (Loss) / Profit and total | | | | | | |
| comprehensive income | | | | | | |
+----------------------------------+------+-------------+--+----------------+-+------------------+
| attributable to : | | | | | | | |
+-------------------------+--------+------+-------------+--+----------------+-+------------------+
| - owners of the Company | | | -3,737 | | 2,483 | | -10,488.00 |
+-------------------------+--------+------+-------------+--+----------------+-+------------------+
| - minority interests | | | - | | 1,010 | | 1,010.00 |
+-------------------------+--------+------+-------------+--+----------------+-+------------------+
| | | | | -3,737 | | 3,493 | | -9,478.00 |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| | | | | | | | | |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| | | | | | | | | |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| | | | | Cents per | | Cents per | | Cents per share |
| | | | | share | | share | | |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| Earnings per share | | 6 | | | | | |
+-------------------------+--------+------+-------------+--+----------------+-+------------------+
| - basis | | | | -3.02 | | 2.13 | | 9.24 |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| | | | | | | | | |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| - diluted | | | | N/A | | 2.13 | | 9.54 |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
| | | | | | | | | |
+------------+------------+--------+------+-------------+--+----------------+-+------------------+
PAQ International Holdings Limited
Unaudited consolidated statement of financial position
As at 30 June 2009
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| | | |Note | 30 June | | 30 June 2008 | 31 December 2008 |
| | | | | 2009 | | | |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| | | | | HK$'000 | | HK$'000 | HK$'000 |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| | | | | (unaudited) | | (unaudited) | (audited) |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| Non-current assets | | | | | | |
+--------------------------+---------+------+-------------+--+----------------+------------------+
| Property, plant and equipment | 7 | 8,231 | | 1,774 | 6,341 |
+------------------------------------+------+-------------+--+----------------+------------------+
| Goodwill | | | 8 | 14,227 | | 16,675 | 14,227 |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| | | | | 22,458 | | 18,449 | 20,568 |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| | | | | | | | |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| Current assets | | | | | | |
+--------------------------+---------+------+-------------+--+----------------+------------------+
| Inventory | | | | 0 | | 2,758 | 0 |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| Trade and other receivables | 9 | 16,615 | | 25,997 | 18,500 |
+------------------------------------+------+-------------+--+----------------+------------------+
| Amount due from a director | 17 | 14 | | 0 | - |
+------------------------------------+------+-------------+--+----------------+------------------+
| Amount due from a related | 17 | 34 | | 0 | 24 |
| company | | | | | |
+------------------------------------+------+-------------+--+----------------+------------------+
| Pledged bank deposit | | 14 | 550 | | 547 | 549 |
+--------------------------+---------+------+-------------+--+----------------+------------------+
| Bank balances and cash | | 141 | | 718 | 189 |
+------------------------------------+------+-------------+--+----------------+------------------+
| | | | | 17,354 | | 30,020 | 19,262 |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| | | | | | | | |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| Current liabilities | | | | | | |
+--------------------------+---------+------+-------------+--+----------------+------------------+
| Trade and other payables | 10 | 8,456 | | 10,000 | 6,235 |
+------------------------------------+------+-------------+--+----------------+------------------+
| Income tax liabilities | | | 4,160 | | 4,906 | 4,400 |
+--------------------------+---------+------+-------------+--+----------------+------------------+
| Amounts due to directors | 16 | 1,540 | | 0 | 954 |
+------------------------------------+------+-------------+--+----------------+------------------+
| Borrowings | | 11 | 12,154 | | 8,283 | 12,416 |
+--------------------------+---------+------+-------------+--+----------------+------------------+
| Obligation under finance lease | | 165 | | 353 | 214 |
+------------------------------------+------+-------------+--+----------------+------------------+
| | | | | | | | |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| | | | | 26,475 | | 23,542 | 24,219 |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| | | | | | | | |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| Net current | | | -9,121 | | 6,478 | -4,957 |
| liabilities | | | | | | |
+--------------------------+---------+------+-------------+--+----------------+------------------+
| | | | | | | | |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| Total assets less current | | 13,337 | | 24,927 | 15,611 |
| liabilities | | | | | |
+------------------------------------+------+-------------+--+----------------+------------------+
| | | | | | | | |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| Non-current liabilities | | | | | |
+------------------------------------+------+-------------+--+----------------+------------------+
| Borrowings | | 11 | 348 | | 0 | 347 |
+--------------------------+---------+------+-------------+--+----------------+------------------+
| Obligation under finance lease | | | | 0 | 38 |
+------------------------------------+------+-------------+--+----------------+------------------+
| | | | | 348 | | 0 | 385 |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| | | | | | | | |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| Net assets | | | 12,989 | | 24,927 | 15,226 |
+--------------------------+---------+------+-------------+--+----------------+------------------+
| | | | | | | | |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| Capital and reserve | | | | | |
+------------------------------------+------+-------------+--+----------------+------------------+
| Share capital | | 12 | 9,707 | | 10,085 | 9,400 |
+--------------------------+---------+------+-------------+--+----------------+------------------+
| Reserves | | | | 3,282 | | 14,842 | 5,826 |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| | | | | | | | |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
| Total equity attributable to owners of | 12,989 | | 24,927 | 15,226 |
| the Company | | | | |
+-------------------------------------------+-------------+--+----------------+------------------+
| | | | | | | | |
+-----------+--------------+---------+------+-------------+--+----------------+------------------+
PAQ International Holdings Limited
Unaudited condensed consolidated statement of changes in equity
For the six months ended 30 June 2009
+----+------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| | | | Reserves |
+----+------------------------+---------+--------------------------------------------------------------------------------------------------------------------+
| | | Share | Share | Shares |Treasury | Share | Merger |Shareholders' |Translation | Retained | Sub- | Total |
| | |capital |premium | to be | shares | option |reserve | contribution | reserve | profit / | total | |
| | | | | issued | |reserve | | | |(Accumulated) | | |
| | | | | | | | | | | losses | | |
+----+------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| | | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 |
+----+------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| | | | | | | | | | | | | |
+----+------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| At 1 January 2008 (audited) | - | - | - | - | - | - | - | - | 9,343 | 9,343 | 9,343 |
+-----------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| | | | | | | | | | | | | |
+----+------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| Profit and total | - | - | - | - | - | - | - | 35 | 2,483 | 2,518 | 2,518 |
| comprehensive income for | | | | | | | | | | | |
| the period | | | | | | | | | | | |
+-----------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| Arising from Reorganization | 8,100 | - | - | - | - | -8,091 | - | - | - | -8,091 | 9 |
| (Note (i)) | | | | | | | | | | | |
+-----------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| Issue of shares (Note (ii)) | 1,300 | 14,160 | - | - | - | - | - | - | - | 14,160 | 15,460 |
+-----------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| Expenses incurred in | - | -9,021 | - | - | - | - | 9,021 | - | - | - | - |
| connection with the issue | | | | | | | | | | | |
| of shares (Note (ii)) | | | | | | | | | | | |
+-----------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| Recognition of equity | - | -670 | - | - | 670 | - | - | - | - | - | - |
| settled share based | | | | | | | | | | | |
| payments (Note (iii)) | | | | | | | | | | | |
+-----------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| Purchase of own shares and | - | - | - | -6,271 | - | - | - | - | - | -6,271 | -6,271 |
| held as treasury shares | | | | | | | | | | | |
+-----------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| Acquisition of additional | 685 | 3,183 | - | - | - | - | - | - | - | 3,183 | 3,868 |
| interest in a subsidiary | | | | | | | | | | | |
+-----------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| | | | | | | | | | | | | |
+----+------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| At 30 June 2008 (unaudited) | 10,085 | 7,652 | - | -6,271 | 670 | -8,091 | 9,021 | 35 | 11,826 | 14,842 | 24,927 |
+-----------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| | | | | | | | | | | | | |
+----+------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| At 1 January 2009 (audited) | 9,400 | 4,469 | 4,313 | -3,583 | 670 | -8,091 | 9,021 | 172 | -1,145 | 5,826 | 15,226 |
+-----------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| | | | | | | | | | | | | |
+----+------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| Loss and total | - | - | - | - | - | - | - | - | -3,737 | -3,737 | -3,737 |
| comprehensive income for | | | | | | | | | | | |
| the period | | | | | | | | | | | |
+-----------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| Issue of shares (Note (iv)) | 307 | 1,193 | - | - | - | - | - | - | - | 1,193 | 1,500 |
+-----------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| | | | | | | | | | | | | |
+----+------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
| At 30 June 2009 (unaudited) | 9,707 | 5,662 | 4,313 | -3,583 | 670 | -8,091 | 9,021 | 172 | -4,882 | 3,282 | 12,989 |
+----+------------------------+---------+---------+---------+----------+---------+---------+---------------+-------------+---------------+---------+---------+
Note:
1. The merger reserve of the Group represents the difference between the nominal
value of share capital of a subsidiary acquired pursuant to Reorganization in
January 2008 and the nominal value of the share capital issued by the Company as
consideration for the reorganization of business under common control.
2. The Company entered into an agreement with Mr. Yau Kwong Chi, Kelvin and Madam
Ng Oi Chun, Patty on 28 November 2007 in connection with the expenses incurred
by the Company in relation to the admission to AIM and the related placing of
shares. Under the terms of this agreement, Madam Ng Oi Chun, Patty agreed to
take responsibility for the payemnt of all professional fees incurred by the
Company in connection with the admission to AMI and placing of shares. In
return, Mr. Yau Kwong Chi, Kelvin transferred a total of 26,272,500 ordinary
shares of the Company to Madam Ng Oi Chun, Patty and nominees.
3. On 19 February 2008, the Company granted an option to subscribe for 1,205,166
ordinary shares of the Company to each of Zimmerman Adams International Limited,
the nominated adviser and broker of the Company, and Hichens, Harrison & Co.
plc, the co-broker of the Company, in connection with the placing of shares and
admission to AIM. The share option will expire on 24 February 2013 and have an
exercise price of GBP0.06 per share.
4. On April 2009, Noah Concept Limited subscribed for 3,954,049 new ordinary shares
of US$0.01 each in the Company at a price of HK$0.38 per share for a total
consideration of HK$1,500,000.
PAQ International Holdings Limited
Unaudited condensed consolidated cash flow statement
For the six months ended 30 June 2009
+-----+----------------------------+------+--------+-------------+--+-------------+--+--------------+
| | | | | Six months ended 30 June | | Ended 31 Dec |
+-----+----------------------------+------+--------+------------------------------+--+--------------+
| | | | | 2009 | | 2008 | | 2008 |
+-----+----------------------------+------+--------+-------------+--+-------------+--+--------------+
| | | | | HK$'000 | | HK$'000 | | HK$'000 |
+-----+----------------------------+------+--------+-------------+--+-------------+--+--------------+
| | | | | (unaudited) | | (unaudited) | | (audited) |
+-----+----------------------------+------+--------+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-----+----------------------------+------+--------+-------------+--+-------------+--+--------------+
| Net cash from (used in) operating activities | 2,453 | | -2,521 | | -4,211 |
+--------------------------------------------------+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-----+----------------------------+------+--------+-------------+--+-------------+--+--------------+
| Net cash used in investing activities | | | | | | |
+-----------------------------------------+--------+-------------+--+-------------+--+--------------+
| | Interest received | | | - | | 5 | | 9 |
+-----+----------------------------+------+--------+-------------+--+-------------+--+--------------+
| | Acquisition of property, plant and | -3,203 | | -83 | | -6,194 |
| | equipment | | | | | |
+-----+--------------------------------------------+-------------+--+-------------+--+--------------+
| | Acquisition of a subsidiary, net of cash | - | | -2,656 | | -2,656 |
| | acquired | | | | | |
+-----+--------------------------------------------+-------------+--+-------------+--+--------------+
| | Acquisition of additional interest in a | - | | -9,901 | | -7,453 |
| | subsidiary | | | | | |
+-----+--------------------------------------------+-------------+--+-------------+--+--------------+
| | Proceeds from disposal of property, plant | | | | | 20 |
| | and equipment | | | | | |
+-----+--------------------------------------------+-------------+--+-------------+--+--------------+
| | Increase in pledged bank deposits | | -1 | | -4 | | -6 |
+-----+-----------------------------------+--------+-------------+--+-------------+--+--------------+
| | | | | -3,204 | | -12,639 | | -16,280 |
+-----+----------------------------+------+--------+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-----+----------------------------+------+--------+-------------+--+-------------+--+--------------+
| Net cash from financing activities | | | | | | |
+-----------------------------------------+--------+-------------+--+-------------+--+--------------+
| | Proceeds from issue of ordinary | | 1,500 | | 15,460 | | 15,460 |
| | shares | | | | | | |
+-----+-----------------------------------+--------+-------------+--+-------------+--+--------------+
| | Repayment of borrowings, | | | -261 | | -53 | | 2,111 |
| | net | | | | | | | |
+-----+----------------------------+------+--------+-------------+--+-------------+--+--------------+
| | Repayment of obligation under finance | -87 | | -67 | | -168 |
| | lease | | | | | |
+-----+--------------------------------------------+-------------+--+-------------+--+--------------+
| | Interest paid | | | -449 | | -27 | | -95 |
+-----+----------------------------+------+--------+-------------+--+-------------+--+--------------+
| | | | | 703 | | 15,313 | | 17,308 |
+-----+----------------------------+------+--------+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-----+----------------------------+------+--------+-------------+--+-------------+--+--------------+
| Net (decrease) / increase in cash and cash | -48 | | 153 | | -3,183 |
| equivalents | | | | | |
+--------------------------------------------------+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-----+----------------------------+------+--------+-------------+--+-------------+--+--------------+
| Cash and cash equivalents at beginning of the | 189 | | -7,644 | | -7,644 |
| period | | | | | |
+--------------------------------------------------+-------------+--+-------------+--+--------------+
| Effect of foreign exchange rate | | - | | -9 | | 37 |
| movements | | | | | | |
+-----------------------------------------+--------+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-----+----------------------------+------+--------+-------------+--+-------------+--+--------------+
| Cash and cash equivalents at end of | | 141 | | -7,500 | | -10,790 |
| the period, represented by bank | | | | | | |
| balances and cash | | | | | | |
+-----------------------------------------+--------+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-----+----------------------------+------+--------+-------------+--+-------------+--+--------------+
PAQ International Holdings Limited
Notes to the condensed consolidated interim financial information
For the six months ended 30 June 2009
1. BASIS OF PREPARATION
The condensed consolidated interim financial information have been prepared
in accordance with International Accounting Standard 34 ("IAS 34"), Interim
Financial Reporting.
The condensed consolidated interim financial information are presented in
Hong Kong Dollars ("HKD"), which is the same as the funciational currency of the
Company.
2.PRINCIPAL ACCOUNTING POLICIES
The condensed consolidated interim financial information have been prepared on
the historical cost basis.
The accounting policies used in the condensed consolidated interim financial
information are consistent with those followed in the preparation of the Group's
annual financial statements for the year ended 31 December 2008 except as
described below.
In the current interim preiod, the Group has applied, for the first time, the
following new and revised standards, amendments and interpretations ("new and
revised IFRSs") which are effective for the Group's financial year beginning on
1 January 2009.
+--------------------------------------+--------------------------------------------------------------+
| IAS | Presentation of Financial Statements |
| 1 | |
| (Revised | |
| 2007) | |
+--------------------------------------+--------------------------------------------------------------+
| IAS | Borrowing costs |
| 23 | |
| (Revised | |
| 2007) | |
+--------------------------------------+--------------------------------------------------------------+
| IAS | Puttable Financial Instruments and |
| 32 | Obligations Arising on Liquidation |
| & 1 | |
| (Amendments) | |
+--------------------------------------+--------------------------------------------------------------+
| IFRS | Cost of an Investment in a |
| 1 | Subsidiary, Jointly Controlled |
| (Amendment) | Entity or Associate |
+--------------------------------------+--------------------------------------------------------------+
| IFRS | Vesting Conditions and Cancellations |
| 2 | |
| (Amendment) | |
+--------------------------------------+--------------------------------------------------------------+
| IFRS | Improving Disclosures about |
| 7 | Financial Instruments |
| (Amendment) | |
+--------------------------------------+--------------------------------------------------------------+
| IFRS | Operating Segments |
| 8 | |
+--------------------------------------+--------------------------------------------------------------+
| IFRIC | Embedded Derivatives |
| 9 & | |
| IAS | |
| 39 | |
| (Amendments) | |
+--------------------------------------+--------------------------------------------------------------+
| IFRIC | Customer Loyalty Programmes |
| 13 | |
+--------------------------------------+--------------------------------------------------------------+
| IFRIC | Agreements for the Construction of |
| 15 | Real Estate |
+--------------------------------------+--------------------------------------------------------------+
| IFRIC | Hedges of a Net Investment in |
| 16 | Foreign Operation |
+--------------------------------------+--------------------------------------------------------------+
| IFRSs | Improvements to IFRSs issued in |
| (Amendments) | 2008, except for the amendment to |
| | IFRS 5 that is effective for annual |
| | periods beginning or after 1 July |
| | 2009 |
+--------------------------------------+--------------------------------------------------------------+
| IFRSs | Improvements of IFRSs issued in 2009 |
| (Amendments) | in relation to the amendment to |
| | paragraph 80 of IAS 39 |
+--------------------------------------+--------------------------------------------------------------+
IAS 1 (Revised 2007) Presentation of Financial Statements
IAS 1 (Revised 2007) has introduced a number of terminology changes, including
revised titles for the condensed consoldiated interim financial information, and
has resulted in a number of changes in presentation and disclosure. However, IAS
1 (Revised 2007) had no impact on the reported results or financial position the
Group.
IAS 23 (Revised 2007) Borrowing Costs
In previous years, the Group expensed all borrowing costs that were directly
attributable to the acquisition, construction or production of an qualifying
asset when they were incurred. IAS 23 (Revised 2007) removes the option
available under the previous version of the Standard to recognize all borrowing
costs as expenses immediately and requires all such borrowing costs to be
capitalized as part of the cost of the qualifying asset. The Group has applied
the revised accounting policy prospectively. The application of IAS 23 (Revised
2007) had no impact on the reported results or financial position of the Group.
IFRS 7 (Amendment) Improving Disclosures about Financial Instruments
IFRS 7 (Amendment) increases the disclosure requirements about fair value
measurement and amends the disclosure about liquidity risk. The amendment
introduces a three-level hierarchy for fair value measurement disclosures about
financial instruments and requires some specific quantitative disclosures for
those instruments classified in the lowest level in the hierarchy. These
disclosures will help to improve comparability between entities about the
effects of fair value measurements. In addition, the amendment clarifies and
enhances the existing requirements for the disclosure of liquidity risk
primarily requiring a separate liquidity risk analysis for derivative and
non-derivative financial liabilities. It also requires a maturity analysis for
financial assets where the information is needed to understand the nature and
context of liquidity risk. The Group will make additional relevant disclosures
in its financial statements ending 31 December 2009.
IFRS 8 Operating Segments
IFRS 8 requires segment disclosure to be based on the way that the Group's chief
operating decision maker regards and manages the Group, with the amounts
reported for each reportable segment being the measures reported to the Group's
chief operating decision maker for the purposes of assessing segment performance
and making decisions about operating matters. This contrasts with the
presentation of segment information in prior years which was based on a
disaggregation of the Group's financial statements into segments based on
related products and services and on geographical areas. The adoption of IFRS 8
has resulted in the presentation of segment information in a manner that is more
consistent with internal reporting provided to the Group's most senior executive
management, and has resulted in additional reportable segments being identified
and presented (See note 3). As this is the first period in which the Group has
presented segment information in accordance with IFRS 8, additional explanation
has been included in the condensed consolidated interim financial information
which explains the basis of preparation of the information. Corresponding
amounts have also been provided on a basis consistent with the revised segment
information.
The adoption of the other new and revised IFRSs has had no material effect on
the reported results and financial position of the Group for the current or
prior accounting periods. Accordingly, no prior period adjustment has been
recognized.
The Group has not early applied the following new or revised standards,
amendments or interpretations that have been issued but are not yet effective:
+--------------------------------------+--------------------------------------------------------------+-----------+-----------+
| IFRSs | Amendment to IFRS 5 as part of |
| (Amendments) | Improvements to IFRSs issued in May |
| | 2008 (note 1) |
+--------------------------------------+--------------------------------------------------------------+
| IFRSs | Improvements to IFRSs issued in |
| (Amendments) | April 2009 (note 2) |
+--------------------------------------+--------------------------------------------------------------+
| IAS | Consolidated and Separate Financial |
| 27 | Statements (note 1) |
| (Revised | |
| 2008) | |
+--------------------------------------+--------------------------------------------------------------+
| IAS | Eligible Hedged Items (note 1) | | |
| 39 | | | |
| (Amendment) | | | |
+--------------------------------------+--------------------------------------------------------------+-----------+-----------+
| IFRS | Additional Exemptions for First-time |
| 1 | Adopters (note 4) |
| (Amendment) | |
+--------------------------------------+--------------------------------------------------------------+
| IFRS | Group Cash-settled Share-based |
| 2 | Payment Transactions (note 4) |
| (Amendment) | |
+--------------------------------------+--------------------------------------------------------------+
| IFRS | Business Combinations (note 1) | |
| 3 | | |
| (Revised | | |
| 2008) | | |
+--------------------------------------+--------------------------------------------------------------+-----------+
| IFRIC | Distributions of Non-cash Assets to |
| 17 | Owners (note 1) |
+--------------------------------------+--------------------------------------------------------------+
| IFRIC | Transfers of Assets from Customers |
| 18 | (note 3) |
+--------------------------------------+--------------------------------------------------------------+
| | |
+--------------------------------------+--------------------------------------------------------------+
| | |
+--------------------------------------+--------------------------------------------------------------+
| | |
+--------------------------------------+--------------------------------------------------------------+
| | |
+--------------------------------------+--------------------------------------------------------------+-----------+-----------+
Note:
1. Effective for annual periods beginning on or after 1 July 2009.
2. Amendments that are effective for annual periods beginning on or after 1 July
2009 or 1 January 2010, as appropriate.
3. Effective for transfers on or after 1 July 2009.
4. Effective for annual periods beginning or or after 1 January 2010.
The adoption of IFRS 3 (Revised 2008) may affect the Group's accounting for
business combinations for which the acquisition dates are on or after 1 January
2010. IAS 27 (Revised 2008) will affect the accounting treatment for changes in
the Group's ownership interest in a subsidiary. The directors of the Company
anticipate that the application of other new and revised standards, amendments
or interpretations will have no material impact on the results and the financial
position of the Group.
3. SEGMENT INFORMATION
The Group has adopted IFRS 8 Operating Segments with effect from 1 January 2009.
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the Group's
chief operating decision maker in order to allocate resources to segments and to
assess their performance.
In prior years, on segment information is presented as the Group is principally
engaged in the manufacturing and distributing branded softwear for branded
electronic products and accessories which comprise a single business segment.
However, information reported to the Group's cheif operating decision maker for
the purposes of resource allocation and performance assessment focuses more
specifically on the following geographical location of customers. The Group's
reportable segments under IFRS 8 are therefore as follows:
(a) Europe
(b) PRC
(c ) United States of America
(d) Australia
(e) Others
The following is an analysis of the Group's revenue and results by operating
segment for the period under review:
For the six months ended 30 June 2009
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| |
+----------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| | | | | | | | | United | | | | | | |
| | | | | | | | | States | | | | | | |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| | | | | Europe | | PRC | | of | | Australia | | Others | | Consolidated |
| | | | | | | | | America | | | | | | |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| | | | | HK$'000 | | HK$'000 | | HK$'000 | | HK$'000 | | HK$'000 | | HK$'000 |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| | | | | | | | | | | | | | | |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| Revenue | | | | | | | | | | | | | |
+-------------+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| External sales | | 654 | | 282 | | 11,606 | | 116 | | 880 | | 13,538 |
+--------------------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| | | | | | | | | | | | | | | |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| Segment profit | | 281 | | 121 | | 252 | | 50 | | 380 | | 1,084 |
+--------------------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| | | | | | | | | | | | | | | |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| Unallocated income | | | | | | | | | | | | 112 |
+--------------------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| Unallocated | | | | | | | | | | | | -4,484 |
| expenses | | | | | | | | | | | | |
+--------------------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| Finance costs | | | | | | | | | | | | -449 |
+--------------------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| | | | | | | | | | | | | | | |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| Loss before tax | | | | | | | | | | | | -3,737 |
+--------------------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| | | | | | | | | | | | | | | |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| For the six months ended 30 June 2008 |
+----------------------------------------------------------------------------------------------------------------+
| | | | | | | | | United | | | | | | |
| | | | | | | | | States | | | | | | |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| | | | | Europe | | PRC | | of | | Australia | | Others | | Consolidated |
| | | | | | | | | America | | | | | | |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| | | | | HK$'000 | | HK$'000 | | HK$'000 | | HK$'000 | | HK$'000 | | HK$'000 |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| | | | | | | | | | | | | | | |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| Revenue | | | | | | | | | | | | | |
+-------------+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| External sales | | 6,512 | | 167 | | 29,357 | | 868 | | 7,528 | | 44,432 |
+--------------------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| | | | | | | | | | | | | | | |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| Segment profit | | 1,172 | | 30 | | 5,267 | | 156 | | 1,355 | | 7,980 |
+--------------------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| | | | | | | | | | | | | | | |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| Interest income | | | | | | | | | | | | 5 |
+--------------------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| Other unallocated | | | | | | | | | | | | 5,658 |
| income | | | | | | | | | | | | |
+--------------------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| Unallocated | | | | | | | | | | | | -9,352 |
| expenses | | | | | | | | | | | | |
+--------------------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| Finance costs | | | | | | | | | | | | -292 |
+--------------------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| | | | | | | | | | | | | | | |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| Profit before tax | | | | | | | | | | | | 3,999 |
+--------------------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
| | | | | | | | | | | | | | | |
+-------+-----+------+--+-----------+--+-----------+--+-----------+--+-----------+--+----------+--+--------------+
Segment profit represents the gross profit earned by each segment. This is the
measure reported to board of directors for the purposes of resource allocation
and performance assessment. 4.(LOSS) / PROFIT BEFORE TAX
+-------+-------+------+--+-+---+--+-----------+--+-----------+--+--------+-+-+--+----------+--+-------------+
| | | | | | | | | | | | | Six months ended 30 |
| | | | | | | | | | | | | June |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+---------------------------+
| | | | | | | | | | | Note | | 2009 | | 2008 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | HK$'000 | | HK$'000 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (Loss) / Profit before tax | | | | | | | | | |
| has been arrived at: | | | | | | | | | |
+----------------------------------+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| After charging: | | | | | | | | | | | | |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (a) | Finance costs: | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Interest on | | | | | | | | 8 | | 9 |
| | finance leases | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Interest on bank | | | | | | | | 58 | | 14 |
| | loans | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Interest on bank | | | | | | | | 375 | | 265 |
| | overdrafts | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Interest on | | | | | | | | 8 | | 4 |
| | discounted bills | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 449 | | 292 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (b) | Staff costs, excluding | | | | (i) | | | | |
| | directors' remuneration: | | | | | | | | |
+-------+--------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| | Salaries, wages and other | | | | | | 1,395 | | 3,795 |
| | benefits | | | | | | | | |
+-------+--------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| | Retirement scheme contributions | | | | | | 40 | | 140 |
+-------+--------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 1,435 | | 3,935 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (c ) | Other | | | | | | | | | | | | |
| | items: | | | | | | | | | | | | |
+-------+--------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Directors' | - | | | | | | | - | | - |
| | remuneration | fees | | | | | | | | | |
+-------+-------------------+------+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | - other | | | | | | 780 | | 599 |
| | | | emoluments | | | | | | | | |
+-------+-------+-----------+------------------+--+-----------+--+----------+----+----------+--+-------------+
| | | | - retirement scheme | | | | - | | 4 |
| | | | contributions | | | | | | |
+-------+-------+-----------+---------------------------------+--+----------+----+----------+--+-------------+
| | Cost of | | | | | | (ii) | | 12,454 | | 36,452 |
| | inventories | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Depreciation on property, plant | | | | | | 1,313 | | 364 |
| | and equipment | | | | | | | | |
+-------+--------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| | Minimum lease payment under | | | | | | 180 | | 595 |
| | operating lease | | | | | | | | |
+-------+--------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| | - rented premises | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Net foreign | | | | | | | | 6 | | 425 |
| | exchange losses | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Impairment loss on other | | | | | | - | | 1,526 |
| | receivables | | | | | | | | |
+-------+--------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| | Research and | | | | | | | | 162 | | 243 |
| | development costs | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Note: | | | | | | | | | | | | |
+-------+--------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | (i) | Staff costs include approximately HK$162,000 (for the six months ended 30 June |
| | | 2008: HK$243,000) relating to research and development costs disclosed separately |
| | | in Note 4(c ). |
+-------+-------+--------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | (ii) | Cost of inventories includes approximately HK$159,000 (for the six months ended 30 |
| | | June 2008: HK$2,310,000) relating to operating lease charges, staff costs and |
| | | depreciation, which are included in the respective total amounts disclosed |
| | | separately above or Note 4(b) for each of these types of expenses. |
+-------+-------+--------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| After crediting: | | | | | | | | | | | | |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Interest income | | | | | | | | | | - | | 5 |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| 5. INCOME TAX EXPENSES | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | Six months ended 30 |
| | | | | | | | | | | | | June |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+---------------------------+
| | | | | | | | | | | | | 2009 | | 2008 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | HK$'000 | | HK$'000 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Current tax - Hong Kong | | | | | | | | - | | 506 |
| Profits Tax | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| No provision for income tax has been made for the Company and group entities established in the |
| Cayman Islands and Hong Kong as they have no assessable income during the interim period. |
+------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| The provision of Hong Kong profits tax is calculated by applying the estimated annual effective |
| tax rate of 16.5% for the six months ended 30 June 2008. |
+------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Pursuant to the relevant laws and regulations in the People's Republic of China ("PRC"), the |
| Group's PRC subsidiary is exempted from PRC enterprise income tax for the two years from the |
| first profit-making year and thereafter is entitled to a 50% relief from PRC enterprise income |
| tax for the following three years. The PRC subsidiary was in its [ third ] profit-making year for |
| the six months ended 30 June 2009. |
+------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| 6. EARNINGS PER SHARE | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (a) | Basis earnings | | | | | | | | | | |
| | per share | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | The calculation of basis earnings per share is based on the profit attributable to owners |
| | of the Company of approximately HK$3,737,000 (for the six months ended 30 June 2008: |
| | HK$2,483,0000 and the weighted average number of 123,714,604 ordinary shares (for the six |
| | months ended 30 June 2008: 116,352,458 shares, after assuming the completion of the |
| | Reorganization on 1 January 2007) in issue during the interim period. |
+-------+----------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (b) | Diluted (loss) / | | | | | | | | | | |
| | earnings per | | | | | | | | | | |
| | share | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Diluted loss per share has not been presented for the six months ended 30 June 2009 |
| | because the exercise price of the Company's options was higher than the average market |
| | price of the Company's shares during that period when they were outstanding. No diluted |
| | earnings per share have been presented for the six months ended 30 June 2008 because the |
| | options outstanding during that period had an anti-dilutive effect on the basis earnings |
| | per share. |
+-------+----------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| 7. MOVEMENT IN PROPERTY, PLANT AND EQUIPMENT | | | | | | |
+-------------------------------------------------------------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| During the six months ended 30 June 2009, the Group spent HK$3,203,000 (for the six months ended |
| 30 June 2008: HK$83,000) on the acquisition of property, plant and equipment. |
+------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| 8. GOODWILL | | | | | | | | | | | | |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 30 June | | 31 |
| | | | | | | | | | | | | | | December |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 2009 | | 2008 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | HK$'000 | | HK$'000 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| COST | | | | | | | | | | | | | |
+---------------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Opening net book amount | | | | | | | | 14,227 | | - |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Acquired on acquisition | | | | | | | | - | | 14,227 |
| of a subsidiary | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Closing net book amount | | | | | | | | 14,227 | | 14,227 |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| On 18 January 2008, PAQ Manufacturing Limited, a wholly owned subsidiary of the Company, acquired |
| 51% equity interest in Plato Leatherware Company Limited at a cash consideration of HK$2,448,000. |
+------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| The net liabilities acquired on 18 January 2008 and the goodwill | | | | |
| arising are as follows: | | | | |
+---------------------------------------------------------------------------+----+----------+--+-------------+
| | | | | | | | | | | | | | | Acquiree's |
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | carrying |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | amounts |
| | | | | | | | | | | | | | | before |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | combination |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | and |
| | | | | | | | | | | | | | | fair |
| | | | | | | | | | | | | | | value |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | HK$'000 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Net assets/(liabilities) | | | | | | | | | | |
| acquired: | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Property, plant and | | | | | | | | | | 5 |
| equipment | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Trade and other | | | | | | | | | | 4,338 |
| receivables | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Bank and cash balances | | | | | | | | | | 6 |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Trade and other payables | | | | | | | | | | -5,603 |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Bank overdrafts | | | | | | | | | | | | -214 |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Net liabilities | | | | | | | | | | | | -1,468 |
| acquired | | | | | | | | | | | | |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Goodwill | | | | | | | | | | | | | 3,916 |
+---------------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | 2,448 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Total consideration | | | | | | | | | | |
| satisfied by: | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Cash | | | | | | | | | | | | | 2,448 |
+---------------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Net cash outflow arising | | | | | | | | | | |
| on acquisition: | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Cash consideration | | | | | | | | | | | | 2,448 |
| paid | | | | | | | | | | | | |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Bank balances and cash, bank overdrafts | | | | | | | | 208 |
| acquired | | | | | | | | |
+----------------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | 2,656 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| On 11 June 2008, PAQ Manufacturing Limited further acquired the remaining 49% equity interests in |
| Plato Leatherware Company Limited at a cash consideration of approximately HK$9,901,000 and |
| 8,772,000 issued shares of the Company. Plato Leatherware Company Limited became a wholly owned |
| subsidiary of the Company thereafter. |
+------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Pursuant to the sale and purchase agreement in relation to the acquisition of the remaining 49% |
| equity interests in Plato Leatherware Company Limited, a part of cash consideration of |
| HK$2,448,000 for the acquisition was contingent on the fund raising by the Company after |
| admission to the AIM by means of share placement on or before 1 May 2009. Management of the |
| Company considered that the fund raising exercise was not probable and did not include the |
| aforesaid cash consideration of HK$2,448,000 in the cost of acquisition at the acquisition date. |
| Subsequent to the date of acquisition of the remaining 49% equity interest in Plato Leatherware |
| Company Limited and up to 1 May 2009, no fund raising by the Company occurred. |
+------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| After the completion of the acquisition of the remaining 49% equity interests in Plato |
| Leatherware Company Limited on 11 June 2008, the goodwill arising is as follows: |
+------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | HK$'000 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Purchase | | | | | | | | | | | | |
| consideration: | | | | | | | | | | | | |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Cash consideration | | | | | | | | | | | | 7,453 |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Fair value of 8,772,000 shares of the Company to be | | | | | | 3,868 |
| issued (Note) | | | | | | |
+-------------------------------------------------------------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | 11,321 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Acquisition of additional interest in a | | | | | | | |
| subsidiary from a minority | | | | | | | |
+-------------------------------------------------+-----------+--+----------+----+----------+--+-------------+
| shareholder | | | | | | | | | | | | -1,010 |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Goodwill arising | | | | | | | | | | | | 10,311 |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Goodwill arising from acquisition on 18 January 2008 - | | | | | | 3,916 |
| shown as above | | | | | | |
+-------------------------------------------------------------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Total goodwill | | | | | | | | | | | | 14,227 |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Note: | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| At 31 December 2008, the consideration of 8,772,000 shares of the Company for the acquisition had |
| not yet been issued and therefore the fair value of 8,772,000 shares to be issued for the |
| acquisition had been recognized as "shares to be issued" in the equity. Shares to be issued was |
| based the published price of the Company's shares as quoted on the AIM on 11 June 2008. |
+------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| 9. TRADE AND OTHER RECEIVABLES | | | | | | | | |
+----------------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 30 June | | 31 |
| | | | | | | | | | | | | | | December |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 2009 | | 2008 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | HK$'000 | | HK$'000 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Trade receivables | | | | | | | | | | 7,566 | | 9,240 |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Less: | Allowance for | | | | | | | | -630 | | -630 |
| | doubtful debts | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 6,936 | | 8,610 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Other receivables | | | | | | | | | | 11,984 | | 18,847 |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Prepayments and deposits | | | | | | | | 554 | | 278 |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 12,538 | | 19,125 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Less: | Allowance for | | | | | | | | -2,859 | | -9,235 |
| | doubtful debts | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 9,679 | | 9,890 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 16,615 | | 18,500 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| An ageing analysis of trade receivables (net of allowance for doubtful debts) at the end of the |
| interim / reporting period is as follows: |
+------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 30 June | | 31 |
| | | | | | | | | | | | | | | December |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 2009 | | 2008 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | HK$'000 | | HK$'000 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Less than 1 month past | | | | | | | | 3,800 | | 6,811 |
| due | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| 1 month to 3 months past | | | | | | | | -658 | | 1,223 |
| due | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| More than 3 months but less than 1 year | | | | | | 3,790 | | 576 |
| past due | | | | | | | | |
+----------------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| Over 1 year past | | | | | | | | | | 4 | | - |
| due | | | | | | | | | | | | |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Amounts past due | | | | | | | | | | 6,936 | | 8,610 |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Trade receivables are due upon the date | | | | | | | | |
| of billing. | | | | | | | | |
+----------------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| 10. TRADE AND OTHER | | | | | | | | | | |
| PAYABLES | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 30 June | | 31 |
| | | | | | | | | | | | | | | December |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 2009 | | 2008 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | HK$'000 | | HK$'000 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Trade payables | | | | | | | | | | 3,785 | | 1,668 |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Other payables and | | | | | | | | 3,411 | | 3,471 |
| accrued charges | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Deposits received | | | | | | | | | | 1,260 | | 1,096 |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 8,456 | | 6,235 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| An ageing analysis of trade payables at the end of the interim / | | | | |
| reporting period is as follows: | | | | |
+---------------------------------------------------------------------------+----+----------+--+-------------+
| | | | | | | | | | | | | 30 June | | 31 |
| | | | | | | | | | | | | | | December |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 2009 | | 2008 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | HK$'000 | | HK$'000 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Less than 1 month | | | | | | | | | | 2,010 | | 457 |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| 1 month to 3 | | | | | | | | | | 622 | | 5 |
| months | | | | | | | | | | | | |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Over 3 months but less | | | | | | | | 613 | | 1,206 |
| than 1 year | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Over 1 year | | | | | | | | | | 540 | | - |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 3,785 | | 1,668 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| The average credit period on purchase of | | | | | | | | |
| goods is 30 days. | | | | | | | | |
+----------------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| 11. BORROWINGS | | | | | | | | | | | | |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 30 June | | 31 |
| | | | | | | | | | | | | | | December |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | Note | | 2009 | | 2008 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | HK$'000 | | HK$'000 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Secured: | | | | | | | | | | | | | |
+---------------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Bank overdrafts | | | | | | | | (a) | | 11,056 | | 10,979 |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Bank loans | | | | | | | | (a) | | 946 | | 1,284 |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Unsecured: | | | | | | | | | | | | |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Other loans | | | | | | | | (b)(i) | | 500 | | 500 |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 12,502 | | 12,763 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| At the end of the interim / reporting period, the bank borrowings | | | | |
| were repayable as follows: | | | | |
+---------------------------------------------------------------------------+----+----------+--+-------------+
| | | | | | | | | | | | | 30 June | | 31 |
| | | | | | | | | | | | | | | December |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 2009 | | 2008 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | HK$'000 | | HK$'000 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Within one year or | | | | | | | | | | 12,154 | | 12,416 |
| on demand | | | | | | | | | | | | |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| After 1 year but | | | | | | | | | | 348 | | 347 |
| within 2 years | | | | | | | | | | | | |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 12,502 | | 12,763 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Less: | Amounts due within one year shown under current | | | | -12,154 | | -12,416 |
| | liabilities | | | | | | |
+-------+-----------------------------------------------------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 348 | | 347 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Note: | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (a) | The Group's interest-bearing borrowings bear interest ranging from 5.75% to 6.25% (for |
| | the year ended 31 December 2008: 6% to 6.25%) per annum. The details of security of |
| | borrowings are disclosed in Note 14. |
+-------+----------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (b) | (i) | Pursuant to an agreement entered into between the Company and Ms. Ho Wing Yee ("Ms. |
| | | Ho"), an independent third party, on 17 June 2008, Ms. Ho agreed to advance to the |
| | | Company a sum of HK$500,000 (the "1st Loan"). The 1st Loan is unsecured, |
| | | interest-free and has no fixed terms of repayment. The 1st Loan is convertible at |
| | | the option of the lender into ordinary shares of the Company. The conversion rights |
| | | attached to the 1st Loan can be exercised at any time after the expiry of one month |
| | | from the date of the agreement and the conversion price of the 1st Loan is HK$0.442 |
| | | per share. |
+-------+-------+--------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | (ii) | Pursuant to an agreement entered into between the Company and Mr. Ng Ngai Hung |
| | | ("Mr. Ng"), an independent third party, on 23 June 2008, Mr. Ng agreed to advance |
| | | to the Company a sum of HK$445,000 (the "2nd Loan"). The 2nd Loan is unsecured, |
| | | interest-free and has no fixed terms of repayment. The 2nd Loan is convertible at |
| | | the option of the lender into ordinary shares of the Company. The conversion rights |
| | | attached to the 2nd Loan can be exercised at any time after the expiry of one month |
| | | from the date of agreement and the conversion price of the 2nd Loan is HK$0.445 per |
| | | share. |
+-------+-------+--------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | During the year ended 31 December 2008, Mr. Ng exercised the conversion rights to |
| | | convert the 2nd Loan into 1,000,000 shares of the Company. Up to the date of |
| | | issuance of these condensed consolidated interim financial information, the Company |
| | | is yet to complete the relevant procedures to convert the 2nd Loan into shares of |
| | | the Company and therefore the sum of HK$445,000 was treated as "Shares to be |
| | | issued" included in the reserves of the Company. |
+-------+-------+--------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| SHARE CAPITAL | | | | | | | | | | | | |
+----------------------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| | | | | | | | | | | | | Number of | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| | | | | | | | | | | Note | | shares | | Amount |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| | | | | | | | | | | | | | | HK$'000 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| At 1 January 2008 | | | | | | | | (a) | | 1 | | - |
+----------------------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| Sub-division of the par | | | | | | (b) | | 9 | | - |
| value | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| of ordinary shares of | | | | | | | | | | |
| US$0.10 | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| to US$0.01 each | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| Issue of shares | | | | | | | | (c ) | | 103,850,000 | | 8,100 |
| upon | | | | | | | | | | | | |
+----------------------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| Reorganization | | | | | | | | | | | | |
+----------------------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| Issue of shares upon | | | | | | (d) | | 16,666,667 | | 1,300 |
| placing | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| Issue of shares for | | | | | | (e) | | 8,772,000 | | 685 |
| acquisition | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| of additional interest | | | | | | | | | | |
| in a subsidiary | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| At 30 June 2008 | | | | | | | | | | 129,288,677 | | 10,085 |
+----------------------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| At 1 January 2009 | | | | | | | | | | 120,516,677 | | 9,400 |
+----------------------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| Issue of shares | | | | | | | | (f) | | 3,954,049 | | 306 |
+----------------------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| At 30 June 2009 | | | | | | | | | | 124,470,726 | | 9,706 |
+----------------------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| Note: | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+--------+---+-------------+--+-------------+
| (a) | The Company was incorporated on 23 November 2007, on which date the authorized share |
| | capital was US$50,000 divided into 500,000 ordinary shares of US$0.10 each, 1 of which |
| | was issued at par for cash. |
+-------+----------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (b) | On 18 January 2008, (i) issued and unissued shares of the Company were sub-divided into |
| | 10 shares of US$0.01 each such that the authorized share capital of the Company became |
| | US$50,000 divided into 5,000,000 ordinary shares; and (ii) the authorized share capital |
| | of the Company was increased to US$3 million by the creation of 295,000,000 new ordinary |
| | shares. |
+-------+----------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (c ) | On 18 January 2008, the Company underwent the Reorganization and acquired the entire |
| | equity interests in PAQ Manufacturing Limited, a company incorporated in Hong Kong, |
| | through the issue of 103,850,000 ordinary shares of US$0.01 each to Mr. Yau Kwong Chi, |
| | Kelvin and Mr. Edmund Lui. |
+-------+----------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (d) | On 25 February 2008, 16,666,667 new ordinary shares of US$0.01 each of the Company were |
| | issued at GBP0.06 per share by way of placing of shares. |
+-------+----------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (e) | On 11 June 2008, the Group acquired the remaining 49% equity interests in Plato |
| | Leatherware Company Limited at a cash consideration of approximately HK$9,901,000 and |
| | 8,772,000 issued shares of the Company. |
+-------+----------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (f) | On April 2009, Noah Concept Limited subscribed for 3,954,049 new ordinary shares of |
| | US$0.01 each in the Company at a price of HK$0.38 per share for a total consideration of |
| | HK$1,500,000. |
+-------+----------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| All the new shares issued during the financial period rank pari passu in all respects with the |
| existing shares of the Company. |
+------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| 13. BANKING FACILITIES | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| At the end of the interim period, the Group had general banking facilities granted by banks to |
| the extent of approximately HK$13,300,000 (as at 31 December 2008: HK$13,300,000). The Group's |
| bank borrowings and other banking facilities were secured by: |
+------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (a) | Personal guarantees provide by Mr. Edmund Lui and Mr. Yau Kwong Chi, Kelvin, directors of |
| | the Company; |
+-------+----------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (b) | Pledge of fixed deposits of the Group and a close family member of a director of PAQ |
| | Manufacturing Limited, a wholly owned subsidiary of the Company; and |
+-------+----------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (c ) | Pledge of a property of a related company, Triple Grand Limited. Mr. Yau Kwong Chi, |
| | Kelvin, director of the Company, had the beneficial interests in Triple Grand Limited. |
+-------+----------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| 14. COMMITMENTS | | | | | | | | | | | | |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| At the end of the interim / reporting period, the total future minimum lease payments under |
| non-cancelable operating leases were payable as follows: |
+------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | 30 June | | 31 |
| | | | | | | | | | | | | | | December |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 2009 | | 2008 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | HK$'000 | | HK$'000 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Within 1 year | | | | | | | | | | 907 | | 991 |
+----------------------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| After 1 year but within 5 | | | | | | | | 431 | | 1,338 |
| years | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 1,338 | | 2,329 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| Operating leases related to rental premises with lease terms of between two to five years. None |
| of the leases includes contingent rentals. |
+------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| 16. CONTINGENT | | | | | | | | | | |
| LIABILITIES | | | | | | | | | | |
+-------------------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| PAQ Manufacturing Limited, a wholly owned subsidiary of the Company, was one of the defendants in |
| a pending litigation and dispute arising from the ownership of a copyright with a supplier. The |
| supplier's claims against the defendants are mainly for damages in resepct of the defendants' |
| acts of copyright infringement. No provision in relation to this claim has been made in this |
| condensed consolidated interim financial information, as legal adviser indicates that it is not |
| probable that a significant liability will arise. There were no contingent liabilities as at 31 |
| December 2008 and 30 June 2009. |
+------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| 17. RELATED PARTY TRANSACTIONS | | | | | | | | |
+----------------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (a) | Save as disclosed elsewhere in the condensed consolidated interim financial information, |
| | the Group had the following significant related party transactions during the interim |
| | period: |
+-------+----------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | Six months ended 30 |
| | | | | | | | | | | | | June |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+---------------------------+
| | | | | | | | | | | Note | | 2009 | | 2008 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | HK$'000 | | HK$'000 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Licensing income received from | | | | (i) | | - | | 500 |
| | Riverstone | | | | | | | | |
+-------+--------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| | Manufacturing | | | | | | | | | | |
| | Limited | | | | | | | | | | |
| | ("Riverstone") | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Management income received from | | | | (ii) | | - | | 14 |
| | Riverstone | | | | | | | | |
+-------+--------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (b) | Key management compensation amounted to approximately HK$780,000 for the six months ended |
| | 30 June 2009 (for the six months ended 30 June 2008: HK$603,000). |
+-------+----------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | Six months ended 30 |
| | | | | | | | | | | | | June |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+---------------------------+
| | | | | | | | | | | | | 2009 | | 2008 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | HK$'000 | | HK$'000 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Salaries and | | | | | | | | 780 | | 599 |
| | other short-term | | | | | | | | | | |
| | benefits | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Post-employment | | | | | | | | | - | | 4 |
| | benefits | | | | | | | | | | | |
+-------+-----------------+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | 780 | | 603 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Total remuneration is included in directors' | | | | | | |
| | remuneration (Note 4(c )). | | | | | | |
+-------+-----------------------------------------------------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| (c ) | At the end of the interim / reporting period, the Group had the following | | |
| | balances with related parties: | | |
+-------+-----------------------------------------------------------------------------------+--+-------------+
| | | | | | | | | | | | | 30 June | | 31 |
| | | | | | | | | | | | | | | December |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | Note | | 2009 | | 2008 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | HK$'000 | | HK$'000 |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Amount due from a | | | | | | | | | | |
| | director | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | Poon Chi | | | | | | (iii) | | 14 | | - |
| | | Man | | | | | | | | | | |
+-------+-------+---------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Maximum balance due from Poon | | | | | | 14 | | - |
| | Chi Man | | | | | | | | |
+-------+--------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Amount due from a related | | | | | | | | |
| | company | | | | | | | | |
+-------+--------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| | | One Plus Manufacturing Limited ("One | | (iv) | | 34 | | 24 |
| | | Plus") | | | | | | |
+-------+-------+---------------------------------------------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Maximum balance due from One | | | | | | 34 | | 24 |
| | Plus | | | | | | | | |
+-------+--------------------------------------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | Amounts due to | | | | | | (iii) | | 1,540 | | 954 |
| | directors | | | | | | | | | | |
+-------+-----------------------+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | (i) | The licensing income was charged at prices and terms mutually agreed | | |
| | | by both parties. | | |
+-------+-------+---------------------------------------------------------------------------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | (ii) | The management income was charged on a cost | | | | |
| | | reimbursement basis. | | | | |
+-------+-------+-----------------------------------------------------------+----+----------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | (iii) | The amount(s) due is/are unsecured, interest-free and has/have no | | |
| | | fixed terms of repayment. | | |
+-------+-------+---------------------------------------------------------------------------+--+-------------+
| | | | | | | | | | | | | | | |
+-------+-------+------+--+-----+--+-----------+--+-----------+--+----------+----+----------+--+-------------+
| | (iv) | One Plus is related to the Group by virtue of the interests of Mr. Edmund Lui and |
| | | Mr. Yau Kwong Chi, Kelvin. The share capital of One Plus is directly held by Mr. |
| | | Edmund Lui and Mr. Yau Kwong Chi, Kelvin, directors of the Company. The amount due |
| | | is unsecured, interest-free and has no fixed terms of repayment. |
+-------+-------+------+--+-+---+--+-----------+--+-----------+--+--------+-+-+--+----------+--+-------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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