GBA Holdings Limited — Interim / Quarterly Report 2017

Aug 29, 2017

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.

==> picture [375 x 124] intentionally omitted <==

(Incorporated in Bermuda with limited liability)

(Stock Code: 00261)

ANNOUNCEMENT OF UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2017

CHAIRMAN’S STATEMENT

On behalf of the Board of CCT Land Holdings Limited, I present the interim results of the Group for the six months ended 30 June 2017.

The Group’s net loss attributable to owners of the parent for the six months ended 30 June 2017 was HK$149 million, as compared with the net loss of HK$32 million for the last corresponding period. The increase in net loss was mainly due to (i) an equity-settled share-based payments was recorded as a result of the granting of 5,940 million share options during the six months ended 30 June 2017; (ii) the increase in loss of the Telecom Products Business; and (iii) the impairment provisions against the property development projects and fair value loss of the investment properties of the Group in the PRC.

The Board does not recommend payment of an interim dividend for the six months ended 30 June 2017 (30 June 2016: nil).

BUSINESS REVIEW

Telecom Products Business

During the reporting period, revenue of the Telecom Products Business was HK$168 million, fell by 35.6% as compared with the revenue of HK$261 million in the last comparable period.

1

The decreasing revenue of the Telecom Products Business was the result of the slow economy in the eurozone, declining demand of cordless phones and keen market competition of the cordless phone market. The performance of the Telecom Products Business has further been dampened by the increasing operating cost in Mainland China. Shortage of labour and the rising wages and manufacturing costs has rendered the manufacturing operations in China difficult, especially when there was no more advantages and preferential treatments given by the Chinese government to foreign enterprises engaging in manufacturing operations as in the past. It is noticed that most of the operating loss of the Telecom Products Business in recent years was attributable to the manufacturing operations of the Group, as a result of the deteriorating manufacturing environment in the Mainland China.

The management has taken initiatives to restructure and reform the Telecom Products Business, in order to combat the current difficult operating environment faced by this business. During 2016, the Company disposed of the Child Products Trading Business to the CCT Fortis Group, as the Company found it difficult to grow that business. The disposal of the Child Products Trading Business was completed in October 2016. After the disposal, the Group continues to supply the Child Products to the CCT Fortis Group. On 11 August 2017, the Company took further action to restructure the Telecom Products Business by entering into the Agreement with the Subscriber in order to transfer the Products Manufacturing Operations to the Subscriber. Completion of the Agreement took place on 11 August 2017. After completion of the Agreement, members of the Enterprise Group have ceased to be subsidiaries of the Company. Pursuant to the Agreement, the Subscriber together with CCT Enterprise have undertaken to manufacture the Products and the Child Products on an outsource basis for the Remaining Group for a period of three years after completion of the Agreement, at reasonable market price acceptable to the Remaining Group. After completion of the Agreement, the Remaining Group will cease to be engaged in the Products Manufacturing Operations and will focus in the Products Trading Business.

In the first half of 2017, the Telecom Products Business recorded an operating loss of HK$36 million (2016: HK$6 million), of which HK$35 million (2016: HK$12 million) was attributable to the Products Manufacturing Operations.

Mainland Property Business

During the period under review, we strived to increase the sales of our Anshan property projects. The Group sold a total of 192 units of the Landmark City and Evian Villa projects in the six months ended 30 June 2017 (2016: 103 units), and generated revenue of HK$93 million for the period, increased 89.8% as compared with HK$49 million for the corresponding period in 2016.

In Anshan, the progress of destocking of property inventory is slow. The market sentiment was also affected by the cooling measures introduced by the Central Government to curb speculation. Due to high inventory level in Anshan and the cut-price strategies adopted by some local developers, the unit selling prices for Landmark City and Evian Villa continued to be under pressure during the period under review. As a result, the Mainland Property Business recorded an operating loss of HK$81 million in the current period, as compared with HK$23 million in the comparable period last year. The increase in loss was partly because of the weak selling prices and partly of the impairment loss of approximately HK$55 million on our Anshan projects due to the difficult market environment in Anshan.

2

The property demand in Anshan is driven mainly by end users with little investment needs. Furthermore, the cold season in this north-eastern city of China is long and usually lasts for five to six months every year, during which property sales are slow and construction work has to come to a complete stop due to the cold weather. Our development and sales strategies have been designed to suit the market environment in Anshan and these strategies have proven to be effective as our Landmark City and Evian Villa Projects are one of the best-selling projects in the local districts.

As for the land site DN1 located in the High-tech Development Zone in Anshan, we plan to develop the land lot into a high-end luxury residential project entitling the name “Evian Garden”. During the period, we have streamlined our development plan to build low-rise apartments and offer more units with a wide range of sizes to first time home buyers and existing house owners who wish to change house to improve their living environment. The changes in the development plan will allow us to develop Evian Garden with an increased plot ratio and hence will increase the gross sales area to 166,000 square meters from the previous plan of 100,000 square meters. The Evian Garden Project will be developed by phases. Construction commenced in the first half of 2017.

Finance Business

The PRC subsidiary in which the Group has 51% equity interest has commenced its finance business since the first half of 2016. In the meantime, the operating and regulatory environment surrounding the online finance business in the Mainland China has been evolving and changing. Our PRC finance company is trying to adapt to the changing environment in the development of its finance business. In the first half of 2017, the PRC subsidiary recorded revenue of HK$5 million and contributed an operating profit of HK$4 million from its offline finance business, as compared with an operating profit of HK$2 million against revenue of HK$3 million for the last corresponding period. In view of the satisfactory performance of the Finance Business, we intend to grow the offline finance business in order to increase our revenue and improve our profitability.

OUTLOOK

The process for United Kingdom preparing to leave the European Union will undoubtedly be complex and time-consuming. The essential questions that have to be addressed are whether, at the conclusion of the negotiations, there will be undue fluctuation to the economies of Europe and hence, the economies of the rest of the world. In addition, the possible interest rate hike in the second half of the year is expected to create uncertainties to the global economy. Furthermore, geopolitical tensions may also pose risks to the global economic outlook. The management will monitor the development and assess the potential impact to the Group.

Following completion of the Agreement, the Group has ceased to be engaged in the loss-making Products Manufacturing Operations. Following the Transactions, the Group intends to continue to be engaged in the Products Trading Business. The Transactions have enabled the Group to further reform and transform its Telecom Products Business by focusing on the development and trading of products, with a view to streamline its cost structure and to improve its efficiency. This is expected to enhance the competitiveness of the Group in the telecom product market. As the global economy has bottomed out, and there is solid demand for consumer electronic products in general, we are cautiously optimistic with the Products Trading Business in the long run. We will continue to enhance our products and will continue to seek new customers and expand our customer base by leveraging our solid experience in the telecom and electronic industry.

3

The Central Economic Work Conference in the PRC has made it clear that “Houses are for living, not for flipping” (房子是用來住的，不是用來炒的). This new policy has set a clear tone for housing market control in 2017, with focus on curbing speculation. However, we are optimistic in the property market in China in the long term as demand for housing is expected to continue to grow in line with the growth of income and wealth of the Chinese people. We will strive to increase sales of our Anshan projects and improve our profit margin. We anticipate that the PRC property market will be prosperous in the long run. We will keep exploring expansion of our property business in other parts of China, including the south-east China. We may replenish our land bank and acquire property projects should suitable opportunities arise.

We have been proactively exploring and seeking new business opportunities in order to broaden our revenue and improve our profitability. On 6 March 2017, an agreement (as amended by the supplemental agreement dated 16 June 2017) (the “ Acquisition Agreement ”) was entered into by the Company, under which the Company has conditionally agreed to acquire 51% equity interest in Sino Partner Global Limited (the “ Target Company ”). The Target Company and its subsidiaries (the “ Target Group ”) owns the well-established European supercar brand “Apollo” and is engaged in the design, development, manufacturing and sale of supercars in the PRC, Europe and internationally. The Target Group also has plan to develop its own electric vehicles and enter into the electric vehicle market. A circular relating to the proposed acquisition under the Acquisition Agreement is being prepared and as announced in the Company’s announcement dated 28 June 2017, the dispatch date of the circular will be further postponed to the date falling on or before 15 September 2017.

The Group’s financial position is strong and our gearing ratio remains at a low level. The Group is well positioned to meet future challenges and grasp new business opportunities to enhance shareholders’ value.

APPRECIATION

On behalf of the Board, I wish to thank the directors, the management and all our employees for their dedication, loyalty, and hard work to meet the challenges during the period. I also want to thank our shareholders, investors, bankers, customers and suppliers for their continued encouragement and strong support to the Group.

Mak Shiu Tong, Clement Chairman

Hong Kong, 29 August 2017

4

FINANCIAL REVIEW

REVIEW OF FINANCIAL RESULTS

HK$ million Continuing operations Revenue Other income and gains Finance costs Loss before tax from continuing operations Tax credit Loss for the period from continuing operations Discontinued operation Profit for the period from a discontinued operation Loss for the period Attributable to: Owners of the parent Non-controlling interest Loss for the period	Six months ended 30 June 2017 2016 % increase/ (Unaudited) (Unaudited) (decrease) (Restated) 266 313 (15.0%) 21 17 23.5% 9 3 200.0% (150) (33) 354.5% 3 2 50.0% (147) (31) 374.2% - - N/A (147) (31) 374.2% (149) (32) 365.6% 2 1 100.0% (147) * (31) 374.2%

*less than HK$1 million

The Group’s revenue was HK$266 million for the six months ended 30 June 2017, decreased by 15.0% as compared with HK$313 million for the corresponding period in 2016. The decrease in the Group’s revenue was due to the net change of (i) the increase in revenue by HK$44 million from the Mainland Property Business (ii) the decrease in revenue by HK$93 million from the Telecom Products Business; and (iii) the increase in revenue of the Finance Business.

5

During the six months ended 30 June 2017, the loss attributable to owners of the parent was HK$149 million (2016: HK$32 million). The increase in loss was mainly due to: (i) share option expenses of HK$24 million; (ii) the increase in loss of the manufacturing operations and the Mainland Property Business due to difficult operating environment; and (iii) the impairment provisions against the property development projects and fair value loss of the investment properties in Mainland China of total amount of HK$83 million, as result of current market situation and tightening policies and measures imposed by the Chinese Government.

Net profit attributable to non-controlling interests represented share of net profit by the minority shareholder of the PRC subsidiary engaged in the Finance Business.

The discontinued operation, representing the Child Product Trading Business disposed of to the CCT Fortis Group in October 2016, was break-even for the six months ended 30 June 2016.

ANALYSIS BY BUSINESS SEGMENT

HK$ million Telecom Products Business Mainland Property Business Finance Business Total	Revenue of continuing operations Six months ended 30 June 2017 2016 Amount Relative Amount Relative % increase/ (Unaudited) %(Unaudited) % (decrease) (Restated) 168 63.1% 261 83.3% (35.6%) 93 5 35.0% 1.9% 49 3 15.7% 1.0% 89.8% 66.7% 266 100% 313 100.0% (15.0%)

HK$ million Telecom Products Business Mainland Property Business Finance Business Total	Operating (loss)/profit of continuing operations for the six months ended 30 June 2017 2016 (Unaudited) (Unaudited) (Restated) % increase/ (decrease) (36) (6) 500.0% (81) (23) 252.2% 4 2 100.0% (113) (27) 318.5%
	(113)

The segmental operating (loss)/profit represented operating result of each segment before taking into account of finance costs and taxation.

6

Telecom Products Business

In the first half of 2017, the Telecom Products Business continued to be the Group’s largest segment in terms of revenue contribution, contributing 63.1% (2016: 83.3%) of the total revenue of the Group. During the six months ended 30 June 2017, revenue of the Telecom Products Business was HK$168 million, decreased by 35.6% as compared with the revenue of HK$261 million in the corresponding period of last year. It recorded an operating loss of HK$36 million for the six months ended 30 June 2017, surged by HK$30 million or 500% as compared with an operating loss of HK$6 million in the comparable period of 2016. Of the operating loss of HK$36 million for the current period, an operating loss of HK$35 million (2016: operating loss of HK$12 million) was attributable to the Products Manufacturing Operations and operating loss of HK$1 million (2016: operating profit of HK$6 million) was attributable to the Products Trading Business.

Mainland Property Business

During the six months ended 30 June 2017, revenue of the Mainland Property Business was HK$93 million, increased by HK$44 million or 89.8% as compared with the corresponding period last year as the sales of our Anshan projects was speeding up. However, loss before interest and tax for this segment increased to HK$81 million by HK$58 million as compared with the loss of HK$23 million in the comparable period last year. The increase in loss was mainly due to weak selling prices and the impairment loss of our property projects in Anshan, amidst the current difficult market situation.

Finance Business

Operating profit of the Finance Business was HK$4 million, which doubled the profit of HK$2 million in the corresponding period in 2016, mainly due to increase in interest income the offline finance business.

7

ANALYSIS BY GEOGRAPHICAL SEGMENT

HK$ million Mainland China and Hong Kong Europe North America and others Total	Revenue of continuing operations Six months ended 30 June 2017 2016 Amount Relative Amount Relative %increase/ (Unaudited) % (Unaudited) (Restated) % (decrease) 123 46.2% 84 26.8% 46.4% 68 25.6% 146 46.7% (53.4%) 75 28.2% 83 26.5% (9.6%) 266 100.0% 313 100.0% (15.0%)

In the first half of the year, Mainland China and Hong Kong became the largest market regions of the Group, contributing HK$123 million or 46.2% of the Group’s total revenue, as compared with HK$84 million or 26.8% of the last comparable period, mainly as a result of the increase in sales of the property units in Anshan. Europe dropped to the second place in terms of the Group’s market regions, contributing HK$68 million or 25.6% of the Group’s total revenue in the current period, as compared with HK$146 million or 46.7% in the last comparable period, mainly as a result of less shipments of telecom products to the regions. Revenue from North America and others also dropped by 9.6% to HK$75 million, due to decreased sales of products to these market regions.

CAPITAL STRUCTURE AND GEARING RATIO

HK$ million Bank borrowings Finance lease payable Total borrowings Equity Total capital employed	30 June Amount (Unaudited) 263 2 265 1,280 1,545	2017 Relative % 17.0% 0.1% 17.1% 82.9% 100.0%	31 December 2016 Amount Relative (Audited) % 359 20.5% 1 0.1% 360 1,386 20.6% 79.4% 1,746 100.0%
				20.6% 79.4%
				100.0%

The Group’s gearing ratio was 17.1% as at 30 June 2017 (31 December 2016: 20.6%). The marginal change in the gearing ratio was caused by the combined net effect of decrease of the Group’s bank borrowings and equity during the period.

8

As at 30 June 2017, the maturity profile of the bank and other borrowings of the Group falling due within one year, in the second to the fifth years amounted to HK$194 million and HK$71 million, respectively (31 December 2016: HK$278 million and HK$82 million, respectively). There was no material effect of seasonality on the Group’s borrowing requirements.

LIQUIDITY AND FINANCIAL RESOURCES

HK$ million Current assets Current liabilities Net current assets Current ratio	30 June 2017 (Unaudited) 1,438 449 989 320.3%	31 December 2016 (Audited) 1,617 550
		1,067
		294.0%

The Group’s current ratio was 320.3% as at 30 June 2017 (31 December 2016: 294.0%), reflecting strong liquidity of the Group’s financial position. Among the total cash balance of HK$187 million (31 December 2016: HK$238 million), deposits with an aggregate amount of HK$95 million (31 December 2016: HK$107 million) were pledged for banking facilities.

In view of the Group’s current cash position and the unutilised banking facilities available, the Group continued to maintain a sound financial position and has sufficient resources to finance its operations and its future expansion plan.

CAPITAL COMMITMENTS

(31 December 2016: nil).

TREASURY MANAGEMENT

The Group employs a conservative approach to cash management and risk control. To achieve better risk control and efficient fund management, the Group’s treasury activities are centralised.

During the six months ended 30 June 2017, the Group’s receipts were mainly denominated in US dollar and RMB. Payments were mainly made in HK$, US dollar and RMB. Cash was generally placed in short-term deposits denominated in HK$ and RMB. In the first half of 2017, the Group’s borrowings were mainly denominated in HK$ and RMB and interest on the borrowing was principally determined on a floating rate basis.

9

The objective of the Group’s treasury policies is to minimise risks and exposures due to the fluctuations in foreign currency exchange rates and interest rates. The Group does not have any significant interest rate risk at present as the interest rates currently remain at low level. In terms of foreign exchange exposures, the Group is principally exposed to two major currencies, namely the US dollar and RMB in terms of receipts and the RMB in terms of expenditures. Since the HK$ remains pegged to the US dollar, the exchange exposure to US currency is minimal. As for RMB exposure, the exchange rate of RMB was stablised during the first half of 2017 and it is not expected that there will be major fluctuation of RMB in the near future.

Our current exposure to foreign exchange risk is not significant. We will continue to monitor the currency exposure but we have no intention to enter into any high-risk exchange derivatives.

ACQUISITIONS AND DISPOSALS OF MATERIAL SUBSIDIARIES AND ASSOCIATES

The Group did not acquire or dispose of any material subsidiaries and associates during the period under review.

SIGNIFICANT INVESTMENT

The Group did not purchase, sell or hold any significant investment during the six months ended 30 June 2017.

PLEDGE OF ASSETS

As at 30 June 2017, certain of the Group’s assets with a net book value of HK$1,456 million (31 December 2016: HK$1,212 million), net asset value of HK$346 million of a subsidiary of the Company (31 December 2016: HK$349 million) and time deposits of the Group of HK$95 million (31 December 2016: HK$107 million) were pledged to secure the general banking facilities granted to the Group to finance operations.

CONTINGENT LIABILITIES

As at 30 June 2017, the Group did not have any significant contingent liabilities (30 June 2016: nil).

EMPLOYEES AND REMUNERATION POLICY

The total number of employees of the Group as at 30 June 2017 was 1,244 (31 December 2016: 1,526). The Group’s remuneration policy is built on principle of equality, motivating, performance-oriented and market-competitive remuneration package to employees. Remuneration packages are normally reviewed on an annual basis. Apart from salary payments, other staff benefits include provident fund contributions, medical insurance coverage and performance related bonuses. Share options may also be granted to eligible employees of the Group. 5,940,000,000 share options were granted on 18 January 2017 under the Company’s share option scheme. At 30 June 2017, there were 5,955,000,000 share options outstanding (31 December 2016: 15,000,000 share options).

PURCHASE, SALE OR REDEMPTION OF THE LISTED SHARES

Neither the Company, nor any of its subsidiaries has purchased, sold or redeemed any of the listed Shares during the period for the six months ended 30 June 2017.

10

CORPORATE GOVERNANCE

The Company has always recognised the importance of the shareholders’ transparency and accountability. It is the belief of the Board that the Shareholders can maximise their benefits from good corporate governance. The Company is committed to maintaining and ensuring high standards of corporate governance in the interests of the Shareholders.

In the opinion of the Directors, the Company has complied with all the Code Provisions under the Corporate Governance Code (the “ CG Code ”) as set out in Appendix 14 to the Listing Rules throughout the period from 1 January 2017 to 30 June 2017, except for the following minor deviations from the Code Provisions of the CG Code:-

(1) A.2.1: the roles of chairman and chief executive should be separate; and

• (2) A.4.2: all directors appointed to fill a casual vacancy should be subject to election by shareholders at the first general meeting after their appointment and every director should be subject to retirement by rotation at least once every three years.

Detailed information of such deviations and their respective considered reasons as well as other information on the corporate governance practices of the Company have been disclosed in the corporate governance report included in the 2016 annual report of the Company issued in April 2017 and will be disclosed in the 2017 interim report of the Company, which will be despatched to the Shareholders on or before 30 September 2017.

MODEL CODE FOR SECURITIES TRANSACTIONS BY THE DIRECTORS

The Company has adopted its code of conduct regarding the securities transactions by the Directors on terms no less exacting than the required standard set out in the Model Code for Securities Transactions by Directors of Listed Issuers (the “ Model Code ”) contained in Appendix 10 to the Listing Rules. Having made specific enquiry of all Directors, they confirmed that they have complied with the required standard set out in the Model Code adopted by the Company throughout the six months ended 30 June 2017.

REVIEW OF INTERIM RESULTS

The audit committee of the Company has reviewed the unaudited condensed consolidated interim results of the Group for the six months ended 30 June 2017.

PUBLICATION OF THE INTERIM RESULTS ANNOUNCEMENT AND INTERIM REPORT

The results announcement of the Company for the six months ended 30 June 2017 is published on the website of the Company at www.cctland.com/eng/investor/statutory.php and that of the Stock Exchange at www.hkexnews.hk. The interim report of the Company will be despatched to the Shareholders and made available on the website of the Company and that of the Stock Exchange on or before 30 September 2017.

11

BOARD OF DIRECTORS

As at the date of this announcement, the executive Directors are Mr. Mak Shiu Tong, Clement, Ms. Cheng Yuk Ching, Flora, Mr. Tam Ngai Hung, Terry, Mr. Guan Huanfei and Ms. Lai Mei Kwan; the non-executive Director is Mr. Tsui Wing Tak; and the independent non-executive Directors are Mr. Chow Siu Ngor, Mr. Lau Ho Kit, Ivan, Mr. Tam King Ching, Kenny and Dr. Chow Ho Wan, Owen.

By Order of the Board CCT LAND HOLDINGS LIMITED Mak Shiu Tong, Clement Chairman

Hong Kong, 29 August 2017

12

INTERIM RESULTS

The Board of the Company is pleased to announce the unaudited consolidated results of the Group for the six months ended 30 June 2017 together with the comparative figures for the corresponding period in 2016 as follows:

Condensed Consolidated Statement of Profit or Loss

For the six months ended 30 June 2017

HK$ million Notes CONTINUING OPERATIONS REVENUE 4 Cost of sales Gross (loss)/profit Other income and gains Selling and distribution expenses Administrative expenses Other expenses Finance costs 5 LOSS BEFORE TAX FROM CONTINUING OPERATIONS 6 Tax credit 7 LOSS FOR THE PERIOD FROM CONTINUING OPERATIONS DISCONTINUED OPERATION Profit for the period from a discontinued operation LOSS FOR THE PERIOD 9 Attributable to: Owners of the parent Continuing operations Discontinued operation Non-controlling interests LOSS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT 10 Basic and diluted - For loss for the period - For loss from continuing operations	Six months ended 30 June 2017 2016 (Unaudited) (Unaudited) (Restated) 266 313 (276) (302) (10) 11 21 17 (9) (9) (60) (40) (83) (9) (9) (3) (150) (33) 3 2 (147) (31) - - (147) (31) (149) - (32) - (149) (32) 2 1 (147) (31) (HK0.11 cent) (HK0.03 cent) (HK0.11 cent) (HK0.03 cent)	Six months ended 30 June 2017 2016 (Unaudited) (Unaudited) (Restated) 266 313 (276) (302) (10) 11 21 17 (9) (9) (60) (40) (83) (9) (9) (3) (150) (33) 3 2 (147) (31) - - (147) (31) (149) - (32) - (149) (32) 2 1 (147) (31) (HK0.11 cent) (HK0.03 cent) (HK0.11 cent) (HK0.03 cent)
		11 17 (9) (40) (9) (3)
		(33) 2
		(31) -*
		(31)
		(32) -*
		(32) 1
		(31)
		(HK0.03 cent)
		(HK0.03 cent)

*less than HK$1 million

13

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2017

HK$ million LOSS FOR THE PERIOD Other comprehensive income/(loss) to be reclassified to profit or loss in subsequent period, net of tax : Exchange differences on translation of foreign operations TOTAL COMPREHENSIVE LOSS FOR THE PERIOD Attributable to: Owners of the parent Non-controlling interest	Six months ended 30 June 2017 2016 (Unaudited) (Unaudited) (147) (31) 19 (8) (128) (39) (130) 2 (40) 1 (128) (39)	Six months ended 30 June 2017 2016 (Unaudited) (Unaudited) (147) (31) 19 (8) (128) (39) (130) 2 (40) 1 (128) (39)
		(39)
		(40) 1
		(39)

14

Condensed Consolidated Statement of Financial Position 30 June 2017

HK$ million Notes ASSETS Non-current assets Property, plant and equipment 11 Investment properties Prepaid land lease payments Goodwill Total non-current assets Current assets Inventories Properties under development Properties held for sale Trade and loans receivables 12 Prepayments, deposits and other receivables Financial assets at fair value through profit or loss Pledged time deposits Cash and cash equivalents Total current assets Total assets EQUITY AND LIABILITIES Equity attributable to owners of the parent Issued capital Convertible bonds Reserves Non-controlling interests Total equity Non-current liabilities Interest-bearing bank borrowings Deferred tax liabilities Total non-current liabilities Current liabilities Trade and bills payables 13 Tax payable Other payables and accruals Interest-bearing bank borrowings Total current liabilities Total liabilities Total equity and liabilities Net current assets Total assets less current liabilities	30 June 2017 (Unaudited) 103 270 37 80	31 December 2016 (Audited) 114 299 39 80 532 38 361 753 142 79 6 107 131 1,617 2,149 1,343 496 (453) 1,386 31 1,417 82 100 182 182 7 83 278 550 732 2,149 1,067 1,599
	490
	35 416 638 131 30 1 95 92
	1,438
	1,928
	1,343 496 (559)
	1,280 33
	**1,313 **
	71 **95 **
	**166 **
	175 8 72 194
	449
	615
	1,928
	989
	1,479

15

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PREPARATION

The unaudited condensed consolidated interim financial statements have been prepared in accordance with the applicable disclosure requirements of Appendix 16 to the Listing Rules and with Hong Kong Accounting Standards (“ HKAS ”) 34 “Interim financial reporting” issued by the Hong Kong Institute of Certified Public Accountants (“ HKICPA ”).

The unaudited condensed consolidated interim financial statements should be read in conjunction with the audited annual financial statements of the Group for the year ended 31 December 2016 (the “ 2016 Annual Report ”).

2. PRINCIPAL ACCOUNTING POLICIES

The accounting policies and methods of computation adopted in the preparation of the unaudited condensed consolidated interim financial statements are consistent with those followed in the preparation of the Group’s 2016 Annual Report.

The following revised Hong Kong Financial Reporting Standards (“ HKFRSs ”) have been adopted by the Company with effect from 1 January 2017. The adoption of the revised HKFRSs does not have any significant financial effect on the interim financial statements.

Amendments to HKAS 7 Disclosure Initiative Amendments to HKAS 12 Recognition of Deferred Tax Assets for Unrealised Losses

Amendments to HKFRS 12 included Disclosure of Interests in Other Entities

in Annual Improvements 2014-2016 Cycle

16

3. OPERATING SEGMENT INFORMATION

For management purposes, the Group is organised into business units based on their products and there were four reportable operating segments during the period under review as follows:

• (a) the Telecom Products Business segment which is the manufacture and sale of telecom and consumer electronic products and supply of infant and baby products;

• (b) the Mainland Property Business segment which is engaged in the development and sale of properties in Mainland China;

• (c) the Finance Business segment which is engaged in the online and offline finance business; and

• (d) the Child Products Trading Business segment which is engaged in the trading and sale of child products (discontinued during the year ended 31 December 2016).

Management monitors the results of its operating segments separately for the purpose of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on reportable segment profit/(loss), which is a measure of adjusted profit/(loss) before tax. The adjusted profit/(loss) before tax is measured consistently with the Group’s profit/ (loss) before tax except the head office and corporate expenses are excluded from such measurement.

Segment assets exclude corporate and other unallocated assets as these assets are managed on a group basis.

Segment liabilities exclude deferred tax liabilities, tax payable and corporate and other unallocated liabilities as these liabilities are managed on a group basis.

17

3. OPERATING SEGMENT INFORMATION (CONTINUED)

For the period ended 30 June 2017

HK$ million Segment revenue: From external customers Other revenue Operating (loss)/profit Finance costs Reconciled items: Equity-settled share option expense Corporate and other unallocated expenses (Loss)/profit before tax Tax credit (Loss)/profit for the period Other segment information: Interest income Expenditure for non-current assets Depreciation and amortization Other material non-cash items: Impairment of properties held for sale Impairment of properties under development Fair value loss on investment properties	Telecom Products Business Mainland Property Business (Unaudited) (Unaudited) 168 93 21 -	Finance Business (Unaudited) 5 -	Reconciliation Group total (Unaudited) (Unaudited) - 266 - 21
	189 93	5	- 287
	(36) (81) (5) (4) - - - -	4 - - -	- (113) - (9) (24) (24) (4) (4)
	(41) (85)	4	(28) (150)
	- -	-	3 3
	(41) (85)	4	(25) (147)
	1 - 1 - (13) - - (27) - (28) (28) -	- - - - - -	- 1 - 1 - (13) - (27) - (28) - (28)

18

3. OPERATING SEGMENT INFORMATION (CONTINUED)

For the period ended 30 June 2016

Continuingoperations Telecom Mainland Products Property Finance HK$ million Business (Unaudited) Business (Unaudited) Business (Unaudited) Segment revenue: Sales to external customers 261 49 3 Other revenue 16 1 - 277 50 3 Operating (loss)/profit (6) (23) 2 Finance costs (3) - - Reconciled items: Corporate and other unallocated expenses - - - (Loss)/profit before tax (9) (23) 2 Tax credit - - - (Loss)/profit for the period (9) (23) 2 Other segment information: Interest income 1 - - Expenditure for non-current assets 1 - - Depreciation and amortisation (16) - - Other material non-cash items: Fair value gain on investment properties 1 - -	Continuingoperations	Continuingoperations	Total continuing operations (Unaudited) 313 17 330 (27) (3) - (30) - (30) 1 1 (16) 1	Discontinued operation Child Products Trading Business (Unaudited) Reconciliations (Unaudited) 87 (83) - -	Group Total (Unaudited) 317 17
	Telecom Mainland Products Property Business (Unaudited) Business (Unaudited) 261 49 16 1	Finance Business (Unaudited) 3 -
	277 50	3		87 (83)	334
	(6) (23) (3) - - -	2 - -		1 - (1) - - (3)	(26) (4) (3)
	(9) (23) - -	2 -		- (3) - 2	(33) 2
	(9) (23)	2		- (1)	(31)
		- - - -		- - - - - - - -	1 1 (16) 1

19

3. OPERATING SEGMENT INFORMATION (CONTINUED)

As at 30 June 2017

HK$ million Segment assets Reconciled items: Corporate and other unallocated assets Total assets Segment liabilities Reconciled items: Corporate and other unallocated liabilities Total liabilities	Telecom Products Business Mainland Property Business (Unaudited) (Unaudited) 673 1,088 - -	Finance Business (Unaudited) 145 -	Reconciliation Group Total (Unaudited) (Unaudited) - 1,906 22 22
	673 1,088	145	22 1,928
	331 179 - -	1 -	- 511 104 104
	331 179	1	104 615

As at 31 December 2016

HK$ million Segment assets Reconciled items: Corporate and other unallocated assets Total assets Segment liabilities Reconciled items: Corporate and other unallocated liabilities Total liabilities	Telecom Products Business Mainland Property Business (Audited) (Audited) 810 1,183 - -	Finance Business (Audited) 141 -	Reconciliation Group Total (Audited) (Audited) - 2,134 15 15
	810 1,183	141	15 2,149
	417 208 - -	- -	- 625 107 107
	417 208	-	107 732

20

3. OPERATING SEGMENT INFORMATION (CONTINUED)

Geographical information

• (a) Revenue from external customers

HK$ million Mainland China and Hong Kong Europe North America and others	Six months ended 30 June 2017 (Unaudited) 2016 (Unaudited) (Restated) 123 84 68 146 75 83 266 313	Six months ended 30 June 2017 (Unaudited) 2016 (Unaudited) (Restated) 123 84 68 146 75 83 266 313
		313

The revenue information above is based on the final locations where the Group’s products or properties were sold to customers.

• (b) Non-current assets

HK$ million Hong Kong Mainland China	30 June 2017 (Unaudited) 6 484 490	31 December 2016 (Audited) 6 526 532

The non-current assets information is based on the location of the assets and excludes financial instruments.

Information about major customers

For the six months ended 30 June 2017, revenue from a major customer of the Telecom Products Business segment was HK$28 million, representing 11% of the Group’s total revenue.

For the six months ended 30 June 2016, revenue from a major customer of the Telecom Products Business segment was HK$56 million, representing 18% of the Group’s total revenue.

21

4. REVENUE

Revenue, which is also the Group’s turnover, represents the net invoiced value of goods sold, after allowances for returns and trade discounts and interest income, and gross proceeds from the sale of properties during the period.

An analysis of revenue is as follows:

HK$ million Manufacture, sale and supply of telecom, electronic and child products Sale of properties Interest income from loan receivables Bank interest income	Six months ended 30 June 2017 (Unaudited) 2016 (Unaudited) (Restated) 167 260 93 49 5 3 1 1 266 313	Six months ended 30 June 2017 (Unaudited) 2016 (Unaudited) (Restated) 167 260 93 49 5 3 1 1 266 313
		313

5. FINANCE COSTS

An analysis of finance costs is as follows:

HK$ million Interest on bank loans wholly repayable within five years	Six months ended 30 June 2017 (Unaudited) 2016 (Unaudited) (Restated) 9 3

22

6. LOSS BEFORE TAX

The Group’s loss before tax is arrived at after charging:

HK$ million Cost of sales Depreciation Amortisation of prepaid land lease payments	Six months ended 30 June 2017 (Unaudited) 2016 (Unaudited) 276 302 12 15 1 1

7. TAX CREDIT

No Hong Kong profits tax has been provided for the six months ended 30 June 2017 and 2016 as the Group had no profits chargeable to Hong Kong profits tax during that periods. Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the countries in which the Group operates.

HK$ million Current – Mainland China Mainland China land appreciation tax Deferred tax credit Total tax credit for the period	Six months ended 30 June 2017 (Unaudited) 2016 (Unaudited) 2 1 (5) (3) (3) (2)	Six months ended 30 June 2017 (Unaudited) 2016 (Unaudited) 2 1 (5) (3) (3) (2)
		(2)

8. DIVIDENDS

The Board does not recommend payment of an interim dividend for the six months ended 30 June 2017 (30 June 2016: nil).

23

9. DISCONTINUED OPERATION

On 3 August 2016, CCT Tech Global Holdings Limited (“ CCT Global ”), a wholly-owned subsidiary of the Company, entered into an agreement with CCT Fortis, pursuant to which the Group conditionally agreed to dispose of its entire issued share capital of Suremark Holdings Limited (“ Suremark ”) to CCT Fortis or a nominee designated by CCT Fortis, for a consideration of HK$24,000,000 to be satisfied by way of set-off against the interest-free loan of HK$24,000,000 due by the Company to CCT Fortis as at the date of the aforesaid agreement (the “ Disposal Transaction ”). The Disposal Transaction was completed on 14 October 2016 and the entire issued share capital of Suremark was transferred to a nominee designated by CCT Fortis. Suremark is principally engaged through its subsidiaries, namely Wiltec Industrial Limited and Wiltec Industries (HK) Limited (collectively the “ Suremark Group ”), in the Child Products Trading Business. The results from the Suremark Group were no longer consolidated into the Group's accounts subsequent to the completion of the Disposal Transaction.

The results of the Suremark Group attributable to the Group for the period ended 30 June 2016 were presented below:

were presented below:
	Six months ended
HK$ million	30 June 2016
Revenue	87
Expenses	(86)
Finance costs	(1)
Profit before tax	-*
Income tax expense	-
Profit for the period from the discontinued operation	-*
Earnings per share from the discontinued operation:
Basic and diluted	HK0.00 cent#

The calculations of the basic and diluted earnings per share from the discontinued operation were based on:

HK$ million Profit attributable to ordinary equity holders of the parent from the discontinued operation, used in the basic and diluted earnings per share calculation Weighted average number of ordinary shares in issue during the period used in the basic and diluted loss per share calculation	Six months ended 30 June 2016 -*
	Six months ended 30 June 2016 Number of shares 111,650,422,562

24

9. DISCONTINUED OPERATION (CONTINUED)

The net cash flows incurred by the Suremark Group for the period ended 30 June 2016 were as follows:

HK$ million Operating activities Investing activities Financing activities Net cash outflows #less than HK0.01 cent *less than HK$1 million	Six months ended 30 June 2016 3 - (5) (2)

10. LOSS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT

The calculation of the basic and diluted loss per share amounts for the period is based on the loss for the period attributable to ordinary equity holders of the parent of HK$149 million (30 June 2016: HK$32 million), and the loss from the continuing operations attributable to ordinary equity holders of the parent of HK$149 million (30 June 2016: HK$32 million) and the weighted average number of 134,278,993,990 (30 June 2016: 111,650,422,562) ordinary shares in issue during the period.

No adjustment has been made to the basic loss per share amount presented for the six months ended 30 June 2017 and 2016 in respect of a dilution as the impact of the outstanding share options and the Convertible Bonds had an anti-dilutive effect on the basic loss per share amounts presented.

11. PROPERTY, PLANT AND EQUIPMENT

During the six months ended 30 June 2017, the Group acquired fixed assets of approximately HK$1 million (six months ended 30 June 2016: HK$1 million).

25

12. TRADE AND LOANS RECEIVABLES

HK$ million Trade receivables Loans and interest receivables	30 June 2017 (Unaudited) 72 59 131	31 December 2016 (Audited) 84 58
		142

An aged analysis of the trade receivables as at the end of the reporting period, based on the invoice date and net of provisions, is as follows:

	30 June	2017	31 December 2016
	(Unaudited)		(Audited)
HK$ million	Balance	Percentage	Balance Percentage
Current to 30 days	17	24	18	21
31 to 60 days	27	38	24	29
61 to 90 days	9	12	13	15
Over 90 days	19	**26 **	29	35
	72	100	84	100

The Group allows an average credit period of 30 to 90 days to its trade customers.

The trade receivables comprised the trade receivables due from customers of the Telecom Products Business, receivables from property sales in Mainland China and loan receivables and accrued interest of the Finance Business.

13. TRADE AND BILLS PAYABLES

An aged analysis of the trade and bills payables as at the end of the reporting period, based on the invoice date, is as follows:

	30 June 2017		31 December 2016
	(Unaudited)		(Audited)
HK$ million	Balance Percentage		Balance Percentage
Current to 30 days	30	17	35	19
31 to 60 days	23	13	28	15
61 to 90 days	17	10	23	13
Over 90 days	105	60	96	53
	175	100	182	100

As at 30 June 2017, included in the trade and bill payables were trade payables of HK$18 million (31 December 2016: HK$25 million) due to CCT Plastic Limited, an indirect wholly-owned subsidiary of CCT Fortis, which were unsecured, interest-free and repayable within 90 days from the invoice date.

The trade payables are non-interest bearing and are normally settled on credit terms between 30 days to 90 days.

26

14. COMPARATIVE PRESENTATION

The comparative condensed consolidated statement of profit or loss have been re-presented as if the operation discontinued on 14 October 2016 had been discontinued at the beginning of the comparative period (note 9). In addition, certain comparative amounts have been reclassified to conform with the current period’s presentation..

15. EVENTS AFTER THE REPORTING PERIOD

On 11 August 2017, the Company entered into an agreement with CCT Enterprise and the Subscriber, under which it was agreed that the Subscriber would subscribe for the 19,998 new shares of CCT Enterprise at the subscription price of US$19,998 and the Subscriber or its designated nominee(s) would acquire the HK$330 million interest-free loan due from CCT Enterprise to the Company. Immediately after completion of the Agreement, CCT Enterprise was directly owned as to 99.99% by the Subscriber and indirectly owned as to 0.01% by the Company, and CCT Enterprise and its subsidiaries ceased to be subsidiaries of the Company. The Transactions would give rise to an estimated unaudited gain of approximately HK$5 million to the Group. Completion of the Agreement took place on 11 August 2017. Further details of the Transaction are set out in the announcement of the Company dated 11 August 2017.

27

GLOSSARY OF TERMS

GENERAL TERMS

• “Agreement” The agreement dated 11 August 2017 entered into amongst the Company, CCT Enterprise and the Subscriber in respect of the Transactions, the completion of which took place on 11 August 2017

• “Assignment” The assignment of the Shareholder’s Loan by the Company to the Subscriber or its designated nominee(s) at the assignment consideration of HK$330,000,000, under the terms and conditions of the Agreement and the deed of assignment to be entered into amongst the Company, CCT Enterprise and the Subscriber (or its designated nominee(s)) in respect of the Assignment

• “Board” The board of Directors “CCT Enterprise” CCT Enterprise Limited, a company incorporated in the British Virgin Islands with limited liability, which was an indirect wholly-owned subsidiary of the Company immediately prior to the completion of the Agreement

• “CCT Fortis” CCT Fortis Holdings Limited, a company listed on the Main Board of the Stock Exchange

• “CCT Fortis Group” CCT Fortis and its subsidiaries, from time to time “Chairman” The chairman of the Company “Child Products” Feeding, health care, hygiene, safety, toy and other related products for infants and babies

• “Child Products Trading The business of trading and sale of Child Products which was disposed of Business” by the Group to the CCT Fortis Group in October 2016

• “Company” CCT Land Holdings Limited, a company incorporated in Bermuda with limited liability, the shares of which are listed on the main board of the Stock Exchange

• “connected person” Has the same meaning as ascribed to it under the Listing Rules

• “Convertible Bonds” The zero coupon convertible bonds with the original aggregate principal amount of HK$1,095,671,000 issued by the Company on 7 December 2015, of which an aggregate principal amount of HK$495,671,000 was outstanding as at the date of this announcement

• “Director(s)” The director(s) of the Company

• “Enterprise Group” CCT Enterprise and its subsidiaries, from time to time

• “Enterprise Share(s)” Ordinary share(s) of US$1.00 each in the capital of CCT Enterprise

28

“Finance Business”	The finance business currently engaged by a subsidiary established in the
	Mainland China, in which the Group has 51% interest
“Group”	The Company and its subsidiaries, from time to time
“HK“ or “Hong Kong”	The Hong Kong Special Administrative Region of the PRC
“HK$” or “$”	Hong Kong dollar(s), the lawful currency of Hong Kong
“Listing Rules”	The Rules Governing the Listing of Securities on the Stock Exchange
“Mainland China”	The mainland of the PRC
“Mainland Property	The development and sale of residential and commercial properties in the
Business”	Mainland China
“N/A”	Not applicable
“PRC”	The People’s Republic of China
“Products”	Indoor-used cordless and corded phones and accessories, walkie-talkies,
	and other consumer telecom and electronic products
“Products Manufacturing	The operations of manufacturing the Products and the Child Products
Operations”	engaged by the Enterprise Group
“Products Trading	The business of development, design and trading of the Products and the
Business”	supply of the Child Products to the CCT Fortis Group, currently engaged by
	the Group
“Remaining Group”	The Group excluding the Enterprise Group after completion of the
	Agreement
“RMB”	Renminbi, the lawful currency of the PRC
“Share(s)”	The ordinary share(s) of HK$0.01 each in the share capital of the Company
“Shareholder(s)”	Holder(s) of the Share(s)
“Shareholder’s Loan”	The outstanding interest-free loan due from CCT Enterprise to the
	Company, which amounted to HK$330 million as at the date of the
	Agreement
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subscriber”	Estate Express Limited, a company incorporated in the British Virgin
	Islands with limited liability, which is a third party independent of the
	Company and its connected persons

29

• “Subscription” The subscription of the Subscription Shares in CCT Enterprise by the Subscriber and allotment and issue of the Subscription Shares by CCT Enterprise at the subscription price of US$19,998, under the terms and conditions of the Agreement, following completion of which the Subscriber would beneficially own approximately 99.99% of the entire issued share capital of CCT Enterprise as enlarged by Subscription Shares

• “Subscription Shares” The 19,998 Enterprise Shares subscribed by the Subscriber and allotted and issued by CCT Enterprise, under the terms and conditions of the Agreement

• “Telecom Products The Products Manufacturing Operations and the Products Trading Business Business”

• “Transactions” The Subscription and the Assignment “US” The United States of America

• “US$” United States dollar, the lawful currency of the US “%” Per cent.

FINANCIAL TERMS

“Current Ratio” Current assets divided by current liabilities “operating Operating profit or loss before interest and taxation profit/(loss)” “Gearing Ratio” Total borrowings (representing bank borrowings) divided by total capital employed (representing total Shareholders’ fund plus total borrowings) “Loss Per Share” Loss attributable to ordinary equity holders of the parent divided by weighted average number of ordinary shares in issue during the period

*For identification only

30