Sinopec Engineering Group Co Ltd. — Interim / Quarterly Report 2015

Feb 27, 2015

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

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

(Incorporated in Bermuda with limited liability)

(Stock Code: 1046)

INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED 31ST DECEMBER 2014

The board of directors (the “Director(s)”) (the “Board”) of Universe International Holdings Limited (the “Company”) announces the unaudited interim results of the Company and its subsidiaries (collectively, the “Group”) for the six months ended 31st December 2014 as follows:

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

		For the six months ended	For the six months ended
		31st December
		2014	2013
	Note	HK$’000	HK$’000
Revenue	4	30,497	152,729
Cost of revenue	5	(16,665)	(146,813)
Selling expenses	5	(1,604)	(2,002)
Administrative expenses	5	(27,291)	(18,190)
Other income		300	4,149
Other gains/(losses) – net		151	(51)
Gain on disposal of non-current assets held for sale		–	126
Gain on disposal of a subsidiary		6	–
Increase in fair value of investment properties		–	2,180
Unrealised fair value (loss)/gain on
investment securities		(19,007)	111,435
Fair value loss in issuance of unlisted warrants		–	(81,206)
Other operating income	5	535	1,549
Finance income		180	274
Share of loss of an associate		(191)	–
Share of loss of a joint venture		(110)	(106)

• for identification purposes only

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Note (Loss)/profit before income tax Income tax credit/(expense) 6 (Loss)/profit for the period attributable to the equity holders of the Company Other comprehensive income: Item that may be reclassified subsequently to profit and loss: Change in value of available-for-sale financial assets Total comprehensive (loss)/income for the period attributable to the equity holders of the Company (Loss)/earnings per share attributable to the equity holders of the Company during the period (expressed in HK cent) – basic 7 – diluted 7

For the six months ended 31st December 2014 2013 HK$’000 HK$’000 (33,199) 24,074 2,812 (18,130) (30,387) 5,944 67 – (30,320) 5,944 (1.45) 0.35 (1.45) 0.34

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

Note ASSETS Non-current assets Property, plant and equipment Investment properties Other intangible assets Film rights and films in progress Investment in an associate Investments in joint ventures Loan receivable from a joint venture Loans receivable 8 Film deposits Deferred income tax assets Available-for-sale financial assets Current assets Inventories Accounts receivable 9 Loans receivable 8 Deposits paid, prepayments and other receivables Financial assets at fair value through profit or loss Cash and cash equivalents Total assets	Unaudited As at 31st December 2014 HK$’000 1,482 25,060 1,858 30,016 4,869 824 8,032 7,000 37,311 372 55,032 171,856 2,623 8,725 61,930 40,811 92,849 50,944 257,882 429,738	Audited As at 30th June 2014 HK$’000 1,581 25,060 1,858 32,021 – 924 7,922 – 39,045 368 54,965 163,744 2,968 25,466 38,930 19,163 60,315 84,178 231,020 394,764

3

Note EQUITY Capital and reserves attributable to the equity holders of the Company Share capital Share premium Other reserves Retained earnings Total shareholders’ equity Non-controlling interest Total equity LIABILITIES Non-current liabilities Obligations under finance lease Deferred income tax liabilities Current liabilities Accounts payable 10 Other payables and accrued charges Deposits received Amount due to the ultimate holding company Obligations under finance lease Taxation payable Total liabilities Total equity and liabilities Net current assets Total assets less current liabilities	Unaudited As at 31st December 2014 HK$’000 49,730 194,669 92,957 14,600 351,956 1,000 352,956 45 1,645 1,690 3,608 32,644 36,408 1 17 2,414 75,092 76,782 429,738 182,790 354,646	Audited As at 30th June 2014 HK$’000 34,578 136,842 83,492 44,987 299,899 – 299,899 52 4,742 4,794 4,193 51,289 32,446 1 17 2,125 90,071 94,865 394,764 140,949 304,693

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NOTES:

1. GENERAL INFORMATION

The Group is principally engaged in the business of production of films and television series, distribution of films in various videogram formats, film exhibition, licensing and sub-licensing of film rights, leasing of investment properties, securities investment and money lending.

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 27th February 2015.

2. BASIS OF PREPARATION

These unaudited condensed consolidated interim financial information for the six months ended 31st December 2014 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 2014, 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 2014.

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3. ACCOUNTING POLICIES

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 30th June 2014 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.

The following new standards, amendments to standards and interpretations are mandatory and relevant to the Group for the financial year beginning on 1st July 2014.

		Effective for
		accounting periods
		beginning on or after
HKAS 32 Amendment	Offsetting Financial Assets and Financial	1st July 2014
	Liabilities
HKAS 36 Amendment	Recoverable Amount Disclosures for Non-	1st July 2014
	Financial Assets
HKAS 39 Amendment	Novation of Derivatives and Continuation	1st July 2014
	of Hedge Accounting
HKFRS 10, HKFRS 12	Investment Entities	1st July 2014
and HKAS 27 (2011) Amendment
Hong Kong (IFRIC)	Levies	1st July 2014
Interpretation (“HK(IFRIC)”) 21

The adoption of above new standards, amendments to standards and interpretations have no significant impact on the unaudited condensed consolidated interim financial information.

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 2014 and have not been early adopted.

		Effective for
		accounting periods
		beginning on or after
HKAS 19 (2011) Amendment	Defined Benefit Plans: Employee	1st July 2015
	Contributions
Annual Improvements Project	Annual Improvements 2010-2012 Cycle	1st July 2015
Annual Improvements Project	Annual Improvements 2011-2013 Cycle	1st July 2015
Annual Improvements Project	Annual Improvements 2012-2014 Cycle	1st July 2016
HKFRS 14	Regulatory Deferral Accounts	1st July 2016
HKFRS 10 and HKAS 28	Sale or Contribution of Assets between an	1st July 2016
Amendment	Investor and its Associate or Joint Venture
HKFRS 11 Amendment	Accounting for Acquisitions of Interests in	1st July 2016
	Joint Operations
HKAS 16 and HKAS 38 Amendment	Clarification of Acceptable Methods of	1st July 2016
	Depreciation and Amortisation
HKAS 16 and HKAS 41 Amendment	Agriculture: Bearer Plants	1st July 2016
HKAS 27 Amendment	Equity Method in Separate Financial	1st July 2016
	Statements
HKFRS 15	Revenue from Contracts with Customers	1st July 2017
HKFRS 9	Financial Instruments	1st July 2018

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4. 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:

• Distribution of films in various videogram formats

• Film exhibition, licensing and sub-licensing of film rights

• Leasing of investment properties

• Securities investments

• Money lending

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 disposal of non-current assets held for sale, gain on disposal of subsidiaries and fair value loss in issuance of unlisted warrants. Finance income and income tax expense/(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 consolidated financial statements.

Total assets, excluding investment properties, financial assets at fair value through profit or loss, loans receivable, inventories, accounts receivable, and other unallocated assets (including leasehold land, 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.

The Group’s inter-segment transactions mainly consist of licensing of film rights, which are transferred at cost. The revenue from external parties reported to the CODM is measured in a manner consistent with that in the consolidated statement of comprehensive income.

There are no sales between geographical segments.

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For the six month ended 31st December 2014

Unaudited

Revenue External sales Inter-segment sales Results Segment results before changes in fair value of investment securities Unrealised fair value loss on investment securities 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 and amortisation of leasehold land Unallocated depreciation and amortisation of leasehold land Total depreciation and amortisation of leasehold land Amortisation of film rights	Sales of goods HK$’000 2,874 – 2,874 (2,461) – (2,461) 313 61 409	Film exhibition, licensing and sub-licensing of film rights HK$’000 22,538 289 22,827 1,275 – 1,275 296 22 12,338	Leasing of investment properties HK$’000 486 – 486 389 – 389 – 1 –	Securities investment HK$’000 344 – 344 (1,183) (19,007) (20,190) – – –	Money lending HK$’000 2,921 – 2,921 1,712 – 1,712 45 12 –	Others HK$’000 1,334 7 1,341 (14,344) – (14,344) 32 17 –	Elimination HK$’000 – (296) (296) – – – – – –	Group HK$’000 30,497 – 30,497 (14,612) (19,007) (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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Unaudited

For the six months ended 31st December 2013

Revenue External sales Inter-segment sales Results Segment results before changes in fair value of investment securities and investment properties Unrealised fair value gain on investment securities Increase in fair value of investment properties Segment results Gain on disposal of non-current assets held for sale Fair value loss in issuance of unlisted warrants Finance income Share of loss of a joint venture Profit before income tax Income tax expense Profit attributable to the equity holders of the Company Other information Capital expenditures Unallocated capital expenditures Total capital expenditures Depreciation and amortisation of leasehold land Unallocated depreciation and amortisation of leasehold land Total depreciation and amortisation of leasehold land Amortisation of film rights	Sales of goods HK$’000 4,232 – 4,232 (959) – – (959) 147 115 2,125	Film exhibition, licensing and sub-licensing of film rights HK$’000 144,381 1,247 145,628 (4,520) – – (4,520) 1,056 46 122,082	Leasing of investment properties HK$’000 830 – 830 390 – 2,180 2,570 5 – –	Securities investments HK$’000 – – – (948) 111,435 – 110,487 – – –	Money lending HK$’000 51 – 51 (708) – – (708) 38 2 –	Others HK$’000 3,235 12 3,247 (1,884) – – (1,884) 6 29 –	Elimination HK$’000 – (1,259) (1,259) – – – – – – –	Group HK$’000 152,729 – 152,729 (8,629) 111,435 2,180 104,986 126 (81,206) 274 (106) 24,074 (18,130) 5,944 1,252 2,312 3,564 192 399 591 124,207

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Unaudited

As at 31st December 2014

Unaudited As at 31st December 2014
Sale of goods Film exhibition, licensing and sub-licensing of film rights Leasing of investment properties Securities investments Money lending Others Elimination HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Assets Segment assets 5,046 30,072 25,069 92,849 68,930 12,647 – Other intangible assets Deferred income tax assets Cash and cash equivalents Other unallocated assets Total assets Audited As at 30th June 2014 Sale of goods Film exhibition, licensing and sub-licensing of film rights Leasing of investment properties Securities investments Money lending Others Elimination HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Assets Segment assets 7,494 53,552 25,070 60,315 38,930 8,602 – Other intangible assets Deferred income tax assets Cash and cash equivalents Other unallocated assets Total assets	Group HK$’000 234,613 1,858 372 50,944 141,951
	429,738
	Group HK$’000 193,963 1,858 368 84,178 114,397
	394,764

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5. EXPENSES BY NATURE

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

	Unaudited
	For the six months	ended
	31st December
	2014	2013
	HK$’000	HK$’000
Amortisation of film rights	12,747	124,207
Amortisation of leasehold land	–	41
Depreciation	306	550
Write-off of inventories	132	–
Written back of film deposits previously written off	–	(1,549)
Employee benefits expenses including directors’ emoluments	6,635	12,539
Cost of inventories sold	2,314	1,664

6.

INCOME TAX CREDIT/(EXPENSE)

Hong Kong profits tax has been provided at the rate of 16.5% on the estimated assessable profit for the period ended 31st December 2014 (2013: 16.5%).

The amount of income tax credit/(expense) credited/(charged) to the unaudited condensed consolidated statement of comprehensive income represents:

Hong Kong profits tax – current Deferred income tax relating to the origination and reversal of temporary differences Deferred income tax relating to unrealised fair value loss/(gain) on investment securities	Unaudited For the six months ended 31st December 2014 2013 HK$’000 HK$’000 (289) – (35) 257 3,136 (18,387) 2,812 (18,130)

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7. (LOSS)/EARNINGS PER SHARE

The calculation of the basic and diluted (loss)/earnings per share attributable to equity owners of the Company during the period ended 31st December 2014 is based on the following data:

(Loss)/earnings for the purpose of basic and diluted (loss)/earnings per share Weighted average number of ordinary shares for the purpose of basic (loss)/earnings per share Effect of dilutive potential shares from the share options Effect of dilutive potential shares from the unlisted warrants Weighted average number of ordinary shares for the purpose of diluted (loss)/earnings per share	Unaudited For the six months ended 31 December 2014 2013 HK$’000 HK$’000 (30,387) 5,944 Number of Shares (in thousand) 2014 2013 2,088,698 1,713,601 N/A 24,558 N/A 12,121 N/A 1,750,280	Unaudited For the six months ended 31 December 2014 2013 HK$’000 HK$’000 (30,387) 5,944 Number of Shares (in thousand) 2014 2013 2,088,698 1,713,601 N/A 24,558 N/A 12,121 N/A 1,750,280
		1,750,280

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

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8. LOANS RECEIVABLE

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

Loans to customers Analysed as: – Non-current – Current Neither past due nor impaired – Unsecured loans – Secured loans	Unaudited As at 31st December 2014 HK$’000 68,930 7,000 61,930 68,930 68,930 – 68,930	Audited As at 30th June 2014 HK$’000 38,930 – 38,930 38,930 29,930 9,000 38,930

The Group’s loans receivable, 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 2014.

All these loans receivable are entered with contractual maturity within 1 year except for a loan of HK$7,000,000 which is entered with contractual maturity of 1.5 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 9% to 12% per annum.

Interest income of approximately HK$2,921,000 (2013: approximately HK$51,000) has been recognised in ‘revenue’ in the unaudited condensed consolidated statement of comprehensive income during the period ended 31st December 2014.

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9. ACCOUNTS RECEIVABLE

Accounts receivable Less: Provision for impairment of accounts receivable Accounts receivable – net	Unaudited As at 31st December 2014 HK$’000 8,867 (142) 8,725	Audited As at 30th June 2014 HK$’000 25,608 (142) 25,466

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

As at 31st December 2014, the ageing analysis of the accounts receivable based on invoice date was as follows:

1 to 90 days 91 days to 180 days Over 180 days	Unaudited As at 31st December 2014 HK$’000 4,467 3,762 496 8,725	Audited As at 30th June 2014 HK$’000 2,114 16,041 7,311 25,466

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.

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.

As at 31st December 2014, the Group does not hold any collateral as security (As at 30th June 2014: Nil).

No provision was recognised by the Group for the impairment of its accounts receivable during the period ended 31st December 2014 (2013: Nil). During the period ended 31st December 2014, no provision (2013: Nil) was written off from the allowance account.

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10. ACCOUNTS PAYABLE

As at 31st December 2014, the ageing analysis of the accounts payable based on invoice date was as follows:

1 to 90 days 91 days to 180 days Over 180 days	Unaudited As at 31st December 2014 HK$’000 1,147 37 2,424 3,608	Audited As at 30th June 2014 HK$’000 1,521 469 2,203 4,193

11. 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”).

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 wholly-owned 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.

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• (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.

• (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 appropriate 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 2014, 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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12. EVENTS AFTER THE BALANCE SHEET DATE

(a) Proposed Issue of Notes

As announced on 28th January 2015, the Company and Convoy Asset Management Limited (the “Placing Agent”) entered into the placing agreement (the “Placing Agreement”), pursuant to which the Placing Agent agreed to act as placing agent of the Company, on a best endeavour basis, to procure the placee(s) who (and its/his/her/their respective ultimate beneficial owner(s), if applicable) shall be third parties independent of, and not connected with the Company, its connected persons (within the meaning of the Listing Rules) and their respective associates, to subscribe for the 6.5% per annum notes (“Notes”) to be issued by the Company in an aggregate principal amount of up to HK$50,000,000 maturing on the same calendar date of the 18th month after the issue date of the Notes at the placing price equal to 100% of the principal amount of the Notes (“Placing”). The placing period for the Placing shall last for a period of two months commencing on the day immediately following the date of the Placing Agreement. If the aggregate principal amount of the Notes successfully placed by the Placing Agent during the placing period is less than HK$10,000,000, the Company is not obliged to issue the Notes to the placee(s) pursuant to the Placing Agreement and has the absolute discretion on determining whether the Notes shall be so issued. The Placing is not completed as at the date of this announcement.

(b) Proposed Capital Reorganisation

As announced on 3rd February 2015, the Board proposed the following capital reorganisation (the “Capital Reorganisation”) that:

• (1) every 10 issued and unissued existing ordinary share(s) of HK0.02 each in the existing share capital of the Company (the “Share”) will be consolidated into 1 consolidated share (the “Consolidated Share”) of HK$0.20 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$0.19 (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$0.20 to HK$0.01 (the “New Share”);

• (3) immediately following the Capital Reduction, each of the authorised but unissued Consolidated Shares of HK$0.20 each will be sub-divided into 20 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$47,244,000 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 remain to 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 16th March 2015 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 3rd February 2015 and 18th February 2015, respectively.

(c) Appointment of a Non-Executive Director

The Board passed a resolution on 27th February 2015 to appoint Mr. Chan Shiu Kwong Stephen as a nonexecutive Director. Such appointment will take effect on 1st March 2015. Mr. Chan’s appointment will be subject to the retirement and rotation requirements in accordance with the bye-laws of the Company.

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INTERIM DIVIDEND

The Board does not recommend the payment of an interim dividend in respect of the six months ended 31st December 2014 (2013: Nil).

MANAGEMENT DISCUSSION AND ANALYSIS

Overall Group results

The Group’s unaudited consolidated revenue for the six months period ended 31 December 2014 (the “ Period ”) decreased by approximately 80.0% over the same period last year to approximately HK$30.5 million which was mainly due to the decrease in revenue from film exhibition, licensing and sub-licensing of film rights segment from approximately HK$144.4 million for the six months period ended 31st December 2013 to approximately HK$22.5 million during the Period as a result of the decrease in number of newly released film and no new self-produced films released during the Period under review.

The Group recorded a net loss of approximately HK$30.4 million for the Period against a net profit of approximately HK$5.9 million for the same period last year, which is mainly due to the recognition of the fair value loss arising from the investment securities and the recognition of the share based payment expenses of approximately HK$19.0 million and approximately HK$9.4 million, respectively during the Period.

Video distribution

During the Period under review, the local video distribution business accounted for approximately 9.4% (2013: approximately 2.8%) of the Group’s consolidated revenue. Turnover from this business segment decreased by approximately 32.1% to approximately HK$2.9 million compared to the same period last year. The decrease in turnover is mainly due to difficult operating environment and the reduction in number of new titles being released during the Period under review.

As a result of the decrease in turnover, the performance of this business segment was deteriorated. During the Period under review, the Group recorded a segmental loss of approximately HK$2.5 million, representing an increase of approximately 156.6% as compared to approximately HK$1.0 million in the same period last year.

Film exhibition, licensing and sub-licensing of film rights

Revenue from this business segment during the Period was approximately HK$22.5 million, representing a decrease of approximately 84.4% as compared to approximately HK$144.4 million in the same period last year. It accounted for approximately 73.9% (2013: approximately 94.5%) of the Group’s total turnover during the Period.

The significant decrease in revenue from this business segment was mainly due to the decrease in number of newly released film and the absence of new self-produced films released during the Period under review.

However, the performance of this segment was improved. Segmental profit of approximately of HK$1.3 million was recorded during the Period against a segmental loss of approximately HK$4.5 million for the same period last year, which is mainly due to the decrease in number of newly released film during the Period as compared to the same period last year. The gross profit margin from non-newly lease films is higher than the newly release films because their cost had been fully amortised in previous years.

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Leasing of investment properties

During the Period under review, this business segment recorded a decrease of revenue of approximately 41.5% to approximately HK$486,000 from approximately HK$830,000. The decrease in rental income during the Period is due to the Group has disposed certain investment properties in February 2014.

Securities Investment

As at 31st December 2014, the Group had financial assets at fair value through profit or loss of approximately HK$92.8 million (As at 30th June 2014: approximately HK$60.3 million) and recognised the fair value loss arising from the investment securities of approximately HK$19.0 million. For the six months period ended 31st December 2013, the Group recognised the fair value gains arising from the investment securities of approximately HK$111.4 million.

The securities investment portfolio of the Group consists of investments mainly in listed securities in Hong Kong. The unfavorable results of this segment is due to the instability and uncertain stock market, as well as change in fair value of held-for-trading investments securities which are mainly non-cash in nature.

The Group will continue diversifying, optimizing and consolidating its existing investment portfolios, so as to achieve a better return to the Group.

Money lending business

As at 31st December 2014, the Group had loans receivable of approximately HK$68.9 million (As at 30th June 2014: approximately HK$38.9 million) and recognised interest income of approximately HK$2.9 million (2013: approximately HK$0.5 million). There was no default event happened in respect of the Group’s loans receivable during the Period (2013: Nil).

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.

Geographical contribution

In terms of geographical contribution, overseas markets accounted for approximately 54.4% (2013: approximately 78.2%) of the Group’s total revenue during the Period under review. Revenue from the Mainland China (the “PRC”) accounted for approximately 52.1% (2013: approximately 70.7%) of the Group’s total revenue.

Other income

Other income for the Period decreased by approximately 92.8% to approximately HK$0.3 million as compared to approximately HK$4.2 million in the same period last year.

The decrease was caused by the lack of sponsorship for the Company’s films (2013: approximately HK$4.1 million) during the Period as no new self-produced film was released during the Period.

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Selling expenses

Selling expenses for the Period decreased by approximately 19.9% to approximately HK$1.6 million as compared to approximately HK$2.0 million in the same period last year. The decrease in selling expenses was mainly due to the decrease in number of the newly released films during the Period.

Administrative expenses

Administrative expenses for the Period increased by approximately 50.0% to approximately HK$27.3 million as compared to approximately HK$18.2 million in the same period last year.

The increase in administrative expenses was mainly due to the recognition in the share based payment expenses of approximately HK$9.4 million (2013: Nil) during the Period.

Income tax credit/(expense)

The Group recorded income tax credit of approximately HK$2.8 million during the Period (2013: income tax expenses of approximately HK$18.1 million), which was mainly attributable to the deferred income tax credit of approximately HK$3.1 million relating to the unrealised fair value loss on investment securities during the Period. For the six months period ended 31st December 2013, the Group recorded the deferred income tax expenses of approximately HK$18.4 million relating to the unrealised fair value gain on investment securities during that period.

NEW/POTENTIAL INVESTMENTS

Pursuant to the Company’s announcement dated 30th October 2013, 30th June 2014 and 31st December 2014, the Group entered into a cooperative framework agreement (“Framework Agreement”) with 貴州多 彩貴州城建設經營有限公司 (“Guizhou Colorful”) (in English, for identification purpose only, Guizhou Colorful Guizhou Town Construction Management Co., Ltd.), a limited liability company established in the PRC on 30th October 2013, in relation to the proposed cooperation in a development project (“Colorful Guizhou Town Project”) of Colorful Guizhou Town（多彩貴州城）, a commercial, leisure and tourism site to be constructed in Guiyang City, PRC. During the construction and operation phase of Colorful Guizhou Town, the Group will provide design, planning and management and personnel training services to Guizhou Colorful, and will consider investment in and construction of high-end theatres in Colorful Guizhou Town. If the parties to the Framework Agreement shall not have entered into a formal cooperative agreement regarding their proposed cooperation by 30th June 2015, the Framework Agreement shall lapse.

OUTLOOK

The total box revenue of film exhibition industry in the PRC is increasing in recent years. Due to the high production, advertising and distribution cost, this makes the operating environment of this segment more challenging than before. In response to the above, the Group adopted a cautious approach towards investment in the film exhibition, licensing and sub-licensing of film rights which in turn resulted in the decrease in number of newly released films and the absence of new self-produced film released during the Period. Nevertheless, the Group will closely monitor the market environment and continue to evaluate new opportunities in this sector.

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In order to diversify the Group’s business, as announced on 6th November 2014, the Group has set up Round Table Performance Entertainment Limited, a 70% owned joint venture, to engage in holding and sponsoring stage performance, concerts and other cultural events, as well as developing the entertainment business in Hong Kong and the PRC. The business of Round Table Performance Entertainment Limited has commenced in January 2015 and will bring new revenue to the Group for the coming financial period.

In addition, the Group will continue to identify different investment opportunities include but not limited to the aforesaid “NEW/POTENTIAL INVESTMENTS” and in entertainment, gaming, culture-related business and other business sectors with enormous potentials to further diversify its business and broaden the income sources to maximise the return to its shareholders.

FINANCIAL RESOURCES/LIQUIDITY

As at 31st December 2014, the Group had cash balances of approximately HK$50.9 million (As at 30th June 2014: approximately HK$84.2 million).

As at 31st December 2014, the Group had total assets of approximately HK$429.7 million (As at 30 June 2014: approximately HK$394.8 million).

The Group’s gearing ratio as at 31st December 2014 fell to almost zero (As at 30th June 2014: same), which was calculated on the basis of the Group’s long term borrowings including obligations under finance lease of approximately HK$45,000 (fully repayable in five years) and on the total equity of the Company of approximately HK$353.0 million.

There was no financial cost incurred for the Period (2013: 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 2014, current ratio (defined as total current assets divided by total current liabilities) was approximately 3.43 (As at 30th June 2014: approximately 2.56).

CAPITAL STRUCTURE

As at 31st December 2014, the Group had shareholders’ capital of approximately HK$49,730,000 (30th June 2014: approximately HK$34,578,000). The shareholders’ capital of the Company is constituted of 2,486,503,070 Shares.

As announced on 23rd June 2014, the Company entered into a placing agreement (the “First 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 343,200,000 new ordinary shares of the Company (“First Placing Shares”) at a price of HK$0.1 per First Placing Share. The placing price of HK$0.1 per First Placing Share represented:

• (i) a discount of approximately 13.79% to the closing price of HK$0.116 per Share as quoted on the Stock Exchange on 23rd June 2014, the date of the First Placing Agreement; and

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• (ii) a discount of approximately 13.64% to the average closing price of HK$0.1158 per Share as quoted on the Stock Exchange for the five consecutive trading days of the Shares immediately prior to the date of the First Placing Agreement.

Assuming the maximum number of the First Placing Shares were placed, the gross proceeds from this placing would be approximately HK$34.3 million and the net proceeds would be approximately HK$33.0 million. On such basis, the net issue price would be approximately HK$0.096 per First Placing Share.

The First Placing Agreement was completed on 9th July 2014 and an aggregated of 343,200,000 First Placing Shares have been successfully placed to not less than six placees. The net proceeds from the issuance of the First Placing Shares are approximately HK$33.0 million and has been utilised for general working capital up to the date of this announcement.

As announced on 9th December 2014, the Company entered into another placing agreement (the “Second 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 414,415,000 new ordinary shares of the Company (“Second Placing Shares”) at a price of HK$0.1 per Second Placing Share. The placing price of HK$0.1 per Second Placing Share represented:

• (i) a discount of approximately 6.54% to the closing price of HK$0.107 per Share as quoted on the Stock Exchange on 9th December 2014, the date of the Second Placing Agreement; and

• (ii) a discount of approximately 16.53% to the average closing price of HK$0.1198 per Share as quoted on the Stock Exchange for the five consecutive trading days of the Shares immediately prior to the date of the Second Placing Agreement.

Assuming the maximum number of the Second Placing Shares was placed, the gross proceeds from this placing would be approximately HK$41.4 million and the net proceeds would be approximately HK$39.7 million. On such basis, the net issue price would be approximately HK$0.096 per Second Placing Share.

The Second Placing Agreement was completed on 18th December 2014 and an aggregated of 414,415,000 Second Placing Shares have been successfully placed to not less than six placees. The net proceeds from the issuance of the Second Placing Shares are approximately HK$39.7 million and approximately HK$34.0 million has been utilised for general working capital up to the date of this announcement.

The Directors are of the view that the placing of new shares under the First Placing Agreement and Second Placing Agreement (the “Placings”) can strengthen the financial position of the Group and provide general working capital to the Group to meet any future development and obligations. The Placings also represent good opportunities to broaden the shareholders’ base and the capital base of the Company.

THE PLEDGE OF GROUP ASSETS

As at 31st December 2014, the Group did not have any pledged assets (As at 30th June 2014: Nil).

EMPLOYEES AND REMUNERATION POLICIES

As at 31st December 2014, the Group had 51 staff (As at 30th June 2014: 46). 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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SHARE OPTION SCHEME

Pursuant to a resolution passed in the annual general meeting held on 26th November 2003, the Company adopted a share option scheme (the “2003 Share Option Scheme”) in compliance with the Listing Rules.

The Company may grant share options to the participants, including Directors and employees, to subscribe for Shares as incentives and/or rewards for their contributions and support to the Group and any entity in which the Group holds any equity interests. On 27th June 2012, the Company granted 34,235,403 share options, which represented approximately 2% of the issued share capital of the Company as at 31st December 2013, to certain Directors and employees at the subscription price of HK$0.067 per share option which were vested immediately and exercisable for a three-year period commencing from 27th June 2012 to 26th June 2015 (both days inclusive). Each share option gives the holder the right to subscribe for one ordinary Share. Particulars of the share options under the 2003 Share Option Scheme outstanding during the Period and as at 31st December 2014 were as follows:

				No of share
				options	No of share	No of share	No of share	Market
		The term during	Price per	outstanding	options	options	options	value per
		which share	Share on	at the	granted	exercised	outstanding	Share on
	Date of	options are	exercise of	beginning	during the	during the	at the end	grant of
Participants	grant	exercisable	options	of the Period	Period	Period	of the Period	share option
			HK$					HK$
Executive Directors
Mr. Lam Shiu Ming, Daneil	27/6/2012	27/6/2012-	0.067	17,117,703	–	–	17,117,703	0.064
		26/6/2015

The 2003 Share Option Scheme expired on 26th November 2013. According to the provisions of the 2003 Share Option Scheme, Options granted during the term of the 2003 Share Option Scheme and remain unexercised immediately prior to the end thereof shall continue to be exercisable in accordance with their terms of grant notwithstanding the expiry of the 2003 Share Option Scheme.

In view of the expiration of the 2003 Share Option Scheme and in order to enable the Company to grant share options to selected participants as incentives or rewards for their contributions to grant the Group, the Company adopted a new share option scheme (the “2013 Share Option Scheme”) pursuant to a resolution passed in the annual general meeting of the Company held on 2nd December 2013 in compliance with the Listing Rules.

The 2013 Share Option Scheme will be valid for 10 years from the date of its adoption. The purpose of the 2013 Share Option Scheme is to enable the Company to grant share options to the participants, as incentives and/or rewards for their contribution to the Group and/or any invested entity (if applicable). Under the 2013 Share Option Scheme, the total number of share options available for issue as at 31st December 2013 was 171,604,979, the full exercise of which in subscribing for Shares would represent 10% of the total number of the issued capital of the Company as at 31st December 2013.

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Particulars of the share options under the 2013 Share Option Scheme outstanding during the Period and as at 31st December 2014 were as follows:

Participants Date of grant Period during which share options are exercisable Price per share on exercise of options HK$ Executive directors Mr. Lam Shiu Ming, Daneil 21 July 2014 21 July 2014 to 20 July 2016 0.1738 Mr. Hung Cho Sing 21 July 2014 21 July 2014 to 20 July 2016 0.1738 Mr. Yeung Kim Piu 21 July 2014 21 July 2014 to 20 July 2016 0.1738 Mr. Lam Kit Sun 21 July 2014 21 July 2014 to 20 July 2016 0.1738 Chief Operating Officer Mr. Lam Siu Keung, Alvin 21 July 2014 21 July 2014 to 20 July 2016 0.1738 Other eligible participants 21 July 2014 21 July 2014 to 20 July 2016 0.1738	Number of share options outstanding at the beginning of the Period – – – – – – –	Number of share options granted during the Period 20,720,000 20,720,000 20,720,000 20,720,000 20,720,000 68,004,000 171,604,000	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$ 20,720,000 0.152 20,720,000 0.152 20,720,000 0.152 20,720,000 0.152 20,720,000 0.152 68,004,000 0.152 171,604,000

Please refer to the Company’s circular dated 31st October 2013 for the principal terms and details of the 2013 Share Option Scheme.

CORPORATE GOVERNANCE CODE

The Company has, throughout the six months ended 31st December 2014, 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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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 and financial reporting matters including a review of the unaudited condensed consolidated interim financial information for the six months ended 31st December 2014 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 2014. 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 2014, 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.

PUBLICATION ON THE COMPANY AND STOCK EXCHANGE’S WEBSITES

This interim results announcement is published on the websites of the Company (www.uih.com.hk) and the Stock Exchange (www.hkexnews.hk), respectively. The interim report will also be available on the same websites on or before 31st March 2015.

By Order of the Board Lam Shiu Ming, Daneil Chairman

Hong Kong, 27th February 2015

As at the date of this announcement, the executive Directors are Mr. Lam Shiu Ming, Daneil, Mr. Hung Cho Sing, Mr. Yeung Kim Piu and Mr. Lam Kit Sun, and the independent non-executive Directors are Mr. Lam Wing Tai, Mr. Choi Wing Koon and Mr. Lam Chi Keung.

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