Brockman Mining Limited — Interim / Quarterly Report 2011

Aug 23, 2011

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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WONG’S INTERNATIONAL (HOLDINGS) LIMITED 王氏國際（集團）有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 99)

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2011

The board of directors (the “Board” or “Directors”) of Wong’s International (Holdings) Limited (the “Company”) is pleased to announce the unaudited condensed consolidated results of the Company and its subsidiaries (the “Group”) for the six months ended 30 June 2011 as follows:

CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2011

Note Revenue 2 Other income 3 Changes in inventories of finished goods and work in progress Raw materials and consumables used Employee benefit expense Depreciation and amortisation charges Other operating expenses Change in fair value of investment properties Other gains/(losses) – net 4 Operating profit Finance income Finance costs Share of profit/(loss) of associates Share of loss of jointly controlled entities Profit before income tax Income tax expense 5 Profit attributable to equity holders of the Company Dividends 6 Earnings per share attributable to the equity holders of the Company during the period Basic earnings per share 7 Diluted earnings per share 7	Unaudited For the six months ended 30 June 2011 2010 HK$’000 HK$’000 1,889,685 1,656,474 30,218 1,945 (33,890) (20,546) (1,465,619) (1,293,287) (192,436) (151,274) (22,010) (27,656) (118,574) (88,715) 6,010 3,060 29 (619) 93,413 79,382 3,501 1,238 (4,226) (389) 93 (1,277) (178) (76) 92,603 78,878 (17,404) (11,420) 75,199 67,458 16,550 16,421 HK$0.16 HK$0.14 HK$0.16 HK$0.14	Unaudited For the six months ended 30 June 2011 2010 HK$’000 HK$’000 1,889,685 1,656,474 30,218 1,945 (33,890) (20,546) (1,465,619) (1,293,287) (192,436) (151,274) (22,010) (27,656) (118,574) (88,715) 6,010 3,060 29 (619) 93,413 79,382 3,501 1,238 (4,226) (389) 93 (1,277) (178) (76) 92,603 78,878 (17,404) (11,420) 75,199 67,458 16,550 16,421 HK$0.16 HK$0.14 HK$0.16 HK$0.14
		(20,546) (1,293,287)
		(151,274) (27,656) (88,715) 3,060 (619) 79,382 1,238 (389) (1,277) (76) 78,878 (11,420) 67,458 16,421 HK$0.14 HK$0.14

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CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2011

FOR THE SIX MONTHS ENDED 30 JUNE 2011
Profit for the period Other comprehensive income: Currency translation differences Other comprehensive income for the period Total comprehensive income attributable to equity holders of the Company for the period	Unaudited For the six months ended 30 June 2011 2010 HK$’000 HK$’000 75,199 67,458 11,412 3,136 11,412 3,136 86,611 70,594
		3,136
		70,594

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CONDENSED CONSOLIDATED INTERIM BALANCE SHEET AS AT 30 JUNE 2011

Note ASSETS Non-current assets Property, plant and equipment Investment properties Leasehold land and land use rights Investments in associates Investments in jointly controlled entities Available-for-sale financial assets Deferred income tax assets Current assets Inventories Trade receivables 8 Prepayments, deposits and other receivables Amounts due from associates Financial assets at fair value through profit or loss Pledged bank deposits Cash and cash equivalents Total assets EQUITY Equity attributable to owners of the parent Share capital Other reserves Retained earnings – Dividends – Others Total equity	Unaudited As at 30 June 2011 HK$’000 255,775 41,560 6,723 33,013 290,252 3,938 15,775 647,036 438,275 853,819 61,152 27,843 4,745 56,608 529,686 1,972,128 2,619,164 47,286 488,789 16,550 762,937 1,315,562	Audited As at 31 December 2010 HK$’000 262,485 35,550 6,659 31,489 282,292 3,938 12,294
		634,707 443,376 948,865 62,214 27,843 1,091 177,774 400,251
		2,061,414
		2,696,121
		46,966 476,454 25,831 704,168
		1,253,419

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Note LIABILITIES Non-current liability Deferred income tax liabilities Current liabilities Trade payables 9 Accruals and other payables Amount due to an associate Derivative financial instruments Current income tax liabilities Borrowings Total liabilities Total equity and liabilities Net current assets Total assets less current liabilities	Unaudited As at 30 June 2011 HK$’000 6,940 711,556 167,115 3,183 1,464 32,484 380,860 1,296,662 1,303,602 2,619,164 675,466 1,322,502	Audited As at 31 December 2010 HK$’000 5,948 774,711 195,532 3,183 2,423 24,646 436,259
		1,436,754
		1,442,702
		2,696,121
		624,660
		1,259,367

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NOTES:

1. BASIS OF PREPARATION

This unaudited condensed consolidated interim financial information (“Interim Financial Information”) for the six months ended 30 June 2011 has been prepared in accordance with Hong Kong Accounting Standard (“HKAS”) 34, ‘Interim financial report’ issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) and Appendix 16 of the Rules Governing the Listing of Securities on the Main Board of The Stock Exchange of Hong Kong Limited. The Interim Financial Information should be read in conjunction with the annual financial statements for the year ended 31 December 2010, which have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”).

This Interim Financial Information has been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss and investment properties, which are carried at fair value.

The accounting policies and methods of computation used in the preparation of this Interim Financial Information are consistent with those used in the annual financial statements for the year ended 31 December 2010, except for the adoption of the standards, amendments and interpretations issued by the HKICPA mandatory for annual periods beginning 1 January 2011.

The preparation of Interim Financial Information in conformity with HKFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies.

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2010, as described in those annual financial statements.

The following amendments to standards are mandatory for the first time for the financial year beginning 1 January 2011.

HKAS 24 (Revised) Related party disclosures HKAS 34 (Amendment) Interim financial reporting

Standards, amendments and interpretations to existing standards effective in 2011 but not relevant to the Group:

HKAS 32 Classification of rights issues HK(IFRIC) – Int 14 (Amendment) Prepayments of a minimum funding requirement HK(IFRIC) – Int 19 Extinguishing financial liabilities with equity instruments

Third improvements to HKFRSs (2010) issued in May 2010.

New standards, amendments and interpretations have been issued but are not effective for the financial year beginning 1 January 2011 and have not been early adopted.

HKAS 12 (Amendment) Deferred tax: Recovery of underlying assets HKFRS 7 (Amendment) Disclosures – Transfers of financial assets HKFRS 9 Financial instruments

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2. SEGMENT INFORMATION

The Group’s senior executive management is considered as the Chief Operating Decision Maker (“CODM”). The Group was organised into two operating divisions:

Electronic Manufacturing Service (“EMS”) – manufacture and distribution of electronic products for EMS customers.

Original Design and Manufacturing (“ODM”) – original design and manufacturing for both EMS and ODM customers.

The CODM reviews the performance of the Group on a regular basis and reviews the Group’s internal reporting in order to assess performance and allocate resources. The CODM assesses the performance of the operating segments based on a measure of segment results. This measurement basis includes profit or loss of the operating segments before other income, other gains/(losses) – net, share of profit/(loss) of associates and jointly controlled entities, interest income, interest expense, tax and change in fair value of investment properties but excludes corporate and unallocated expenses. Other information provided to the Group’s management is measured in a manner consistent with that in the Interim Financial Information.

For the six months ended 30 June 2011 Total gross revenue Inter-segment revenue External revenue Segment results Depreciation and amortisation charges Capital expenditure For the six months ended 30 June 2010 Total gross revenue Inter-segment revenue External revenue Segment results Depreciation and amortisation charges Capital expenditure	Unaudited EMS division HK$’000 1,886,771 – 1,886,771 74,881 20,703 14,271 Unaudited EMS division HK$’000 1,655,177 (579) 1,654,598 92,023 27,496 10,876	Unaudited ODM division HK$’000 2,914 – 2,914 (6,072) 40 68 Unaudited ODM division HK$’000 1,876 – 1,876 (7,293) 58 31	Unaudited Total HK$’000 1,889,685 – 1,889,685 68,809 20,743 14,339 Unaudited Total HK$’000 1,657,053 (579) 1,656,474 84,730 27,554 10,907

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Reportable segment assets As at 30 June 2011 As at 31 December 2010	Unaudited EMS division HK$’000 2,040,517 2,018,000	Unaudited ODM division HK$’000 8,145 5,138	Unaudited Total HK$’000 2,048,662
			2,023,138

Segment assets consist primarily of property, plant and equipment, leasehold land and land use rights, inventories, trade receivables, prepayments, deposits and other receivables, and cash and bank deposits, but exclude corporate and unallocated assets.

A reconciliation of reportable segment results to profit before income tax is provided as follows:

Reportable segment results Other income Change in fair value of investment properties Other gains/(losses) – net Finance (costs)/income – net Share of profit/(loss) of associates Share of loss of jointly controlled entities Corporate and unallocated expenses Profit before income tax Reportable segments assets are reconciled to total assets as follows: Reportable segment assets Investment properties Investments in associates Investments in jointly controlled entities Available-for-sale financial assets Deferred income tax assets Amounts due from associates Financial assets at fair value through profit or loss Corporate and unallocated assets Total assets per condensed consolidated balance sheet	Unaudited For the six months ended 30 June 2011 2010 HK$’000 HK$’000 68,809 84,730 30,218 1,945 6,010 3,060 29 (619) (725) 849 93 (1,277) (178) (76) (11,653) (9,734) 92,603 78,878 Unaudited Audited As at 30 June 2011 As at 31 December 2010 HK$’000 HK$’000 2,048,662 2,023,138 41,560 35,550 33,013 31,489 290,252 282,292 3,938 3,938 15,775 12,294 27,843 27,843 4,745 1,091 153,376 278,486 2,619,164 2,696,121	Unaudited For the six months ended 30 June 2011 2010 HK$’000 HK$’000 68,809 84,730 30,218 1,945 6,010 3,060 29 (619) (725) 849 93 (1,277) (178) (76) (11,653) (9,734) 92,603 78,878 Unaudited Audited As at 30 June 2011 As at 31 December 2010 HK$’000 HK$’000 2,048,662 2,023,138 41,560 35,550 33,013 31,489 290,252 282,292 3,938 3,938 15,775 12,294 27,843 27,843 4,745 1,091 153,376 278,486 2,619,164 2,696,121
		78,878
		Audited As at 31 December 2010 HK$’000 2,023,138 35,550 31,489 282,292 3,938 12,294 27,843 1,091 278,486
		2,696,121

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Reconciliations of other material items are as follows:

Depreciation and amortisation charges – Reportable segment total – Corporate headquarters Capital expenditure – Reportable segment total – Corporate headquarters	Unaudited For the six months ended 30 June 2011 2010 HK$’000 HK$’000 20,743 27,554 1,267 102 22,010 27,656 14,339 10,907 874 102,903 15,213 113,810	Unaudited For the six months ended 30 June 2011 2010 HK$’000 HK$’000 20,743 27,554 1,267 102 22,010 27,656 14,339 10,907 874 102,903 15,213 113,810
		27,656
		10,907 102,903
		113,810

The Company is domiciled in Bermuda. Analysis of the Group’s revenue by geographical market, which is determined by the destination of the invoices billed, is as follows:

North America Asia (excluding Hong Kong) Europe Hong Kong	Unaudited For the six months ended 30 June 2011 2010 HK$’000 HK$’000 183,055 143,765 1,050,329 956,818 306,479 267,037 349,822 288,854 1,889,685 1,656,474	Unaudited For the six months ended 30 June 2011 2010 HK$’000 HK$’000 183,055 143,765 1,050,329 956,818 306,479 267,037 349,822 288,854 1,889,685 1,656,474
		1,656,474

For the six months ended 30 June 2011, revenues of approximately HK$603,376,000 (2010: HK$530,563,000), HK$420,660,000 (2010: HK$228,614,000) and HK$217,511,000 (2010: HK$164,217,000) were derived from the top 3 external customers respectively. These revenues are attributable to the EMS division.

Analysis of the Group’s non-current assets by geographical market is as follows:

North America Asia (excluding Hong Kong) Europe Hong Kong	Unaudited As at 30 June 2011 HK$’000 216 165,584 51 465,410 631,261	Audited As at 31 December 2010 HK$’000 185 170,234 52 451,942
		622,413

Non-current assets comprise property, plant and equipment, investment properties, leasehold land and land use rights, investments in associates, investments in jointly controlled entities and available-for-sale financial assets. They exclude deferred income tax assets.

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3. OTHER INCOME

OTHER INCOME
Write-back of trade payables Scrap and spare parts sales Tooling income Sundry income	Unaudited For the six months ended 30 June 2011 2010 HK$’000 HK$’000 15,333 – 8,486 – 4,140 – 2,259 1,945 30,218 1,945
		1,945

4. OTHER GAINS/(LOSSES) – NET

Fair value change on financial instruments, net Gains on disposal of property, plant and equipment Exchange losses, net INCOME TAX EXPENSE Current income tax – Hong Kong profits tax – Overseas taxation Deferred income tax Under-provision in prior years – Current income tax	Unaudited For the six months ended 30 June 2011 2010 HK$’000 HK$’000 243 (310) 160 291 (374) (600) 29 (619) Unaudited For the six months ended 30 June 2011 2010 HK$’000 HK$’000 5,467 2,287 13,852 4,492 (2,489) 4,641 574 – 17,404 11,420

5. INCOME TAX EXPENSE

Hong Kong profits tax has been provided at the rate of 16.5% (2010: 16.5%) on the estimated assessable profit arising in or derived from Hong Kong.

The new Corporate Income Tax Law in the People’s Republic of China increases the corporate income tax rate for foreign investment enterprises from previous preferential rates to 25% with effect from 1 January 2008. Companies established in Mainland China before 16 March 2007 and previously taxed at the rate lower than 25% may be offered a gradual increase of tax rate to 25% within 5 years. Certain subsidiaries of the Company established in Mainland China will enjoy preferential income tax rate from 2008 to 2011 and be taxed at the rate of 25% from 2012 when the preferential treatment expires.

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6. DIVIDENDS

DIVIDENDS
		Unaudited
		For the six months ended 30 June
		2011	2010
		HK$’000	HK$’000
Interim dividend – HK$0.035	(2010: HK$0.035) per share	16,550	16,421

The Board has resolved to pay an interim dividend of HK$0.035 per share (2010: HK$0.035 per share) on Friday, 30 September 2011 to the shareholders whose names appear on the Register of Members of the Company on Friday, 16 September 2011.

7. EARNINGS PER SHARE

(a) Basic

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

Profit attributable to equity holders of the Company_(HK$’000) Weighted average number of ordinary shares in issue(in thousands) Basic earnings per share(HK$)_	Unaudited For the six months ended 30 June 2011 2010 75,199 67,458 471,484 467,992 0.16 0.14	Unaudited For the six months ended 30 June 2011 2010 75,199 67,458 471,484 467,992 0.16 0.14
		467,992
		0.14

(b) Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has outstanding share options, which are of dilutive potential. For share options, a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company’s shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.

Profit attributable to equity holders of the Company_(HK$’000) Weighted average number of ordinary shares in issue(in thousands) Adjustment for share options(in thousands) Weighted average number of ordinary shares for diluted earnings per share (in thousands) Diluted earnings per share(HK$)_	Unaudited For the six months ended 30 June 2011 2010 75,199 67,458 471,484 467,992 4,525 5,425 476,009 473,417 0.16 0.14	Unaudited For the six months ended 30 June 2011 2010 75,199 67,458 471,484 467,992 4,525 5,425 476,009 473,417 0.16 0.14
		467,992 5,425
		473,417
		0.14

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8. TRADE RECEIVABLES

The credit period allowed by the Group to its trade customers mainly ranges from 30 days to 90 days and no interest is charged.

Ageing analysis of the Group’s trade receivables by invoice date is as follows:

0–60 days 61–90 days Over 90 days	Unaudited As at 30 June 2011 HK$’000 707,095 96,183 50,541 853,819	Audited As at 31 December 2010 HK$’000 754,235 141,456 53,174
		948,865

9. TRADE PAYABLES

Ageing analysis of the Group’s trade payables by invoice date is as follows:

0–60 days 61–90 days Over 90 days	Unaudited As at 30 June 2011 HK$’000 644,422 48,849 18,285 711,556	Audited As at 31 December 2010 HK$’000 714,607 34,550 25,554
		774,711

INTERIM DIVIDEND

The Board has resolved to pay an interim dividend of HK$0.035 per share (2010: HK$0.035 per share) on Friday, 30 September 2011 to the shareholders whose names appear on the Register of Members of the Company on Friday, 16 September 2011.

CLOSURE OF REGISTER OF MEMBERS

The Register of Members of the Company will be closed from Wednesday, 14 September 2011 to Friday, 16 September 2011, both days inclusive, during which period no transfer of shares shall be effected. To qualify for the above interim dividend, all transfers accompanied by the relevant share certificates must be lodged with the Company’s Hong Kong branch share registrar, Tricor Standard Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong for registration not later than 4:00 p.m. on Monday, 12 September 2011.

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REVIEW OF BUSINESS ACTIVITIES

Electronic Manufacturing Service (“EMS”) and Original Design and Manufacturing (“ODM”) Divisions

For the first six months ended 30 June 2011, the Group’s turnover was HK$1.89 billion, increased by 14% from HK$1.66 billion in 2010, mainly due to the continuing of the improved customer demand, which began from the end of 2009. Sales growth came from industrial and energy products.

Profit attributable to equity holders increased 11% to HK$75.2 million in 2011 from HK$67.5 million in 2010. The profit growth resulted from the increased sales volume.

During the period under review, the manpower cost in PRC continued to increase as the result of minimum wage regulatory requirement and the shortage of labour force. Our utmost effort in upkeeping the high operational efficiency largely offset such manpower cost increase impact.

For the first six months ended 30 June 2011, sales revenue of EMS Division increased 14% to HK$1.89 billion from HK$1.65 billion for the same period of 2010. Sales revenue for Shajing factory in Shenzhen grew by 12% and the factory at Suzhou also increased by 18% as compared with 2010’s first half year. The increase in the overall sales at EMS Division was largely driven by the improved customer demand for electronic products in industrial and energy products while demand for computer peripheral products remained stable. The segment results attributable to EMS Division was HK$74.9 million (2010 interim: HK$92 million). Other income, which was not included in the segment results, increased mainly due to scrap and spare parts sales, trade payables written-back and tooling income.

For the ODM Division, sales revenue increased to HK$2.9 million (2010 interim: HK$1.9 million). The segment loss attributable to ODM Division was HK$6.1 million (2010 interim: HK$7.3 million). The revenue increase was mainly attributed to the new sales by iCarte for Apple iPhone starting in the early part of 2011. International sales of iCarte generated from Europe, South Korea, Singapore and Australia on new mobile payment deployments are the key growth drivers for the sales expansion in the second half of 2011.

Property Development

Kwun Tong office buildings

The Group has two jointly controlled entities with Sun Hung Kai Properties Limited on the development of two sites for office buildings. The Group has paid its proportional share of the land premium for lease modification on one of the sites. Foundation works is due to completion in the second half of the year 2011. In respect of the second site where Wong’s Industrial Centre is currently located, the land premium is still in discussion with the District Land Office based on a preliminary assessment received. We expect the land premium assessment to be finalized around end of this year or early next year. Demolition of Wong’s Industrial Centre on the second site is expected to commence upon the finalization of the said land premium.

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Mid-level residential

During the first half of 2011, the project development company sold a duplex unit together with a parking space at a cash consideration of approximately HK$36.8 million (the Group’s interest in this project development represents 25.26%). As at 30 June 2011, there were two residential units remaining, consisted of one duplexes and one combined units. In addition, there were eight parking spaces which remain unsold. According to the market evaluation, the Directors expected that the balance of the amount due from the Mid-level development project amounting to HK$24.3 million will be recoverable and thus no further impairment provision is necessary.

Media Network

The Group currently has an investment in Focus Media Network Limited (“FMN”) for 18.75% (25% before its IPO). Its shares have been listed on the GEM Board of the Hong Kong Stock Exchange since 28 July 2011. FMN is on out-of-home digital screen network business, which is one of the fastest growing advertising sectors after the internet. FMN has extensive network at office buildings and renowned retail outlets.

FINANCE

As at 30 June 2011, the Group had HK$988.7 milion of total banking facilities. Total bank borrowings were HK$380.9 million, of which a loan of HK$29.0 million was arranged by an overseas subsidiary and a sum of HK$56.6 million was back-up by the pledged deposit in PRC for trade payment.

Cash and bank deposits were HK$586.3 million at 30 June 2011 (2010 December: HK$578.0 million).

As at 30 June 2011, the Group had a net cash surplus of HK$205.4 million in excess of the bank borrowings as compared to the net cash surplus of HK$141.8 million in excess of the bank borrowings at 31 December 2010.

Most of the Group’s sales are conducted in United States dollars and costs and expenses are mainly in United States dollars, Hong Kong dollars, Japanese Yen and Renminbi. Forward contracts are used to hedge foreign exchange exposures where it is necessary or practicable.

CAPITAL STRUCTURE

There had been no material change in the Group’s capital structure since 31 December 2010 which consists of bank borrowings, cash and cash equivalents and equity attributable to owners of the parent, comprising issued share capital and reserves.

EMPLOYEES

As at 30 June 2011, the Group employed approximately 5,800 employees of whom approximately 4,800 were production workers. In addition to the provision of annual bonuses, medical and life insurances, discretionary bonuses are also available to employees based on individual performance. The remuneration packages and policies are reviewed periodically.

The Group also provides in-house and external training programs to its employees.

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PROSPECTS

Based on the current level of orders and forecast provided by our customers, the Group is conservative with its revenue and profitability in the second half of the current year. The economic recovery in US and Europe is still not in a good shape. Japan tsunami, which happened in March 2011, continues to affect the supply chain in the remaining year. In this connection, we will expect the vulnerable economic environment may limit the customer demand in the second half year. As to the business environment specifically in PRC, labour shortage, wage increase, inflation and Renminbi appreciation remain the challenges to us. Nevertheless, the Group will find ways to improve the sales, streamline the operations and enhance its efficiency.

On behalf of the Directors, I would like to sincerely thank our customers, suppliers and business partners for their continued confidence in and support to the Group. I would also like to pay a special tribute to all of our employees for their loyal, diligent and professional services to the Group.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES

During the six months ended 30 June 2011, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company’s listed securities.

CODE ON CORPORATE GOVERNANCE PRACTICES

During the six months ended 30 June 2011, the Company has complied with the code provisions of the Code on Corporate Governance Practices (the “Code”) as set out in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”), except for the following deviations:

1. Code provision A.2.1

Mr. Wong Chung Mat, Ben is the Group’s Chairman and Chief Executive Officer and has occupied these two positions since February 2003. In allowing the two positions to be occupied by the same person, the Company has considered the following:

• (a) Both positions require in-depth knowledge and considerable experience of the Group’s business. Candidates with the suitable knowledge, experience and leadership are difficult to find both within and outside the Group. If either of the positions is occupied by an unqualified person, the Group’s performance could be gravely compromised.

• (b) The Company believes that the supervision of the Board and its Independent Non-executive Directors can provide an effective check and balance mechanism and ensures that the interests of the shareholders are adequately represented.

2. Code provision A.4.1

None of the existing Non-executive Directors of the Company is appointed for a specific term. This constitutes a deviation from code provision A.4.1 of the Code. However, every Director of the Company is now subject to retirement by rotation under Bye-law 112 of the Bye-laws of the Company. As such, the Company considers that sufficient measures have been taken to ensure that the Company’s corporate governance practices are no less exacting than those in the Code.

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COMPLIANCE WITH THE MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS OF LISTED ISSUERS

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) as set out in Appendix 10 to the Listing Rules. Having made specific enquiry to all Directors, all Directors confirmed that they had complied with the required standard set out in the Model Code during the six months ended 30 June 2011.

AUDIT COMMITTEE

The Audit Committee, which comprises all Independent Non-executive Directors, has reviewed with management the accounting principles and practices adopted by the Group and discussed auditing, internal controls and financial reporting matters including a review of the unaudited interim financial information for the six months ended 30 June 2011.

PUBLICATION OF RESULTS AND INTERIM REPORT

This results announcement is published on the Company’s website at www.wongswih.com and The Stock Exchange of Hong Kong Limited at www.hkexnews.hk. The 2011 interim report will be dispatched to shareholders of the Company and will be available on the above websites in due course.

By Order of the Board WONG CHUNG MAT, BEN Chairman and Chief Executive Officer

Hong Kong, 23 August 2011

As at the date of this announcement, the Executive Directors of the Company are Mr. Wong Chung Mat, Ben, Ms. Wong Yin Man, Ada, Mr. Wong Chung Ah, Johnny, Mr. Chan Tsze Wah, Gabriel, Mr. Tan Chang On, Lawrence and Mr. Wan Man Keung; and the Independent Non-executive Directors are Dr. Li Ka Cheung, Eric GBS, OBE, JP, Dr. Yu Sun Say GBS, JP and Mr. Alfred Donald Yap JP.

• For identification purpose only

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