ICO Group Limited - Annual Report 2016

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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(Incorporated in Bermuda with limited liability)

(Stock Code : 630)

ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2016

RESULTS

The board (the “Board”) of directors (the “Directors”) of AMCO United Holding Limited (the “Company”) announces the audited consolidated results of the Company and its subsidiaries (collectively referred to as the “Group”) for the year ended 31 December 2016, together with the comparative figures for the previous year, as follows.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2016

Notes Continuing operations Revenue 3, 4 Cost of sales and services Gross profit Other income and other gains or losses 5 Distribution costs Administrative expenses Finance costs Share of loss of an associate Loss before income tax 6 Income tax credit/(expense) 7	2016 HK$’000 98,879 (81,706) 17,173 5,184 (282) (38,799) (120) (1,612) (18,456) 426	2015 HK$’000 (Re-presented) 71,845 (61,016) 10,829 3,500 (534) (30,656) (6) – (16,867) (235)

For identification purposes only

Loss for the year from continuing operations Discontinued operation Loss for the year from discontinued operation Loss and total comprehensive income for the year attributable to owners of the Company Loss and total comprehensive income for the year attributable to owners of the Company – from continuing operations – from discontinued operation Loss per share 8 Basic and diluted – from continuing operations – from discontinued operation Notes	(18,030) (379) (18,409) (18,030) (379) (18,409) HK(1.00) cent HK(0.02) cent HK(1.02) cents 2016 HK$’000	(17,102) (1,504) (18,606) (17,102) (1,504) (18,606) (Restated) HK(2.45) cents HK(0.22)cent HK(2.67) cents 2015 HK$’000 (Re-presented)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2016

Notes ASSETS AND LIABILITIES Non-current assets Property, plant and equipment 9 Goodwill 10 Intangible assets 11 Available-for-sale financial asset 12 Deposits 14 Current assets Inventories Held-for-trading investments 13 Trade and other receivables 14 Cash and cash equivalents Current liabilities Trade and other payables 15 Tax payable Net current assets Total assets less current liabilities Non-current liabilities Deferred tax liabilities Net assets EQUITY Share capital 16 Reserves Total equity	2016 HK$’000 2,652 10,196 5,297 15,300 – 33,445 11 166,311 103,758 30,479 300,559 30,260 28 30,288 270,271 303,716 874 302,842 18,627 284,215 302,842	2015 HK$’000 65,703 957 2,584 – 6,264
		75,508
		11 – 14,812 184,235
		199,058
		30,442 –
		30,442
		168,616
		244,124
		354
		243,770
		12,418 231,352
		243,770

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. General information

AMCO United Holding Limited (the “Company”) was incorporated in Bermuda with limited liability on 19 August 1994 as an exempted company under the Companies Act 1981 of Bermuda with its shares listed on the Main Board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) since 28 November 1996. The registered office of the Company is located at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda. The principal place of business of the Company is located at 9/F, Fung House, 19-20 Connaught Road Central, Hong Kong.

The Company and its subsidiaries (hereinafter collectively referred to as the “Group”) are principally engaged in (i) manufacture and sale of medical devices products; (ii) manufacture and sale of plastic moulding products; (iii) provision of public relations services; (iv) provision of construction services in building construction, building maintenance and improvement works, project management, renovation and decoration works; (v) provision of money lending; and (vi) investment in securities.

2. Basis of preparation

The consolidated financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”), which is a collective term for all individual HKFRSs, Hong Kong Accounting Standards (“HKASs”) and Interpretations, and the disclosure requirements of the Hong Kong Companies Ordinance. In addition, the consolidated financial statements include applicable disclosures required by the Rules Governing the Listing of Securities on the Stock Exchange (“Listing Rules”).

The consolidated financial statements have been prepared under the historical cost basis except for certain financial instruments which are measured at their fair value.

(a) Adoption of new and revised HKFRSs – effective 1 January 2016

In the current year, the Group has applied for the first time the following new amendments and interpretation to HKFRSs (hereinafter collectively referred to as “new and revised HKFRSs”) issued by the HKICPA, which are relevant to and effective for the Group’s consolidated financial statements for the annual period beginning on 1 January 2016:

Amendments to HKAS 1 Disclosure Initiative Amendments to HKAS 16 and Clarification of Acceptable Methods of Depreciation and HKAS 38 Amortisation Amendments to HKAS 27 Equity Method in Separate Financial Statements HKFRSs (Amendments) Annual Improvements 2012 – 2014 Cycle Amendments to HKFRS 10, Investment Entities: Applying the Consolidation Exception HKFRS 12 and HKAS 28 Amendments to HKFRS 11 Accounting for Acquisition of Interests in Joint Operations

The application of the new and revised HKFRSs in the current year has no material effect on the Group’s financial performance and position for the current year or the disclosures set out in the consolidated financial statements.

(b) Application of new and revised HKFRSs that have been issued but are not yet effective

The following new and revised HKFRSs, potentially relevant to the Group’s consolidated financial statements, have been issued, but are not yet effective and have not been early adopted by the Group.

Amendments to HKAS 7 Disclosure Initiative[1] HKFRS 9 Financial Instruments[2] HKFRS 15 Revenue from Contracts with Customers[2] Amendments to HKFRS 2 Classification and Measurement of Share-based Payment Transactions[2] Amendments to HKFRS 15 Clarifications to HKFRS 15 Revenue from Contracts with Customers[2] HKFRS 16 Leases[3] Amendments to HKFRS 10 and Sale or Contribution of Assets between an Investor and its HKAS 28 Associate or Joint Venture[4]

1 Effective for annual periods beginning on or after 1 January 2017 2 Effective for annual periods beginning on or after 1 January 2018 3 Effective for annual periods beginning on or after 1 January 2019 4 Effective for annual periods beginning on or after a date to be determined

The Group is in the process of making an assessment of the potential impact of these pronouncements but is not yet in a position to state whether the application of these pronouncements would have a significant impact on the Group’s consolidated financial statements.

3. Segment reporting

The Group determines its operating segments based on the reports reviewed by the chief operating decision-maker that are used to make strategic decisions.

The Group has seven (2015: four) reportable segments. The segments are managed separately as each business offers different products and services and requires different business strategies. The following summary describes the operations in each of the Group’s reportable segments:

(1) Manufacture and sale of medical devices products (“Medical Devices Business”);
(2) Manufacture and sale of plastic moulding products (“Plastic Moulding Business”);
(3) Provision of public relations services (“PR Business”);
(4) Provision of human resources management services (“HR Business”);

(5) Provision of construction services in building construction, building maintenance and improvement works, project management, renovation and decoration works (“Building Contract Works Business”);
(6) Provision of money lending (“Money Lending Business”); and
(7) Investment in securities (“Securities Investment”).

During the year ended 31 December 2016, the Group commenced the Money Lending Business and Securities Investment. In addition, the Group acquired the Building Contract Works Business in January 2016.

The business segment of HR Business was sold and discontinued during the year ended 31 December 2016.

Inter-segment transactions, if any, are priced with reference to prices charged to external parties for similar products. Corporate revenue and expenses are not allocated to the operating segments as they are not included in the measure of the segments’ profit that is used by the chief operating decision-maker for assessment of segment performance.

The following is an analysis of the Group’s revenue and results by reportable segment:

(a) Business segments

For the year ended 31 December 2016

		Continuing	operations		Total HK$’000 100,625 (105)
Medical Devices Business HK$’000 38,761 – 38,761 1,186 – (2) – 2,577 – (4,243)	Plastic Moulding Business HK$’000 2,540 – 2,540 347 1 (397) 128 578 – (660)	PR Business HK$’000 479 – 479 (86) – (14) – 45 – (4)	Building Contract Works Business HK$’000 53,650 – 53,650 (1,611) 196 (2,633) (7) 41,698 525 (13,948)	Money Lending Business HK$’000 3,554 (105) 3,449 2,765 5 – – 74,557 – –
					100,520

					4,632

					204 (3,062) 121 285,766 536 (18,874)

For the year ended 31 December 2015 (Re-presented)

Reportable segment revenue Revenue from external customers Reportable segment profit/(loss) Interest income Depreciation Gain on disposal of property, plant and equipment Reportable segment assets Additions to non-current assets Reportable segment liabilities	Continuing operations Medical Devices Business Plastic Moulding Business PR Business HK$’000 HK$’000 HK$’000 54,340 16,627 878 54,340 16,627 878 2,151 (2,098) (510) 1 – – (387) (122) (10) – 797 – 13,782 750 219 – 5 69 (9,846) (3,094) (298)	Continuing operations Medical Devices Business Plastic Moulding Business PR Business HK$’000 HK$’000 HK$’000 54,340 16,627 878 54,340 16,627 878 2,151 (2,098) (510) 1 – – (387) (122) (10) – 797 – 13,782 750 219 – 5 69 (9,846) (3,094) (298)	Sub-total HK$’000 71,845 71,845 (457) 1 (519) 797 14,751 74 (13,238)	Discontinued operation HR Business HK$’000 507 507 (1,504) – (26) – 199 172 (193)	Total HK$’000 72,352 72,352 (1,961) 1 (545) 797 14,950 246 (13,431)
	Medical Devices Business HK$’000 54,340 54,340 2,151 1 (387) – 13,782 – (9,846)	Plastic Moulding Business HK$’000 16,627 16,627 (2,098) – (122) 797 750 5 (3,094)

(b) Reconciliation of reportable segment revenue, profit or loss, assets and liabilities

Revenue Reportable segment revenue Inter-segment revenue Segment revenue from discontinued operation Consolidated revenue from continuing operations Loss before income tax and discontinued operation Reportable segment profit/(loss) Segment loss from discontinued operation Finance costs Share of loss of an associate Unallocated corporate income Unallocated corporate expenses Consolidated loss before income tax from continuing operations Assets Segment assets Leasehold land and buildings Intangible asset Goodwill Available-for-sale financial asset Cash and cash equivalents Unallocated corporate assets Consolidated total assets Liabilities Segment liabilities Amounts due to related parties Unallocated corporate liabilities Consolidated total liabilities	2016 HK$’000 100,625 (105) (1,641) 98,879 4,632 379 (120) (1,612) 1,530 (23,265) (18,456) 285,766 – – – 15,300 30,479 2,459 334,004 18,874 9,200 3,088 31,162	2015 HK$’000 (Re-presented) 72,352 – (507) 71,845 (1,961) 1,504 (6) – 2,488 (18,892) (16,867) 14,950 62,590 2,584 957 – 184,235 9,250 274,566 13,431 9,200 8,165 30,796

Reportable segment profit/loss represents the profit/loss attributable to each segment without allocation of corporate administrative expenses, share of loss of an associate, finance costs, corporate directors’ emoluments, corporate interest income and income tax credit/expense. This is the measure reported to the chief operating decision-maker for the purposes of resource allocation and performance assessment.

All assets are allocated to reportable segments other than leasehold land and buildings, availablefor-sale financial asset and cash and cash equivalents.

All liabilities are allocated to reportable segments other than amounts due to related parties.

(c) Geographic information

The geographical location of customers is based on the location at which the goods delivered or service provided. The geographical location of the non-current assets is based on the physical and operating location of the assets.

The Group’s operations and workforce are mainly located in Hong Kong.

The following table provides an analysis of the Group’s revenue from external customers.

Asia – Hong Kong – other region Europe North and South America	Continuing operations 2016 2015 HK$’000 HK$’000 (Re-presented) 57,578 889 858 9,581 1,394 3,710 39,049 57,665 98,879 71,845	Discontinued operation 2016 2015 HK$’000 HK$’000 (Re-presented) 1,641 507 – – – – – – 1,641 507	Total 2016 2015 HK$’000 HK$’000 (Re-presented) 59,219 1,396 858 9,581 1,394 3,710 39,049 57,665 100,520 72,352	Total 2016 2015 HK$’000 HK$’000 (Re-presented) 59,219 1,396 858 9,581 1,394 3,710 39,049 57,665 100,520 72,352
				72,352

The following table provides an analysis of the Group’s non-current assets.

	Continuing	operations	Discontinued operation	Discontinued operation	Total	Total
	2016	2015	2016	2015	2016	2015
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
		(Re-presented)		(Re-presented)		(Re-presented)
Asia
– Hong Kong	33,445	75,362	–	146	33,445	75,508

(d) Information about major customers

Revenue from customers contributing over 10% of the total revenue of the Group for both continuing operations and discontinued operation are set out below:

	2016		2015
		% of total		% of total
	HK$’000	revenue	HK$’000	revenue
Customer A – Medical Devices Business	38,761	39%	54,329	75%
Customer B – Plastic Moulding Business	N/A(Note)	N/A(Note)	8,634	12%
Customer C – Building Contract Works Business	13,070	13%	-	-

Note: The corresponding revenue did not contribute over 10% of the total revenue of the Group.

4. Revenue

Revenue represents the net invoiced value of goods sold or services provided, net of returns and trade discounts, revenue from construction contracts and loan interest income.

Continuing operations Sales of goods Revenue from construction contracts Loan interest income Provision of services	2016 HK$’000 41,301 53,650 3,449 479 98,879	2015 HK$’000 (Re-presented) 70,967 – – 878
		71,845

5. Other income and other gains or losses

Analysis of the Group’s other income and other gains or losses recognised during the year is as follows:

Continuing operations Exchange gain, net Gain on sale of held-for-trading investments Loss on disposal of subsidiaries Gain arising from disposal of an associate Gain on disposal of property, plant and equipment Gain on change in fair value of held-for-trading investments Interest income Rental income Others	2016 HK$’000 – 1,954 (1,285) 412 140 1,528 211 273 1,951 5,184	2015 HK$’000 12 – – – 797 – 7 5 2,679
		3,500

6. Loss before income tax

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

Continuing operations Employee costs (including Directors’ emoluments) – Salaries, wages and other benefits – Contribution to defined contribution retirement plan Depreciation of property, plant and equipment – Owned – Held under a finance lease Amortisation of intangible asset (Note 11) Auditor’s remuneration Operating lease charges in respect of properties Cost of inventories recognised as expenses Cost of services	2016 HK$’000 13,628 426 14,054 2,397 – 2,505 400 2,017 32,342 48,286	2015 HK$’000 (Re-presented) 13,933 369
		14,302
		1,673 331 – 765 2,042 53,160 734

7. Income tax credit/expense

Continuing operations Hong Kong Profits Tax – Tax for the year – Over-provision in prior year Deferred tax (credit)/expense – current year Income tax (credit)/expense	2016 HK$’000 28 (38) (416) (426)	2015 HK$’000 – – 235
		235

Hong Kong Profits Tax is calculated at 16.5% of the estimated assessable profits for the current year. No Hong Kong Profits Tax was provided for last year as the Group had sufficient tax loss brought forward to offset against the assessable profits for the year ended 31 December 2015.

8. Loss per share

(a) Basic loss per share

The calculation of the basic loss per share attributable to owners of the Company is based on the following data:

Basic Loss for the year for the purposes of computation of basic loss per share – from continuing operations – from discontinued operation Number of shares Weighted average number of ordinary shares in issue (Note)	2016 HK$’000 (18,030) (379) (18,409) ‘000 1,805,541	2015 HK$’000 (Re-presented) (17,102) (1,504)
		(18,606)

		(Restated) ‘000 699,171

Note:

The calculation of basic loss per share for the year ended 31 December 2016 is based on the consolidated loss for the year attributable to owners of the Company and on the weighted average number of ordinary shares in issue during the year after adjustment of the bonus element in the shares issued under the open offer completed during the year.

The comparative figures for the basic loss per share for the year ended 31 December 2015 are restated to take into account of the effects of the share consolidation and the bonus elements arising from the share placings and open offer completed retrospectively as if they had taken place since the beginning of the comparative period. Details of the above share consolidation, share placings and open offer are set out in Note 16.

(b) Diluted loss per share

Diluted loss per share was the same as basic loss per share because there was no potential dilutive ordinary share in issue for the years ended 31 December 2016 and 2015.

There were no outstanding share options as at 31 December 2016 and 2015.

9. Property, plant and equipment

Cost At 1 January 2015 Additions at cost Acquisition of a subsidiary Acquisition of asset through acquisition of a subsidiary Disposals Written off At 31 December 2015 and 1 January 2016 Additions at cost Acquisition of a subsidiary Derecognised upon disposal of subsidiaries Disposals Written off At 31 December 2016	Leasehold land and buildings HK$’000 – – – 62,590 – – 62,590 – – (62,590) – – –	Plant and machinery HK$’000 11,348 – – – (1,284) – 10,064 – – – (1,480) – 8,584	Furniture, fixtures and office equipment HK$’000 2,485 1,580 419 – (174) (1,124) 3,186 908 17 (559) – (776) 2,776	Motor vehicles HK$’000 5,844 – – – (1,018) – 4,826 – 124 – (591) – 4,359	Total HK$’000 19,677 1,580 419 62,590 (2,476) (1,124)
					80,666 908 141 (63,149) (2,071) (776)
					15,719

Accumulated depreciation and impairment At 1 January 2015 Depreciation Disposals Written off At 31 December 2015 and 1 January 2016 Depreciation Derecognised upon disposal of subsidiaries Disposals Written off At 31 December 2016 Net book value At 31 December 2016 At 31 December 2015	Leasehold land and buildings HK$’000 – – – – – 1,373 (1,373) – – – – 62,590	Plant and machinery HK$’000 11,348 – (1,284) – 10,064 – – (1,480) – 8,584 – –	Furniture, fixtures and office equipment HK$’000 2,369 391 (149) (1,124) 1,487 599 (107) – (758) 1,221 1,555 1,699	Motor vehicles HK$’000 2,791 1,639 (1,018) – 3,412 441 – (591) – 3,262 1,097 1,414	Total HK$’000 16,508 2,030 (2,451) (1,124)
					14,963 2,413 (1,480) (2,071) (758)
					13,067

					2,652

					65,703

The building is situated on leasehold land in Hong Kong held under long term lease.

10. Goodwill

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating unit (“CGU”) that is expected to benefit from that business combination. The carrying amount of goodwill as at 31 December 2016 related to a new business unit acquired during the year, as further explained below.

Cost At 1 January Acquisition of a subsidiary (Note (i)) Derecognised upon disposal of a subsidiary (Note (ii)) At 31 December Accumulated impairment losses At 1 January and 31 December (Note (iii)) Net book value at 31 December	2016 HK$’000 68,319 10,196 (957) 77,558 (67,362) 10,196	2015 HK$’000 67,362 957 –
		68,319
		(67,362)
		957

Notes:

(i) Building Contract Works Business

At 31 December 2016, goodwill of approximately HK$10,196,000 relates to the Building Contract Works Business unit, a CGU, acquired as part of the acquisition of ACE Engineering Limited (“ACE Engineering”) during the year.

The recoverable amount of the CGU, has been determined using cash flow projections to calculate value in use based on estimates and financial budgets approved by the Directors. These projections cover a five-year period, and have been discounted using a pre-tax discount rate of 14.99%. The cash flows beyond that five-year period have been extrapolated using a growth rate of 3%.

All of the assumptions and estimations involved in the preparation of the cash flow projection including budgeted gross margin, discount rate and growth rate are determined by the management of the Group based on their experience and expectation for future market development.

The Directors believe that any reasonably possible change in the key assumptions on which the recoverable amount is based would not cause the carrying amount of the unit to exceed the aggregate recoverable amount of the CGU.

(ii) Provision for information technology services

During the year ended 31 December 2016, the Group disposed of Zeed Asia Technology Limited (“Zeed Asia”) with the associated goodwill of approximately HK$957,000.

(iii) Medical Devices Business

At 31 December 2016, goodwill of approximately HK$67,362,000 relates to the Medical Devices Business unit acquired as part of the acquisition of the Titron Group in 2011, as defined and detailed in the Company’s circular dated 11 August 2011. Owing to the significant and continuous losses incurred by this business unit in prior years, all of the goodwill of approximately HK$67,362,000 had been impaired as at 31 December 2014.

11. Intangible assets

	2016	2016	2015
Contracts backlog (Note (i)) HK$’000 – 2,786 – – 2,786 – 2,505 2,505 281	Contractor registrations (Note (i)) HK$’000 – 5,016 – – 5,016 – – – 5,016	In-process research and development project (Note (ii)) HK$’000 2,584 – – (2,584) – – – – –	In-process research and development project HK$’000 – 2,202 382 –
			2,584

			– –
			–

			2,584

Notes:

(i) Building Contract Works Business

Intangible assets with net book value of approximately HK$5,297,000 as at 31 December 2016 represent contractor registrations and contracts backlog arising from the acquisition of ACE Engineering during the year ended 31 December 2016.

ACE Engineering is a registered contractor in several government/public organisations and only registered contractors are eligible to obtain contracts from these government bodies. These contractor registrations include the registration as an authorised building contractor under the subcategory of Maintenance Works in the category of Building Work in Group M1 approved by the Hong Kong Housing Authority and is eligible to tender for maintenance and improvement contracts with a value of up to HK$50 million and for term maintenance and improvement contracts with an average annual expenditure of up to HK$50 million. In general, these registrations require certain criteria to be met which effectively limit the number of new entries in the list of authorised contractors. Accordingly, contractor registrations held by ACE Engineering are considered as the main attributes to the revenue and future growth of ACE Engineering and thus are recognised as intangible assets with indefinite useful live and are valued at fair value as approximately HK$5,016,000 upon acquisition by the Group. The fair value of these contractor registrations was determined by an independent professional firm of valuers using the income approach and the

Multi Period Excess Earnings Method is employed. The discount rate used for the valuation of the contractor registrations is 17.61%. The contractor registrations are measured initially at cost and subsequently measured at cost less accumulated impairment losses.

On 5 January 2016, ACE Engineering had 10 contracts on hand and expected to finish substantially all of them before the end of 2016. As such, it was considered that these contracts could generate future economic benefits to the Group and thus are recognised as intangible assets with finite useful life. The fair value on acquisition is determined by an independent professional firm of valuers and the present value technique is employed to value the fair value of the contracts backlog. The expected revenue and the associated costs are identified for each contract. The associated direct costs and proportional operating expenses are deducted from the revenue generated by each contract. The profits are then discounted by the appropriate required rate of return to arrive at present values. The discount rate used for the valuation of contracts backlog was 15.61%. The contracts backlog was valued at fair value as approximately HK$2,786,000 at the date of acquisition. The contracts backlog is measured initially at cost and subsequently measured at cost less accumulated amortisation and accumulated impairment losses. The contracts backlog was amortised over the period up to the completion of each of the contracts. During the year ended 31 December 2016, the amortisation of intangible asset was approximately HK$2,505,000 (Note 6).

The contractor registrations and contracts backlog relate to the segment of Building Contract Works Business which constitutes a CGU, and have been assessed for impairment as detailed in Note 10(i). Based on the impairment assessment performed by management, the Directors are of the opinion that no impairment on the intangible assets is considered necessary.

(ii) Provision for information technology services

During the year ended 31 December 2016, the intangible asset with net book value of approximately HK$2,584,000 was derecognised upon the disposal of Zeed Asia.

12. Available-for-sale financial asset

	2016	2015
	HK$’000	HK$’000
Unlisted share, at cost	15,300	–

On 18 April 2016, Eternity Riches Limited (“Eternity Riches”), a wholly-owned subsidiary of the Company, as the subscriber entered into a subscription agreement with Alpha Generator Limited (“Alpha Generator”) and three individuals as the warrantors, with each of the warrantors being an independent third party and a shareholder of Alpha Generator, pursuant to which Eternity Riches agreed to subscribe for and Alpha Generator agreed to allot and issue, the subscription shares at the aggregate subscription price of HK$15,300,000 in cash. The subscription shares represent 14% of the enlarged issued share capital of Alpha Generator as enlarged by the allotment and issue of the subscription shares. Alpha Generator and its wholly-owned subsidiary, OPS Interior Design Consultant Limited (“OPS Interior”), is principally engaged in provision of interior design, fit out and decoration services.

According to the subscription agreement, the warrantors have irrevocably and unconditionally guaranteed that the consolidated audited net profits of Alpha Generator for the year ended 30 June 2016 and year ending 30 June 2017 shall in aggregate be not less than HK$24,000,000. If the aggregated results of these two years were less than the said amount, the warrantors shall pay to the Group the shortfall compensation calculated pursuant to the agreement with a maximum cap at HK$15,300,000.

The investment is measured at cost less impairment as the range of reasonable fair value estimates is so significant that the Directors are of the opinion that the fair value cannot be measured reliably. The Directors use their judgment in assessing impairment of the available-for-sale (“AFS”) investment. Based on the financial information provided by management of Alpha Generator, no potential impairment has been identified by the Directors for the AFS investment. The Group does not intend to dispose the investment in the near future.

13. Held-for-trading investments

At 31 December 2016, these investments represented investments in equity securities listed in Hong Kong. The fair values of the investments are determined with reference to the quoted market bid prices on the Stock Exchange.

14. Trade and other receivables

Non-current Deposit for acquisition of a subsidiary Deposit for purchase of a property, plant and equipment Current Trade receivables (Note (i)) Retention receivables (Note (ii)) Loan receivables (Note (iii)) Amounts due from customers for contract work Other deposits, prepayments and other receivables Total current portion Total trade and other receivables Notes:	2016 HK$’000 – – – 11,779 8,197 74,557 355 8,870 103,758 103,758	2015 HK$’000 6,150 114
		6,264
		10,860 – – – 3,952
		14,812
		21,076

(i) The Group allows an average credit period of 30 to 90 days (2015: 30 to 90 days) to its trade customers. The ageing analysis of trade receivables (net of accumulated impairment losses) by invoice date is as follows:

Current 1 to 90 days 91 to 180 days Over 181 days Trade receivables	2016 HK$’000 2,048 8,411 353 967 11,779	2015 HK$’000 2,156 4,812 3,798 94
		10,860

In respect of trade receivables, individual credit evaluations are performed on all customers requiring credit over a certain amount. These evaluations focus on the customers’ past history of making payments when due and current liability to pay, and take into account information specific to the customer as well as pertaining to the economic environment in which the customers operate. The Group does not hold any collateral over these balances. Receivables that were neither past due nor impaired constitute about 88% (2015: 53%) of total trade receivables, and relate to a wide range of customers for whom there was no recent history of default. The following is an aged analysis of trade receivables (net of accumulated impairment losses) by due date as at the end of the reporting period.

Neither past due nor impaired Less than 3 months past due 3 to 6 months past due Over 6 months past due Trade receivables	2016 HK$’000 10,391 399 105 884 1,388 11,779	2015 HK$’000 5,730
		1,346 3,780 4
		5,130
		10,860

Included in the Group’s trade receivables balance are debtors with aggregate carrying amount of approximately HK$1,388,000 (2015: HK$5,130,000) which are past due as at the reporting date for which the Group has not provided any impairment loss. The Group does not hold any collateral over these balances.

Receivables that were past due but not impaired relate to a number of independent customers that have a good repayment record with the Group. Based on past experience, management believes that no impairment allowance is necessary in respect of these balances as there has not been a significant change in credit quality and the balances are still considered fully recoverable.

(ii) Retention receivables are derived from the Building Contract Works Business and are interest-free and recoverable at the end of the retention period of individual construction contracts ranging from 3 months to 1 year.
(iii) Loan receivables represent outstanding principals and interest receivables arising from the Money Lending Business of the Group. All of the loan receivables are entered with contractual maturity within 12 months. The Group seeks to maintain strict control over its loan receivables in order to minimise credit risk by reviewing the borrowers’ financial positions.

The loan receivables are interest-bearing at rates mutually agreed between the contracting parties, ranging from 6% to 8% per annum. All of the loan receivables were unsecured as at 31 December 2016.

Loan receivables were neither past due nor impaired at 31 December 2016.

15. Trade and other payables

Trade payables Retention payables Accruals and other payables Amounts due to related parties	2016 HK$’000 11,553 4,280 5,227 9,200 30,260	2015 HK$’000 8,067 – 13,175 9,200
		30,442

As at 31 December 2016 and 2015, included in amounts due to related parties are an amount due to Titron Group Holdings Limited (“TGHL”), in the amount of HK$1,700,000 and the cash consideration of HK$7,500,000 payable to the Vendors of Titron Group (as defined below) arising from the acquisition of Titron Group in 2011.

TGHL was one of the vendors in the acquisition of Apex Solution Group Limited, Titron Industries Limited, Titron International Limited, Titron Manufacturing Limited, Titron Precision Limited and its subsidiaries in the Peoples’ Republic of China (collectively referred to as “Titron Group”) in 2011. Titron Group is principally engaged in the Medical Devices Business and the Plastic Moulding Business. One of the shareholders of TGHL, Mr. Yip Wai Lun, Alvin, a shareholder and the Chairman and Managing Director of the Company as at 31 December 2016 and 2015, owns shares in the Company.

The amounts due to related parties as at 31 December 2016 and 2015 were unsecured, interest-free and repayable on demand.

The following is an aged analysis of trade payables presented based on the invoice date at the end of the reporting period.

Within 3 months Over 3 months but within 6 months Over 6 months	2016 HK$’000 10,578 493 482 11,553	2015 HK$’000 7,946 109 12
		8,067

The average credit period on purchases of goods is 30-90 days (2015: 30-90 days).

16. Share capital

Notes Authorised: Balance as at 31 December 2015 and 31 December 2016 Issued and fully paid: Balance as at 1 January 2015 Share consolidation of every five shares of par value of HK$0.01 each into one consolidated share of par value HK$0.05 each; and reduction in par value of each consolidated share from HK$0.05 to HK$0.01 (a) Issue of shares on 24 July 2015 (b) Issue of shares on 30 November 2015 (c) Balance as at 31 December 2015 and 1 January 2016 Open offer on 17 March 2016 (d) Balance as at 31 December 2016	Number of shares 40,000,000,000 1,532,431,606 (1,225,945,285) 61,200,000 874,100,000 1,241,786,321 620,893,160 1,862,679,481	Amount HK$’000 400,000 15,324 (12,259) 612 8,741 12,418 6,209 18,627

Notes:

(a) Save as disclosed in the Company’s circular dated 31 March 2015 in respect of a proposed capital reorganisation (“Capital Reorganisation”) which was approved by the shareholders of the Company (“Shareholders”) in a special general meeting of the Company on 27 April 2015, the Capital Reorganisation has become effective on 28 April 2015 as detailed below.
(i) every five existing shares of HK$0.01 each in the issued share capital of the Company were consolidated into one consolidated share of HK$0.05 each;
(ii) the issued share capital was reduced by cancelling of HK$0.04 of the paid-up capital on each issued consolidated share so that the par value of each issued consolidated share be reduced from HK$0.05 to HK$0.01, and resulted in share capital being reduced by HK$12,259,000;
(iii) the credits arising from the share capital account of the Company of HK$12,259,000 was transferred to the accumulated losses of the Company.

(b) On 24 July 2015, 61,200,000 ordinary shares of HK$0.01 each were placed at a price of HK$0.328 per placing share, according to a placing agreement under general mandate signed on 14 July 2015 (“GM Placing Agreement”). The closing price was HK$0.400 per share as quoted on the Stock Exchange on the date of the GM Placing Agreement. A share premium of approximately HK$19,462,000 was credited to share premium account. The net proceeds of approximately HK$19,311,000, after deducting commission and placing expenses of approximately HK$763,000 were intended to be utilised as to (i) general working capital of the Group; and (ii) Money Lending Business as set out in the announcement dated 17 December 2015 regarding the change in use of proceeds. The net proceeds had been utilized as intended.
(c) On 30 November 2015, 874,100,000 ordinary shares of HK$0.01 each were placed at a price of HK$0.23 per placing share (“SM Placing”), according to a placing agreement under specific mandate signed on 14 July 2015 (“SM Placing Agreement”) and the supplemental agreement to the SM Placing Agreement signed on 31 August 2015 (“Supplemental SM Placing Agreement”). The closing price was HK$0.290 per share as quoted on the Stock Exchange on the date of the Supplemental SM Placing Agreement. A share premium of approximately HK$192,302,000 was credited to share premium account. The net proceeds of approximately HK$194,609,000 after deducting commission and placing expenses of approximately HK$6,434,000 were intended to be utilised as to (i) general working capital of ACE Engineering; (ii) funding the subscription price for the subscription of 14% equity interest in Alpha Generator; (iii) funding the remaining consideration of the acquisition of Bonus First Group Limited and purchasing an office in Hong Kong; (iv) expansion of Money Lending Business and/or potential acquisitions of equity interests in companies that are principally engaged in money lending business as and when opportunity arises; and (v) general working capital of the Group as set out in the announcements dated 11 April 2016, 18 April 2016 and 12 July 2016 regarding the change in use of proceeds. The net proceeds had been utilized as intended.
(d) On 17 March 2016, 620,893,160 ordinary shares of HK$0.01 each were issued at a subscription price of HK$0.13 per offer share on the basis of one offer share for every two shares in issue held on the record date (“Open Offer”), which was fully underwritten according to an underwriting agreement dated 20 January 2016. The subscription price of HK$0.13 per offer share represented a discount of approximately 65.33% to the closing price of HK$0.375 per share as quoted on the Stock Exchange on 16 March 2016, being the business day immediately preceding the date of allotment and issuance of offer shares. A share premium of approximately HK$74,507,000 was credited to share premium account. The net proceeds of approximately HK$77,481,000 after deducting shares issue expenses paid in relation to the Open Offer of approximately HK$3,235,000 were intended to be utilized as to develop and operate the Group’s Money Lending Business. The net proceeds had been utilized as intended.

MANAGEMENT DISCUSSION AND ANALYSIS

RESULTS, BUSINESS REVIEW AND PROSPECTS

RESULTS

The total revenue of the Group from continuing operations increased HK$27.1 million or 37.7%, from HK$71.8 million last year to HK$98.9 million for the year ended 31 December 2016. Such an increase was mainly attributable to the revenue generated from the provision of construction services in building construction, building maintenance and improvement works, project management, renovation and decoration works (“Building Contract Works Business”) newly acquired in January 2016, partially offset by the decrease in revenue generated from the manufacture and sale of medical devices products (“Medical Devices Business”) and the manufacture and sale of plastic moulding products (“Plastic Moulding Business”).

Gross profit of the Group was HK$17.2 million, representing an increase of HK$6.4 million or 59.3% as compared to HK$10.8 million in 2015. Gross profit margin for the year reached 17.4% (2015: 15.0%), representing an elevation of 2.4 percentage points over the last financial year, primarily as a result of gross profit margin contributed from the business in the provision of money lending (“Money Lending Business”) newly commenced in the year.

Other income and other gains or losses during the year under review recorded HK$5.2 million, an increase of HK$1.7 million or 48.6% as compared to HK$3.5 million in the corresponding year of 2015, which was mainly due to realised and unrealised gain recorded on change in fair value of held-for-trading investments arising from the business of investment in securities (“Securities Investment”) newly commenced in the year.

The distribution costs declined by HK$0.2 million to HK$0.3 million during the year under review (2015: HK$0.5 million), representing a reduction of 40.0% against the corresponding year of 2015, alongside with the decrease in revenue of Medical Devices Business and Plastic Moulding Business. The administrative expenses increased by HK$8.1 million to HK$38.8 million (2015: HK$30.7 million), representing an increase of 26.4% over the corresponding year of 2015. Such an increase was mainly attributable to the expenses from the Building Contract Works Business.

Finance costs increased from HK$6,000 in 2015 to HK$0.1 million in 2016. Such an increase is primarily due to finance costs on borrowings made from the Building Contract Works Business which were fully repaid in February 2016.

During the year under review, the Group recorded a share of loss of an associate of HK$1.6 million which was acquired in April 2016 and disposed of in December 2016.

The Group discontinued its operation in the provision for human resources management services (“HR Business”) in June 2016 and recorded a loss from discontinued operation of HK$0.4 million (2015: loss from discontinued operation of HK$1.5 million) during the year under review.

As a result, the overall loss attributable to owners of the Company was HK$18.4 million, which remained relatively stable as compared to HK$18.6 million loss for the corresponding year of 2015.

BUSINESS REVIEW

Continuing operations

Medical Devices Business

For the year ended 31 December 2016, the Medical Devices Business recorded revenue of HK$38.8 million, which decreased by 28.5% or HK$15.5 million as compared to that of HK$54.3 million in the previous year. This amount represented 39.2% of the Group’s total revenue from continuing operations for the year under review. In the second half of 2016, the economy of the United States of America (“America”) has gone increasingly uncertain, and the Medical Devices Business has suffered from a decline in sales order from our key customer in America. Along with one of the medical devices product reached the end of its product life cycle, revenue of the Medical Devices Business has decreased over previous year for the year under review.

Segment profit of the Medical Devices Business amounted to HK$1.2 million for the year ended 31 December 2016, representing a decrease of HK$1.0 million or 45.5% as compared to that of HK$2.2 million in the corresponding year of 2015. The decrease in segment profit was primarily as a result of decline in sales order and end of product life cycle of one of the medical devices product which has a relatively higher profit margin. Facing the challenge of fluctuating sales order, the Group will persist to deploy business strategies of streamlining and outsourcing of business processes, implementing stringent cost control and ensuring effective utilization of resources in order to maintain its long-term sustainable competitive advantages in the business segment.

Plastic Moulding Business

The revenue from the Plastic Moulding Business decreased by 84.9% or HK$14.1 million to HK$2.5 million, as compared to HK$16.6 million in the previous year, which accounted for 2.5% of the Group’s total revenue from continuing operations for the year under review. A majority of plastic moulding products suffered from declining sales orders as relevant customers’ end products have reached the end of their product life cycle, causing significant decline in revenue of the Plastic Moulding Business during the year under review. Since the first half of 2015, the Group has ceased the production of the majority of these products, which had contributed a relatively low gross profit margin. However, the Group has been accepting small number of production orders of mould fabrication and some products, which have a relatively higher gross profit margin.

Along with the improvement in profit margins of sales orders and the reduction of distribution costs and administrative expenses driven by effective cost control, the Group turned HK$2.1 million segment loss for the corresponding year of 2015 into a profit of HK$0.4 million for the year under review. Despite improvement in segment results during the year under review, the Group considered the momentum of the Plastic Moulding Business to grow is limited due to end of product life cycle of the majority of products. As such, the Group has shifted assets and resources of this segment to other more profitable business units, but will continue the operation of the Plastic Moulding Business as long as it still contributes sufficiently to share appropriate portion of the administration and operation cost of the Group.

Provision of public relations services (“PR Business”)

During the year under review, revenue generated from the PR Business was HK$0.5 million (2015: HK$0.9 million) which accounted for 0.5% of the Group’s total revenue from continuing operations, and this business recorded a segment loss of HK$86,000 (2015: segment loss of HK$0.5 million). Despite reduction of segment loss during the year under review, the Group considered the revenue and gross profit margin of the PR Business have been continually curtailed and the momentum of the PR Business to grow is limited due to lack of customer base and market presence despite continued efforts made by the public relations team in providing public relations activities to a small number of corporate clients. In view of this, the Group has slowed down its business plan of development and expansion in respect of this segment.

Building Contract Works Business

Revenue from ACE Engineering Limited (“ACE Engineering”), a newly acquired whollyowned subsidiary of the Company in January 2016 which carried on the Building Contract Works Business, was HK$53.7 million, which contributed 54.3% of the Group’s total revenue from continuing operations for the year under review. This business recorded a gross profit of HK$5.6 million and gross profit margin of 10.4%. Segment loss of this business during the year under review amounted to HK$1.6 million which was primarily as a result of amortisation charges of intangible asset acquired as part of the acquisition of the business of HK$2.5 million which was non-cash item.

As at 31 December 2016, ACE Engineering had undertaken (i) four building maintenance and/ or renovation projects from private sector with the contract sums ranging from approximately HK$1.6 million to HK$15.4 million and the aggregate contract sum of approximately HK$41.5 million; and (ii) one building repair project from the Hong Kong Housing Society with the contract sum of approximately HK$5.0 million. Hence, the aggregate contract sums from private sector and the Hong Kong Housing Society amounted to approximately HK$46.5 million and the aggregate estimated paid and payable subcontracting fee of those five existing construction projects undertaken by ACE Engineering was approximately HK$41.2 million. As at 31 December 2016, approximately HK$20.5 million of the aggregate contract sums was still outstanding and those five construction projects were pending to be completed within next financial year.

While the Building Contract Works Business succeeded in contributing increase in revenue and gross profit of the Group during the year under review, segment results of this business indicated that market competition of the building construction and maintenance industry is still fierce. The Group will deploy more efforts to facilitate its development and improvement in results.

Money Lending Business

Ever Great Finance Limited (“Ever Great”), a wholly-owned subsidiary of the Company, is a licensed money lender in Hong Kong under the Money Lenders Ordinance (Chapter 163 of the Laws of Hong Kong). Since January 2016, the Group commenced the Money Lending Business in the name of Ever Great and recorded loan interest income of HK$2.9 million for the year under review. With an aim to realise the loan portfolio of Ever Great in a relatively short period of time and to realise value of the money lender’s license generated by Ever Great, the Group disposed of Ever Great in October 2016 and continued to develop the Money Lending Business in the name of JS Finance Limited (“JS Finance”), a whollyowned subsidiary of the Company and a licensed money lender in Hong Kong under the Money Lenders Ordinance. JS Finance recorded loan interest income of HK$0.6 million for the year under review. Accordingly, total revenue generated from the Money Lending Business amounted to HK$3.5 million for the year ended 31 December 2016, which accounted for 3.5% of the Group’s total revenue from continuing operations. Segment profit of the Money Lending Business amounted to HK$2.8 million during the year under review. The outstanding principal amount of loan receivables as at 31 December 2016 was HK$74.6 million. During the year under review, there was no provision of doubtful or bad debt of the Money Lending Business. The Group will continue to develop this business by employing prudent credit control procedures and strategies to hold a balance between the business growth and the risk management.

Securities Investment

During the year under review, the Group commenced the business of Securities Investment. For the year ended 31 December 2016, the Group recorded realised gain of HK$1.9 million and unrealised gain of HK$1.5 million arising on change in fair value of held-for-trading investments of listed equity securities in Hong Kong. Segment profit of the Securities Investment amounted to HK$2.4 million for the year under review.

As at 31 December 2016, the Group held 10 listed equity securities in Hong Kong with the fair value of HK$166.3 million. In light of the recent volatile financial market in Hong Kong, the Group intends to diversify its investment portfolio in order to reduce the relevant concentration and investment risks and will closely monitor the performance of this business. The Group will keep adopting a prudent investment attitude with the aim to improve the capital usage efficiency and generate additional investment returns on the idle funds of the Group.

As at 31 December 2016, the Group’s held-for-trading investments were represented as follows:

Company Name/Stock Code % of shareholding as at 31 December 2016 Securities listed in Hong Kong China Jicheng Holdings Limited (“China Jicheng”) (1027) (Note (a)) 0.297% Luen Wong Group Holdings Limited (“Luen Wong”) (8217) (Note (b)) 0.085% China e-Wallet Payment Group Limited (“China e-Wallet”) (802) (Note (c)) 2.176% WLS Holdings Limited (“WLS”) (8021) (Note (d)) 1.529% Others (Note (e))	Fair value gain/(loss) for the year ended 31 December 2016 HK$’000 54 7,777 (3,980) (471) (1,852) 1,528	Fair value as at 31 December 2016 HK$’000 42,147 23,744 33,150 44,910 22,360 166,311	% of total assets of the Group as at 31 December 2016 12.62% 7.11% 9.93% 13.44% 6.69% 49.79%

Notes:

(a) China Jicheng is principally engaged in manufacturing and sale of umbrella.
(b) Luen Wong is principally engaged in provision of civil engineering works.
(c) China e-Wallet (previously known as RCG Holdings Limited) is principally engaged in (i) trading of security and biometric products, solutions, projects and services; (ii) internet and mobile’s application and related accessories; and (iii) commodities trading.
(d) WLS is principally engaged in (i) scaffolding services for construction and buildings work; (ii) fitting out services for construction and buildings work; (iii) management contracting services for construction and buildings work; (iv) gondolas, parapet railings and access equipment installation and maintenance services; and (v) money lending business.
(e) None of these investments represented more than 5% of the total assets of the Group as at 31 December 2016.

Discontinued operation

HR Business

During the year under review, revenue generated from the HR Business was HK$1.6 million (2015: HK$0.5 million) and the HR Business incurred a loss before income tax of HK$0.6 million (2015: loss before income tax of HK$1.5 million). Such loss was mainly attributable to the limitation of increase in revenue due to reducing demand for recruitment services from various business sectors.

In the first half of 2016, Hong Kong economy was adversely affected by a series of global and local crisis and events such as decline in oil and commodity price, the United States (“U.S.”) interest rate hike uncertainties, sluggish local merchandise trade, weak tourism performance, and the correction of residential property prices. Against this backdrop of this intensified downturn risk in Hong Kong economy, enterprise leaders tended to be conservative and prudent in their business development and expansion plan, and in return reduced labor demand in various industries. Companies including multinational corporations and local small and medium enterprises (“SMEs”) in Hong Kong chose to shut down unprofitable business units and lay off staff to bolster their corporate resilience to the global and local headwinds. Although the unemployment rate of Hong Kong only edged up one-tenth to 3.4% between March and June 2016 compared to the second half of 2015, many headhunters and human resources participants considered the current level of hiring is the worst since the 2008 global financial crisis. A wave of job cuts, layoffs, hiring and salary freeze has been announced in the first half of 2016 by international and local bankers, financial institutions, theme park, and SMEs from various business sectors including tourism, retail and trading. Labor market in Hong Kong suffered under this background of business shrinking and corporate battle to cut cost in the first half of 2016.

Having considered that there is no clear potential for material improvement on the performance of the HR Business under the challenging environment described above, the Directors believed that disposal represented a good opportunity for the Group to improve its overall returns and would provide a greater value to the shareholders of the Company (the “Shareholders”) by focusing its resources on other profitable business units. As such, on 28 June 2016, the Group disposed of the HR Business at a consideration of HK$0.1 million. Following the disposal of the HR Business, the Group recorded a gain on disposal of HK$0.2 million and a loss from discontinued operation of HK$0.4 million (2015: loss from discontinued operation of HK$1.5 million).

ACQUISITION AND DISPOSAL OF BUSINESSES

Acquisition of Building Contract Works Business

Pursuant to an announcement made by the Company on 5 January 2016, Best Reward Global Limited (“Best Reward”), a wholly-owned subsidiary of the Company, completed the acquisition of ACE Engineering pursuant to the sale and purchase agreement dated 14 September 2015 entered into between Best Reward as the purchaser and two individuals as vendors, each being an independent third party, to acquire 100% of the issued share capital of ACE Engineering at an aggregate cash consideration of HK$20.5 million. ACE Engineering is principally engaged in the Building Contract Works Business in Hong Kong.

Details of the acquisition of ACE Engineering are set out in the Company’s announcements dated 14 September 2015 and 5 January 2016 respectively and the Company’s circular dated 4 December 2015.

Acquisition and disposal of 40% of issued share capital of Ultimate Elite Investments Limited

On 15 January 2016, Praiseful Moment Limited (“Praiseful Moment”), a wholly-owned subsidiary of the Company, as the purchaser entered into a sale and purchase agreement with an independent third party, Rosy Lane Investments Limited (a company incorporated in the British Virgin Islands (the “BVI”) with limited liability and is wholly-owned by Hong Kong Education (Int’l) Investments Limited, a company incorporated in the Cayman Islands and continued in Bermuda with limited liability, the shares of which are listed on the Main Board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) (Stock Code: 1082)) as the vendor, in which Praiseful Moment conditionally agreed to acquire, and the vendor agreed to sell, the 8 issued shares in the share capital of Ultimate Elite Investments Limited (“Ultimate Elite”), representing 40% of the issued share capital of Ultimate Elite at completion, at an aggregate cash consideration of HK$50.0 million. On 11 April 2016, the acquisition has been completed. Praiseful Moment then holds 40% of the issued share capital of Ultimate Elite and indirectly holds the properties located at Offices A-H, J-N & P on 21/F. (Whole Floor), No. 3 On Kwan Street, Shatin, New Territories, Hong Kong (“Shatin Property”) held by a wholly-owned subsidiary of Ultimate Elite, Vision Smart Limited (“Vision Smart”). Ultimate Elite and Vision Smart then became an associate of the Company.

Details of the acquisition of Ultimate Elite are set out in the Company’s announcements dated 15 January 2016, 22 January 2016 and 11 April 2016 respectively.

On 5 December 2016, Praiseful Moment, as the vendor entered into a sale and purchase agreement with an independent third party, Winrange Investments Limited (a company incorporated in the BVI with limited liability and is wholly owned by Finsoft Financial Investment Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the issued shares of which are listed on the Growth Enterprise Market (“GEM”) of the Stock Exchange (Stock Code: 8018)) as the purchaser, pursuant to which Praiseful Moment agreed to sell and the purchaser agreed to acquire, the 8 issued shares in the share capital of Ultimate Elite, representing 40% of the issued share capital of Ultimate Elite at completion, at an aggregate cash consideration of HK$48.8 million. Completion took place immediately after the signing of the sale and purchase agreement. On the same date, Ultimate Elite and Vision Smart ceased to be an associate of the Company and Praiseful Moment ceased to hold, directly or indirectly, any interest in Ultimate Elite and Vision Smart and, in substance, the Shatin Property. The Group recorded a gain arising from disposal of the associate of HK$0.4 million. The net proceeds from the disposal after deducting the expenses directly attributable thereto of approximately HK$0.6 million was approximately HK$48.2 million, which had been used as to (i) approximately HK$44.9 million to develop and operate the Group’s Money Lending Business; and (ii) approximately HK$3.3 million for the general working capital of the Group.

Details of the disposal of Ultimate Elite are set out in the Company’s announcement dated 5 December 2016.

Subscription of 14% of issued share capital of Alpha Generator Limited

On 18 April 2016, Eternity Riches Limited (“Eternity Riches”), a wholly-owned subsidiary of the Company, as the subscriber entered into a subscription agreement with Alpha Generator Limited (“Alpha Generator”) and three individuals as warrantors with each of the warrantors being an independent third party and a shareholder of Alpha Generator, pursuant to which Eternity Riches agreed to subscribe for and Alpha Generator agreed to allot and issue, the 210 new shares (“Subscription Shares”) at the aggregate subscription price of HK$15.3 million. The Subscription Shares represent 14% of the enlarged issued share capital of Alpha Generator as enlarged by the allotment and issue of the Subscription Shares. Alpha Generator holds the entire equity interests of OPS Interior Design Consultant Limited which is principally engaged in the provision of interior design, fit out and decoration services. The completion took place immediately after the signing of the subscription agreement and at the same date, Alpha Generator and its subsidiary became available-for-sale investment of the Company.

Details of the subscription are set out in the Company’s announcements dated 5 January 2016 and 18 April 2016 respectively.

Disposal of a subsidiary

As the performance of Zeed Asia Technology Limited (“Zeed Asia”), a wholly-owned subsidiary of the Company acquired in November 2015, was behind the management’s expectation and has yet to generate revenue since acquisition, the Group decided to dispose of it and focus its resources on other profitable business segments.

On 31 March 2016, the Group completed the disposal of Zeed Asia at an aggregate cash consideration of HK$6.2 million and recorded a gain arising from disposal of the subsidiary of HK$2.3 million.

Disposal of the HR Business

It is anticipated that the economic slowdown would possibly lead to a recession in the HR Business caused by freezed hiring and massive layoffs. In view of the unsatisfactory performance of the HR Business in last year and the first half of 2016, the Group decided to dispose of this business and shift its resources into other profitable businesses.

On 28 June 2016, the Group completed the disposal of the HR Business at an aggregate cash consideration of HK$0.1 million and recorded a gain on disposal of HK$0.2 million of the discontinued operation.

Disposal of Ever Great

As the maturity period of Ever Great’s loan portfolio varies with a range which can be extended up to two years, the Group considers the disposal of Ever Great represents a good opportunity to realise the loans and interest receivables of its loan portfolio in a relatively short period of time. This can improve the Group’s cash flow and liquidity position, and realise value of the money lender’s license generated by Ever Great. As such, on 7 October 2016, the Company as the vendor and an independent third party, DX.com Holdings Limited (a company incorporated in the Cayman Islands and continued in Bermuda with limited liability, the shares of which are listed on the GEM of the Stock Exchange (Stock Code: 8086)) as the purchaser, entered into the sale and purchase agreement, pursuant to which the purchaser agreed to acquire and the Company agreed to sell the 2 issued shares in the share capital of Success Beauty Limited (“Success Beauty”) (a wholly-owned subsidiary of the Company with the sole asset being the entire issued share capital of Ever Great, Success Beauty and Ever Great collectively referred to as “Success Beauty Group”) which represented the entire issued share capital of Success Beauty at completion, at an aggregate cash consideration of HK$58.3 million (subject to adjustment by reference to the net assets value of the Success Beauty Group at completion). Completion took place immediately after the signing of the sale and purchase agreement. After the completion of the disposal, Success Beauty ceased to be a subsidiary of the Company and the financial results of the Success Beauty Group were no longer consolidated into the Group’s financial statements. The adjusted consideration amounted to HK$59.5 million, and the Company recorded a gain arising from disposal of the subsidiaries of HK$1.0 million. The net proceeds from the disposal after deducting the expenses directly attributable thereto of approximately HK$0.1 million was approximately HK$59.4 million, which had been used as to (i) approximately HK$40.5 million to develop and operate the Group’s Money Lending Business; and (ii) approximately HK$18.9 million for Securities Investment by the Group.

Details of the disposal of Ever Great are set out in the Company’s announcement dated 7 October 2016.

Disposal of Bonus First Group Limited (“Bonus First”)

On 19 October 2016, the Company as the vendor and an independent third party, Key Winner Investments Limited (a company incorporated in the BVI with limited liability and a whollyowned subsidiary of Jun Yang Financial Holdings Limited, the shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 397)) as the purchaser, entered into the sale and purchase agreement, pursuant to which the Company conditionally agreed to sell, and the purchaser conditionally agreed to acquire, the 200 issued shares in the share capital of Bonus First (a company incorporated in the BVI with limited liability and is directly whollyowned by the Company) which represented the entire issued share capital of Bonus First at completion, at an aggregate cash consideration of HK$56.5 million. The principal business of Bonus First is investment holding and its principal asset is a commercial property located at Office 503 (also known as Unit 503) on 5th Floor, Wing On House, No. 71 Des Voeux Road Central, Hong Kong (“Central Property”). On 25 October 2016, the Company completed the disposal of Bonus First and recorded a loss arising from disposal of the subsidiary of HK$4.6 million. After the completion of the disposal, the Company ceased to have any interest in Bonus First and, in substance, the Central Property. The net proceeds from the disposal after deducting the expenses directly attributable thereto of approximately HK$0.1 million was approximately HK$56.4 million, which had been used for Securities Investment by the Group.

Details of the disposal of Bonus First are set out in the Company’s announcement dated 19 October 2016.

Possible formation of joint venture

On 22 July 2016, the Company entered into the cooperation framework agreement with 臨沂商城管理委員會 (in English, for identification purpose only, Linyi Trade City Administrative Commission) in relation to the proposed formation of a joint venture company for the purpose of collaborating to develop the business of logistics software systems and explore investment opportunities. It is contemplated that the Company will contribute RMB100 million as initial investment in the joint venture company. As at the date of this announcement, the parties to the framework agreement are still negotiating for the possible cooperation and no definitive agreement has been entered into. Further announcement in relation to the framework agreement will be made by the Company as and when appropriate. Details of the framework agreement are set out in the Company’s announcement dated 22 July 2016.

PROSPECTS

With the introduction and commencement of new businesses which has successfully diversified the Group’s business portfolio in 2016, the Group will deploy its efforts on formulating and modifying business strategies to facilitate business development of its business segments. To monitor the ongoing business development, the Group will conduct constant and dynamic performance appraisals and evaluation, and actively reallocate its assets, labour force and funding to profitable business segments. To cope with the ongoing uncertainties of the Hong Kong and global economies, the Group will continue to build on its diversified business portfolio, lean organization structure, and effective capital allocation to generate stable income streams and enhance profitability.

In addition to continuing evolution of business strategies to develop its business segments, the Group will seek to adjust its business portfolio to adapt to the ever-changing business environment and in response to the changing business performance, and will proactively explore every potentially profitable business and investment opportunity with an aim to maintain an optimal business portfolio which can maximize shareholders’ value and drive sustainable growth and prosperity.

FINANCIAL REVIEW

Capital structure

As at 31 December 2016, the Group’s consolidated net assets was HK$302.8 million, representing an increase of HK$59.0 million as compared to that of HK$243.8 million in 2015, primarily as a result of completion of open offer during the year.

As at 31 December 2016, the Company has 1,862,679,481 ordinary shares of HK$0.01 each in issue.

Open offer

On 20 January 2016, the Company announced its proposal to raise funds by way of an open offer of one offer share for every two shares held by the qualifying shareholders at a subscription price of HK$0.13 per offer share (“Open Offer”). It was considered that the Group’s long term growth would be financed by way of equity fund raising which would not only strengthen the Group’s capital base but also enhance its financial position without increasing finance costs. The subscription price of HK$0.13 per offer share represented (i) a discount of approximately 67.5% to the closing price of HK$0.40 per share as quoted on the Stock Exchange on 20 January 2016; (ii) a discount of approximately 66.9% to the average closing price of HK$0.393 per share quoted on the Stock Exchange for the five trading days before 20 January 2016; and (iii) a discount of approximately 63.4% to the closing price of HK$0.355 per share as quoted on the Stock Exchange on 19 February 2016, being the latest practicable date of the prospectus of the Open Offer dated 23 February 2016.

The Open Offer was fully-underwritten by Ample Orient Capital Limited (“Underwriter”) pursuant to the underwriting agreement dated 20 January 2016 entered into by and between the Company and Underwriter and was completed on 17 March 2016 with a total of 620,893,160 new shares with an aggregate nominal value of HK$6.2 million issued on the same date, on the basis of 1,241,786,321 shares in issue on 22 February 2016, being the record date of the Open Offer. The Company received the net proceeds of approximately HK$77.4 million after deducting relevant expenses in relation to the Open Offer, representing a net price of HK$0.12 per offer share. The Board intended to apply the net proceeds from the Open Offer to develop and operate the Group’s Money Lending Business. As at 31 December 2016, approximately HK$77.4 million of the net proceeds from the Open Offer was used as intended.

Details of the Open Offer are set out in the Company’s announcements dated 20 January 2016, 11 February 2016 and 16 March 2016 respectively and the Company’s prospectus dated 23 February 2016.

Use of proceeds from placing of new shares under specific mandate in November 2015 (“2015 SM Placing”)

The Company and the placing agent entered into a placing agreement under specific mandate (“SM Placing Agreement”) and a supplemental agreement to the SM Placing Agreement (“Supplemental SM Placing Agreement”) on 14 July 2015 and 31 August 2015 respectively. Pursuant to the Supplemental SM Placing Agreement, the Company conditionally agreed to place 874,100,000 new shares (“SM Placing Shares”) at a placing price of HK$0.23 per placing share on a best endeavor basis, to not less than six placees, in order to strengthen the financial position of the Group and provide working capital to the Group to meet future development and obligations.

All conditions set out in the SM Placing Agreement were fulfilled on 25 November 2015, and completion of the 2015 SM Placing took place on 30 November 2015 with a total of 874,100,000 SM Placing Shares with an aggregate nominal value of HK$8.7 million issued on the same date. The net proceeds received from 2015 SM Placing were approximately HK$194.5 million (“2015 SM Placing Net Proceeds”) after deducting commission and placing expenses, which had been used as intended as to (i) approximately HK$1.2 million for general working capital of ACE Engineering; (ii) HK$15.3 million for funding the subscription price for the subscription of 14% equity interest in Alpha Generator; (iii) HK$58.9 million for funding the remaining consideration of the acquisition of Bonus First; (iv) HK$50.0 million for funding the consideration for the acquisition of 40% of issued share capital of Ultimate Elite which holds the Shatin Property; (v) approximately HK$0.6 million for legal and professional fees in relation to the acquisition of Bonus First; (vi) approximately HK$0.2 million for legal and professional fees in relation to the acquisition of Ultimate Elite; (vii) approximately HK$0.1 million for general working capital associated with managing the Central Property; (viii) approximately HK$41.0 million for the expansion of the Group’s Money Lending Business; and (ix) approximately HK$27.2 million for the general working capital of the Group.

Details of the 2015 SM Placing and the change in use of proceeds are set out in the Company’s announcements dated 14 July 2015, 31 August 2015, 27 October 2015, 18 November 2015, 30 November 2015, 11 April 2016, 18 April 2016 and 12 July 2016 respectively and the Company’s circular dated 2 November 2015.

Debt structure

As at 31 December 2016 and 2015, the Group’s total borrowings from financial institutions were zero. The Group’s total cash and bank balances amounted to HK$30.5 million as at 31 December 2016, which decreased HK$153.7 million as compared to that of 2015 (as at 31 December 2015: HK$184.2 million).

Working capital and liquidity

As at 31 December 2016, both of the Group’s current ratio and quick ratio were 9.9 (31 December 2015: 6.5). Inventory turnover on sales decreased to 0 day (31 December 2015: 5 days). Receivable turnover was 42 days (31 December 2015: 53 days).

Contingent liabilities and charges

As at 31 December 2016 and 2015, the Group had not pledged any assets to secure bank facilities and finance lease obligations. The Group had no material contingent liabilities as at 31 December 2016 and 2015.

Foreign currency exposure

The Group’s monetary assets, liabilities and transactions are mainly denominated in United States dollars, Renminbi and Hong Kong dollars. Since Hong Kong dollars are pegged to United States dollars and the exchange rate of Renminbi to Hong Kong dollars was relatively stable during the year, the Group’s exposure to the potential foreign currency risk was relatively limited.

EMPLOYEES AND REMUNERATION POLICIES

As at 31 December 2016, the Group’s employees number was 32 (31 December 2015: 38). The Group’s employees are remunerated largely based on their performance and experience, alongside with the current industry practices. Remuneration packages of employees include salaries, insurance, mandatory provident fund and share option scheme. Other employee benefits include medical cover, housing allowance and discretionary bonuses.

FINAL DIVIDEND

No payment of dividends has been proposed by the Board in respect of the year ended 31 December 2016 (2015: Nil).

EVENTS AFTER THE REPORTING PERIOD

There is no significant event after the end of the reporting period of the Group.

CORPORATE GOVERNANCE

The Company has complied with all code provisions of the Corporate Governance Code (“CG Code”) throughout the year ended 31 December 2016 as set out in Appendix 14 of the Rules Governing the Listing of Securities (the “Listing Rules”) on the Stock Exchange, except for certain deviations disclosed herein.

Code Provision A.1.3

Under this code provision, notice of at least 14 days should be given of a regular board meeting to give all directors an opportunity to attend. During the year, certain Board meetings were convened with less than 14 days’ notice to enable the Board members to react timely and make expeditious decisions in respect of urgent corporate transaction and general business update which was significant in nature. As a result, the Board meeting was held with a shorter notice period than required with the consent of the Directors. The Board will do its best endeavor to meet the requirement of code provision A.1.3 of the CG Code in the future.

Code Provision A.2.1

Under this code provision, the roles of chairman and the chief executive should be separate and should not be performed by the same individual. Mr. Yip Wai Lun, Alvin was the Chairman and Managing Director of the Company (the Company regards the role of its managing director to be the same as that of chief executive under the CG Code) during the year ended 31 December 2016. During the year under review, the Group has been streamlining its operations, including business development, operation efficiency and financial management. The Board considers that it would be in the best interest of the Shareholders that the roles of the Chairman and the Managing Director of the Company be combined to enable a strong and dedicated leadership to reposition the Company and implement effective measures to improve Shareholders’ value. In this light, the Company has maintained Mr. Yip Wai Lun, Alvin as the Chairman and the Managing Director of the Company during the year ended 31 December 2016. On 31 January 2017, Mr. Yip Wai Lun, Alvin resigned as an Executive Director, the Chairman and the Managing Director of the Company and Mr. Zhang Hengxin, an Executive Director, was appointed as the Chairman and the Managing Director of the Company an the same date. The Company will review the current structure when and as it becomes appropriate.

Code Provision E.1.2

Under this code provision, the chairman of the board should attend the annual general meeting. Mr. Yip Wai Lun, Alvin, the Chairman of the Company during the year ended 31 December 2016, was unable to attend the annual general meeting held on 30 May 2016 due to his other business engagements.

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (“Model Code”) set out in Appendix 10 to the Listing Rules as the code of conduct regarding securities transactions by its Directors. Having made specific enquiry, all Directors have confirmed that they have fully complied with the required standard set out in the Model Code during the year ended 31 December 2016.

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

During the year, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company’s listed securities.

REVIEW OF FINANCIAL STATEMENTS

The Audit Committee of the Company currently comprises three Independent Non-executive Directors, namely Mr. Wong Siu Ki (Chairman), Mr. Chan Ngai Sang Kenny and Mr. Li Kwok Fat. The Audit Committee has reviewed with the management the accounting principles and practices adopted by the Group, and discussed internal controls and financial reporting matters including the review of the audited results for the year ended 31 December 2016.

REVIEW OF THIS FINAL RESULTS ANNOUNCEMENT

The figures in respect of the preliminary announcement of the Group’s results for the year ended 31 December 2016 have been agreed by the Group’s auditor, Elite Partners CPA Limited, to the amounts set out in the Group’s consolidated financial statements for the year. The work performed by Elite Partners CPA Limited in this respect did not constitute an assurance engagement in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the Hong Kong Institute of Certified Public Accountants and consequently no assurance has been expressed by Elite Partners CPA Limited on the preliminary announcement.

APPRECIATION

On behalf of the Board, I would like to express appreciation to colleagues for their hard work and dedication in the past year. We will remain committed to achieving better results and maximising returns to our Shareholders.

By Order of the Board AMCO United Holding Limited Zhang Hengxin Chairman and Managing Director

Hong Kong, 29 March 2017

As at the date of this announcement, Mr. Zhang Hengxin, Mr. Peng Shiyuan and Mr. Jia Minghui are the Executive Directors; and Mr. Wong Siu Ki, Mr. Chan Ngai Sang Kenny and Mr. Li Kwok Fat are the Independent Non-executive Directors.

AI assistant

ICO Group Limited — Annual Report 2016

49938_rns_2017-03-29_15779ab9-232b-4991-a8d2-7fdce79025db.pdf

(Stock Code : 630)

ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2016

RESULTS

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2016

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. General information

2. Basis of preparation

(a) Adoption of new and revised HKFRSs – effective 1 January 2016

(b) Application of new and revised HKFRSs that have been issued but are not yet effective

3. Segment reporting

(a) Business segments

For the year ended 31 December 2016

(b) Reconciliation of reportable segment revenue, profit or loss, assets and liabilities

(c) Geographic information

(d) Information about major customers

4. Revenue

5. Other income and other gains or losses

6. Loss before income tax

7. Income tax credit/expense

8. Loss per share

(a) Basic loss per share

(b) Diluted loss per share

9. Property, plant and equipment

10. Goodwill

(iii) Medical Devices Business

11. Intangible assets

12. Available-for-sale financial asset

13. Held-for-trading investments

14. Trade and other receivables

15. Trade and other payables

16. Share capital

MANAGEMENT DISCUSSION AND ANALYSIS

RESULTS, BUSINESS REVIEW AND PROSPECTS

RESULTS

BUSINESS REVIEW

Continuing operations

Medical Devices Business

Plastic Moulding Business

Provision of public relations services (“PR Business”)

Building Contract Works Business

Money Lending Business

Securities Investment

Notes:

Discontinued operation

HR Business

ACQUISITION AND DISPOSAL OF BUSINESSES

Acquisition of Building Contract Works Business

Acquisition and disposal of 40% of issued share capital of Ultimate Elite Investments Limited

Subscription of 14% of issued share capital of Alpha Generator Limited

Disposal of a subsidiary

Disposal of the HR Business

Disposal of Ever Great

Disposal of Bonus First Group Limited (“Bonus First”)

Possible formation of joint venture

PROSPECTS

FINANCIAL REVIEW

Capital structure

Open offer

Debt structure

Working capital and liquidity

Contingent liabilities and charges

Foreign currency exposure

EMPLOYEES AND REMUNERATION POLICIES

FINAL DIVIDEND

EVENTS AFTER THE REPORTING PERIOD

CORPORATE GOVERNANCE

Code Provision A.1.3

Code Provision A.2.1

Code Provision E.1.2

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

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

REVIEW OF FINANCIAL STATEMENTS

REVIEW OF THIS FINAL RESULTS ANNOUNCEMENT

APPRECIATION

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ICO Group Limited Annual Report 2016