REF Holdings Limited — Interim / Quarterly Report 2019

Aug 28, 2019

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Stock Code: 1631

INTERIM REPORT

Condensed Consolidated Financial Statements

The board (the “ Board ”) of directors (the “ Directors ”) of REF Holdings Limited (the “ Company ”) announces the unaudited condensed consolidated results of the Company and its subsidiaries (collectively referred to as the “ Group ”) for the six months ended 30 June 2019 (the “ Period ”) together with the relevant comparative figures as follows:

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the six months ended 30 June 2019

			Six months ended 30 June	Six months ended 30 June	Six months ended 30 June
			2019		2018
			HK$’000		HK$’000
		Notes	(unaudited)		(unaudited)
Revenue		4	98,507		92,006
Cost of services			(48,096)		(44,688)
Gross profit			50,411		47,318
Other gains and losses		5	678		1,071
Selling and distribution expenses			(7,060)		(7,260)
Administrative expenses			(20,278)		(17,557)
Finance costs		6	(1,083)		(8)
Profit before taxation		7	22,668		23,564
Taxation		8	(3,769)		(3,918)
Profit for the period			18,899		19,646
Profit and total comprehensive income
for the period attributable to owners
of the Company			18,899		19,646
Earnings per share
— Basic and diluted (HK cents)		10	7.38		7.67

The accompanying notes form an integral part of these condensed consolidated financial statements.

Interim Report 2019 [| ] REF Holdings Limited

1

Condensed Consolidated Statement of Financial Position

As at 30 June 2019

		As at		As at
		30 June		31 December
		2019		2018
		HK$’000		HK$’000
	Notes	(unaudited)		(audited)
Assets
Non-current assets
Plant and equipment	11	10,447		11,940
Deferred tax assets	19	234		330
Right-of-use assets	12	33,608		–
		44,289		12,270
Current assets
Financial assets at fair value through
profit or loss	13	18,543		–
Trade receivables	14	52,295		28,560
Prepayments, deposits and
other receivables	15	10,129		10,700
Other current assets		2,580		1,551
Tax recoverable		3,561		7,412
Fixed deposits	16	177,496		195,190
Bank balances and cash	16	12,004		12,922
		276,608		256,335
Current liabilities
Trade payables	17	7,505		6,003
Accruals and other payables	18	8,919		19,661
Contract liabilities		41,863		35,394
Lease liabilities	12	18,534		–
		76,821		61,058
Net current assets		199,787		195,277
Total assets less current liabilities		244,076		207,547

REF Holdings Limited[| ] Interim Report 2019

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Condensed Consolidated Statement of Financial Position As at 30 June 2019

		As at		As at
		30 June		31 December
		2019		2018
		HK$’000		HK$’000
	Notes	(unaudited)		(audited)
Non-current liabilities
Deferred tax liabilities	19	340		518
Lease liabilities	12	17,808		–
		18,148		518
Net assets		225,928		207,029
Capital and reserves
Share capital	20	2,560		2,560
Reserves		223,368		204,469
Total equity attributable to owners of
the Company		225,928		207,029

Approved and authorised for issue by the Board on 23 August 2019 and signed on its behalf by:

Chiu Hok Yu Executive Director

Kwok Kam Lai

Executive Director

The accompanying notes form an integral part of these condensed consolidated financial statements.

Interim Report 2019 [| ] REF Holdings Limited

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Condensed Consolidated Statement of Changes in Equity For the six months ended 30 June 2019

		Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company	Attributable to owners of the Company
		Share		Share		Retained
		capital		premium		profits		Total
		HK$’000		HK$’000		HK$’000		HK$’000
As at 1 January 2018 (audited)		2,560		41,233		126,497		170,290
Profit and total comprehensive
income for the period		–		–		19,646		19,646
As at 30 June 2018 (unaudited)		2,560		41,233		146,143		189,936
As at 1 January 2019 (audited)		2,560		41,233		163,236		207,029
Profit and total comprehensive
income for the period		–		–		18,899		18,899
As at 30 June 2019 (unaudited)		2,560		41,233		182,135		225,928

REF Holdings Limited[| ] Interim Report 2019

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Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2019

	Six months ended	Six months ended	Six months ended
	30 June
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(unaudited)
Cash flows from operating activities
Profit before taxation	22,668		23,564
Adjustments for:
Interest income	(1,655)		(1,069)
Interest on lease liabilities	1,075		–
Depreciation of plant and equipment	1,820		399
Depreciation of right-of-use assets	8,835		–
Net loss of financial assets at
fair value through profit or loss	1,033		–
Operating cash flows before movements in
working capital	33,776		22,894
Increase in work in progress	–		(3,442)
Increase in other current assets	(2,009)		–
(Increase)/decrease in trade receivables	(23,735)		658
Decrease/(increase) in prepayments, deposits and
other receivables	571		(14,089)
Increase in financial assets at fair value
through profit or loss	(19,576)		–
Increase/(decrease) in trade payables	2,482		(1,297)
Decrease in accruals and other payables	(7,868)		(14,684)
Increase in deposits received	–		7,115
Increase in contract liabilities	6,469		–
Net cash used in operating activities	(9,890)		(2,845)

Interim Report 2019 [| ] REF Holdings Limited 5

Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2019

	Six months ended	Six months ended	Six months ended
	30 June
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(unaudited)
Cash flows from investing activities
Purchase of plant and equipment	(327)		(302)
Placement of fixed deposits	(807,496)		(275,300)
Uplift of fixed deposits	825,190		235,000
Interest received	1,655		1,069
Net cash generated from/(used in)
investing activities	19,022		(39,533)
Cash flows from financing activity
Repayment of lease liabilities	(10,050)		–
Net cash used in financing activity	(10,050)		–
Net decrease in cash and cash equivalents	(918)		(42,378)
Cash and cash equivalents at the beginning
of the period	12,922		57,039
Cash and cash equivalents at the end
of the period	12,004		14,661

REF Holdings Limited[| ] Interim Report 2019

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Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

1. GENERAL INFORMATION

The Company was incorporated in the Cayman Islands on 5 February 2014 as an exempted company with limited liability under the Companies Law (2011 Revision) (as consolidated and revised) of the Cayman Islands. Its immediate parent is Jumbo Ace Enterprises Limited (“ Jumbo Ace ”), a company incorporated in the British Virgin Islands and its ultimate parent is Rising Luck Management Limited (“ Rising Luck ”), a company incorporated in the British Virgin Islands. Its ultimate controlling party is Mr. Lau Man Tak (“ Mr. Lau ”), who is also the chairman (the “ Chairman ”) and non-executive director of the Company. The Company has been registered as a non-Hong Kong company under Part 16 of the Hong Kong Companies Ordinance (Cap. 622) since 12 March 2014. The Company’s issued shares are listed on the Main Board of the Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”).

The address of the registered office of the Company is Clifton House, 75 Fort Street, PO Box 1350, Grand Cayman KY1-1108, Cayman Islands and the address of its headquarters, head office and principal place of business in Hong Kong is 6th Floor and 7th Floor, Nexxus Building, 77 Des Voeux Road Central, Hong Kong.

The Company is an investment holding company and the Group is principally engaged in the provision of financial printing services. The unaudited condensed consolidated financial statements for the six months ended 30 June 2019 are presented in Hong Kong dollars (“ HK$ ”) which is also the functional currency of the Company. All values are rounded to the nearest thousand (“ HK$’000 ”) except otherwise indicated.

Interim Report 2019 [| ] REF Holdings Limited

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Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

2. BASIS OF PREPARATION

These condensed consolidated financial statements have been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on the Stock Exchange (the “ Listing Rules ”), including compliance with Hong Kong Accounting Standard (“ HKAS ”) 34, Interim financial reporting , issued by the Hong Kong Institute of Certified Public Accountants (the “ HKICPA ”). This interim report is unaudited but has been reviewed by the audit committee of the Company (the “ Audit Committee ”) and was authorised for issue on 23 August 2019.

The condensed consolidated financial statements have been prepared in accordance with the same accounting policies adopted in the 2018 annual report, except for the changes in accounting policies that are expected to be reflected in the 2019 annual report. Details of any changes in accounting policies are set out in Note 3.

The preparation of the condensed consolidated financial statements in conformity with HKAS 34 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses on a year to date basis. Actual results may differ from these estimates.

This interim report contains condensed consolidated financial statements and selected explanatory notes. The notes include an explanation of events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the 2018 annual report. The condensed consolidated financial statements and notes thereto do not include all of the information required for full set of financial statements prepared in accordance with Hong Kong Financial Reporting Standards (“ HKFRSs ”).

The financial information relating to the financial year ended 31 December 2018 that is included in the interim report as comparative information does not constitute the Group’s annual financial statements for that financial year but is derived from those financial statements.

REF Holdings Limited[| ] Interim Report 2019

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Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

3. CHANGES IN ACCOUNTING POLICIES

The HKICPA has issued the following new and amendments to HKFRSs that are first effective for the current accounting period of the Group and the Company.

HKFRS 9 (Amendments) Prepayment Features with Negative Compensation HKFRS 16 Leases HKAS 19 (Amendments) Plan Amendment, Curtailment or Settlement HKAS 28 (Amendments) Long-term Interests in Associates and Joint Ventures HK (IFRIC)-Int 23 Uncertainty over Income Tax Treatments Amendments to HKFRSs Annual Improvements to HKFRSs 2015–2017 Cycle 2015–2017 Cycle

Except for the new and amendments to HKFRSs mentioned below, the directors of the Company anticipate that the application of all other new and amendments to HKFRSs will have no material impact on the consolidated financial statements in the foreseeable future.

HKFRS 16 LEASES

Impacts and changes in accounting policies of application on HKFRS 16 Leases

The Group has applied HKFRS 16 for the first time in the current interim period. HKFRS 16 superseded HKAS 17 “Leases” (“ HKAS 17 ”), and the related interpretations.

• (a) Key changes in accounting policies resulting from application of HKFRS 16

The Group applied the following accounting policies in accordance with the transition provisions of HKFRS 16.

Definition of a lease

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

For contracts entered into or modified on or after the date of initial application, the Group assesses whether a contract is or contains a lease based on the definition under HKFRS 16 at inception or modification date. Such contract will not be reassessed unless the terms and conditions of the contract are subsequently changed.

Interim Report 2019 [| ] REF Holdings Limited

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Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

3. CHANGES IN ACCOUNTING POLICIES (Continued)

HKFRS 16 LEASES (Continued)

• (a) Key changes in accounting policies resulting from application of HKFRS 16 (Continued)

As a lessee

Allocation of consideration to components of a contract

For a contract that contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

Short-term leases

The Group applies the short-term lease recognition exemption to leases of premises that have a lease term of 12 months or less from the date of initial application of HKFRS 16. Lease payments on short-term leases are recognised as expense on a straight-line basis over the lease term.

Right-of-use assets

Except for short-term leases, the Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities.

The cost of right-of-use asset includes:

• the amount of the initial measurement of the lease liability;

• any lease payments made at or before the commencement date, less any lease incentives received;

• any initial direct costs incurred by the Group; and

• an estimate of costs to be incurred by the Group in dismantling and removing the underlying assets, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

REF Holdings Limited[| ] Interim Report 2019

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Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

3. CHANGES IN ACCOUNTING POLICIES (Continued) HKFRS 16 LEASES (Continued)

• (a) Key changes in accounting policies resulting from application of HKFRS 16 (Continued)

• As a lessee (Continued)

Right-of-use assets (Continued)

Right-of-use assets in which the Group is reasonably certain to obtain ownership of the underlying leased assets at the end of the lease term is depreciated from commencement date to the end of the useful life. Otherwise, right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term.

The Group presents right-of-use assets as a separate line item on the condensed consolidated statement of financial position.

Lease liabilities

At the commencement date of a lease, the Group recognises and measures the lease liability at the present value of lease payments that are unpaid at that date. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable.

The lease payments include:

• fixed payments (including in-substance fixed payments) less any lease incentives receivable;

• variable lease payments that depend on an index or a rate;

• amounts expected to be paid under residual value guarantees;

• the exercise price of a purchase option reasonably certain to be exercised by the Group; and

• payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate.

Interim Report 2019 [| ] REF Holdings Limited

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Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

3. CHANGES IN ACCOUNTING POLICIES (Continued) HKFRS 16 LEASES (Continued)

• (a) Key changes in accounting policies resulting from application of HKFRS 16 (Continued)

As a lessee (Continued)

Lease liabilities (Continued)

Variable lease payments that reflect changes in market rental rates are initially measured using the market rental rates as at the commencement date. Variable lease payments that do not depend on an index or a rate are not included in the measurement of lease liabilities and right-of-use assets, and are recognised as expense in the period on which the event or condition that triggers the payment occurs.

After the commencement date, lease liabilities are adjusted by interest accretion and lease payments.

The Group remeasures lease liabilities (and makes a corresponding adjustment to the related right-of-use assets) whenever:

• the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the related lease liability is remeasured by discounting the revised lease payments using a revised discount rate at the date of reassessment.

• the lease payments change due to changes in market rental rates following a market rent review, in which cases the related lease liability is remeasured by discounting the revised lease payments using the initial discount rate.

Lease modifications

The Group accounts for a lease modification as a separate lease if:

• the modification increases the scope of the lease by adding the right to use one or more underlying assets; and

• the consideration for the leases increases by an amount commensurate with the stand-alone price for the increase in scope and any appropriate adjustments to that stand-alone price to reflect the circumstances of the particular contract.

REF Holdings Limited[| ] Interim Report 2019

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Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

3. CHANGES IN ACCOUNTING POLICIES (Continued) HKFRS 16 LEASES (Continued)

• (a) Key changes in accounting policies resulting from application of HKFRS 16 (Continued)

As a lessee (Continued)

Lease modifications (Continued)

For a lease modification that is not accounted for as a separate lease, the Group remeasures the lease liability based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.

Taxation

For the purposes of measuring deferred tax for leasing transactions in which the Group recognises the right-of-use assets and the related lease liabilities, the Group first determines whether the tax deductions are attributable to the right-of-use assets or the lease liabilities.

• (b) Transition and summary of effects arising from initial application of HKFRS 16

Definition of a lease

The Group has elected the practical expedient to apply HKFRS 16 to contracts that were previously identified as leases applying HKAS 17 and HK(IFRIC)-Int 4 Determining whether an Arrangement contains a Lease and not apply this standards to contracts that were not previously identified as containing a lease. Therefore, the Group has not reassessed contracts which already existed prior to the date of initial application.

For contracts entered into or modified on or after 1 January 2019, the Group applies the definition of a lease in accordance with the requirements set out in HKFRS 16 in assessing whether a contract contains a lease.

As a lessee

The Group has applied HKFRS 16 retrospectively with the cumulative effect recognised at the date of initial application, 1 January 2019. Any difference at the date of initial application is recognised in the opening retained profits and comparative information has not been restated.

Interim Report 2019 [| ] REF Holdings Limited

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Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

3. CHANGES IN ACCOUNTING POLICIES (Continued) HKFRS 16 LEASES (Continued)

• (b) Transition and summary of effects arising from initial application of HKFRS 16 (Continued)

• As a lessee (Continued)

• When applying the modified retrospective approach under HKFRS 16 at transition, the Group applied the following practical expedients to leases previously classified as operating leases under HKAS 17, on lease-by-lease basis, to the extent relevant to the respective lease contracts:

• (i) relied on the assessment of whether leases are onerous by applying HKAS 37 Provisions, Contingent Liabilities and Contingent Assets as an alternative of impairment review;

• (ii) elected not to recognise right-of-use assets and lease liabilities for leases with lease term ends within 12 months of the date of initial application;

• (iii) excluded initial direct costs from measuring the right-of-use assets at the date of initial application;

• (iv) applied a single discount rate to a portfolio of leases with similar remaining terms for similar class of underlying assets in similar economic environment. Specifically, discount rate for certain leases of premises in Hong Kong was determined on a portfolio basis; and

• (v) used hindsight based on facts and circumstances as at date of initial application in determining the lease term for the Group’s leases with extension and termination options.

14 REF Holdings Limited[| ] Interim Report 2019

Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

3. CHANGES IN ACCOUNTING POLICIES (Continued)

HKFRS 16 LEASES (Continued)

• (b) Transition and summary of effects arising from initial application of HKFRS 16 (Continued)

• As a lessee (Continued)

On transition, the Group has made the following adjustments upon application of HKFRS 16:

The Group recognised lease liabilities of approximately HK$45,317,000 and right-of-use assets of approximately HK$42,443,000 at 1 January 2019.

When recognising the lease liabilities for leases previously classified as operating leases, the Group has applied incremental borrowing rates of the relevant group entities at the date of initial application. The weighted average lessee’s incremental borrowing rate applied is 5.38%.

		1 January
		2019
		HK$’000
Operating lease commitment as at 31 December 2018		48,274
Less: total future interest expenses		(2,957)
Lease liabilities as at 1 January 2019		45,317
Analysed as:
— Current		18,194
— Non-current		27,123
		45,317

Interim Report 2019 [| ] REF Holdings Limited 15

Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

3. CHANGES IN ACCOUNTING POLICIES (Continued) HKFRS 16 LEASES (Continued)

• (b) Transition and summary of effects arising from initial application of HKFRS 16 (Continued)

• As a lessee (Continued)

The carrying amount of right-of-use assets as at 1 January 2019 comprises the following:

		1 January
		2019
		HK$’000
Right-of-use assets relating to operating leases recognised
upon application of HKFRS 16		45,316
Less: Accrued lease liabilities relating to rent free period
at 1 January 2019 (Note)		(2,873)
Right-of-use assets as at 1 January 2019		42,443

Note:

These relate to accrued lease liabilities for leases of properties in which the lessors provided rent-free period. The carrying amount of the lease incentive liabilities as at 1 January 2019 was adjusted to right-of-use assets at transition.

Significant changes in significant judgements and key sources of estimation uncertainty

The Group applies judgement to determine the lease term for lease contracts in which it is a lessee that include renewal option. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount of lease liabilities and right-of-use assets recognised.

REF Holdings Limited[| ] Interim Report 2019

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Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

3. CHANGES IN ACCOUNTING POLICIES (Continued)

HKFRS 16 LEASES (Continued)

• (b) Transition and summary of effects arising from initial application of HKFRS 16 (Continued)

• As a lessee (Continued)

• Significant changes in significant judgements and key sources of estimation uncertainty (Continued)

• The following adjustments were made to the amounts recognised in the condensed consolidated statement of financial position at 1 January 2019. Line items that were not affected by the changes have not been included.

	Carrying				Carrying
	amounts				amount
	previously				under
	reported at				HKFRS 16
	31 December				at 1 January
	2018		Adjustments		2019
	HK$’000		HK$’000		HK$’000
Assets
Right-of-use assets	–		42,443		42,443
Liabilities
Lease liabilities
— Current portion	–		18,194		18,194
— Non-current portion	–		27,123		27,123
	–		45,317		45,317

Note:

For the purpose of reporting cash flows from operating activities under indirect method for the six months ended 30 June 2019, movements in working capital have been computed based on opening condensed consolidated statement of financial position as at 1 January 2019 as disclosed above.

Interim Report 2019 [| ] REF Holdings Limited 17

Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

4. REVENUE

		Six months ended	Six months ended	Six months ended
		30 June
		2019		2018
		HK$’000		HK$’000
		(unaudited)		(unaudited)
	Financial printing services:
	Printing	68,912		65,396
	Translation	23,072		20,653
	Media placement	6,523		5,957
		98,507		92,006
	OTHER GAINS AND LOSSES
		Six months ended
		30 June
		2019		2018
		HK$’000		HK$’000
		(unaudited)		(unaudited)
	Interest income	1,655		1,069
	Net loss of financial assets at fair value through
	profit or loss	(1,033)		–
	Sundry income	56		2
		678		1,071

5. OTHER GAINS AND LOSSES

18 REF Holdings Limited[| ] Interim Report 2019

Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

6. FINANCE COSTS

	Six months ended	Six months ended	Six months ended
	30 June
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(unaudited)
Bank charges	8		8
Interest on lease liabilities	1,075		–
	1,083		8

7. PROFIT BEFORE TAXATION

	Six months ended	Six months ended	Six months ended
	30 June
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(unaudited)
Profit for the period has been arrived at
after charging:
Directors’ emoluments	3,074		3,206
Other staff costs:
— Salaries and other benefits	20,599		18,129
— Discretionary bonuses	4,875		3,163
— Retirement scheme contributions	842		769
Total employee benefit expense	26,316		22,061
Auditors’ remuneration	420		420
Depreciation of plant and equipment	1,820		399
Depreciation of right-of-use assets	8,835		–
Operating lease rental expenses in respect
of rented premises	–		8,231

Interim Report 2019 [| ] REF Holdings Limited

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Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

8. TAXATION

	Six months ended	Six months ended	Six months ended
	30 June
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(unaudited)
Current tax
— Hong Kong	3,851		3,896
Deferred tax
Current period	(82)		22
	3,769		3,918

Hong Kong Profits Tax is calculated at 16.5% of the estimated assessable profit for the six months ended 30 June 2018.

On 21 March 2018, the Hong Kong Legislative Council passed The Inland Revenue (Amendment) (No. 7) Bill 2017 (the“ Bill ”) which introduces the two-tiered profits tax rates regime. The Bill was signed into law on 28 March 2018 and was gazetted on the following day.

Under the two-tiered profits tax rates regime, the first HK$2 million of assessable profits of qualifying corporations will be taxed at 8.25%, and assessable profits above HK$2 million will be taxed at 16.5%. The assessable profits of corporations not qualifying for the two-tiered profits tax rates regime will continue to be taxed at a flat rate of 16.5%.

The two-tiered profits tax rates regime is applicable to the Group for the six months ended 30 June 2019.

9. DIVIDENDS

The Board does not declare the payment of any dividend for the six months ended 30 June 2019 (2018: Nil).

REF Holdings Limited[| ] Interim Report 2019

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Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

10. EARNINGS PER SHARE

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

	Six months ended	Six months ended	Six months ended
	30 June
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(unaudited)
Earnings:
Profit attributable to owners of the Company
for the purpose of calculating basic
earnings per share	18,899		19,646
	’000		’000
Number of shares:
Weighted average number of ordinary shares
for the purpose of calculating basic
earnings per share (Note)	256,000		256,000
Basic earnings per share (HK cents)	7.38		7.67

Note:

The calculation of basic earnings per share for the six months ended 30 June 2019 and 2018 is based on the profit attributable to owners of the Company and the weighted average number of ordinary shares for the relevant periods.

For the six months ended 30 June 2019 and 2018, the weighted average number of ordinary shares for the purpose of calculating basic earnings per share is calculated based on 256,000,000 ordinary shares in issue.

Diluted earnings per share is same as the basic earnings per share for the six months ended 30 June 2019 and 2018 as there were no potential dilutive ordinary shares in issue.

Interim Report 2019 [| ] REF Holdings Limited

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Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

11. PLANT AND EQUIPMENT

During the six months ended 30 June 2019, the Group acquired plant and equipment at a cost of HK$327,000 (2018: HK$302,000), which consisted of furniture and fixtures amounting to HK$327,000 (2018: office equipment and furniture and fixtures amounting to HK$56,000 and HK$246,000, respectively). None of the plant and equipment were disposed of during the six months ended 30 June 2019 (2018: Nil).

12. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

RIGHT-OF-USE ASSETS

	As at		As at
	30 June		31 December
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(audited)
As at 1 January 2019	42,443		–
Depreciation provided during the period	(8,835)		–
As at 30 June 2019	33,608		–

The right-of-use assets represent the Group’s rights to use underlying leased premises and equipment under operating lease arrangements over the lease terms, which are stated at cost less accumulated depreciation and accumulated impairment losses, and adjusted for any remeasurement of the lease liabilities.

REF Holdings Limited[| ] Interim Report 2019

22

Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

12. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (Continued) LEASE LIABILITIES

	As at		As at
	30 June		31 December
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(audited)
Analysed as:
Current	18,534		–
Non-current	17,808		–
	36,342		–
Minimum lease payments due:
Within one year	19,946		–
More than one year but not later than
two years	17,008		–
More than two years but not later
than five years	1,295		–
	38,249		–
Less: Future finance charges	(1,907)		–
Present value of lease liabilities	36,342		–
Maturity analysis:
Within one year	18,534		–
More than one year but not later than
two years	16,582		–
More than two years but not later
than five years	1,226		–
	36,342		–

Interim Report 2019 [| ] REF Holdings Limited

23

Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

13. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

	As at		As at
	30 June		31 December
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(audited)
Listed securities
— Equity securities listed in Hong Kong	18,543		–

Financial assets at fair value through profit or loss are stated at fair values which are determined with reference to quoted market bid price.

During the period, the following losses were recognised in profit of loss:

	As at		As at
	30 June		31 December
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(audited)
Net loss of financial assets at fair value
through profit or loss	1,033		–

14. TRADE RECEIVABLES

	As at		As at
	30 June		31 December
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(audited)
Trade receivables (Note)	52,295		28,560

REF Holdings Limited[| ] Interim Report 2019

24

Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

14. TRADE RECEIVABLES (Continued)

As at 30 June 2019 and 1 January 2019, trade receivables from contracts with customers amounted to approximately HK$52,295,000 and HK$28,560,000 respectively.

The following is an aged analysis of trade receivables, presented based on the invoice dates at the end of the reporting periods:

	As at		As at
	30 June		31 December
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(audited)
Current — neither past due nor impaired	24,035		12,147
Under 31 days past due	10,780		7,131
31–60 days past due	13,359		5,454
61–120 days past due	2,940		3,532
121–150 days past due	27		239
Over 150 days past due	1,154		57
	52,295		28,560

The Group generally allows a credit period of 30 days to its customers.

As at 30 June 2019, included in the Group’s trade receivables balance are debtors with aggregate carrying amount of approximately HK$28,260,000 (2018: HK$16,413,000) which are past due as at the reporting date for which the Group has not provided for impairment loss. Out of the past due balances, approximately HK$1,181,000 (2018: HK$296,000) has been past due 120 days or more and is not considered as in default due to long and on-going business relationship, good repayment record and good credit quality from these debtors.

Interim Report 2019 [| ] REF Holdings Limited 25

Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

14. TRADE RECEIVABLES (Continued)

Trade receivables that are past due but not impaired related to a number of independent debtors that have a good track record with the Group. Based on past experience, the 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. The Group does not hold any collateral over these balances.

• Note: No trade receivable from a related party, TEM Holdings Limited (“ TEM ”) as at 30 June 2019 and 31 December 2018. Mr. Lau, a substantial shareholder, non-executive director and chairman of the Company, is the controlling shareholder of TEM. The maximum outstanding balance during the six months ended 30 June 2019 and the year ended 31 December 2018 were approximately HK$31,000 and HK$143,000, respectively.

15. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES

	As at		As at
	30 June		31 December
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(audited)
Rental, utility and other deposits	9,298		8,827
Prepayments and other receivables	831		1,873
	10,129		10,700

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26

Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

16. FIXED DEPOSITS/BANK BALANCES AND CASH

	As at		As at
	30 June		31 December
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(audited)
Fixed deposits	177,496		195,190
Bank balances and cash	12,004		12,922
	189,500		208,112

The fixed deposits are short-term fixed deposits with an original maturity of six months or less which are held for the purpose of meeting short-term cash commitments and are subject to an insignificant risk of changes in value. As at 30 June 2019 and 31 December 2018, these fixed deposits carry fixed interest rate ranging from 0.85% to 2.70% per annum and 0.80% to 2.40% per annum, respectively.

Bank balances carrying interest at market rates of 0.125% and 0.001% per annum for the six months ended 30 June 2019 and the year ended 31 December 2018, respectively.

17. TRADE PAYABLES

	As at		As at
	30 June		31 December
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(audited)
Trade payables	7,505		6,003

Interim Report 2019 [| ] REF Holdings Limited 27

Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

17. TRADE PAYABLES (Continued)

The credit period from suppliers is up to 60 days. The following is an aged analysis of trade payables, presented based on the invoice date at the end of the reporting period:

	As at		As at
	30 June		31 December
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(audited)
Current — up to 60 days	6,883		6,003
Under 31 days past due	350		–
31–60 days past due	2		–
61–120 days past due	149		–
121–150 days past due	121		–
	7,505		6,003

18. ACCRUALS AND OTHER PAYABLES

	As at		As at
	30 June		31 December
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(audited)
Accruals	592		1,004
Other payables (Note)	8,327		18,657
	8,919		19,661

Note: Included above are provision of staff bonus of approximately HK$6,340,000 and HK$14,575,000 as at 30 June 2019 and 31 December 2018, respectively.

28 REF Holdings Limited[| ] Interim Report 2019

Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

19. DEFERRED TAX (LIABILITIES)/ASSETS

	As at		As at
	30 June		31 December
	2019		2018
	HK$’000		HK$’000
	(unaudited)		(audited)
Deferred tax assets	234		330
Deferred tax liabilities	(340)		(518)
	(106)		(188)

20. SHARE CAPITAL

	As	As	at		As	As	at
	30 June 2019				31 December			2018
	Number of				Number of
	shares				shares
	’000		HK$’000		’000			HK$’000
	(unaudited)		(unaudited)		(audited)			(audited)
Authorised
Ordinary shares of HK$0.01 each	10,000,000		100,000		10,000,000			100,000
Issued and fully paid
At the beginning and at the end
of the period	256,000		2,560		256,000			2,560

Interim Report 2019 [| ] REF Holdings Limited 29

Notes to the Condensed Consolidated Financial Statements For the six months ended 30 June 2019

21. MATERIAL RELATED PARTY TRANSACTIONS AND BALANCES

Save as disclosed elsewhere in the condensed consolidated financial statements, the Group had also entered into the following material related party transactions during the reporting period:

(A) TRANSACTIONS WITH RELATED PARTY

				Six months ended	Six months ended	Six months ended
				30 June
Name of company	Nature of transactions			2019		2018
				HK$’000		HK$’000
				(unaudited)		(unaudited)
TEM (Note)	Financial printing services
	income rendered			57		50

Note:

Mr. Lau, a substantial shareholder, non-executive director and chairman of the Company, is the controlling shareholder of both TEM Group Limited (“ TEMG ”) and TEM. TEM became the holding company of TEMG now comprising the group (the “ TEM Group ”). The issued shares of the TEM Group are listed on the GEM of the Stock Exchange.

On 29 May 2018 and 6 January 2016, the Company entered into service contracts with the TEM Group for the financial printing services in the contract sum of approximately HK$226,000 and HK$451,000, respectively. These transactions fall within the deminimis criteria of a connected transaction and are fully exempt from the reporting and shareholders’ approval requirements in the Listing Rules. In the opinion of the directors of the Company, the balance was conducted in the normal course of business and based on the terms mutually determined and agreed by the respective parties.

(B) COMPENSATION OF KEY MANAGEMENT PERSONNEL

The Directors are identified as key management members of the Group and their compensation during the reporting period is set out in Note 7.

22. EVENTS AFTER REPORTING PERIOD

The Group had no significant events after the end of the reporting period of this report.

REF Holdings Limited[| ] Interim Report 2019

30

Management Discussion and Analysis

BUSINESS REVIEW AND OUTLOOK

The Group aims to establish itself as one of the top-notch financial printing service providers in the financial sector by strengthening its core competitiveness in order to meet customers’ expectations and provide them with a unique and perfect experience. The Group is principally engaged in the provision of financial printing services for the financial sector in Hong Kong. The Group offers ancillary services such as provision of conference room facilities in Hong Kong. The core financial printing services of the Group cover printing of listing documents, financial reports, debt offering circulars, compliance documents and other documents. The services of the Group can be broadly categorised into three types, namely printing, translation and media placement. Most of the Group’s customers are listed on the Stock Exchange and/or other stock exchanges.

PRINTING SERVICES

Printing revenue during the six months ended 30 June 2019 (the “ Period ”) was approximately HK$68.9 million (six months ended 30 June 2018: approximately HK$65.4 million), representing an increase of approximately 5.4% as compared to that of the same period last year, which was primarily due to an increase in the number of jobs completed. For the six months ended 30 June 2019 and 2018, the revenue generated from the printing services represented approximately 70.0% and 71.0% respectively of our total revenue.

TRANSLATION SERVICES

Translation revenue during the Period was approximately HK$23.1 million (six months ended 30 June 2018: approximately HK$20.7 million), representing an increase of approximately 11.6% as compared to that of the same period last year, which was primarily due to an increase in the number of jobs completed. For the six months ended 30 June 2019 and 2018, the revenue generated from the translation services represented approximately 23.4% and 22.5% respectively of our total revenue.

MEDIA PLACEMENT SERVICES

Media placement revenue during the Period was approximately HK$6.5 million (six months ended 30 June 2018: approximately HK$6.0 million), representing an increase of approximately 8.3% as compared to that of the same period last year, which was primarily due to an increase in the number of jobs completed. For the six months ended 30 June 2019 and 2018, the revenue generated from the media placement services represented approximately 6.6% and 6.5% respectively of our total revenue.

For the Period, the Group’s turnover increased by approximately 7.1% as compared to that of the same period last year.

Interim Report 2019 [| ] REF Holdings Limited

31

Management Discussion and Analysis

BUSINESS REVIEW AND OUTLOOK (Continued)

With the increasing number of listed companies in Hong Kong, we see business opportunities in providing financial printing services. To further enhance our competitive edge, we continue improving and acquiring office facilities, equipment and software, and strengthening our design capabilities regularly. We shall continue to provide a comprehensive range of convenient and quality services to our customers and react to their changing needs more efficiently and effectively. Through the above, we aim to capture market opportunities so as to achieve a sustainable business growth and longterm benefits for our shareholders (the “ Shareholders ”).

FINANCIAL REVIEW

REVENUE

The Group’s revenue increased by approximately HK$6.5 million, or 7.1%, from approximately HK$92.0 million for the six months ended 30 June 2018 to approximately HK$98.5 million for the six months ended 30 June 2019. The increase was primarily attributable to the increase in printing activity, translation activity and media placement services.

COST OF SERVICES

The Group’s cost of services increased by approximately HK$3.4 million, or 7.6%, from approximately HK$44.7 million for the six months ended 30 June 2018 to approximately HK$48.1 million for the six months ended 30 June 2019. The increase was in line with the increase in revenue generated from printing activity, translation activity and media placement services.

OTHER GAINS AND LOSSES

Other gains and losses decreased by approximately HK$0.4 million, or 36.4% from approximately HK$1.1 million for the six months ended 30 June 2018 to approximately HK$0.7 million for the six months ended 30 June 2019. The decrease was mainly due to the net loss of financial assets at fair value through profit or loss amounting to approximately HK$1.0 million.

32 REF Holdings Limited[| ] Interim Report 2019

Management Discussion and Analysis

FINANCIAL REVIEW (Continued)

SELLING AND DISTRIBUTION EXPENSES

The Group’s selling and distribution expenses decreased by approximately HK$0.2 million, or 2.7%, from approximately HK$7.3 million for the six months ended 30 June 2018 to approximately HK$7.1 million for the six months ended 30 June 2019. The decrease was mainly due to the tighten control of cost by the management’s effort.

ADMINISTRATIVE EXPENSES

The Group’s administrative expenses increased by approximately HK$2.7 million, or 15.3%, from approximately HK$17.6 million for the six months ended 30 June 2018 to approximately HK$20.3 million for the six months ended 30 June 2019. The increase was mainly due to the increase of (i) depreciation of right-of-use assets and (ii) depreciation for the assets purchased in second half of 2018.

FINANCE COSTS

Finance costs increased by approximately HK$1.1 million was mainly due to the increase of approximately HK$1.1 million of interest on lease liabilities for the six months ended 30 June 2019 (six months ended 30 June 2018: Nil).

TAXATION

Profits tax expenses decreased by approximately HK$0.1 million, or 2.6%, from approximately HK$3.9 million for the six months ended 30 June 2018 to approximately HK$3.8 million for the six months ended 30 June 2019.

PROFIT FOR THE PERIOD

The profit for the six months ended 30 June 2019 was approximately HK$18.9 million, representing a decrease of approximately HK$0.7 million, or 3.6% as compared with approximately HK$19.6 million for the six months ended 30 June 2018. The decrease was primarily attributable to the net loss of financial assets at fair value through profit or loss for the six months ended 30 June 2019.

GEARING RATIO

As at 30 June 2019, the gearing ratio of the Group was 16.1% due to the increase in lease liabilities after the initial application of HKFRS 16 on 1 January 2019 (31 December 2018: not applicable).

Interim Report 2019 [| ] REF Holdings Limited 33

Management Discussion and Analysis

LIQUIDITY AND FINANCIAL RESOURCES

As at 30 June 2019, fixed deposits, bank balances and cash of the Group amounted to approximately HK$189.5 million (31 December 2018: HK$208.1 million). The current ratios (current assets divided by current liabilities) of the Group were 3.6 times and 4.2 times as at 30 June 2019 and 31 December 2018, respectively. In view of the Group’s current level of fixed deposits, bank balances and cash and funds generated internally from our operations, the Board is confident that the Group will have sufficient resources to meet the financial needs for its operations.

CAPITAL STRUCTURE

As at 30 June 2019 and 31 December 2018, the authorised share capital of the Company was HK$100,000,000 divided into 10,000,000,000 ordinary shares of par value of HK$0.01 each (the “ Shares ”) and the issued share capital of the Company was HK$2,560,000 divided into 256,000,000 Shares. The share capital of the Company only comprised Shares. There was no change in the share capital of the Company during the Period.

EMPLOYEES AND REMUNERATION POLICY

As at 30 June 2019, the Group had 116 (30 June 2018: 110) full-time employees. Employees are remunerated according to their performance, qualification and work experience. On top of basic salaries, discretionary bonus may be granted to eligible staff by reference to the Group’s performance, individual staff’s performance and the market conditions. The total staff costs (including remuneration of the Directors) amounted to approximately HK$25.3 million for the six months ended 30 June 2018 and approximately HK$29.4 million for the six months ended 30 June 2019. The dedication and hard work of the Group’s staff during the six months ended 30 June 2019 are generally appreciated and recognised.

In addition, the Company adopted a share option scheme (the “ Scheme ”) on 12 August 2015 (please refer to the section of “SHARE OPTION SCHEME” below for more information). The Group also provides and arranges on-the-job training for its employees.

CAPITAL COMMITMENT

As at 30 June 2019, the Group did not have any significant capital commitment (31 December 2018: Nil).

34 REF Holdings Limited[| ] Interim Report 2019

Management Discussion and Analysis

FOREIGN CURRENCY EXPOSURE

The Group’s sales and purchases are denominated in Hong Kong dollars. The Group will review and monitor from time to time the risk relating to foreign exchanges whenever applicable.

SIGNIFICANT INVESTMENTS

As at 30 June 2019, the Group maintained a portfolio of equity investments with total carrying amount of approximately HK$18.5 million (31 December 2018: Nil). The portfolio of equity investments as at 30 June 2019 are set out as follows:

				Percentage of
				fair value of
			the investment
				in listed		Fair value		Fair value of
			securities/total			losses for	the investment
				assets of the		the		in listed
		Investment		Group as at		period ended		securities as at
		cost		30 June 2019		30 June 2019		30 June 2019
		HK$’000				HK$’000		HK$’000
Equity investments at fair value
through profit or loss		19,576		5.8%		1,033		18,543

The Group held less than 0.1% of shareholding in each of the listed securities in the above equity investments portfolio.

During the six months ended 30 June 2019, the stock market witnessed a sustaining pullback, the Group will continue to adopt the cautious approach in making investment decision in securities trading so as to obtain a balance between risk and return.

Save as disclosed above, the Group did not have any significant investment as at 30 June 2019 (31 December 2018: Nil).

Interim Report 2019 [| ] REF Holdings Limited 35

Management Discussion and Analysis

CHARGE ON THE GROUP’S ASSETS

As at 30 June 2019 and 31 December 2018, the Group had no charges on the Group’s assets.

CONTINGENT LIABILITIES

As at 30 June 2019 and 31 December 2018, the Group did not have any material contingent liabilities or guarantees.

FUTURE PLANS FOR MATERIAL INVESTMENTS OR CAPITAL ASSETS

There was no specific plan for material investments or capital assets as at 30 June 2019.

MATERIAL ACQUISITIONS OR DISPOSALS OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

During the six months ended 30 June 2019, there was no acquisition or disposal of subsidiaries, associates and joint ventures by the Group.

COMPETING INTERESTS

The Directors are not aware of any business or interest of the Directors or the controlling shareholders of the Company nor any of their respective close associates that competed or might compete, either directly or indirectly, with the business of the Group and any other conflicts of interest which any such person or entity had or might have with the Group during the Period.

EVENTS AFTER REPORTING PERIOD

There were no significant events after the reporting period up to the approval date on these financial statements.

INTERIM DIVIDEND

The Board does not declare the payment of any interim dividend for the six months ended 30 June 2019 (six months ended 30 June 2018: Nil).

36 REF Holdings Limited[| ] Interim Report 2019

Management Discussion and Analysis

USE OF PROCEEDS

The net proceeds from the placing of new Shares completed on the Date of Listing (the “ Placing ”) were approximately HK$31.4 million, after deducting the expenses relating to the listing of the Shares on GEM of the Stock Exchange. As at 30 June 2019, all of the unused proceeds were deposited in licensed banks in Hong Kong and a large portion of the net proceeds from the Placing was utilised and the corresponding explanations are set out in the table below:

					Amount
		Proposed			estimated
		amount to be	Amount used		to be used
Proposed use of		used and	as of		for the next		Changes and
proceeds		time frame	30 June 2019		6 months		explanations
Enhance		HK$9.1 million	HK$3.0 million has		Not applicable		Not applicable
competitiveness		(extended from	been used to
through expansion		before 30 June	purchase office
of workforce as		2017 to 30 June	facilities,
well as improving		2018)	equipment and
and acquiring			software; and
office facilities,			HK$6.1 million
equipment and			has been used to
software			expand workforce
Strengthen design		HK$2.1 million	HK$1.3 million has		Not applicable		Not applicable
capabilities		(extended from	been used to
		before 30 June	employ additional
		2017 to 30 June	design personnel;
		2018)	and HK$0.8
			million has been
			used to purchase
			various equipment
			and software to
			improve the
			design efficiency

Interim Report 2019 [| ] REF Holdings Limited

37

Management Discussion and Analysis

USE OF PROCEEDS (Continued)

					Amount
		Proposed			estimated
		amount to be	Amount used		to be used
Proposed use of		used and	as of		for the next		Changes and
proceeds		time frame	30 June 2019		6 months		explanations
Set up an in-house		HK$18.5 million	Approximately		Approximately		Will be fully
translation team		(extended from	HK$1.8 million		HK$5.1		utilised as
		before 30 June	has been used to		million will be		intended on
		2017 to	set up a new		used as		or before 31
		31 December	office for the		operating		December
		2019)	in-house		expenses for		2019
			translation team;		the new office
			and approximately		and the newly
			HK$11.6 million		recruited
			has been used as		translation
			operating		personnel
			expenses for the
			new office and
			the newly
			recruited
			translation
			personnel

38 REF Holdings Limited[| ] Interim Report 2019

Other Information

DIRECTORS’ AND CHIEF EXECUTIVES’ INTERESTS AND SHORT POSITIONS IN THE SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY AND ITS ASSOCIATED CORPORATIONS

As at 30 June 2019, the interests and short positions of the Directors and chief executives of the Company in the shares, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (“ SFO ”)) which were notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO) or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein or which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 (“ Model Code ”) of the Listing Rules were as follows:

LONG POSITION IN THE SHARES OF HK$0.01 EACH OF THE COMPANY

				Percentage of
			Number of	issued share
Name of director	Nature of interest		Shares held	capital
Mr. Lau Man Tak (Note)	Interest in controlled		192,000,000	75.0%
	corporations

Note: Mr. Lau, the chairman of the Board and the non-executive Director, owns 7,625 ordinary shares in, representing 76.25% of the issued share capital of, Rising Luck Management Limited (“ Rising Luck ”), and the remaining 23.75% thereof is owned by an independent third party. Rising Luck owns 47,500 ordinary shares in, representing 95% of the entire issued share capital of, Jumbo Ace Enterprises Limited (“ Jumbo Ace ”). Mr. Lau also has a direct 5% interest (or 2,500 ordinary shares) in Jumbo Ace. Under the SFO, Mr. Lau is deemed to be interested in 192,000,000 Shares registered in the name of Jumbo Ace. Mr. Lau is a director of each of Rising Luck and Jumbo Ace, both being associated corporations of the Company.

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39

Other Information

DIRECTORS’ AND CHIEF EXECUTIVES’ INTERESTS AND SHORT POSITIONS IN THE SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY AND ITS ASSOCIATED CORPORATIONS (Continued)

Save as disclosed above, as at 30 June 2019, none of the Directors or chief executives of the Company had any interests or short positions in any shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they are taken or deemed to have under such provisions of the SFO), or which were required, pursuant to Section 352 of the SFO, to be entered in register referred to therein, or which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code of the Listing Rules.

SUBSTANTIAL SHAREHOLDERS’ INTERESTS AND SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY

As at 30 June 2019, the following persons/entities had interests or short positions in the shares and underlying shares of the Company which were notified to the Company and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO and entered in the register maintained by the Company pursuant to Section 336 of the SFO were as follows:

LONG POSITION IN THE SHARES

					Percentage of
				Number of	issued share
Name of Shareholder	Nature of interest			Shares held	capital
Jumbo Ace (Note 1)	Beneficial owner			192,000,000	75%
Rising Luck (Note 1)	Interest in controlled			192,000,000	75%
	corporation
Mr. Lau (Notes 1&2)	Interest in controlled			192,000,000	75%
	corporation
Ms. Lim Youngsook	Interest of spouse			192,000,000	75%
(Note 2)

REF Holdings Limited[| ] Interim Report 2019

40

Other Information

SUBSTANTIAL SHAREHOLDERS’ INTERESTS AND SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY

(Continued)

• Note 1: Rising Luck owns 47,500 ordinary shares, representing 95% of the issued share capital of Jumbo Ace, the remaining 2,500 ordinary shares, representing 5% of which is owned by Mr. Lau. Mr. Lau owns 7,625 ordinary shares, representing 76.25% of the issued share capital of Rising Luck and the remaining 23.75% thereof is owned by an independent third party.

• Note 2: Ms. Lim Youngsook is the wife of Mr. Lau and is, therefore, deemed to be interested in the Shares owned by Mr. Lau (by himself and through his controlled corporations).

Save as disclosed above, as at 30 June 2019, the Company had not been notified by any persons/entities who had interests or short positions in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register maintained by the Company pursuant to Section 336 of the SFO.

CORPORATE GOVERNANCE

During the Period, the Company complied with the code provisions as set out in the Corporate Governance Code (the “ CG Code ”) contained in Appendix 14 of the Listing Rules except for the following deviation:

In respect of the code provisions A.6.7 and E.1.2 of the CG Code, Mr. Lau Man Tak, the Chairman and non-executive Director was unable to attend the annual general meeting of the Company held on 21 May 2019 due to his business engagement.

In respect of the code provisions A.6.7 and E.1.2 of the CG Code, Mr. Wong Kun Kau, an independent non-executive Director and the chairman of the nomination committee of the Company, was unable to attend the annual general meeting of the Company held on 21 May 2019 due to his business engagement.

SECURITIES TRANSACTIONS BY DIRECTORS

The Company adopted the Model Code of the Listing Rules as the codes of conduct regarding securities transactions by Directors. All Directors have confirmed, following specific enquiries by the Company, that they fully complied with the Model Code and its code of conduct regarding directors’ securities transactions throughout the Period.

Interim Report 2019 [| ] REF Holdings Limited

41

Other Information

DISCLOSURE OF INFORMATION ON DIRECTORS

Pursuant to Rule 13.51B(1) of the Listing Rules, the change of the profile of the independent non-executive Director is set out below:

Mr. Wong Kun Kau resigned from his position as an independent non-executive director of West China Cement Limited, a company listed on the Main Board of the Stock Exchange (stock code: 2233) with effect from 16 May 2019.

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

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

SHARE OPTION SCHEME

The Company adopted the Scheme on 12 August 2015. The purpose of the Scheme is to advance the interests of the Company and the Shareholders by enabling (i) the Company to grant options to attract, retain and reward the eligible persons and to provide them with an incentive or reward for their contribution to the Group and (ii) such persons’ contribution to further advance the interests of the Group.

As at 30 June 2019, the total number of Shares available for issue under the Scheme is 25,600,000 Shares and represents 10% of the issued share capital of the Company.

No share option has been granted since the adoption of the Scheme and no share option was outstanding as at 30 June 2019 (2018: Nil) and no share option was exercised or cancelled or lapsed during the Period.

AUDIT COMMITTEE

The Audit Committee has reviewed and discussed with the management of the Company on the unaudited condensed consolidated results of the Group for the Period including this report of the Company and the accounting principles and practices adopted by the Group and is of the view that the financial information and report have been prepared in compliance with the applicable accounting standards, the Listing Rules and other applicable legal requirements, and that adequate disclosure has been made.

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Other Information

APPRECIATION

On behalf of the Board and management, I would like to express my sincere gratitude to all our clients, investors, suppliers, business partners and Shareholders for their continued valuable support and trust. I would also like to take this opportunity to thank my fellow Directors for their wise counsel and all of our staff for their dedication, hard work and contribution during the Period.

By order of the Board REF Holdings Limited Lau Man Tak Chairman

Hong Kong, 23 August 2019

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Corporate Information

BOARD OF DIRECTORS

EXECUTIVE DIRECTORS

Ms. Chiu Hok Yu Ms. Kwok Kam Lai

CHAIRMAN AND NON-EXECUTIVE DIRECTOR

Mr. Lau Man Tak

INDEPENDENT NON-EXECUTIVE DIRECTORS

Mr. Leung Chi Hung Mr. Wong Kun Kau Mr. Lum Chor Wah Richard

COMPANY SECRETARY

Mr. Ko Wai Lun Warren

AUTHORISED REPRESENTATIVES

Ms. Chiu Hok Yu Ms. Kwok Kam Lai

AUDIT COMMITTEE

Mr. Leung Chi Hung (chairman) Mr. Wong Kun Kau Mr. Lum Chor Wah Richard

REMUNERATION COMMITTEE

Mr. Lum Chor Wah Richard (chairman) Mr. Leung Chi Hung Mr. Wong Kun Kau Ms. Chiu Hok Yu

NOMINATION COMMITTEE

Mr. Wong Kun Kau (chairman) Mr. Leung Chi Hung Mr. Lum Chor Wah Richard Ms. Chiu Hok Yu

REGISTERED OFFICE

Clifton House 75 Fort Street PO Box 1350 Grand Cayman KY1-1108 Cayman Islands

HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS IN HONG KONG

6th Floor and 7th Floor, Nexxus Building 77 Des Voeux Road Central Hong Kong

PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE

Estera Trust (Cayman) Limited Clifton House 75 Fort Street PO Box 1350 Grand Cayman KY1-1108 Cayman Islands

HONG KONG BRANCH SHARE REGISTRAR AND TRANSFER OFFICE

Union Registrars Limited Suites 3301–04, 33/F. Two Chinachem Exchange Square 338 King’s Road North Point Hong Kong

PRINCIPAL BANKER

The Hongkong and Shanghai Banking Corporation Limited

WEBSITE

INDEPENDENT AUDITORS

HLB Hodgson Impey Cheng Limited Certified Public Accountants

www.ref.com.hk

STOCK CODE

1631

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