Sinopec Engineering Group Co Ltd. - Interim / Quarterly Report 2016

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UNIVERSE INTERNATIONAL HOLDINGS LIMITED 寰宇國際控股有限公司

Incorporated in Bermuda with limited liability 於百慕達註冊成立之有限公司 Stock Code 股份代號: 1046

Universe International Holdings Limited Interim Report 2015/2016 1

CORPORATE INFORMATION

Executive Directors

Mr Lam Shiu Ming, Daneil (Chairman) Mr Hung Cho Sing Ms Cheng Hei Yu (appointed on 8th December 2015) Mr Lam Kit Sun Mr Yeung Kim Piu (retired on 30th November 2015)

Non-executive Directors

Mr Chan Shiu Kwong Stephen

Independent Non-executive Directors

Mr Lam Wing Tai Mr Lam Chi Keung Mr Choi Wing Koon

Company Secretary

Mr Lam Kit Sun

Authorized Representatives

Mr Lam Shiu Ming, Daneil Mr Lam Kit Sun

Principal Bankers

The Hongkong and Shanghai Banking Corporation Limited OCBC Wing Hang Bank Limited Bank of Communications Co., Ltd

Auditor

PricewaterhouseCoopers Certified Public Accountants

Legal Advisers

So Keung Yip & Sin 1009-1012, 10th Floor Nan Fung Tower 173 Des Voeux Road Central Hong Kong

Leung & Lau, Solicitors Unit 7208-10, 72/F, The Center. 99 Queen’s Road Central, Central Hong Kong

Share Registrar

Tricor Abacus Limited Level 22, Hopewell Centre 183 Queen’s Road East Hong Kong

Audit Committee

Mr Lam Wing Tai (Chairman) Mr Lam Chi Keung Mr Choi Wing Koon

Remuneration Committee

Mr Choi Wing Koon (Chairman) Mr Lam Shiu Ming, Daneil Mr Lam Wing Tai Mr Lam Chi Keung

Nomination Committee

Mr Lam Chi Keung (Chairman) Mr Lam Shiu Ming, Daneil Mr Lam Wing Tai Mr Choi Wing Koon

Registered Office

Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Head Office and Principal Place of Business

18th Floor Wyler Centre Phase II 192-200 Tai Lin Pai Road Kwai Chung New Territories Hong Kong

Website

www.uih.com.hk

Stock Code

1046

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Universe International Holdings Limited Interim Report 2015/2016

The board of directors (the “Director(s)”) (the “Board”) of Universe International Holdings Limited (the “Company”) announces the unaudited condensed consolidated balance sheet as at 31st December 2015 and the unaudited condensed consolidated statement of comprehensive income, the unaudited condensed consolidated statement of changes in equity and the unaudited condensed consolidated statement of cash flows of the Company and its subsidiaries (collectively, the “Group”) for the six months ended 31st December 2015 (the “Period”) as follows:

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

	Note	Unaudited As at 31st December 2015	Audited As at 30th June 2015 HK$’000
		HK$’000

ASSETS Non-current assets Property, plant and equipment Investment properties Goodwill Other intangible assets Film rights and films in progress Investments in associates Investments in joint ventures Loans receivable Loan receivable from a joint venture Film related deposits Deposits paid Deferred income tax assets Available-for-sale financial assets	6 6 6 6 6 7 8 11 8 9		5,229 25,560 1,314 1,858 17,906 5,022 706 – 8,140 38,195 6,204 380 88,415


		9,585
		25,560
		86,819
		23,107
		17,759
		38,179
		594
		23,000
		8,252
		37,524
		1,192
		377
		74,268

			198,929
		346,216

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Universe International Holdings Limited Interim Report 2015/2016 3

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET (Continued)

	Note	Unaudited As at 31st December 2015
		HK$’000

Current assets Inventories Accounts receivable Loans receivable Amount due from a joint venture Amounts due from shareholders Amounts due from directors Deposits paid, prepayments and other receivables Financial assets at fair value through profit or loss Bank balances – trust and segregated accounts Bank balances (general accounts) and cash	10 11 12 13

		22,595
		108,541
		124,946
		10
		27
		149
		37,590
		201,517
		153,770
		184,158


		833,303

Total assets
		1,179,519

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Universe International Holdings Limited Interim Report 2015/2016

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET (Continued)

UNAUDITED CONDENSED SHEET(Continued)	CONSO	LIDATED BA	LANCE
	Note	Unaudited As at 31st December 2015	Audited As at 30th June 2015 HK$’000
		HK$’000

EQUITY Equity attributable to the owners of the Company Share capital Share premium Other reserves Retained earnings	15 17		2,984 213,630 148,463 206,943


		14,815
		510,938
		139,688
		112,298

Non-controlling interests			572,020 247
		777,739
		(421)

Total equity			572,267
		777,318

LIABILITIES Non-current liabilities Borrowings Obligations under finance lease Deferred income tax liabilities Convertible bonds	18 19 21		9,200 97 29,813 –


		–
		79
		8,921
		57,441

			39,110
		66,441

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Universe International Holdings Limited Interim Report 2015/2016 5

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET (Continued)

UNAUDITED CONDENSED SHEET(Continued)	CONSO	LIDATED BA	LANCE
	Note	Unaudited As at 31st December 2015	4,189 52,868 – 56,726 1 35 14,432 128,251 167,361 739,628 412,448 611,377 Audited As at 30th June 2015 HK$’000
		HK$’000

Current liabilities Accounts payable Other payables and accrued charges Borrowings Deposits received Amount due to the ultimate holding company Obligations under finance lease Taxation payable	22 18 19

		182,108
		42,346
		23,766
		68,051
		1
		35
		19,453


		335,760

Total liabilities
		402,201

Total equity and liabilities
		1,179,519

Net current assets
		497,543

Total assets less current liabilities
		843,759

The notes on pages 12 to 71 form an integral part of these unaudited condensed consolidated interim financial information.

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Universe International Holdings Limited Interim Report 2015/2016

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31st December 2015 2014 Note HK$’000 HK$’000
Revenue and income Sales of goods 42,372 Income on film exhibition, licensing and sub-licensing of film rights 22,738 Fair value changes on investment securities (133,011) Income on other businesses 9,853	2,874 22,538 (18,664) 4,742
Total revenue and income 5 (58,048)	11,490
Cost of revenue and income Cost of inventories sold 23 (18,261) Related cost on film exhibition, licensing and sub-licensing of film rights (8,098) Cost on other businesses (477)	(2,314) (14,351) –
Total cost of revenue and income (26,836)	(16,665)
Selling expenses 23 (9,735) Administrative expenses 23 (34,309) Other income 1,744 Other gains – net 81 Gain on disposal of a subsidiary – Gain on step acquisition of a subsidiary 26(a) 1,764 Increase in fair value of financial assets at fair value through profit or loss 683 Decrease in fair value of convertible bonds 21 6,878 Other operating (expenses)/income 23 (425) Finance income 2,970 Finance costs (543) Share of profit/(loss) of associates 7 753 Share of loss of a joint venture 8 (112)	(1,604) (27,291) 300 151 6 – – – 535 180 – (191) (110)
Loss before income tax (115,135) Income tax credit 24 20,217	(33,199) 2,812
Loss for the period (94,918)	(30,387)

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Universe International Holdings Limited Interim Report 2015/2016 7

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Continued)

Note	Note	For the six months ended 31st December 2015 2014 HK$’000 HK$’000	For the six months ended 31st December 2015 2014 HK$’000 HK$’000
		2015
		HK$’000

Loss for the period attributable to: Owners of the Company Non-controlling interests			(30,387) –

		(94,645)
		(273)

			(30,387)
		(94,918)

Loss per share attributable to the owners of the Company during the period (expressed in HK cent) – basic 25 – diluted 25			(1.45) (1.45)


		(7.54)

		(7.54)
Loss for the period Other comprehensive (loss)/income: Items that may be reclassified to profit or loss: Change in value of available-for-sale financial assets Currency translation differences	Note		2014 HK$’000 (30,387) 67 –
		2015
		HK$’000

		(94,918)


		(10,274)
		172

Other comprehensive (loss)/income for the period, net of tax			67
		(10,102)

Total comprehensive loss for theperiod			(30,320)
		(105,020)
Total comprehensive loss for the period attributable to: Owners of the Company Non-controlling interests			(30,320) –

		(104,747)
		(273)

			(30,320)
		(105,020)

The notes on pages 12 to 71 form an integral part of these unaudited condensed consolidated interim financial information.

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Universe International Holdings Limited Interim Report 2015/2016

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Attributable to the owners of the Company
	Share capital Share premium Other reserves Retained earnings Total Non- controlling interests Total equity
	HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Balance at 1st July 2015
	2,984 213,630 148,463 206,943 572,020 247 572,267

Comprehensive loss Loss for the Period

	– – – (94,645) (94,645) (273) (94,918)

Other comprehensive loss Change in value of available-for-sale financial assets Currency translation difference

	– – (10,274) – (10,274) – (10,274)
	– – 172 – 172 – 172

Total other comprehensive loss
	– – (10,102) – (10,102) – (10,102)

Total comprehensive loss for the Period
	– – (10,102) (94,645) (104,747) (273) (105,020)

Transactions with owners Issue of new ordinary shares Employees share option scheme – grant of share options Non-controlling interests arising on business combination

	11,831 297,308 – – 309,139 – 309,139

	– – 1,327 – 1,327 – 1,327
	– – – – – (395) (395)

Total contributions by and distribution to owners of the Company, recognised directly in equity
	11,831 297,308 1,327 – 310,466 (395) 310,071

Balance at 31st December 2015
	14,815 510,938 139,688 112,298 777,739 (421) 777,318

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Universe International Holdings Limited Interim Report 2015/2016 9

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)

		Attributable to the owners of	Attributable to the owners of	the Company		Non- controlling interests HK$’000	Total equity HK$’000
	Share capital HK$’000	Share premium HK$’000	Other reserves HK$’000	Retained earnings HK$’000	Total HK$’000
Balance at 1st July 2014	34,578	136,842	83,492	44,987	299,899	–	299,899
Comprehensive loss Loss for the period	–	–	–	(30,387) (30,387) –			(30,387)
Other comprehensive income Change in value of available-for-sale financial assets	–	–	67	– 67 –			67
Total other comprehensive income	–	–	67	– 67 –			67
Total comprehensive loss for the period	–	–	67	(30,387) (30,320) –			(30,320)
Transactions with owners Issue of new ordinary shares 15,152 Employees share option scheme – grant of share options – Capital injection from non-controlling interests –		57,827 – –	– 9,398 –	– 72,979 – – 9,398 – – – 1,000			72,979 9,398 1,000
Total contributions by and distribution to owners of the Company, recognised directly in equity 15,152		57,827	9,398	– 82,377 1,000			83,377
Balance at 31st December 2014 49,730		194,669	92,957	14,600 351,956 1,000			352,956

The notes on pages 12 to 71 form an integral part of these unaudited condensed consolidated interim financial information.

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Universe International Holdings Limited Interim Report 2015/2016

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

	For the six months ended 31st December 2015 2014 HK$’000 HK$’000	For the six months ended 31st December 2015 2014 HK$’000 HK$’000
	2015
	HK$’000

Net cash used in operating activities		(91,991)
	(113,281)

Cash flows from investing activities Acquisition of subsidiaries, net of cash acquired Investments in associates Investment in a joint venture Purchase of property, plant and equipment Decrease in film deposits Purchase of film rights and investment in films in progress 6 Investment in available-for-sale financial assets Proceeds on return of available-for-sale financial assets Interest received		– (5,060) (10) (207) 1,734 (10,742) – – 70

	(81,413)
	(36,750)
	–
	(362)
	671
	(5,691)
	(11,330)
	15,203
	2,858

Net cash used in investing activities		(14,215)
	(116,814)

Cash flows from financing activities Proceeds from issuance of ordinary shares Capital element of finance lease payments Interest paid		72,979 (7) –

	309,139
	(18)
	(543)

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Universe International Holdings Limited Interim Report 2015/2016 11

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)

	Note	For the six months ended 31st December 2015 2014 HK$’000 HK$’000	For the six months ended 31st December 2015 2014 HK$’000 HK$’000
		2015
		HK$’000

Net cash generated from financing activities			72,972
		308,578


Net increase/(decrease) in cash and cash equivalents Currency translation differences Cash and cash equivalents at the beginning of the period			(33,234) – 84,178
		78,483

		275
		102,834

Cash and cash equivalents at the end of the period			50,944
		181,592

Cash and cash equivalents comprises: Bank overdrafts Bank balances (general accounts) and cash	18		– 102,834

		(2,566)
		184,158

Cash and cash equivalents			102,834
		181,592

The notes on pages 12 to 71 form an integral part of these unaudited condensed consolidated interim financial information.

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Universe International Holdings Limited Interim Report 2015/2016

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

1. GENERAL INFORMATION

The Group is principally engaged in film distribution and exhibition, licensing and sub-licensing of film rights, properties and securities investment, money lending, trading, wholesaling and retailing of optical, watches and jewellery products, securities brokerage and margin financing, training and coaching.

The Company is a limited liability company incorporated in Bermuda. The address of its registered office is Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

The Company is listed on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).

This unaudited condensed consolidated interim financial information is presented in thousands of units of Hong Kong dollars (“HK$’000”), unless otherwise stated. This unaudited condensed consolidated interim financial information was approved for issue by the board of directors of the Company (the “Board”) on 26th February 2016.

2. BASIS OF PREPARATION

These unaudited condensed consolidated interim financial information for the Period have been prepared in accordance with the applicable disclosure requirements of Appendix 16 to the Rules of Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”) and with the Hong Kong Accounting Standard (“HKAS”) 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”).

The unaudited condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 30th June 2015, which have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the HKICPA.

The preparation of the unaudited condensed consolidated interim financial information in conformity with HKAS 34 requires management to make judgments, 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.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 30th June 2015.

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Universe International Holdings Limited Interim Report 2015/2016 13

3. ACCOUNTING POLICIES

The accounting policies applied are consistent with those of the annual financial statements for the year ended 30th June 2015 as described in those annual financial statements.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

There were no new standards, amendments to standards and interpretations that are mandatory and relevant to the Group for the financial year beginning on 1st July 2015.

The following new standards, amendments to standards and interpretations to existing standards have been issued but are not yet effective for the financial year beginning 1st July 2015 and have not been early adopted.

Effective for annual period beginning on or after Annual Improvements Project Annual Improvements 1st January 2016 2012-2014 Cycle HKFRS 14 Regulatory Deferral Accounts 1st January 2016 HKFRS 10 and Sale or Contribution of Assets 1st January 2016 HKAS 28 Amendment between an Investor and its Associate or Joint Venture HKFRS 10, HKFRS 12 and Investment Entities: Applying 1st January 2016 HKAS 28 Amendment the Consolidation Exception HKFRS 11 Amendment Accounting for Acquisitions 1st January 2016 of Interests in Joint Operations HKAS 1 Amendment Disclosure Initiative 1st January 2016 HKAS 16 and Clarification of Acceptable Methods 1st January 2016 HKAS 38 Amendment of Depreciation and Amortisation

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Universe International Holdings Limited Interim Report 2015/2016

3. ACCOUNTING POLICIES (Continued)

		Effective for
		annual period
		beginning
		on or after
HKAS 16 and	Agriculture: Bearer Plants	1st January 2016
HKAS 41 Amendment
HKAS 27 Amendment	Equity Method in Separate Financial	1st January 2016
	Statements
HKFRS 15	Revenue from Contracts	1st July 2017
	with Customers
HKFRS 9	Financial Instruments	1st January 2018

4. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

4.1 Financial risk factors

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk.

The unaudited condensed consolidated interim financial information does not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s annual consolidated financial statements as at 30th June 2015.

There have been no changes in the risk management policies of the Group since year end or in any risk management policies since the year end.

Liquidity risk

Compared to year end, there was no material change in the contractual undiscounted cash out flows for financial liabilities.

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Universe International Holdings Limited Interim Report 2015/2016 15

4. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

(Continued)

4.2 Fair value estimation

There were no other changes in valuation technique during the Period.

If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

There were no transfers between levels 1, 2 and 3 during the Period.

The fair value of all equity securities is based on their closing prices as at 31st December 2015 in an active market except for one equity security whose trading of shares was suspended in an active market in May 2015, its fair value is based on the Group’s share of its net asset value as at 30th June 2015 with reference to the latest published interim report of the respective equity security.

The table below analyses financial instruments carried at fair value as at 31st December 2015 by levels of inputs to valuation techniques used to measure fair value. Such techniques are categorised into three levels within a fair value hierarchy as follows:

Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

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Universe International Holdings Limited Interim Report 2015/2016

4. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Continued)

4.2 Fair value estimation (Continued)

The following table presents the Group’s financial assets and liabilities that are measured at fair value at 31st December 2015 and 30th June 2015.

At 31st December 2015

Level 1 Assets HK$’000	Level 2	Level 3	Total
	HK$’000	HK$’000	HK$’000

Financial assets at fair value through profit or loss – Equity securities 194,028 – Call option – Available-for-sale financial assets – Equity securities –

	–	–	194,028
	–	7,489	7,489


	–	74,268	74,268

Total 194,028
	–	81,757	275,785

Level 1 Liabilities HK$’000
	Level 2	Level 3	Total
	HK$’000	HK$’000	HK$’000

Convertible bonds –
	–	57,441	57,441

Total –
	–	57,441	57,441

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Universe International Holdings Limited Interim Report 2015/2016 17

4. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Continued)

4.2 Fair value estimation (Continued)

At 30th June 2015

	Level 1	Level 2	Level 3	Total
Assets	HK$’000	HK$’000	HK$’000	HK$’000
Financial assets at fair value
through profit or loss
– Equity securities	315,109	–	–	315,109
Available-for-sale
financial assets
– Equity securities	–	–	88,415	88,415
Total	315,109	–	88,415	403,524

The following table presents the changes in level 3 instruments for the Period:

31st December 2015

Assets	Financial assets at fair value through profit or loss Available-for- sale financial assets Total HK$’000 HK$’000 HK$’000
At 1st July 2015	– 88,415 88,415
Additions Return of investment Change in fair value	6,806 11,330 18,136 – (15,203) (15,203) 683 (10,274) (9,591)
At 31st December 2015	7,489 74,268 81,757

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Universe International Holdings Limited Interim Report 2015/2016

4. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Continued)

4.2 Fair value estimation (Continued)

						Relationship of
				Significant	Range of	unobservable
	31st December	Fair value		unobservable	unobservable	input to fair
Description	2015	hierarchy	Valuation technique	input	input	value
Financial assets at fair value
through profit or loss
Financial assets at fair value through	7,489	Level 3	Binomial Option Pricing Model	N/A	N/A	N/A
profit or loss
Available-for-sale financial assets
Available-for-sale financial assets	74,268	Level 3	Share of net asset and recent	N/A	N/A	N/A
			transaction price*
			Convertible
Liabilities				bonds		Total
				HK$’000		HK$’000
At 1st July 2015					–		–
Additions				64,319		64,319
Change in fair value				(6,878)		(6,878)
At 31st December 2015				57,441		57,441
						Relationship of
				Significant	Range of	unobservable
	31st December	Fair value		unobservable	unobservable	input to fair
Description	2015	hierarchy	Valuation technique	input	input	value
Convertible bonds
Convertible bonds	57,441	Level 3	Binominal Option Pricing Model	N/A	N/A	N/A

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Universe International Holdings Limited Interim Report 2015/2016 19

4. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

(Continued)

4.2 Fair value estimation (Continued)

The following table presents the changes in level 3 instruments for the year ended 30th June 2015:

30th June 2015

	Available-for-
	sale financial
	assets	Total
Assets	HK$’000	HK$’000
At 1st July 2014	54,965	54,965
Additions	25,103	25,103
Change in fair value	8,347	8,347
At 30th June 2015	88,415	88,415

						Relationship of
				Significant	Range of	unobservable
		Fair value		unobservable	unobservable	input to fair
Description	30th June 2015	hierarchy	Valuation technique	input	input	value
Available-for-sale financial assets
Available-for-sale financial assets	88,415	Level 3	Share of net asset and recent	N/A	N/A	N/A
			transaction price*

The financial assets and liabilities classified as level 3 and presented in the table above is not traded in an active market. These have been valued based on information derived from individual fund report from the fund manager and considering relevant factors if deemed necessary. The Group has determined that the reported net asset value represents fair value of the captioned financial assets and liabilities.

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Universe International Holdings Limited Interim Report 2015/2016

4. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Continued)

4.3 Fair value of financial assets and liabilities measured at amortised cost

The fair value of the following financial assets and liabilities approximate their carrying amount:

Accounts receivable
Loans and other receivables
Cash and cash equivalents
Accounts payable
Other payables and accrued charges
Deposits received
Obligations under finance lease

5. SEGMENT INFORMATION

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (the “CODM”). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chairman of the Group that makes strategic decisions. The CODM has determined the operating segments based on these reports, as below:

Films distribution and exhibition, licensing and sub-licensing of film rights
Trading, wholesaling and retailing of optical, watches and jewellery products
Properties and securities investments
Money lending
Securities brokerage and margin financing
Training and coaching

The CODM assesses the performance of the operating segments based on a measure of segment results. This measurement basis excludes the effects of non-recurring expenditure from the operating segments, such as gain on step acquisition of a subsidiary, increase in fair value of financial assets at fair value through profit or loss and decrease in fair value of convertible bonds. Finance income and income tax credit are not included in the result for each operating segment that is reviewed by the CODM. Other information provided, except as noted below, to the CODM is measured in a manner consistent with that in the unaudited condensed consolidated interim financial information.

Total assets, excluding investment properties, financial assets at fair value through profit or loss, loans receivable, inventories, accounts receivable, goodwill, other intangible assets and other unallocated assets (including property, plant and equipment, deposits paid, prepayment and other receivables) are managed on a central basis. These are part of the reconciliation to total balance sheet assets.

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Universe International Holdings Limited Interim Report 2015/2016 21

5. SEGMENT INFORMATION (Continued)

The revenue from external parties reported to the CODM is measured in a manner consistent with that in the unaudited condensed consolidated statement of comprehensive income.

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Unaudited
For the six month ended 31st December 2015
Video Sales of
distribution, goods – Securities Securities
film exhibition, optical, investments brokerage
licensing and watches and and leasing and Training
sub-licensing jewellery of investment Money margin and
of film rights products properties lending financing coaching Others Elimination Group
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Revenue and income
External sales 28,566 36,544 510 3,833 694 840 3,976 – 74,963
Fair value changes in
investment securities – – (133,011) – – – – – (133,011)
Inter-segment sales – – – – – – – – –
28,566 36,544 (132,501) 3,833 694 840 3,976 – (58,048)
Results
Segment results 5,019 8,465 (132,470) 1,331 535 (123) (8,782) – (126,025)
Other operating income (425)
Gain on step acquisition
of a subsidiary 1,764
Increase in fair value of
financial assets at fair value
through profit or loss 683
Decrease in fair value of
convertible bonds 6,878
Finance income 1,818
Finance costs (469)
Share of loss of associates 753
Share of loss of a joint venture (112)
Loss before income tax (115,135)
Income tax credit 20,217
Loss attributable to the equity holders
of the Company (94,918)
Other information
Capital expenditures 6,032 – – 11 5 – 5 6,053
Unallocated capital expenditures –
Total capital expenditures 6,053
Depreciation 433 593 1 242 108 68 16 1,461
Unallocated depreciation 198
Total depreciation 1,659
Amortisation of film rights 5,838 – – – – – – 5,838
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Universe International Holdings Limited Interim Report 2015/2016

5. SEGMENT INFORMATION (Continued)

	Unaudited For the six month ended 31st December 2014 Video distribution, film exhibition, licensing and sub-licensing of film rights Sales of goods – optical, watches and jewellery products Securities investments and leasing of investment properties Money lending Securities brokerage and margin financing Training and coaching Others Elimination Group HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000	Unaudited For the six month ended 31st December 2014 Video distribution, film exhibition, licensing and sub-licensing of film rights Sales of goods – optical, watches and jewellery products Securities investments and leasing of investment properties Money lending Securities brokerage and margin financing Training and coaching Others Elimination Group HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Revenue and income External sales Fair value changes in investment securities Inter-segment sales Results Segment results Gain on disposal of a subsidiary Other operating income Finance income Share of loss of an associate Share of loss of a joint venture Loss before income tax Income tax credit Loss attributable to the equity holders of the Company Other information Capital expenditures Unallocated capital expenditures Total capital expenditures Depreciation Unallocated depreciation Total depreciation Amortisation of film rights	25,412 – 486 2,921 – – 1,334 – 30,153 – – (18,663) – – – – – (18,663) – – – – – – 7 (7) –
	25,412 – (18,177) 2,921 – – 1,341 (7) 11,490
	(1,186) – (19,801) 1,712 – – (14,344) – 609 – – 45 – – 32 – 83 – 1 12 – – 17 – 12,747 – – – – – – –	(33,619) 6 535 180 (191) (110)
		(33,199) 2,812
		(30,387)
		686 10,263
		10,949
		113 193
		306
		12,747

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Universe International Holdings Limited Interim Report 2015/2016 23

5. SEGMENT INFORMATION (Continued)

Unaudited As at 31st December 2015 Video distribution, film exhibition, licensing and sub-licensing of film rights Sales of goods – optical, watches and jewellery products Securities investments and leasing of investment properties Money lending Securities brokerage and margin financing Training and coaching Others Elimination HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

	Group
	HK$’000

Assets Segment assets 32,621 81,174 212,791 104,855 290,671 26,402 7,322 – Deferred income tax assets Bank balances (general accounts) and cash Other unallocated assets Total assets

	755,836
	377
	184,158
	239,148


	1,179,519

Audited As at 30th June 2015 Video distribution, film exhibition, licensing and sub-licensing of film rights Sales of goods – optical, watches and jewellery products Securities investments and leasing of investment properties Money lending Securities brokerage and margin financing Training and coaching Others Elimination HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000	Group HK$’000
Assets Segment assets 41,839 1,314 340,677 37,000 – – 13,913 – Deferred income tax assets Bank balances (general accounts) and cash Other unallocated assets Total assets	434,743 380 102,834 201,671
	739,628

Audited
As at 30th June 2015
Video
distribution,
film
exhibition,
licensing and
sub-licensing
of film rights
Sales of
goods –
optical,
watches and
jewellery
products
Securities
investments
and leasing
of investment
properties
Money
lending
Securities
brokerage
and margin
financing
Training
and
coaching
Others
Elimination
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000

Group
HK$’000

Assets
Segment assets
41,839
1,314
340,677
37,000
–
–
13,913
–
Deferred income tax assets
Bank balances (general accounts)
and cash
Other unallocated assets
Total assets

434,743
380
102,834
201,671

739,628

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Universe International Holdings Limited Interim Report 2015/2016

6. CAPITAL EXPENDITURES

CAPITAL EXPENDITURES
	Unaudited Property, plant and equipment Investment properties Goodwill Other intangible assets Film rights and films in progress HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Six month ended 31st December 2015
Opening net book amount at 1st July 2015	5,229 25,560 1,314 1,858 17,906
Additions Acquisition of Winston (Note 26(a))	362 – – – 5,691 1,227 – 45,371 1,108 –
Acquisition of Win Fung (Note 26(b))	1,554 – 19,323 20,141 –
Acquisition of AP Group (Note 26(c))	3,063 – 20,811 – –
Disposals	(88) – – – –
Depreciation and amortisation	(1,659) – – – (5,838)
Currency translation differences	(103) – – – –
Closing net book amount at 31st December 2015	9,585 25,560 86,819 23,107 17,759

			Unaudited
	Property,			Other	Film rights
	plant and	Investment		intangible	and films
	equipment	properties	Goodwill	assets	in progress
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
Six months ended 31st December 2014
Opening net book amount at 1st July 2014	1,581	25,060	–	1,858	32,021
Additions	207	–	–	–	10,742
Depreciation and amortisation	(306)	–	–	–	(12,747)
Closing net book amount at 31st December 2014	1,482	25,060	–	1,858	30,016

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Universe International Holdings Limited Interim Report 2015/2016 25

6. CAPITAL EXPENDITURES (Continued)

All investment properties were revalued at 30th June 2015 by an independent, professionally qualified valuer engaged by the Group, Roma Appraisals Limited, who is a member of the Hong Kong Institute of Surveyors. Valuations were based on current prices in an active market. The directors estimated the fair value as at 31st December 2015 approximates the fair value as at 30th June 2015.

Fair value hierarchy Fair value measurement at 31st December 2015 using Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (Level 1) (Level 2) (Level 3) HK$’000 HK$’000 HK$’000	Fair value hierarchy Fair value measurement at 31st December 2015 using Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (Level 1) (Level 2) (Level 3) HK$’000 HK$’000 HK$’000	Fair value hierarchy Fair value measurement at 31st December 2015 using Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (Level 1) (Level 2) (Level 3) HK$’000 HK$’000 HK$’000
Recurring fair value measurements Investment properties –	–	25,560
Fair value measurement
Fair value hierarchy at	30th June 2015 using
Quoted prices
in active	Significant	Significant
markets for	other observable	unobservable
identical assets	inputs	inputs
(Level 1)	(Level 2)	(Level 3)
HK$’000	HK$’000	HK$’000
Recurring fair value measurements
Investment properties –	–	25,560

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Universe International Holdings Limited Interim Report 2015/2016

6. CAPITAL EXPENDITURES (Continued)

The Group’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer.

There were no transfers among Level 1, Level 2 and 3 during the Period.

Investment properties which have fair value measurement using significant unobservable inputs (Level 3).

		Unaudited
		For the six months ended
		31st December
		2015	2014
		HK$’000	HK$’000
At the beginning	and the end of the period	25,560	25,060

Level 3 fair values of investment properties have been derived using the sales comparison approach assuming sale of the property interests in their existing states with the benefit of vacant possession and by making reference to comparable sales transactions as available in the relevant market.

There was no change in valuation techniques during the Period.

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Universe International Holdings Limited Interim Report 2015/2016 27

7. INVESTMENTS IN ASSOCIATES

INVESTMENTS IN ASSOCIATES
Unaudited	Audited
As at	As at
31st December	30th June
2015	2015
HK$’000	HK$’000
Investment in Winston Asia Limited (Note a) –	5,022
Investment in Glory International Entertainment Limited (Note b) 38,179	–
38,179	5,022

At 31st December 2015, particulars of the associate is as follows:

			Percentage of interest
			in ownership/voting
	Place of	Nominal value of	power/profit sharing held
Name	incorporation	registered capital	by the Company	Principal activity
			Direct Indirect
Glory International	British Virgin	US$50,000	– 49%	Note i
Entertainment Limited	Islands (“BVI”)

Note i: Glory International Entertainment Limited is a company incorporated in the British Virgin Islands (“BVI”) with limited liability and is the holding company of a group of companies which are principally engaged in advertising promotion, provision of public relations services, holding and sponsoring stage performance, concerts, film production and other cultural event in Hong Kong, Taiwan and the People’s Republic of China.

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Universe International Holdings Limited Interim Report 2015/2016

7. INVESTMENTS IN ASSOCIATES (Continued)

Notes:

(a) Investment in Winston Asia Limited (“Winston”)

On 17th November 2014, Fragrant River Entertainment Culture (Holdings) Limited (“FREC”), a direct wholly-owned subsidiary of the Company, acquired 22.13% equity interest in Winston at a consideration of HK$5,060,000. The equity interest held by the Group decreased to 20.01% following a group restructuring by Winston on 29th May 2015. On 31st July 2015, FREC further acquired 79.99% equity interest in Winston in which Winston became an indirect wholly-owned subsidiary of the Company as further detailed in note 26(a) to the unaudited condensed consolidated interim financial information.

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||||
|---|---|---|
|Unaudited|Audited|
|As at|As at|
|31st December|30th June|
|2015|2015|
|HK$’000|HK$’000|
|At the beginning of the period/year|5,022|–|
|Acquisition|–|5,060|
|Share of post-acquisition profit/(losses)|203|(38)|
|Disposal upon step acquisition of subsidiary|(5,225)|–|
|At the end of the period/year|–|5,022|

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Universe International Holdings Limited Interim Report 2015/2016 29

7. INVESTMENTS IN ASSOCIATES (Continued)

(b) Investment in Glory International Entertainment Limited (“Glory Entertainment”)

On 28th August 2015, Fragrant River Entertainment Investment Limited (“FREI”), an indirect wholly-owned subsidiary of the Company, entered into a sale and purchase agreement with an independent third party vendor, pursuant to which the Group acquired 49% equity interest in Glory Entertainment, a company incorporated in BVI with limited liability at an initial cash consideration of HK$36,750,000. The final cash consideration is subject to adjustment and a cap of HK$55,125,000 in accordance with the formula stipulated in the sale and purchase agreement.

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|||
|---|---|
|Unaudited|
|As at|
|31st December|
|2015|
|HK$’000|
|At the beginning of the Period|–|
|Acquisition|37,629|
|Share of post-acquisition profit|550|
|At the end of the Period|38,179|

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Universe International Holdings Limited Interim Report 2015/2016

7. INVESTMENTS IN ASSOCIATES (Continued)

(b) Investment in Glory International Entertainment Limited (“Glory Entertainment”) (Continued)

Summarised financial information for the associate

Set out below are the summarised financial information of Glory Entertainment which is accounted for using the equity method. The information below reflects the amounts presented in the financial statements of the associate. There is no significant difference in accounting policies between the Group and Glory Entertainment.

Summarised balance sheet

	Unaudited As at 31st December 2015 HK$’000
Non-current assets Current assets	8,604 6,863
Non-current liabilities	–
Current liabilities	(12,479)
Net assets	2,988

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Universe International Holdings Limited Interim Report 2015/2016 31

7. INVESTMENTS IN ASSOCIATES (Continued)

(b) Investment in Glory International Entertainment Limited (“Glory Entertainment”) (Continued)

Summarised statement of comprehensive income

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|||
|---|---|
|Unaudited|
|For the|
|six months|
|ended|
|31st December|
|2015|
|HK$’000|
|Revenue|8,939|
|Profit for the period from the acquisition date to|
|31st December 2015|1,123|
|Other comprehensive income|–|
|Total comprehensive income for the Period|1,123|

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Universe International Holdings Limited Interim Report 2015/2016

7. INVESTMENTS IN ASSOCIATES (Continued)

(b) Investment in Glory International Entertainment Limited (“Glory Entertainment”) (Continued)

Reconciliation of summarised financial information

Reconciliation of the summarised financial information of the associate presented to the carrying value of the Group’s interest in associate.

	Unaudited As at 31st December 2015 HK$’000
Net assets of Glory Entertainment as at the acquisition date	860
Proportion of the Group’s ownership interest in the associate	49%
Share of net assets	421
Goodwill on acquisition	36,611
Intangible assets	597
Carrying amount at 28th August 2015 (date of acquisition)	37,629
Share of profit for the period from the acquisition date to
31st December 2015	550
Carrying value as at 31st December 2015	38,179

There are no significant contingent liabilities and material capital commitment relating to the Group’s interest in the associate as at 31st December 2015.

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Universe International Holdings Limited Interim Report 2015/2016 33

8. INVESTMENTS IN JOINT VENTURES

On 15th April 2013, Digital Programme Production Limited (“DPP”), an indirect wholly-owned subsidiary of the Company, entered into an agreement with three independent parties to form a joint venture, Sun Billion Property Limited (“SBPL”).

On 31st July 2014, Ample China Development Limited (“ACD”), an indirectly wholly-owned subsidiary of the Company, formed a joint venture, Topword Victory Limited (“TVL”) with another independent party.

Unaudited	Audited
As at	As at
31st December	30th June
2015	2015
HK$’000	HK$’000
Investment in Sun Billion Property Limited 594 Investment in other joint venture (Note a) –	706 –
594	706

Note (a):

The investment in TVL of HK$1 was fully impaired and the Group did not recognise the share of loss of TVL of approximately HK$1,200 for the Period.

Set out below is the joint venture of the Group as at 31st December 2015, which in the opinion of directors, is material to the Group.

			Percentage of interest
			in ownership/voting
	Place of	Nominal value of	power/profit sharing held
Name	incorporation	registered capital	by the Company	Principal activity
			Direct Indirect
Sun Billion Property Limited	Macau	Macau Pataca (“MOP”)	– 40%	Investment of land
		MOP150,000		and property in
				Macau

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Universe International Holdings Limited Interim Report 2015/2016

8. INVESTMENTS IN JOINT VENTURES (Continued)

Summarised financial information of material joint venture

Summarised financial information in respect of each of the Group’s material joint venture is set out below. The summarised financial information below represents amounts shown in the joint venture’s financial statements prepared in accordance with HKFRSs.

All of these joint ventures are accounted for using the equity method in the unaudited condensed consolidated financial information.

Summarised balance sheet

Summarised balance sheet
	Unaudited Audited As at 31st December As at 30th June 2015 2015 HK$’000 HK$’000
Non-current assets Current assets Non-current liabilities Current liabilities	26,146 22,457 2,436 912 (20,630) (20,350) (6,463) (1,250)
Net assets	1,489 1,769

Summarised statement of comprehensive income

Unaudited
For the six months ended
31st December
2015	2014
HK$’000	HK$’000
Revenue –	–
Loss for the period (112)	(110)
Total comprehensive loss for the period (112)	(110)

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Universe International Holdings Limited Interim Report 2015/2016 35

8. INVESTMENTS IN JOINT VENTURES (Continued)

Reconciliation of summarised financial information

Reconciliation of the summarised financial information of the material joint venture presented to the carrying value of the Group’s interest in joint venture.

	Unaudited As at 31st December 2015 Audited As at 30th June 2015 HK$’000 HK$’000
Opening net assets as at 1st July Loss for the period/year	1,769 2,316 (280) (549)
Closing net assets as at 31st December/30th June Interest in the joint venture Net assets attributable to the Group as at 31st December/30th June Investment in other joint venture	1,489 1,767 40% 40% 594 706 – –
Carrying value as at 31st December/30th June	594 706

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Universe International Holdings Limited Interim Report 2015/2016

8. INVESTMENTS IN JOINT VENTURES (Continued)

There were no contingent liabilities relating to the Group’s interest in the joint ventures and no significant contingent liabilities of the joint ventures as at 31st December 2015.

In addition, DPP agreed to provide SBPL an unsecured interest-free loan of HK$8,800,000 which is denominated in HK dollar and repayable in 5 years. The loan of HK$8,252,000 (As at 30th June 2015: HK$8,140,000) is recognised as “Loan receivable from a joint venture” in the unaudited condensed consolidated balance sheet as at 31st December 2015 and is measured at amortised cost using the effective interest method.

	Unaudited Audited As at As at 31st December 30th June 2015 2015 HK$’000 HK$’000
Loan receivable from a joint venture At the beginning of the Period/year Accretion income for the Period/year	8,140 7,922 112 218
At the end of the Period/year	8,252 8,140

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Universe International Holdings Limited Interim Report 2015/2016 37

9. AVAILABLE-FOR-SALE FINANCIAL ASSETS

AVAILABLE-FOR-SALE FINANCIAL ASSETS
Unaudited	Audited
As at	As at
31st December	30th June
2015	2015
HK$’000	HK$’000
At the beginning of the Period/year 88,415	54,965
Additions 11,330	25,103
Return of investment (15,203) Change in value recognised in other comprehensive income (10,274)	– 8,347
At the end of the Period/year 74,268	88,415
Unlisted investment Equity securities in Hong Kong, at fair value 74,268	88,415

Available-for-sale financial assets are denominated in Hong Kong Dollars.

In view of the negative trend of the financial health and business outlook for the investees, including factors such as industry and sector performance as well as operational and financing cash flow, the management determined the carrying value of the available-for-sale financial assets was depreciated.

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10. ACCOUNTS RECEIVABLE

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||||
|---|---|---|
|Unaudited|Audited|
|As at|As at|
|31st December|30th June|
|2015|2015|
|HK$’000|HK$’000|
|Accounts receivable arising from securities|
|brokerage and margin financing business:|
|Accounts receivable – cash clients|70,063|–|
|Accounts receivable – margin clients|16,302|–|
|Accounts receivable – clearing house|8,018|–|
|Accounts receivable – other businesses|
|Accounts receivable – others|14,300|14,325|
|Less: Provision for impairment of|
|accounts receivable – others|(142)|(142)|
|Accounts receivable – net|108,541|14,183|

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For securities brokerage and margin financing business, the settlement terms of accounts receivable from cash clients, margin clients and clearing house are two days after trade date.

The carrying amount of accounts receivable approximates to their fair values.

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Universe International Holdings Limited Interim Report 2015/2016 39

10. ACCOUNTS RECEIVABLE (Continued)

As at 31st December 2015, the ageing analysis of the accounts receivable – securities brokerage and margin financing business, arising from cash clients, margin clients and clearing house, was presented as follows based on trade date which approximates revenue recognition date:

Unaudited	Audited
As at	As at
31st December	30th June
2015	2015
HK$’000	HK$’000
Current 84,826 Less than 2 months past due 6,574 2 to 3 months past due 874 More than 3 months but less than 12 months past due 2,109	– – – –
94,383	–

As at 31st December 2015, the ageing analysis of the accounts receivable – other businesses based on invoice date was as follows:

Unaudited	Audited
As at	As at
31st December	30th June
2015	2015
HK$’000	HK$’000
1 to 90 days 10,679	13,800
91 days to 180 days 2,545 Over 180 days 934	211 172
14,158	14,183

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Universe International Holdings Limited Interim Report 2015/2016

10. ACCOUNTS RECEIVABLE (Continued)

Sales of videogram products are with credit terms vary from 7 days to 60 days. Sales from film exhibition, licensing and sub-licensing of film rights are on open account terms. Sales to retail customers are made in cash or via major credit cards. Training and coaching fees are received in advance. The Group has policies in place to ensure that sales of products on credit terms are made to customers with an appropriate credit history and the Group performs periodic credit evaluations of its customers.

There is no concentration of credit risk with respect to accounts receivable, as the Group has a large number of customers, and are internationally dispersed.

No provision was recognised by the Group for the impairment of its accounts receivable during the Period (2014: Nil). During the Period, no provision (2014: Nil) was written off from the allowance account.

As at 31st December 2015, except for the margin clients of securities brokerage and margin financing business, the Group does not hold any collateral as security (As at 30th June 2015: Nil).

11. LOANS RECEIVABLE

The credit quality analysis of the loans receivable is as follows:

Unaudited As at 31st December 2015 HK$’000	Audited As at 30th June 2015 HK$’000
Loans to customers (Note i) 98,050 Loan to a third party (Note ii) 49,896	37,000 –
147,946	37,000
As at 31st December 2015 and 30th June 2015, the maturity profile of the loans receivable, based on the maturity date is as follows: – Non-current 23,000 – Current 124,946	– 37,000
147,946	37,000

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Universe International Holdings Limited Interim Report 2015/2016 41

11. LOANS RECEIVABLE (Continued)

LOANS RECEIVABLE(Continued)
Unaudited	Audited
As at	As at
31st December	30th June
2015	2015
HK$’000	HK$’000
The credit quality analysis of the loans receivables is as follows: Neither past due nor impaired – Unsecured loans 147,946	37,000
– Secured loans –	–
147,946	37,000

Notes:

(i) The Group’s loans receivable from customers, which arise from the money lending business in Hong Kong, are denominated in Hong Kong dollars.

The loans receivable are neither impaired nor overdue as at 31st December 2015 (At 30th June 2015: same).

The maximum exposure to credit risk at each balance sheet dates is the carrying value of the loans receivable.

All the loans receivable are entered with contractual maturity within 1 to 2 years. The Group seeks to maintain tight control over its loans receivable in order to minimise credit risk by reviewing the borrowers’ or guarantors’ financial positions.

Loans receivable are interest-bearing at rates ranging from 8% to 12% per annum (At 30th June 2015: 8% to 15% per annum).

Interest income of approximately HK$3,833,000 (2014: approximately HK$2,921,000) has been recognised in ‘revenue and income’ in the unaudited condensed consolidated statement of comprehensive income during the Period.

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Universe International Holdings Limited Interim Report 2015/2016

11. LOANS RECEIVABLE (Continued)

(ii) On 5th October 2015, Fragrant River Entertainment Limited (“FREI”), an indirect wholly owned subsidiary of the Company, entered into a loan agreement with Cassia Investments Limited Partnership I (“Cassia Investments”), an independent third party, pursuant to which FREI agreed to grant to Cassia Investments an unsecured loan in the principal amount of HK$55,000,000, bearing interest at a rate of 9.75% per annum for a period of one year.

Pursuant to the loan agreement, Cassia Investments agreed to grant an option to FREI to confer it the right (“Call Option”) to purchase the existing issued shares of Cassia Optical Holdings Limited (“COH”) currently held by Cassia Investments (“Option Shares”) at an exercise price of HK$177,993.50 each, in which the aggregate shareholding percentage of the Option Shares shall not exceed 15.45% of the issued share capital of COH. The Call Option can be exercised by FREI more than once during the period commencing from 6th October 2015 until the one-month-period prior to 5th October 2016. The aggregate amount in relation to the exercise of the Call Option shall be settled by offsetting an equivalent amount of outstanding loan.

The fair value at initial recognition of the receivable component and the Call Option, which is a derivative component, amounted to HK$48,194,000 and HK$6,806,000 respectively, are determined based on the valuation provided by Grant Sherman Appraisal Limited, an independent professionally qualified valuers. Subsequent to initial recognition, the debt component was carried at amortised cost using the effective interest method and was recognised as the loan receivable of the balance sheet. The derivative component – Call Option was carried at fair value and was recognised as the financial assets at fair value through profit or loss in the balance sheet.

The Group’s loan receivable from third party and the Call Option were recognised as follows:

	Debt	Derivative
	component	component
	– loan receivable	– Call Option
		(Note 12)
	HK$’000	HK$’000
At 5th October 2015 (Date of the loan
agreement and date of granting of
the Call Option)	48,194	6,806
Accretion income for the Period	1,702	–
Change in fair value recognised in profit or loss	–	683
At 31st December 2015	49,896	7,489

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Universe International Holdings Limited Interim Report 2015/2016 43

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Unaudited	Audited
As at	As at
31st December	30th June
2015	2015
HK$’000	HK$’000
Listed securities – held-for-trading – Equity securities – HK 194,028	315,109
– Call Option (Note 11) 7,489	–
Market value of listed securities 201,517	315,109

Financial assets at fair value through profit and loss are presented within ‘operating activities’ as part of changes in working capital in the unaudited condensed consolidated statement of cash flows.

13. BANK BALANCES – TRUST AND SEGREGATED ACCOUNTS

The Group receives and holds monies deposited by clients and other institutions in the course of the conduct of the regulated activities of its securities brokerage and margin financing business. These clients’ monies are maintained in one or more segregated bank accounts. The Group has recognised the corresponding accounts payable to respective clients and other institutions (Note 22). However, the Group does not have a currently enforceable right to offset those payables with the deposits placed.

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Universe International Holdings Limited Interim Report 2015/2016

14. INTERESTS IN JOINT OPERATIONS

The Group has entered into certain joint operation arrangements to produce and distribute four television series (30th June 2015: four) and ten films (30th June 2015: ten) respectively. The Group has participating interests ranging from 5% to 82% in these joint operations. As at 31st December 2015, the aggregate amounts of assets, liabilities and profit after income tax recognised in the unaudited condensed consolidated interim financial information relating to the Group’s interests in these joint operation arrangements were as follows:

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||||
|---|---|---|
|Unaudited|Audited|
|As at|As at|
|31st December|30th June|
|2015|2015|
|HK$’000|HK$’000|
|Assets|
|Film right and film in progress|
|– Television series rights and television series in progress|814|814|
|– Film rights and films in progress|13,745|14,440|
|Film related deposit|–|2,500|
|Accounts receivable and other receivables|1,337|3,687|
|15,896|21,441|
|Liabilities|
|Accounts payable and other payables|584|594|
|Deposits received|10,956|10,343|
|11,540|10,937|

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Universe International Holdings Limited Interim Report 2015/2016 45

14. INTERESTS IN JOINT OPERATIONS (Continued)

	Unaudited	Unaudited
	For the six months ended
	31st December
	2015	2014
	HK$’000	HK$’000
Revenue	16,862	15,279
Expenses	(4,257)	(11,687)
Profit after income tax	12,605	3,592

15. SHARE CAPITAL

	Number of
	ordinary shares	Ordinary
	issued	shares
		HK$’000
At 1st July 2015	298,380,307	2,984
Issue of new shares in July 2015 (note a)	586,350,000	5,863
Issue of new shares in August 2015 (note b)	596,760,614	5,968
At 31st December 2015	1,481,490,921	14,815

The total authorised number of ordinary shares is 10,000 million shares (As at 30th June 2015: 10,000 million shares) with a par value of HK$0.01 per share (As at 30th June 2015: HK$0.01 per share). All issued shares are fully paid.

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Universe International Holdings Limited Interim Report 2015/2016

15. SHARE CAPITAL (Continued)

Note a

As announced on 26th May 2015, the Company entered into a placing agreement (the “Placing Agreement”) pursuant to which the Company appointed a placing agent to procure, on a best effort basis, not less than six placees to subscribe for up to 586,350,000 new ordinary shares of the Company (“Placing Shares”) at a price of HK$0.3411 per Placing Share. The Second Placing Agreement was completed on 28th July 2015 and an aggregate of 586,350,000 Placing Shares have been successfully placed.

Note b

As announced on 26th May 2015, the Company proposed to raise not less than approximately HK$120.55 million and not more than approximately HK$134.36 million before expenses by issuing not less than 596,760,614 and not more than 665,160,614 new shares of HK$0.01 each in the share capital of the Company (“Rights Shares”) at the subscription price of HK$0.202 (“Subscription Price”) per Rights Share on the basis of two (2) Rights Shares for every one (1) Share in issue held on 23rd July 2015 (“Right Issue”). The Rights Issue was completed on 13th August 2015 and an aggregated of 596,760,614 Rights Shares have been issued.

16. SHARE OPTIONS

Pursuant to an ordinary resolution passed in the annual general meeting held on 2nd December 2013 (the “2013 AGM”), the Company conditionally approved and adopted a share option scheme (the “Share Option Scheme”) in compliance with the Listing Rules. The total number of share options available for issue under the Share Option Scheme as at the date of the 2013 AGM was 171,604,979, which represented 10% of the total number of the issued shares of the Company as at the date of the 2013 AGM. There was no share option outstanding prior to 30th June 2014 under the Share Option Scheme.

On 21st July 2014, the Company granted 171,604,000 share options to certain directors and employees of the Group under the Share Option Scheme at the subscription price of HK$0.1738 per share option which were vested immediately and exercisable for a two-year period between 21st July 2014 and 20th July 2016 (both dates inclusive).

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Universe International Holdings Limited Interim Report 2015/2016 47

16. SHARE OPTIONS (Continued)

As a result of the capital reorganisation which took effect on 17th March 2015, adjustments have been made and the said outstanding 171,604,000 share options became 17,160,400 share options conferring holders thereof to subscribe for up to a total of 17,160,400 Shares, out of which 2,072,000 share options were lapsed in April 2015 and 15,088,400 share options remained unexercised and outstanding as at 30th June 2015. The subscription price per share option was adjusted to HK$1.738 per share option after taking into account of the effect of capital reorganisation which became effective on 17th March 2015. As a result of Rights Issue, adjustments have been made and the said 15,088,400 share options became 24,348,782 share options conferring holder thereof to subscribe for up to a total of 24,348,782 shares. The subscription price per share option was further adjusted to HK$1.077 per share option after taking into account of the effect of Rights Issue.

On 30th September 2015, the Company granted 20,720,880 share options to certain employees of the Group under the Share Option Scheme at the subscription price of HK$0.169 per share option which were vested immediately and exercisable for a two-year period between 30th September 2015 to 29th September 2017 (both dates inclusive).

None of the share options have been exercised during the Period ended 31st December 2015. The outstanding options of 45,069,662 granted under the Share Option Scheme as at 31st December 2015 were exercisable.

The fair value of the share options granted under the Share Option Scheme at the measurement dated 30th September 2015 of approximately HK$1,327,000 was determined under the Binomial Option Pricing Model and based on the following assumptions:

Risk-free	interest rate	0.953%
Expected	life of the share options	2 years
Expected	volatility	78.99%

The fair value of the share options granted under the Share Option Scheme at the measurement dated 21st July 2014 of approximately HK$9,398,000 was determined under the Black-Scholes Option Pricing Model and based on the following assumptions:

Risk-free	interest rate	0.386%
Expected	life of the share options	2 years
Expected	volatility	84.867%

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Universe International Holdings Limited Interim Report 2015/2016

16. SHARE OPTIONS (Continued)

The Black-Scholes Option Pricing Model and Binomial Option Pricing Model require input of highly subjective assumptions, including the risk-free interest rate and the expected stock price volatility. Because changes in the subjective input assumptions can materially affect the fair value estimate, both the Black-Scholes Option Pricing Model and Binomial Option Pricing Model do not necessarily provide a reliable measure of the fair value of the share options.

17. OTHER RESERVES

	Reserves arising on consolidation HK$’000	Reorganisation reserve HK$’000	Available- for-sale investment reserve HK$’000	Translation reserve HK$’000	Share-based compensation reserve HK$’000	Unlisted warrants reserve HK$’000	Total HK$’000
At 1st July 2015	821	47,244	8,312	(18)	10,143	81,961	148,463
Change in fair value of
available-for-sale
financial assets Employee share	–	–	(10,274)	–	–	–	(10,274)
option scheme
– grant of share options	–	–	–	–	1,327	–	1,327
Currency translation
difference	–	–	–	172	–	–	172
At 31st December 2015	821	47,244	(1,962)	154	11,470	81,961	139,688
			Available-
	Reserve		for-sale		Share-based	Unlisted
	arising on	Reorganisation	investment	Translation	compensation	warrants
	consolidation	reserve	reserve	reserve	reserve	reserve	Total
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
At 1st July 2014	821	–	(35)	–	745	81,961	83,492
Change in fair value of
available-for-sale
financial assets	–	–	67	–	–	–	67
Employee share option scheme:
– grant of share options	–	–	–	–	9,398	–	9,398
At 31st December 2014	821	–	32	–	10,143	81,961	92,957

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Universe International Holdings Limited Interim Report 2015/2016 49

18. BORROWINGS

	Unaudited	Audited
	As at	As at
	31st December	30th June
	2015	2015
	HK$’000	HK$’000
6.5%	coupon note due 2016 9,200	9,200
Bank Bank	loans 12,000 overdrafts 2,566	– –
Total	borrowings 23,766	9,200

The Group’s borrowings are repayment as follows:

	Unaudited Audited As at 31st December As at 30th June 2015 2015 HK$’000 HK$’000
On demand Within 1 year Between 1 to 2 years Between 2 to 5 years Later than 5 years	12,566 – 11,200 – – 9,200 – – – –
Total	23,766 9,200

The bank loans bear fixed interest rate at 2.75% to 10% per annum and is not secured.

The carrying amounts of the Group’s borrowings are denominated in Hong Kong dollars. The fair values of the borrowings approximate their carrying amounts as at 31st December 2015.

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19. OBLIGATIONS UNDER FINANCE LEASES

As at 31st December 2015, the Group’s obligations under finance lease are repayable as follows:

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||||
|---|---|---|
|Unaudited|Audited|
|As at|As at|
|31st December|30th June|
|2015|2015|
|HK$’000|HK$’000|
|Within one year|35|35|
|One to two years|35|35|
|Two to five years|44|62|
|Future finance charges on obligations|
|under finance lease|–|–|
|Present value of obligations under finance lease|114|132|
|The present value of obligations under|
|finance lease was as follows:|
|Within one year|35|35|
|One to two years|35|35|
|Two to five years|44|62|
|114|132|

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Universe International Holdings Limited Interim Report 2015/2016 51

20. EMPLOYEE BENEFITS EXPENSES INCLUDING DIRECTORS’ EMOLUMENTS

On 1st December 2000, a Mandatory Provident Fund scheme (the “MPF scheme”) was set up for employees, including the executive directors. Under the MPF scheme, the Group’s contributions are at 5% of employees’ relevant income as defined in the Hong Kong Mandatory Provident Fund Schemes Ordinance up to a maximum of HK$1,500 per employee per month. The employees also contribute a corresponding amount to the MPF scheme if their relevant income is more than HK$7,100. The MPF contributions are fully and immediately vested in the employees as accrued benefits once they are paid.

Unaudited

Unaudited	Unaudited
For the six months ended
31st December
2015	2014
HK$’000	HK$’000
Wages and salaries 14,251	6,414
Provision for unutilised annual leave 63	39
Write-back of provision for long service payment (72)	(25)
Staff welfare – operating lease payments for directors quarters 509 Staff welfare – others 423	– 49
Pension costs – defined contribution plan 980 Share based payment 1,327	158 –
Total including directors’ emoluments 17,481	6,635

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Universe International Holdings Limited Interim Report 2015/2016

21. CONVERTIBLE BONDS

In accordance with the terms of acquisition of Winston as set out in note 26(a), on 31st July 2015, the Company issued a zero coupon convertible bond due on 31st July 2017 with a principal amount denominated in Hong Kong Dollars (“HK$”) of HK$64,000,000 to three independent third party vendors as deferred consideration. The bonds are convertible into ordinary shares of the Company at an initial conversion price of HK$0.485 per conversion share (subject to adjustments in accordance with the terms of the convertible bonds) at any time during the period commencing from the date of issue of the convertible bonds. The conversion price was subsequently adjusted to HK$0.3880 per conversion share as a result of the Right Issue.

Convertible bonds of the Company consisted of the liability component and embedded conversion option. The directors have designated its convertible bonds as financial liabilities at fair value through profit or loss and initially recognised them at fair value. In subsequent periods, the convertible bonds are measured at fair value with changes in fair value recognised in profit or loss.

The movement of the convertible bonds for the six months ended 31st December 2015 is set out as below:

	HK$'000
At initial recognition	64,319
Change in fair value recognised in profit or loss	(6,878)
At 31st December 2015	57,441

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Universe International Holdings Limited Interim Report 2015/2016 53

22. ACCOUNTS PAYABLE

ACCOUNTS PAYABLE
	Unaudited	Audited
	As at	As at
	31st December	30th June
	2015	2015
	HK$’000	HK$’000
Accounts payable arising from securities
brokerage and margin financing business:
Accounts payable – cash clients	111,893	–
Accounts payable – margin clients	63,225	–
Accounts payable – others	2,144	–
Accounts payable – other businesses
Accounts payable – others	4,846	4,189
	182,108	4,189

The settlement terms of accounts payable arising from securities brokerage and margin financing business are two days after trade date.

Accounts payable to cash clients and margin clients bear variable interest at commercial rates, and repayable on demand subsequent to two days after trade date.

No ageing analysis is disclosed as in the opinion of the Board, the ageing analysis does not give additional value in view of the nature of business of securities brokerage and margin financing business.

The accounts payable to clients and clearing house in respect of the trust and segregated bank balances received and held for clients in the course of the conduct of securities brokerage and margin financing business. However, the Group does not have a currently enforceable right to offset these payables with the deposits placed.

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Universe International Holdings Limited Interim Report 2015/2016

22. ACCOUNTS PAYABLE (Continued)

As at 31st December 2015, the ageing analysis of the accounts payable – other businesses based on invoice date was as follows:

Accounts payable – other business

Unaudited Audited
As at As at
31st December 30th June
2015 2015
HK$’000 HK$’000
Current to 90 days 2,137 1,761
91 days to 180 days 171 97 Over 180 days 2,538 2,331
4,846 4,189

23. EXPENSES BY NATURE

Expenses included in cost of revenue and income, selling expenses, administrative expenses and other operating expenses are analysed as follows:

Unaudited
For the six months ended
31st December
2015	2014
HK$’000	HK$’000
Amortisation of film rights 5,838	12,747
Depreciation 1,659 Write-off of inventories 132	306 132
Provision for inventories 310	–
Employee benefits expenses including directors’ emoluments 17,481	6,635
Cost of inventories sold 18,261	2,314

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Universe International Holdings Limited Interim Report 2015/2016 55

24. INCOME TAX CREDIT

Hong Kong profits tax has been provided at the rate of 16.5% on the estimated assessable profit for the Period (2014: 16.5%).

The amount of income tax credit credited to the unaudited condensed consolidated statement of comprehensive income represents:

Unaudited	Unaudited
For the six months ended
31st December
2015	2014
HK$’000	HK$’000
Hong Kong profits tax – current (673)	(289)
Deferred income tax relating to the origination and reversal of temporary differences 1,170	(35)
Deferred income tax relating to unrealised fair value loss on investment securities 19,720	3,136
20,217	2,812

25. LOSS PER SHARE

The calculation of the basic and diluted loss per share attributable to equity owners of the Company during the Period is based on the following data:

Unaudited For the six months ended 31 December 2015 2014 HK$’000 HK$’000	Unaudited For the six months ended 31 December 2015 2014 HK$’000 HK$’000
Loss for the Period attributable to the owners of the Company (94,645)	(30,387)

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Universe International Holdings Limited Interim Report 2015/2016

25. LOSS PER SHARE (Continued)

	Number of shares	Number of shares
	(in thousand)
	2015		2014
Weighted average number of ordinary shares for
the purpose of basic loss per share	1,255,990	2,088,698
Effect of deemed issue of shares under
the Company’s share option scheme	449		N/A
Weighted average number of ordinary shares
for diluted loss per share	1,256,439		N/A

For the Period, the computation of diluted loss per share does not assume the exercise of the Company’s share options since the exercise of share options would result in a decrease in loss per share.

For the six months ended 31st December 2014, the basic and diluted loss per share are the same because the effect of the assumed conversion of all dilutive potential ordinary shares outstanding during the six months ended 31st December 2014 was anti-dilutive.

26. ACQUISITION OF SUBSIDIARIES

(a) Step acquisition from associate to subsidiary of Winston Asia Limited (“Winston”)

On 31st July 2015, Fragrant River Entertainment Culture (Holdings) Limited (“FREC”), a directly-owned subsidiary of the Company, acquired 79.99% equity interests in Winston, which is principally engaged in trading, wholesaling and retailing of watches and jewellery products, at a consideration of HK$64,000,000 by issuing convertible bonds with an aggregate principal amount of HK$64,000,000. Prior to the business combination, the Group already held 20.01% equity interest in Winston and was accounted for by equity accounting. As a result of the business combination, the Group held 100% equity interest in Winston.

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Universe International Holdings Limited Interim Report 2015/2016 57

26. ACQUISITION OF SUBSIDIARIES (Continued)

(a) Step acquisition from associate to subsidiary of Winston Asia Limited (“Winston”) (Continued)

The following summarises the acquisition date fair value of the total consideration transferred:

	HK$'000
Fair value of convertible bonds issued	64,319

The following summarises the total consideration and the amounts of the assets acquired and liabilities assumed, as well as the amount of intangible assets and goodwill arising from the acquisition recognised at 31st July 2015 (the date of acquisition):

	Fair value
	HK$'000
Property, plant and equipment	1,227
Other intangible assets – brand name	1,108
Inventories	20,696
Trade and other receivables	8,864
Cash and cash equivalents	1,468
Accrued liabilities and other payables	(5,426)
Bank borrowings	(2,000)
Total identifiable net assets at fair value	25,937
Fair value of the equity interest held before the business combination	(6,989)
Goodwill arising on step acquisition	45,371
Total consideration	64,319
Net cash inflow on step acquisition:	HK$’000
Net cash acquired from step acquisition	1,468

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Universe International Holdings Limited Interim Report 2015/2016

26. ACQUISITION OF SUBSIDIARIES (Continued)

(a) Step acquisition from associate to subsidiary of Winston Asia Limited (“Winston”) (Continued)

The transaction costs of HK$1,313,000 have been excluded from the consideration transferred and included in ‘administrative expenses’ in the unaudited condensed consolidated statement of comprehensive income.

The Group recognised a gain on step acquisition of HK$1,764,000 as a result of measuring at fair value of its 20.01% equity interest in Winston held before the business combination. The gain is included in the unaudited condensed consolidated statement of comprehensive income for the Period.

The goodwill arising from the acquisition is attributable to the synergies expected to arise from the business combination and future growth and profitability of Winston. None of the goodwill recognised is expected to be deductible for income tax purposes.

Winston contributed HK$32,857,000 to the Group’s total revenue and income and approximately HK$8,720,000 profit to the Group’s loss before tax, for the period between the date of completion of the step acquisition and the end of the reporting period.

If the acquisition of Winston had been completed on 1st July 2015, the Group’s total revenue and income and loss after tax for the Period would have been HK$(52,658,000) and HK$93,903,000 respectively. The proforma information is for illustrative purposes only and is not necessarily an indication of the total revenue and income and results of operations of the Group that actually would have been achieved had the acquisition been completed on 1st July 2015, nor is intended to be a projection of future results.

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Universe International Holdings Limited Interim Report 2015/2016 59

26. ACQUISITION OF SUBSIDIARIES (Continued)

(b) Acquisition of Win Fung Securities Limited (“Win Fung”)

On 21st August 2015, Rising Fame International Limited, an indirect wholly owned subsidiary of the Company, entered into an agreement with two independent third party vendors to acquire the entire interest of Win Fung at a cash consideration of HK$73,000,000. Win Fung is a licensed corporation under the Securities and Futures Ordinance and authorised to engage in the following regulated activities: (i) Type 1: Dealing in securities; and (ii) Type 4: Advising on securities. The principal activities of Win Fung are provision of brokerage services and securities margin financing to clients. The acquisition was completed on 17th November 2015.

	Fair value
	HK$'000
Property, plant and equipment	1,554
Other intangible assets – trading rights	20,141
Trade and other receivables	232,758
Bank balances (general accounts) and cash	8,809
Bank balances – trust and segregated accounts	168,391
Trade and other payables	(366,167)
Tax payable	(1,809)
Bank borrowings	(10,000)
Total identifiable net assets at fair value	53,677
Goodwill arising on acquisition	19,323
Total consideration	73,000
Net cash outflow on acquisition of Win Fung:	HK$’000
Cash consideration paid	73,000
Net cash acquired from the subsidiary	(8,809)
	64,191

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Universe International Holdings Limited Interim Report 2015/2016

26. ACQUISITION OF SUBSIDIARIES (Continued)

(b) Acquisition of Win Fung Securities Limited (“Win Fung”) (Continued)

The transaction costs of HK$570,000 have been excluded from the consideration transferred and included in ‘administrative expenses’ in the unaudited condensed consolidated statement of comprehensive income.

The goodwill arising on the acquisition of Win Fung is attributable to the future growth and profitability in relation to the provision of brokerage services and securities margin financing to clients.

Win Fung contributed HK$694,000 to the Group’s total revenue and income and approximately HK$535,000 profit to the Group’s loss before tax, for the period between the date of acquisition and the end of the reporting period.

If the acquisition of Win Fung had been completed on 1st July 2015, the Group’s total revenue and income and loss after tax for the Period would have been HK$(52,718,000) and HK$91,219,000 respectively. The proforma information is for illustrative purposes only and is not necessarily an indication of the total revenue and income and results of operations of the Group that actually would have been achieved had the acquisition been completed on 1st July 2015, nor is intended to be a projection of future results.

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Universe International Holdings Limited Interim Report 2015/2016 61

26. ACQUISITION OF SUBSIDIARIES (Continued)

(c) Acquisition of AP Group Investment Holdings Limited (“AP Group”)

On 12th October 2015, FREC, a direct wholly owned subsidiary of the Company, entered into an agreement with four independent third party vendors to acquire 51% equity interest of AP Group for consideration of HK$20,400,000 (subject to downward adjustment in respect of the guaranteed profit as described in the sale and purchase agreement). AP Group is principally engaged in provision of education and training programs in relation to self-improvement and self-enhancement in Hong Kong and the PRC. The acquisition was completed on 14th December 2015.

The vendors have agreed to provide a profit guarantee to FREC in relation to the financial performance of AP Group for the period from 1st January 2016 to 31st December 2017. The profit guarantee requires AP Group to meet a target profit after tax for the period from 1st January 2016 to 31st December 2017 of HK$16,000,000 (the “Guaranteed Profit”). If AP Group fails to meet the Guaranteed Profit, the consideration of HK$20,400,000 should be reduced by the shortfall calculated in accordance with the formula stipulated in the sale and purchase agreement.

The following summarises the acquisition date fair value of the total consideration transferred:

	HK$'000
Cash consideration	20,400
Contingent consideration arrangement	–
Total consideration	20,400

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Universe International Holdings Limited Interim Report 2015/2016

26. ACQUISITION OF SUBSIDIARIES (Continued)

(c) Acquisition of AP Group Investment Holdings Limited (“AP Group”) (Continued)

	Fair value
	HK$'000
Property, plant and equipment	3,063
Trade and other receivables	2,948
Cash and cash equivalents	1,710
Trade and other payables	(7,915)
Tax payable	(612)
Total identifiable net liabilities at fair value	(806)
Non-controlling interest	395
Goodwill arising on acquisition	20,811
Total consideration	20,400
Net cash outflow on acquisition of AP Group:	HK$’000
Cash consideration paid	20,400
Net cash acquired from the subsidiary	(1,710)
	18,690

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Universe International Holdings Limited Interim Report 2015/2016 63

26. ACQUISITION OF SUBSIDIARIES (Continued)

(c) Acquisition of AP Group Investment Holdings Limited (“AP Group”) (Continued)

The transaction costs of HK$417,000 have been excluded from the consideration transferred and included in ‘administrative expenses’ in the unaudited condensed consolidated statement of comprehensive income.

The goodwill arising on the acquisition of AP Group is attributable to the future growth and profitability expected to arise from the business combination. None of the goodwill is expected to be deductible for income tax purposes.

AP Group contributed HK$840,000 to the Group’s total revenue and income and approximately HK$131,000 loss to the Group’s loss before tax, for the period between the date of acquisition and the end of the reporting period.

If the acquisition of AP Group had been completed on 1st July 2015, the Group’s revenue and income and loss after tax for the Period would have been HK$(48,260,000) and HK$94,738,000 respectively. The proforma information is for illustrative purposes only and is not necessarily an indication of the total revenue and income and results of operations of the Group that actually would have been achieved had the acquisition been completed on 1st July 2015, nor is intended to be a projection of future results.

27. PENDING LITIGATIONS

(a) A court action was commenced in the Court of First Instance of the Hong Kong Special Administrative Region on 17th April 2002 by The Star Overseas Limited (“Star”), an independent third party, against Universe Entertainment Limited (“UEL”), an indirect wholly-owned subsidiary of the Company.

By the above action, Star alleges that a sum of US$935,872 (equivalent to HK$7,299,799) was payable by UEL to Star as its share of the revenue of the movie entitled “Shaolin Soccer” (the “Movie”).

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Universe International Holdings Limited Interim Report 2015/2016

27. PENDING LITIGATIONS (Continued)

(a) (Continued)

Pursuant to an Order (the “Order”) made by the High Court on 21st February 2003, UEL was ordered and had paid to Star a sum of HK$5,495,700, being part of the licence fee of the Movie received by UEL from Miramax Films (being the licencee of the Movie) and which was also part of the sum claimed by Star. Pursuant to the Order, UEL is also liable to pay Star interest in the sum of HK$350,905 and some of the costs of the application leading to the making of the Order, all of which have been settled. As the Order has not disposed of all the claims of US$935,872 (equivalent to HK$7,299,799) by Star, UEL is entitled to continue to defend the claim by Star for recovering the remaining balance in the sum of approximately HK$1,804,099 (HK$7,299,799 less HK$5,495,700).

On 30th April 2002, UEL issued a Writ of Summons against Star for the latter’s wrongful exploitation of certain rights in the Movie co-owned by both parties. UEL claimed to recover all losses and damages suffered by UEL as a result of the wrongful exploitation.

On 9th September 2002, Universe Laser & Video Co. Limited (“ULV”), an indirect whollyowned subsidiary of the Company, issued a Writ of Summons against Star for the latter’s infringement of the licensed rights in the Movie held by ULV. ULV claimed to recover all loss and damages suffered by ULV as a result of the said infringement.

In the opinion of legal counsel, it is premature to predict the outcome of the claim against UEL. The Board is of the opinion that the outcome of the said claim against UEL will have no material financial impact on the Group for the Period.

(b) On 1st September 2008, Koninklijke Philips Electronics N.V. (“KPE”) issued a Writ of Summons against among other persons, the Company, ULV and Mr. Lam Shiu Ming, Daneil (one of the Directors), being three of the defendants named therein, in respect of damages arising from alleged infringement of the patents regarding Video Compact Disc owned by KPE.

In the opinion of legal counsel, it is premature to predict the outcome of the said claim made against the Company, ULV and Mr. Lam Shiu Ming, Daneil. The Board is of the opinion that the outflow of economic benefits cannot be reliably estimated and accordingly no provision for any liability that may result has been made in the unaudited condensed consolidated interim financial information.

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Universe International Holdings Limited Interim Report 2015/2016 65

27. PENDING LITIGATIONS (Continued)

(c) On 8th January 2010, KPE issued a Writ of Summons against among other persons, the Company, ULV and Mr. Lam Shiu Ming, Daneil (one of the Directors), being three of the defendants named therein, in respect of damages arising from alleged infringement of the patents regarding Digital Video Disc owned by KPE.

In June 2012, the action was discontinued against the Company and Mr. Lam Shiu Ming, Daneil. The claim made against ULV has been agreed with KPE and settled by ULV and appropriate legal costs provision was recognised accordingly in the consolidated financial statements for the year ended 30th June 2012.

No additional provision has been made in the unaudited condensed consolidated interim financial information for the Period. Based on the consultation with legal counsel, no further material outflow of economic benefits will be incurred for ULV.

(d) Universe Artiste Management Limited (“UAM”) commenced Court of First Instance Action against Kwong Ling and Oriental Prosperous Int’l Entertainments Limited (collectively the “Defendants”) on 30th June 2014 claiming inter alia for a declaration that UAM is entitled to extend/renew the term of the Artist Management Contract of the Defendants with UAM (the “Artist Management Contract”) for 5 years as from 3rd May 2014 to 2nd May 2019.

The Defendants filed their defence and counterclaim on 29th September 2014. By such counterclaim, the Defendants claiming against UAM inter alia for a declaration that the Artist Management Contract was void and unenforceable, the Artist Management Contract to be rescinded, damages for breach of the Artist Management Contract and for breach of fiduciary duties, a declaration that UAM is liable to account to the Defendants and an order for payment of all sums found to be due by UAM to the Defendants.

In the opinion of legal counsel, it is premature to predict the outcome of the said claim against UAM. The Board considers that the amounts of counterclaim by the Defendants against UAM is insignificant to the Group as a whole.

Save as disclosed above, as at 31st December 2015, no litigation or claim of material importance is known to the Directors to be pending against either the Company or any of its subsidiaries.

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Universe International Holdings Limited Interim Report 2015/2016

28. COMMITMENTS

(a) Operating leases commitments

As at 31st December 2015, the Group had future aggregate minimum lease payments under non-cancellable operating leases as follows:

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----- Start of picture text -----

||||
|---|---|---|
|Unaudited|Audited|
|As at|As at|
|31st December|30th June|
|2015|2015|
|HK$’000|HK$’000|
|Land and buildings|
|Not later than one year|10,077|5,594|
|Later than one year and not later than five years|7,888|5,980|
|17,965|11,574|

----- End of picture text -----

(b) Other commitments

As at 31st December 2015, the Group had commitments contracted but not provided for in the unaudited condensed consolidated interim financial information as follows:

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----- Start of picture text -----

||||
|---|---|---|
|Unaudited|Audited|
|As at|As at|
|31st December|30th June|
|2015|2015|
|HK$’000|HK$’000|
|Purchase of film rights and production of films|59,098|64,844|
|Underwriting agreement|76,745|–|
|Licence agreement|1,677|–|

----- End of picture text -----

Note: As at 31st December 2015, the Group had commitment of approximately HK$6,879,000 in respect of joint operations (As at 30th June 2015: approximately HK$29,739,000).

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Universe International Holdings Limited Interim Report 2015/2016 67

29. FUTURE OPERATING LEASES ARRANGEMENTS

As at 31st December 2015, the Group had future aggregate minimum lease receipts under noncancellable operating leases as follows:

cancellable operating leases as follows:
Unaudited	Audited
As at	As at
31st December	30th June
2015	2015
HK$’000	HK$’000
Not later than one year 3,296 Later than one year and not later than five years 413	935 527
3,709	1,462

30. RELATED PARTY TRANSACTIONS

	Unaudited	Unaudited
	For the six months ended
	31st December
	2015	2014
	HK$’000	HK$’000
i)	Details of key management compensation Salaries and other short-term employee benefits 4,431	3,606
	Employer’s contribution to retirement scheme 36 Share-based compensation 949	36 –
	5,416	3,642
ii)	Rental expenses paid to Universe Property Investment Limited which is wholly owned by a director of the Company (Note a) 1,464	1,464
iii)	Rental expenses paid to Sam Fung Global Limited which is wholly owned by the spouse of a director of the Company (Note b) 140	–

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Universe International Holdings Limited Interim Report 2015/2016

30. RELATED PARTY TRANSACTIONS (Continued)

Note a:

Universe Digital Entertainment Limited (“UDE”), an indirect wholly-owned subsidiary of the Company, entered into a tenancy agreement with Universe Property Investment Limited (“UPI”), a company owned by Mr. Lam Shiu Ming, Daneil, the executive Director of the Company, for renting (1) an industrial unit and (2) 5 carparking spaces of an industrial building for warehouse, ancillary office and carparking uses in Kwai Chung from 1st February 2014 to 31st January 2017, with a monthly rental of HK$244,000 (the “Tenancy Agreement”) which were arrived at following arm’s length negotiation between the Group and Mr. Lam Shiu Ming, Daneil with reference to the renal valuation performed by Roma Appraisals Limited as at 30th November 2013 which reflects the then market rent.

Note b:

Win Fung Securities Limited (“Win Fung”), an indirect wholly-owned subsidiary of the Company, entered into a tenancy agreement with Sam Fung Global Limited, a company owned by the spouse of Ms. Cheng Hei Yu, the executive Director of the Company for renting an office unit in Sheung Wan, Hong Kong from 1st November 2015 to 31st October 2017, with a monthly rental of HK$100,000 (the “Win Fung Tenancy Agreement”) which were arrived at the arm’s length negotiation by the relevant parties with reference to the market rent. During the Period, Win Fung has incurred a total rental expenses of approximately HK$140,000 (2014: Nil) in accordance to the Win Fung Tenancy Agreement for the period from 18th November 2015 (the date of acquisition of Win Fung by the Group) to 31st December 2015.

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Universe International Holdings Limited Interim Report 2015/2016 69

31. EVENTS AFTER THE BALANCE SHEET DATE

(a) Capital reorganisation

As announced on 29th January 2016, the Board proposed the following capital reorganisation (the “Capital Reorganisation”) that:

(1) every 10 issued and unissued existing ordinary share(s) of HK0.01 each (“Existing Share”) in the existing share capital of the Company of will be consolidated into 1 consolidated share (the “Consolidated Share”) of HK$0.10 each (the “Share Consolidation”) and where applicable, the total number of Consolidated Shares in the issued share capital of the Company immediately following the Share Consolidation will be rounded down to a whole number by cancelling any fraction in the issued share capital of the Company which may arise from the Share Consolidation;
(2) the issued share capital of the Company will be reduced through a cancellation of the paid-up capital of the Company to the extent of HK$0.09 (the “Capital Reduction”) on each of the issued Consolidated Shares such that the nominal value of each issued Consolidated Share will be reduced from HK$0.10 to HK$0.01 (the “New Share”);
(3) immediately following the Capital Reduction, each of the authorised but unissued Consolidated Shares of HK$0.10 each will be sub-divided into 10 New Shares of HK$0.01 each; and
(4) the credits arising in the books of the Company from (i) the cancellation of any fraction in the issued share capital of the Company which may arise from the Share Consolidation; and (ii) the Capital Reduction of approximately HK$13,333,418.29 will be credited to the contributed surplus account of the Company within the meaning of the Companies Act 1981 of Bermuda.

The New Shares will be traded in board lot of 5,000 New Shares after the Capital Reorganisation having become effective.

The special general meeting of the Company will be convened and held for the shareholders on 17th March 2016 to consider and, if thought fit, approve the Capital Reorganisation. Details of the Capital Reorganisation are set out in the Company’s announcement and circular dated 29th January 2016 and 23rd February 2016, respectively.

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Universe International Holdings Limited Interim Report 2015/2016

31. EVENTS AFTER THE BALANCE SHEET DATE (Continued)

(b) Placing of new shares

As announced on 24th February 2016, the Company and SBI China Capital Financial Services Limited (the “Placing Agent”) entered into a placing agreement (“New Placing Agreement”), pursuant to which the Company has conditionally agreed to place through the Placing Agent, on a best endeavour basis, up to 296,250,000 Existing Shares (“New Placing Shares”) (or where Completion takes place after the Capital Reorganisation becomes effective, 29,625,000 New Shares) to not less than six Placees who and whose ultimate beneficial owners are independent third parties at the placing price of HK$0.10 (“New Placing Price”) per Existing Share (or where completion takes place after the Capital Reorganisation becomes effective, HK$1.00 per New Share) (“New Placing”).

The New Placing Price of HK$0.10 per Existing Share was determined after arm’s length negotiations between the Company and the Placing Agent with reference to, among other matters, the prevailing market prices of the Shares and represents: (i) a discount of approximately 12.3% to the closing price of HK$0.114 per Existing Share as quoted on the Stock Exchange on 23rd February 2016 (the “New Last Trading Day”); and (ii) a premium of approximately 15.2% over the average closing price of HK$0.0868 per Existing Share as quoted on the Stock Exchange for the five consecutive trading days of the Existing Shares immediately prior to the New Last Trading Day.

Assuming completion of New Placing takes place prior to the Capital Reorganisation becoming effective, the maximum number of 296,250,000 New Placing Shares represents (i) approximately 19.99% of the existing issued share capital of the Company as at 24 February 2016; and (ii) approximately 16.66% of the existing issued share capital of the Company as enlarged by the New Placing (assuming the maximum number of the New Placing Shares is placed and there is no other change in the issued share capital of the Company from 24 February 2016 and up to completion of the New Placing). The aggregate nominal value of the maximum number of the New Placing Shares under the New Placing will be HK$2,962,500.

Assuming completion of New Placing takes place prior to the Capital Reorganisation becoming effective and assuming the maximum number of the New Placing Shares is placed, the gross proceeds from the New Placing will be approximately HK$29.6 million and the net proceeds from the New Placing will be approximately HK$28.5 million (after deduction of commission and other expenses of the New Placing). It is expected that the net proceeds from the New Placing will be utilised for general working capital.

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Universe International Holdings Limited Interim Report 2015/2016 71

31. EVENTS AFTER THE BALANCE SHEET DATE (Continued)

(b) Placing of new shares (Continued)

The New Placing Shares will be allotted and issued pursuant to the general mandate granted by the shareholders of the Company at the annual general meeting of 30th November 2015 and therefore the allotment and issue of the New Placing Shares are not subject to any additional shareholders’ approval.

The Board are of the view that the New Placing can strengthen the financial position of the Group and provide working capital to the Group to meet any future development and obligations. The New Placing also represents good opportunities to broaden the shareholders’ base and the capital base of the Company. The Board consider that the New Placing is in the interest of the Company and the Shareholders as a whole.

Completion of the New Placing is conditional upon the Stock Exchange granting the listing of, and permission to deal in, the New Placing Shares to be placed pursuant to the New Placing Agreement. Each of the Company and the Placing Agent shall use their respective best endeavours to procure the satisfaction of the above condition by 18th March 2016 (“Long Stop Date”). If the above condition is not satisfied by the Long Stop Date, all obligations of the Placing Agent and of the Company under the New Placing Agreement shall cease and determine and neither the Placing Agent nor the Company shall have any claim against the other in relation to the New Placing Agreement (save in respect of any antecedent breach of any obligation thereunder).

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Universe International Holdings Limited Interim Report 2015/2016

INTERIM DIVIDEND

The Board does not recommend the payment of an interim dividend in respect of the six months ended 31st December 2015 (2014: Nil).

MANAGEMENT DISCUSSION AND ANALYSIS

Overall Group results

The Group recorded a net loss of approximately HK$94.9 million for the Period, representing an increase of approximately 3.12 times as compared to the net loss of approximately HK$30.4 million for the same period last year, which is mainly due to the significant increase of the fair value loss arising from the investment securities from approximately HK$18.7 million during the six months period ended 31st December 2014 to approximately HK$133.0 million during the Period.

The Group’s unaudited consolidated revenue (excluding the fair value changes in investment securities, the “Consolidated Revenue”) for the Period was HK$75.0 million, representing an increase of approximately 2.48 times as compared to the Consolidated Revenue of approximately HK$30.2 million for the same period last year. The increase in Consolidated Revenue was mainly due to the completion of the acquisition of 79.99% equity interest of Winston, which are principally engaged in trading, wholesale and retails of watches and jewellery products, in July 2015. The Group recorded revenue from Winston of approximately HK$32.9 million during the Period.

Films distribution and exhibition, licensing and sub-licensing of film rights

Revenue from this business segment during the Period was approximately HK$28.6 million, representing an increase of approximately 12.6% as compared to approximately HK$25.4 million in the same period last year. It accounted for approximately 38.1% (2014: approximately 84.3%) of the Group’s Consolidated Revenue during the Period.

The growth of revenue from this business segment was mainly due to the increase in the number of new titles of films/television drama distributed in various videogram formats during the Period.

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Universe International Holdings Limited Interim Report 2015/2016 73

MANAGEMENT DISCUSSION AND ANALYSIS (Continued)

The performance of this segment improved. Segmental profit of approximately of HK$5.0 million was recorded during the Period against a segmental loss of approximately HK$1.2 million for the same period last year, which is mainly due to (i) the increase of gross profit contribution from the new titles of films/television drama distributed in various videogram formats during the Period and (ii) higher gross contribution from film exhibition, licensing and sub-licensing of film rights business as a result of the stringent cost control on the film production cost implemented during the Period.

Due to high production, advertising and distribution cost, the business environment of this segment is more challenging than before and the Group will continue to adopt a cautious and prudent approach to identify new opportunities and streamline the cost structure of this business segment.

Trade, wholesale and retail of optical, watches and jewellery products

Revenue from this business segment during the Period was approximately HK$36.5 million (2014: Nil), which included the revenue of approximately HK$3.6 million from trade, wholesales and retail of optical products from 2 optical retail shops under the name of “茂昌眼鏡 Hong Kong Optical” in Hong Kong and the revenue of approximately HK$32.9 million from Winston, which are principally engaged in trading, wholesale and retails of watches and jewellery products in Hong Kong and the People’s Republic of China (“PRC”). It accounted for approximately 48.7% (2014: Nil) of the Group’s Consolidated Revenue during the Period.

As the controlling stake of the business of the trade, wholesale and retail of optical, watches and jewellery products were acquired by the Group in May 2015 and July 2015, no comparative figure for the 6 months period ended 31 December 2014 was presented here.

Segmental profit of approximately of HK$8.5 million was recorded during the Period, which is mainly contributed by Winston during the Period. Due to the weakening of the retails market in Hong Kong and PRC in 2016, the business outlook of this segment is very challenging. In view of the downward trend of the retail market in Hong Kong and PRC in coming year, the Group will adopt a tight cost control. The Group will review the performance of each retail shops and close down those shops with lower profitability in order to maintain the competitiveness of this business segment.

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Universe International Holdings Limited Interim Report 2015/2016

MANAGEMENT DISCUSSION AND ANALYSIS (Continued)

Securities investments and leasing of investment properties

As at 31st December 2015, the carrying value of the securities investments (recorded as the financial assets at fair value through profit or loss in the unaudited condensed consolidated balance sheet) was approximately HK$194.0 million (30th June 2015: approximately HK$315.1 million). It included the Group’s investment portfolio and consists of nine (30th June 2015: seven) investment items, all of which are shares of companies listed on the Stock Exchange. Three of the aforesaid investment items held by the Group, i.e., the shares of (i) Town Health International Medical Group Limited (“Town Health”); (ii) China Jicheng Holdings Limited (“China Jicheng”); and (iii) Jiu Rong Holdings Limited (“Jiu Rong”) valued at approximately HK$62.2 million, approximately HK$52.4 million and approximately HK$27.7 million respectively which represented approximately 5.3%, approximately 4.4% and approximately 2.3% of the Group’s total asset value as at 31st December 2015 respectively and approximately 30.9%, approximately 26.0% and approximately 13.7% of the value of the Group’s financial assets at fair value through profit or loss as at 31st December 2015 respectively.

As at 31st December 2015, the total market value of the aforesaid three investment items was approximately HK$142.3 million, representing (i) approximately 12.1% of the Group’s total asset value and (ii) approximately 70.6% of the total financial assets at fair value through profit or loss of the Group respectively.

Town Health and its subsidiaries are principally engaged in (i) healthcare business investments; (ii) provision and management of medical, dental and other healthcare related services; and (iii) investments and trading in properties and securities. As at 31st December 2015, the Group held 38,900,000 shares (30th June 2015: same) of Town Health, representing approximately 0.5% of the total issued shares of Town Health of 7,469,631,786 shares.

China Jicheng and its subsidiaries are principally engaged in manufacturing and sale of POE umbrellas and nylon umbrellas and umbrella parts such as plastic cloth and shaft to its customers. As at 31st December 2015, the Group held 38,250,000 shares (30th June 2015: same) of China Jicheng, representing approximately 0.3% of the total issued shares of China Jicheng of 15,000,000,000 shares.

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Universe International Holdings Limited Interim Report 2015/2016 75

MANAGEMENT DISCUSSION AND ANALYSIS (Continued)

Jiu Rong and its subsidiaries are principally engaged in (i) design, assembly and installation of water meter; and (ii) TV business. As at 31st December 2015, the Group held 180,000,000 shares (30th June 2015: same) of Jiu Rong, representing approximately 4.7% of the total issued shares of Jiu Rong of 3,800,000,000 shares.

The Group’s recorded fair value loss on changes on investment securities of approximately HK$133.0 million (2014: approximately HK$18.7 million) during the Period. Such loss was mainly attributable to the volatile and unfavourable market sentiment in the stock market in Hong Kong in the second half of 2015 which lead to the substantial decrease in the market price of the investments of the Group.

The investments in the shares of Town Health, China Jicheng and Jiu Rong recorded fair value loss of approximately HK$18.3 million, approximately HK$27.2 and approximately HK$43.4 million respectively, and together contributed to approximately 66.8% of the total fair value loss on changes on investment securities of the Group for the Period.

As at 31st December 2015, the Group’s securities investments portfolio included the shares of companies listed on the Stock Exchange and engaged in different industries such as entertainment services, manufacturing, financial advisory business, asset management, solar energy, healthcare and wholesale business etc. The Group will continue reviewing its investment portfolios, so as to achieve a better return to the Group.

The rental income from leasing of investment properties remained stable during the Period. The Group recorded rental income of approximately HK$0.5 million (2014: approximately HK$0.5 million) during the Period.

The overall segment loss of this business segment was approximately HK$132.5 million (2014: segment loss of approximately HK$19.8 million) during the Period.

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Universe International Holdings Limited Interim Report 2015/2016

MANAGEMENT DISCUSSION AND ANALYSIS (Continued)

Available-for-sale financial assets

As at 31 December 2015, the available-for-sale financial assets of the Group of approximately HK$74.3 million (30th June 2015: approximately HK$88.4 million) consisted of five (30th June 2015: four) investment items in non-listed funds or companies. One of the aforesaid investment items held by the Group, named “Hydra Capital SPC – Class A #1 Share” (“Hydra Capital”) valued at approximately HK$47.3 million as at 31st December 2015 which represented (i) approximately 4.0% of the Group’s total asset value as at 31st December 2015 and (ii) approximately 63.7% of the value of the Group’s available-for-sale financial assets as at 31st December 2015.

Hydra Capital is an exempted company incorporated with limited liability and registered as a segregated portfolio company under the laws of the Cayman Islands established for the purpose of making investments on behalf of its portfolios where its principal investments are internet related and mobile application in Asia.

As at 31st December 2015, the Group held 5,500 shares (30th June 2015: same) in Hydra Capital, representing approximately 24.6% of the total issued shares of Hydra Capital of 22,400 shares.

The Group recorded a decrease of the carrying value of the available-for-sale financial assets of approximately HK$10.3 million (2014: increase in value of approximately HK$67,000) in the other comprehensive income/loss during the Period. In view of the negative trend of the financial market and business outlook for the available-for-sale financial assets, including factors such as industry and sector performance as well as operational and financing cash flow, it was determined that the carrying value of the available-for-sale financial assets was depreciated.

Money lending business

The Group engaged in money lending business in Hong Kong during the Period. As at 31st December 2015, the Group had loans receivable of approximately HK$98.1 million (As at 30th June 2015: HK$37.0 million) and recognised interest income of approximately HK$3.8 million (2014: approximately HK$2.9 million). It accounted for approximately 5.1% (2014: 9.8%) of the Group’s Consolidated Revenue during the Period. There was no default event happened in respect of the Group’s loans receivable during the Period (2014: Nil). The segment profit of this business segment was approximately HK$1.3 million (2014: approximately HK$1.7 million) during the Period.

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Universe International Holdings Limited Interim Report 2015/2016 77

MANAGEMENT DISCUSSION AND ANALYSIS (Continued)

It is expected the money lending market in Hong Kong will be stable and continue to grow in the nearly future. The Group will continue to expand the money lending business to effectively utilise the Group’s cash resources and to diversify the sources of the Group’s income.

Securities brokerage and margin financing

The Group completed the acquisition of 100% equity interest in Win Fung Securities Limited (“Win Fung”) in November 2015. Win Fung is a company with limited liability incorporated in Hong Kong. Win Fung is a licensed corporation under the SFO with the following regulated activities: (i) Type 1: Dealing in securities; and (ii) Type 4: Advising on securities. The principal activities of Win Fung are provision of brokerage services and securities margin financing to clients.

Revenue from this business segment during the Period was approximately HK$0.7 million (2014: Nil). It accounted for approximately 0.9% (2014: Nil) of the Group’s Consolidated Revenue during the Period. The segment profit of this business segment was approximately HK$0.5 million (2014: Nil) during the Period.

The acquisition of Win Fung during the Period enabled the Company to diversify its business into the financial services industry and broaden revenue sources of the Group in the coming financial period.

Training and coaching

The Group completed the acquisition of 51% equity interest in AP Group Investment Holdings Limited in December 2015. AP Group Investment Holdings Limited and its subsidiaries (collectively “AP Group”) is principally engaged in the provision of education and training programs in relation to self-improvement and self-enhancement in Hong Kong and PRC.

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Universe International Holdings Limited Interim Report 2015/2016

MANAGEMENT DISCUSSION AND ANALYSIS (Continued)

Revenue from this business segment during the Period was approximately HK$0.8 million (2014: Nil). It accounted for approximately 1.1% (2014: Nil) of the Group’s Consolidated Revenue during the Period. The segment loss of this business segment was approximately HK$0.1 million (2014: Nil) during the Period.

AP Group has a well-established business in the provision of education and training programs in relation to self-improvement and self-enhancement in Hong Kong and PRC. The acquisition of AP Group enabled the Group to tap into the business of education and training program and broaden revenue sources of the Group.

Geographical contribution

In terms of geographical contribution, overseas markets accounted for approximately 45% (2014: approximately 22%) of the Group’s Consolidated Revenue during the Period. More revenue were generated from the trading, wholesale and retails of watches and jewellery products in PRC after the acquisition of Winston in July 2015 during the Period as compared to the same period last year.

Selling expenses

Selling expenses for the Period increased by approximately 6.07 times to approximately HK$9.7 million as compared to approximately HK$1.6 million in the same period last year. The increase in selling expenses was mainly due to the inclusion of the selling expense of Winston of approximately HK$6.6 million in the new business of trade, wholesale and retails of watches and jewellery products during the Period.

Administrative expenses

Administrative expenses for the Period increased by approximately 25.7% to approximately HK$34.3 million as compared to approximately HK$27.3 million in the same period last year.

The increase in administrative expenses was mainly due to (i) the inclusion of the administrative expense of Winston of approximately HK$4.0 million in the new business of trade, wholesale and retails of watches and jewellery products during the Period and (ii) the increase of legal and professional fee of approximately HK$3.7 million which was mainly due to the acquisitions conducted by the Group during the Period.

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Universe International Holdings Limited Interim Report 2015/2016 79

MANAGEMENT DISCUSSION AND ANALYSIS (Continued)

Income tax credit

The Group recorded income tax credit of approximately HK$20.2 million during the Period (2014: approximately HK$2.8 million), which was mainly attributable to the deferred income tax credit of approximately HK$20.4 million arising from the fair value loss on investment securities during the Period. The increase in income tax credit was mainly due to the increase of the fair value loss on investment securities during the Period.

Update on the adjustment to the consideration of Winston

Reference is made to the announcement and the circular (the “Circular”) of the Company dated 7th May 2015 and 26th June 2015 respectively, Fragrant River Entertainment Culture (Holdings) Limited (the “Purchaser”), a company incorporated in BVI and a wholly-owned subsidiary of the Company, entered into an agreement (“SP Agreement”) with Victor Meg Limited, Mr. Ng Tang and Most Profitable Investment Ltd. (collectively the “Vendors”) to acquire from them an aggregate of 79.99% of the enlarged issued share capital of Winston (together with its subsidiaries, the “Winston Group”) at a consideration of HK$64,000,000 (the “Consideration”) (subject to adjustments).

In accordance to the SP Agreement and as disclosed in the Circular, in the event that the audited consolidated profit after tax of the Winston Group attributable to the owners of Winston for the year ended 31st December 2015 (“FY 2015”) (the “2015 Net Profit”) (which only comprised income or gain generated by activities in the ordinary and usual course of business of Winston) is less than the target profit for FY 2015 of HK$10,000,000, the Vendors and the guarantors, namely, Mr. Ng Tang and Ms. Lo Lai Kuen, shall collectively pay the Purchaser in cash a sum equal to the adjustment amount as defined in the Circular without any set off, withholding or deduction within 10 Business Days upon the receipt of the audited consolidated financial statements of the Target for FY 2015.

According to the audited consolidated financial statements of Winston for FY 2015 delivered to the Group on 25th February 2016, the 2015 Net Profit (which only comprised income or gain generated by activities in the ordinary and usual course of business of Winston) was not less than HK$10,000,000. As such, the Consideration is not required to be adjusted and is fixed at HK$64,000,000.

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Universe International Holdings Limited Interim Report 2015/2016

OUTLOOK

During the period the Group has successfully acquired three new business, namely, (i) trade, wholesale and retails of watches and jewellery; (ii) securities brokerage and margin financing and (iii) training and coaching. These diversified the Group’s business in 3 different industries, enabling the Group to broaden the sources of revenue.

In addition, the Group will continue to identify different investment opportunities in other business sectors with enormous potentials. This allows the Group to further diversify its businesses and broaden the income sources and therefore maximising the return to its shareholders.

FINANCIAL RESOURCES/LIQUIDITY

As at 31st December 2015, the Group had cash balances of approximately HK$184.2 million (As at 30th June 2015: approximately HK$102.8 million).

As at 31st December 2015, the Group had total assets of approximately HK$1,179.5 million (As at 30th June 2015: approximately HK$739.6 million).

The Group’s gearing ratio as at 31st December 2015 is approximately 7.4% (As at 30th June 2015: approximately 1.6%), which was calculated on the basis of the Group’s noncurrent liabilities excluding the deferred tax liabilities and on the total equity of the Group.

The Group incurred financial cost of approximately HK$0.5 million (2014: Nil).

In light of the fact that most of the Group’s transactions were denominated in Hong Kong dollars, Renminbi and United States dollars, the management considered that the exposure to fluctuation of currency exchange rates is limited and no financial instruments for hedging purposes were used by the Group.

As at 31st December 2015, current ratio (defined as total current assets divided by total current liabilities) was approximately 2.5 (As at 30th June 2015: approximately 4.2).

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Universe International Holdings Limited Interim Report 2015/2016 81

CAPITAL STRUCTURE

As at 31st December 2015, the Group had shareholders’ capital of approximately HK$14.8 million (30th June 2015: approximately HK$3.0 million). The shareholders’ capital of the Company is constituted of 1,481,490,921 shares.

Pursuant to the Company’s announcement dated 26th May 2015, Company’s circular dated 24th June 2015 and Company’s prospectus dated 24th July 2015, the Company proposed to raise not less than approximately HK$120.55 million and not more than approximately HK$134.36 million before expenses by issuing not less than 596,760,614 and not more than 665,160,614 new Shares (“Rights Shares”) at the subscription price of HK$0.202 (“Subscription Price”) per Rights Share on the basis of two (2) Rights Shares for every one (1) Share in issue held on the 23rd July 2015 (“Rights Issue”).

The Subscription Price of HK$0.202 per Rights Share represented: (i) a discount of 74.75% to the closing price of HK$0.8 per Share as quoted on the Stock Exchange on 26th May 2015, being the last trading day of the announcement of Rights Issue (“Last Trading Day”); (ii) a discount of approximately 49.66% to the theoretical ex-rights price of approximately HK$0.4013 per Share based on the closing price of HK$0.8 per Share as quoted on the Stock Exchange on the Last Trading Day; and (iii) a discount of approximately 72.78% to the average closing price of approximately HK$0.742 per Share for the last five consecutive trading days immediately prior to the Last Trading Day.

The Rights Issue was completed on 13th August 2015 and an aggregated of 596,760,614 Rights Shares have been issued. The net proceeds from the Rights Issue were approximately HK$114.8 million. Up to the date of this report, the Group has applied (i) approximately HK$50.0 million for the development of money lending business and (ii) approximately HK$33.0 million for the film production in Hong Kong and PRC. The remaining unutilised proceeds of approximately HK$31.8 million will be utilised as intended.

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Universe International Holdings Limited Interim Report 2015/2016

CAPITAL STRUCTURE (Continued)

Pursuant to the Company’s announcement dated 26th May 2015 and Company’s circular dated 24th June 2015, the Company entered into a placing agreement (the “Placing Agreement”) pursuant to which the Company appointed a placing agent to procure, on a best effort basis, not less than six placees to subscribe for up to 586,350,000 new Shares of the Company (“Placing Shares”) at a price of HK$0.3411 per Placing Share (“Placing”). The placing price of HK$0.3411 per Placing Share represented: (i) a discount of approximately 57.36% to the closing price of HK$0.8 per Share as quoted on the Stock Exchange on 26th May 2015, being the date of the Placing Agreement; (ii) a discount of approximately 15.00% to the theoretical ex-rights price of approximately HK$0.4013 per Share based on the closing price of HK$0.8 per Share as quoted on the Stock Exchange on the date of the Placing Agreement (taking into account the Rights Issue); and (iii) a discount of approximately 54.03% to the average of the closing price per Share of HK$0.742 as quoted on the Stock Exchange for the last five consecutive trading days immediately prior to the date of the Placing Agreement.

Assuming the maximum number of the Placing Shares was placed, the gross proceeds from Placing would be approximately HK$200.0 million and the net proceeds would be approximately HK$192.5 million. On such basis, the net issue price would be approximately HK$0.3283 per Placing Share.

The Placing Agreement was completed on 28 July 2015 and an aggregated of 586,350,000 Placing Shares have been successfully placed to not less than six placees. The net proceeds from the issuance of the Placing Shares were approximately HK$192.5 million. Up to the date of this report, the Group has applied (i) approximately HK$20 million for the development of its existing business in trading, wholesale, and retail of watch and jewellery products; (ii) Item (II): approximately HK$36.75 million to acquire 49% of the issued share capital of Glory International Entertainment Limited principally engaged in film and advertising production, provision of public relations services, holding and sponsoring stage performance, concerts and other cultural events in Hong Kong, Taiwan and the PRC as announced on 27th August 2015, (iii) Item (III): approximately HK$55 million to Cassia Investments Limited Partnership I, with the options grant to the Group to subscribe up to 15.45% of the issued capital of Cassia Optical Holdings Limited, a company incorporated in the Cayman Islands with limited liability, which owned 85% equity interest in a group of companies which are principally engaged in the production, supply and distribution of frames for eyeglasses and other optical products as announced on 5th October 2015; (iv) approximately HK$53.3 million for the development of money lending business (including the HK$18.3 million to the provision of short terms loans re-allocated from item Item (II) as disclosed in the Company’s announcement dated 27th August 2015); and (v) approximately HK$27.45 million as general working capital of the Group (inclusive of approximately HK$4.9 million originally allocated in Item (II) and the remaining HK$5 million referred to in Item (III) was used as general working capital).

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Universe International Holdings Limited Interim Report 2015/2016 83

CAPITAL STRUCTURE (Continued)

The Board has noted that the revenue and income of the Group has fluctuated in the past five financial years (i.e. from the year ended 30th June 2010 to the year ended 30th June 2014) from a maximum of approximately HK$233.2 million for the year ended 30th June 2014 to a minimum of approximately HK$75.9 million for the year ended 30th June 2012. The business segment of the film exhibition, licensing and sub-licensing of film rights accounted for a major portion of the total revenue and income of the Group, which represented approximately 74.8% of the total revenue for the financial year ended 30th June 2014. However, films are produced on a project basis and the revenue generated thereunder are not stable, thus causing the fluctuation of the revenue and income and also the profitability of the Group. In view of the above, it was the goal of the Group to expand its revenue and income stream and stabilise its revenue and income through (i) the acquisition of new businesses, which are considered to have a relatively stable income stream, from other parties; and/or (ii) further expansion of the other existing business segments of the Group. As such, the Group conducted the Rights Issue and the Placing to raise funds for this goal. The Board also considered that the Rights Issue and the Placing represented a good opportunity to broaden the shareholders’ base and the capital base of the Company.

THE PLEDGE OF GROUP ASSETS

As at 31st December 2015, the Group did not have any pledged assets (As at 30th June 2015: Nil).

EMPLOYEES AND REMUNERATION POLICIES

As at 31st December 2015, the Group had 203 staff (As at 30th June 2015: 52). Remuneration is reviewed annually and certain staffs are entitled to commission. In addition to basic salaries, staff benefits including discretionary bonus, medical insurance scheme and mandatory provident fund.

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Universe International Holdings Limited Interim Report 2015/2016

DIRECTORS’ AND CHIEF EXECUTIVES’ INTERESTS IN SHARES, UNDERLYING SHARES AND DEBENTURES

As at 31st December 2015, the interests of each of the Directors and chief executives of the Company in the shares (within the meaning of the Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong (“SFO”)) which were required to be (a) notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of SFO (including interest which any such Director was taken or deemed to have under such provisions of the SFO) or; (b) entered in the register required to be kept by the Company pursuant to Section 352 of Part XV of the SFO or; (c) notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) as set out in Appendix 10 to the Listing Rules were as follows:

		Number of
		the Company’s	Percentage of
Name	Nature of interest	shares held	shareholding
Mr. Lam Shiu Ming, Daneil	Founder of a discretionary	56,739,510	3.83%
(Director)	trust (Note 1)
	Beneficial owner	3,343,673	0.23%
		60,083,183	4.06%
Mr. Hung Cho Sing (Director)	Beneficial owner	3,343,673	0.23%
Mr. Lam Kit Sun (Director)	Beneficial owner	3,343,673	0.23%

Note:

The trustee of the discretionary trust is Central Core Resources Limited which owns the entire issued share capital of the Globalcrest Enterprises Limited which in turn is interested in 56,739,510 shares of the Company. Central Core Resources Limited is, the trustee of a discretionary trust under which certain immediate family members of Mr. Lam Shiu Ming, Daneil are discretionary objects.

All the interests in the shares and underlying shares of the Company were long positions.

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Universe International Holdings Limited Interim Report 2015/2016 85

DIRECTORS’ AND CHIEF EXECUTIVES’ INTERESTS IN SHARES, UNDERLYING SHARES AND DEBENTURES (Continued)

Save as disclosed above, as at 31st December 2015, none of the Directors or chief executives of the Company had any interests or short positions in the shares, underlying shares and debentures of the Company and its associated corporations which were required to be (a) notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests which they were deemed or taken to have under such provisions of the SFO) or; (b) entered in the register kept by the Company pursuant to Section 352 of Part XV of the SFO or; (c) notified to the Company and the Stock Exchange pursuant to the Model Code.

Save as disclosed above, at no time during the Period, the Directors and chief executives of the Company (including their spouse and children under 18 years of age) had any interests in, or had been granted, or exercised, any rights to subscribe for shares (or warrants or debentures, if applicable) of the Company and its associated corporations required to be disclosed pursuant to the SFO.

In addition, at no time during the Period was the Company, its holding company, its subsidiaries, its associated company or its fellow subsidiaries a party to any arrangement to enable the Directors and chief executives of the Company (including their spouse and children under 18 years of age) to hold any interests or short positions in the shares or underlying shares in or debentures of, the Company or its associated corporation.

SHARE OPTION SCHEME

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Universe International Holdings Limited Interim Report 2015/2016

SHARE OPTION SCHEME (Continued)

On 21st July 2014, the Company granted 171,604,000 share options to certain Directors and employees of the Group under the Share Option Scheme at the subscription price of HK$0.1738 per share option which were vested immediately and exercisable for a two-year period between 21st July 2014 and 20th July 2016 (both dates inclusive).

As a result of the capital reorganisation which became effective on 17th March 2015, adjustments have been made and the said outstanding 171,604,000 share options became 17,160,400 share options conferring holders thereof to subscribe for up to a total of 17,160,400 Shares, out of which 2,072,000 share options were lapsed in April 2015 and 15,088,400 share options remained unexercised and outstanding as at 30th June 2015. The subscription price per share option was adjusted to HK$1.738 per share option after taking into account of the effect of capital reorganisation which became effective on 17th March 2015. As a result of Rights Issue, adjustments have been made and the said 15,088,400 share options became 24,348,782 share options conferring holder thereof to subscribe for up to a total of 24,348,782 shares. The subscription price per share option was further adjusted to HK$1.077 per share option after taking into account of the effect of Rights Issue.

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Universe International Holdings Limited Interim Report 2015/2016 87

SHARE OPTION SCHEME (Continued)

Particulars of the share options under the Share Option Scheme outstanding during the Period and as at 31st December 2015 were as follows:

Participants
Date of
grant
Period during
which share
options are
exercisable
Price
per share
on exercise
of options
HK$

Number of
share options
outstanding
at the
beginning
of the Period
Adjusted
number of
share options
after Right
Issue
Number of
share options
granted
during
the Period
Number of
share options
exercised
during
the Period
Number of
share options
outstanding
at the end of
the Period
Market value
per share
on grant of
share options
HK$

Executive directors
Mr. Lam Shiu Ming, Daneil
21st July 2014
21st July 2014 to
20th July 2016
1.077
Mr. Hung Cho Sing
21st July 2014
21st July 2014 to
20th July 2016
1.077
Mr. Lam Kit Sun
21st July 2014
21st July 2014 to
20th July 2016
1.077
Other eligible participants
21st July 2014
21st July 2014 to
20th July 2016
1.077
30th September
2015
30th September 2015
to 29th September
2017
0.169

2,072,000
3,343,673
–
–
3,343,673
0.94

2,072,000
3,343,673
–
–
3,343,673
0.94

2,072,000
3,343,673
–
–
3,343,673
0.94

8,872,400
14,317,763
–
–
14,317,763
0.94
–
–
20,720,880
–
20,720,880
0.161
15,088,400
24,348,782
20,720,880
–
45,069,662

The price per share on exercise of options and market value per share on grant of options have been adjusted after taking into account of the effect of the Rights Issue.

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Universe International Holdings Limited Interim Report 2015/2016

SUBSTANTIAL SHAREHOLDERS

So far as is known to any Director or chief executive of the Company, as at 31st December 2015, shareholders (other than Directors or chief executive of the Company disclosed above) who had interests or short positions in shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the SFO, or which were recorded in the register kept by the Company under Section 336 of Part XV of the SFO were as follows:

	Number of	Approximate
	the Company’s	percentage of
Name of shareholders	shares held	shareholding
Mr. Ng Tang (note 1)	145,129,788	9.80%
Victor Meg Limited (note 1)	134,816,626	9.10%
Ever Robust Holdings Limited (note 2)	135,892,815	9.17%
Interactive Entertainment China Culture
Technology Investments Limited (formerly known
as “China Mobile Games and Culture Investment
Limited”) (note 2)	135,892,815	9.17%

Note:

(1) Victor Meg Limited is owned as to 40% by Mr. Ng Tang and Mr. Ng Tang is deemed to be interested in the 134,816,626 underlying shares of the Company held by Victor Meg Limited. Other than the underlying shares of the Company held by Victor Meg Limited, Mr. Ng Tang holds 10,303,162 underlying shares of the Company as beneficial owner. The underlying shares of the Company owned by Victor Meg Limited and Mr. Ng represent the maximum number of conversion shares that may be allotted and issued to each of them pursuant to the exercise of the conversion rights attached to the consideration convertible notes in accordance with the terms and conditions thereof.
(2) As the entire issued share capital of Ever Robust Holdings Limited is held by Interactive Entertainment China Culture Technology Investments Limited (formerly known as “China Mobile Games and Culture Investment Limited”), Interactive Entertainment China Culture Technology Investments Limited (formerly known as “China Mobile Games and Culture Investment Limited”) is deemed to be interested in all the 135,892,815 Shares held by Ever Robust Holdings Limited.

All the interests disclosed above represent long positions in shares.

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Universe International Holdings Limited Interim Report 2015/2016 89

SUBSTANTIAL SHAREHOLDERS (Continued)

Save as disclosed above, as at 31st December 2015, no other person has any interests or short positions in the shares, underlying shares and debentures of the Company in the register required to be kept by Company under section 336 of Part XV of the SFO.

MANAGEMENT CONTRACTS

No contracts concerning the management and administration of the whole or any substantial part of the business of the Company were entered into or existed during the Period.

CORPORATE GOVERNANCE CODE

The Company has, throughout the six months ended 31st December 2015, complied with the code provisions contained in Corporate Governance Code (the “Code”) set out in Appendix 14 to the Listing Rules except for the code provision A.2.1 of the Code for the separation of the roles of Chairman and Chief Executive Officer (“CEO”) as described in the following.

Code provision A.2.1 of the Code sets out that the roles of the Chairman and CEO should be separate and should not be performed by the same individual. The Company does not at present have any officer holding the position of CEO. Mr. Lam Shiu Ming, Daneil is the founder and Chairman of the Company and has also carried out the responsibilities of CEO. Mr. Lam possesses the essential leadership skills to manage the Board and extensive knowledge in the business of the Group. The Board considers the present structure to be more suitable to the Company because it can promote the efficient formulation and implementation of the Group’s strategies.

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Universe International Holdings Limited Interim Report 2015/2016

AUDIT COMMITTEE

The Audit Committee was established on 11th October 1999. Its current members include three independent non-executive Directors, namely Mr. Lam Wing Tai (Chairman), Mr. Lam Chi Keung and Mr. Choi Wing Koon.

The Audit Committee has reviewed the accounting principles and practices adopted by the Group and discussed internal control, risk management and financial reporting matters including a review of the unaudited condensed consolidated interim financial information for the six months ended 31st December 2015 with the management.

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

The Company has not redeemed any of its shares during the six months ended 31st December 2015. Neither the Company nor any of its subsidiaries has purchased or sold any of the Company’s listed securities during the Period.

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

During the six months ended 31st December 2015, the Company has adopted the Model Code as the code for dealing in securities of the Company by Directors. Having made specific enquiries, all Directors confirmed that they have complied with the Model Code throughout the Period.

By Order of the Board

Lam Shiu Ming, Daneil

Chairman and Executive Director

Hong Kong, 26th February 2016

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UNIVERSE INTERNATIONAL HOLDINGS LIMITED 寰宇國際控股有限公司

www.uih.com.hk

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Sinopec Engineering Group Co Ltd. — Interim / Quarterly Report 2016

14896_rns_2016-03-17_78f86ec9-5ea9-45a0-98b8-90286ce55528.pdf

CORPORATE INFORMATION

Executive Directors

Non-executive Directors

Independent Non-executive Directors

Company Secretary

Authorized Representatives

Principal Bankers

Auditor

Legal Advisers

Share Registrar

Audit Committee

Remuneration Committee

Nomination Committee

Registered Office

Website

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET (Continued)

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET (Continued)

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET (Continued)

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Continued)

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

1. GENERAL INFORMATION

2. BASIS OF PREPARATION

3. ACCOUNTING POLICIES

3. ACCOUNTING POLICIES (Continued)

4.1 Financial risk factors

Liquidity risk

4. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

4.2 Fair value estimation

4. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Continued)

4.2 Fair value estimation (Continued)

At 31st December 2015

4. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Continued)

4.2 Fair value estimation (Continued)

At 30th June 2015

31st December 2015

4. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Continued)

4. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

30th June 2015

4. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Continued)

5. SEGMENT INFORMATION

5. SEGMENT INFORMATION (Continued)

5. SEGMENT INFORMATION (Continued)

5. SEGMENT INFORMATION (Continued)

6. CAPITAL EXPENDITURES

6. CAPITAL EXPENDITURES (Continued)

6. CAPITAL EXPENDITURES (Continued)

7. INVESTMENTS IN ASSOCIATES

7. INVESTMENTS IN ASSOCIATES (Continued)

(a) Investment in Winston Asia Limited (“Winston”)

7. INVESTMENTS IN ASSOCIATES (Continued)

(b) Investment in Glory International Entertainment Limited (“Glory Entertainment”)

7. INVESTMENTS IN ASSOCIATES (Continued)

(b) Investment in Glory International Entertainment Limited (“Glory Entertainment”) (Continued)

Summarised financial information for the associate

Summarised balance sheet

7. INVESTMENTS IN ASSOCIATES (Continued)

(b) Investment in Glory International Entertainment Limited (“Glory Entertainment”) (Continued)

7. INVESTMENTS IN ASSOCIATES (Continued)

(b) Investment in Glory International Entertainment Limited (“Glory Entertainment”) (Continued)

8. INVESTMENTS IN JOINT VENTURES

Note (a):

8. INVESTMENTS IN JOINT VENTURES (Continued)

Summarised financial information of material joint venture

Summarised balance sheet

Summarised statement of comprehensive income

8. INVESTMENTS IN JOINT VENTURES (Continued)

Reconciliation of summarised financial information

8. INVESTMENTS IN JOINT VENTURES (Continued)

9. AVAILABLE-FOR-SALE FINANCIAL ASSETS

10. ACCOUNTS RECEIVABLE

10. ACCOUNTS RECEIVABLE (Continued)

Sinopec Engineering Group Co Ltd. Interim / Quarterly Report 2016