Synagistics Limited — Annual Report 2010

Jul 22, 2010

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

==> picture [69 x 52] intentionally omitted <==

==> picture [36 x 41] intentionally omitted <==

OP FINANCIAL INVESTMENTS LIMITED 東 英 金 融 投 資 有 限 公 司 *

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1140)

ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 MARCH 2010

RESULTS

The Board of Directors (the ‘‘Board’’) of OP Financial Investments Limited (‘‘OP Financial’’ or the ‘‘Company’’) is pleased to announce the consolidated results of the Company and its subsidiaries (the ‘‘Group’’) for the financial year ended 31 March 2010 (the ‘‘Year’’).

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 MARCH 2010

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2010
Note Revenue 3 Other income Net gain/(loss) on financial assets at fair value through profit or loss — Classified as held for trading — Designated as such upon initial recognition Gain on disposal of available-for-sale financial assets Loss on redemption of available-for-sale financial assets Impairment loss on available-for-sale financial assets Fair value gain on other financial liabilities Administrative expenses Profit/(Loss) from operations Finance costs Share of results of associates Profit/(Loss) before tax Income tax 5 Profit/(Loss) for the year 6 Earnings/(Loss) per share Basic 7(a) Diluted 7(b)	2010 HK$’000 458,201 4	2009 HK$’000 7,663 —
	102,308 6,255	(7,034) —
	108,563 471 (16,654) — 7,760 (102,923) 455,422 — 22,946 478,368 (5,298) 473,070 HK60.3 cents N/A	(7,034) — — (78) 9,628 (30,914) (20,735) (74) (4,807) (25,616) — (25,616) HK(3.5 cents) N/A

• for identification purpose only

– 1 –

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MARCH 2010

Profit/(Loss) for the year Other comprehensive income Available-for-sale financial assets Fair value changes during the year Reclassification adjustments relating to redemption of available-for-sale financial assets during the year Total comprehensive income for the year	2010 HK$’000 473,070 154,921 (34,664) 120,257 593,327	2009 HK$’000 (25,616) 41,461 — 41,461 15,845

– 2 –

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2010

Note Non-current assets Property, plant and equipment Investments in associates Available-for-sale financial assets Financial assets at fair value through profit or loss Current assets Financial assets at fair value through profit or loss Accounts receivable 8 Interest receivables Fund subscription Prepayments and other receivables Tax recoverable Bank and cash balances Current liabilities Accrued charges Tax payable Other financial liabilities Net current assets Total assets less current liabilities Non-current liabilities Other financial liabilities NET ASSETS Capital and reserves Share capital Reserves TOTAL EQUITY Net asset value per share 9	2010 HK$’000 108 82,643 694,890 162,920 940,561 332,824 8,377 48 7,734 3,490 — 261,365 613,838 69,002 5,298 — 74,300 539,538 1,480,099 — 1,480,099 78,450 1,401,649 1,480,099 HK$1.89	2009 HK$’000 143 59,652 209,636 —
		269,431
		237,580 — 323 — 578 1,404 391,759
		631,644
		6,543 — 3,880
		10,423
		621,221
		890,652 3,880
		886,772
		78,450 808,322
		886,772
		HK$1.13

– 3 –

NOTES

1. BASIS OF PREPARATION

The financial statements have been prepared in accordance with new and revised Hong Kong Financial Reporting Standards (‘‘HKFRSs’’), accounting principles generally accepted in Hong Kong and the applicable disclosures required by the Rules Governing the Listing of Securities (the ‘‘Listing Rules’’) on The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’) and by the Hong Kong Companies Ordinance.

The financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain investments and derivatives which are carried at their fair values.

2. ADOPTION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS

In the current year, the Group has adopted all of the new and revised Hong Kong Financial Reporting Standards (‘‘HKFRSs’’) issued by the Hong Kong Institute of Certified Public Accountants that are relevant to its operations and effective for its accounting year beginning on 1 April 2009. HKFRSs comprise all applicable individual Hong Kong Financial Reporting Standards (‘‘HKFRS’’); Hong Kong Accounting Standards (‘‘HKAS’’); and Interpretations. The adoption of these new and revised HKFRSs had no material impact on the Group’s results and financial position for the current or prior years, and did not result in any significant changes in the accounting policies of the Group. Nevertheless, certain changes in presentation and disclosure have been adopted by the Group in compliance with the following new and revised HKFRSs:

(a) Presentation of Financial Statements

HKAS 1 (Revised) ‘‘Presentation of Financial Statements’’ affects certain disclosures and presentation of the financial statements. The balance sheet is renamed as the statement of financial position and the cash flow statement is renamed as the statement of cash flows. All income and expenses arising from transactions with non-owners are presented in the income statement and statement of comprehensive income, and the total carried to the statement of changes in equity. The owner changes in equity are presented in the statement of changes in equity. HKAS 1 (Revised) also requires disclosures of the reclassification adjustments and tax effects relating to each component of other comprehensive income for the Year. HKAS 1 (Revised) has been applied retrospectively.

(b) Amendments to HKFRS 7 ‘‘Financial Instruments: Disclosures — Improving Disclosures about Financial Instruments’’

The HKFRS 7 amendments require additional disclosures about fair value measurement and liquidity risk. Fair value measurements related to items recorded at fair value are to be disclosed by sources of inputs using a threelevel fair value hierarchy, by class, for all financial instruments recognised at fair value. In addition, a reconciliation between the beginning and ending balances is now required for level 3 fair value measurements, as well as significant transfers between levels in the fair value hierarchy. The amendments also clarify the requirements for liquidity risk disclosures with respect to derivative transactions and assets used for liquidity management. The Group has not presented comparative information for the new disclosures required by the amendments in accordance with the transitional provision set out in the amendments.

– 4 –

(c) Operating Segments

HKFRS 8 ‘‘Operating Segments’’ requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. Previously, HKAS 14 ‘‘Segment Reporting’’ required an entity to identify two sets of segments (business and geographical), using a risks and rewards approach, with the entity’s ‘‘system of internal financial reporting to key management personnel’’ serving as the starting point for the identification of such segments. The Group has determined that its primary segment reported under HKAS 14 are the same as the segment reported under HKFRS 8. HKFRS 8 has been applied retrospectively.

The Group has not applied the new HKFRSs that have been issued but are not yet effective. The Group has already commenced an assessment of the impact of these new HKFRSs but is not yet in a position to state whether these new HKFRSs would have a material impact on its results of operations and financial position.

3. REVENUE

Revenue, which is also the Group’s turnover, represents the income received and receivable on investments during the Year as follows:

Dividend income from listed investments Dividend income from unlisted investments Performance premiums from co-investment partners Interest income	2010 HK$’000 241 330,416 121,097 6,447 458,201	2009 HK$’000 72 — — 7,591
		7,663

– 5 –

4. SEGMENT INFORMATION

The chief operating decision maker has been identified as the Board. The Board assesses the operating segments using a measure of operating profit. The Group’s measurement policies for segment reporting under HKFRS 8 are the same as those used in its HKFRS financial statements.

On adopting of HKFRS 8, based on the internal financial information reported to the Board for decisions about resources allocation to the Group’s business components and review of these components’ performance, the Group has identified only one operating segment, being investment holding. Accordingly, segment disclosures are not presented.

Geographical information:

Revenue Hong Kong Mainland China	2010 HK$’000 337,104 121,097 458,201	2009 HK$’000 7,663 —
		7,663

In presenting the geographical information, revenue is based on the location of the investments or the co-investment partners.

Non-current assets other than financial instruments

Hong Kong	2010 HK$’000 82,751	2009 HK$’000 59,795

Information about major investments and co-investment partners:

During the Year, dividend income and loan interest income derived from one of the Group’s investments which accounted for 10% or more of the Group’s revenue amounted to approximately HK$322,383,000 (2009: Nil).

During the Year, performance premiums derived from one of the Group’s co-investment partners which accounted for 10% or more of the Group’s revenue amounted to approximately HK$83,988,000 (2009: Nil).

5. INCOME TAX

Hong Kong Profits Tax has been provided at a rate of 16.5% (2009: 16.5%) on the estimated assessable profit for the Year.

Provision for the year	2010 HK$’000 5,298	2009 HK$’000 —

– 6 –

6. PROFIT/(LOSS) FOR THE YEAR

The Group’s profit/(loss) for the year is stated after charging the following:

Auditor’s remuneration Audit Others Depreciation Investment management fee Performance fee Operating lease payments in respect of office premises Staff costs (including directors’ emoluments) Salaries and other benefits Retirement benefits scheme contributions	2010 HK$’000	2009 HK$’000	2009 HK$’000
	500 110	300 110
	610 59 17,637 65,363 941	410 54 13,395 4,990 871
	11,740 108	7,775 67
	11,848	7,842

All the above expenses are included in administrative expenses.

7. EARNINGS/(LOSS) PER SHARE

(a) Basic earnings/(loss) per share

The calculation of basic earnings/(loss) per share is based on the profit for the Year of approximately HK$473,070,000 (2009: loss of approximately HK$25,616,000) and the weighted average number of 784,500,000 (2009: 728,589,042) ordinary shares in issue during the Year.

(b) Diluted earnings/(loss) per share

Diluted earnings per share for the Year has not been presented as the Company’s outstanding share options had no dilutive effect for the Year as the exercise prices of those share options were higher than the average market price for shares.

Diluted loss per share for the year ended 31 March 2009 has not been presented as the Company’s outstanding warrants and share options had no dilutive effect for the year ended 31 March 2009 as the exercise prices of those warrants and share options were higher than the average market price for shares.

– 7 –

8. ACCOUNTS RECEIVABLE

At 31 March 2010, the Group’s accounts receivable represented performance premium receivable from a co-investment partner. The credit period on services rendered is 90 days. The Group does not hold any collateral or other credit enhancements over the accounts receivable.

The aging analysis of accounts receivable based on the invoice date is as follows:

Within 3 months	2010 HK$’000 8,377	2009 HK$’000 —

At 31 March 2010, the accounts receivable was neither past due nor impaired.

9. NET ASSET VALUE PER SHARE

The net asset value per share is calculated by dividing the net asset value of the Group at 31 March 2010 of approximately HK$1,480,099,000 (2009: HK$886,772,000) by the number of ordinary shares in issue at that date, being 784,500,000 (2009: 784,500,000).

– 8 –

FINAL DIVIDEND

The Board has resolved not to pay a final dividend for the Year (2009: HK$Nil).

MANAGEMENT DISCUSSION AND ANALYSIS

OP Financial is a Hong Kong listed investment company with the mandate allowing us to invest in various assets, financial instruments, and businesses globally.

We produce medium to long term shareholder returns by developing customized investment solutions for and alongside institutional and corporate investors in the region. Our co-investors are mainly large financial institutions and organizations targeting either high growth opportunities within China or strategic investments outside the region. We also invest in funds of listed and unlisted equities to generate diversified returns. Over time, these funds will serve as the foundation of a marketable proprietary financial services platform catered towards attracting new investment partners.

We have redefined our two main investment focuses to appropriately address the evolution in our business model. Direct Investment Solutions, previously known as ‘‘PEIB Investment Approach,’’ includes both our proprietary investments as well as the managed investments together with other investors. These investments target strategic resources and related businesses globally, but they may also include high growth medium sized businesses in China. The Financial Services Platform includes (i) ‘‘Partnerships with major players’’; these are joint ventures with financial institutions, and, (ii) ‘‘Integrated Fund Solutions,’’ which focuses on developing asset managers, and fund incubation strategies.

– 9 –

INVESTMENT REVIEW

Investment holdings as at 31 March Direct Investment Solutions Kaisun Energy Equity Convertible Bond Nobel Oil Meichen Finance Equity Profit Guarantee Total Direct Investment Solutions Financial Services Platform Partnerships with Major Players CSOP Asset Management Guotai Junan Fund Management TOP Commodity Capital Management OP Calypso Capital Group Integrated Fund Solutions Calypso Asia Fund Asian Special Opportunities Fund Greater China Select Funds Total Financial Services Platform Other Investments Kith Holdings Pacific Life Science China Data Broadcasting Total Other Investments	2010 HK$’000 144,771 298,206 442,977 323,824 91,725 7,261 98,986 865,787 79,454 2,906 40 34,046 116,446 135,497 120,741 30,056 286,294 402,740 — — 4,750 4,750	2009 HK$’000 n.a. n.a. 180,038note — — — — 180,038 57,685 1,685 — 29,424 88,794 120,110 110,154 — 230,264 319,058 7,293 479 — 7,772

Note: The Group’s investment interest was through a co-investment holding vehicle formed with syndicate investors until its dissolution in 2010.

– 10 –

DIRECT INVESTMENT SOLUTIONS

Kaisun Energy

Kaisun Energy Group Limited (‘‘Kaisun Energy’’) is an integrated coking coal producer which operates a coal mine in Inner Mongolia with reserves of 99.6 million tonnes. As at 31 March 2010, it reported a total comprehensive income of HK$453.62 million from HK$8.49 million a year prior. Restructuring progressed well and this has been reflected in a stronger net asset value and market response.

The Group partially realised investments in convertible bonds and shares of Kaisun Energy through a co-investment holding vehicle formed with syndicate investors. During the Year, the holding vehicle made certain investment disposals. The proceeds from the investment disposals with any remaining cash, convertible bonds and shares of Kaisun Energy was returned as respective capital and dividends to the shareholders of the holding vehicle allowing investors a clean exit.

As a performance premium for the successful divestment, co-investment partners awarded us a greater proportional distribution of shares and convertible bonds in Kaisun Energy. Taking into account the awarded share premiums, this project has recorded an investment return of over 235%. The value of our current investments in Kaisun Energy have grown to approximately HK$442.98 million in shares and convertible bonds.

Nobel Oil

The Group successfully arranged a co-investment with China Investment Corporation, cumulatively representing a 50% equity interest in Nobel Holdings Investments Ltd (‘‘Nobel Oil’’). Nobel Oil is an independent Russian oil and gas production group which engages exploration and production. It owns two producing and 4 non-producing oil fields in Russia under 7 subsoil licenses with aggregated proved reserves of 120.46 million barrels. The Group’s holding grew to HK$323.82 million at the end of the Year for an unrealized gain of 39.19% as reflected in the comprehensive statement of income under ‘‘other comprehensive income on page 2.’’

As the syndicate managing investor, OP Financial contributed management expertise from origination, monitoring, to exit. The Group was awarded performance premium in return for the successful execution of the deal and the subsequent monitoring of the asset. The awarded performance premium significantly reduced the overall investment entry cost.

Meichen Finance

During the Year, we invested HK$45.45 million in Meichen Finance Group Ltd. (‘‘Meichen Finance’’), a rapidly growing insurance agency and brokerage in China. It performed well in 2009 having sold policies of approximately RMB830 million in insurance premiums representing over 1.3 times of prior year. Our net position appreciated to approximately HK$98.99 million to reflect this progress. We will continue to monitor its performance in 2010 and provide strategic support as needed.

– 11 –

FINANCIAL SERVICES PLATFORM

Partnerships with Major Players

We have investments in four asset management companies with total assets under management and advisory of approximately HK$7.4 billion. Aggregate results of the four companies attributable to the Group totalled approximately HK$22.95 million for the Year.

Integrated Fund Solutions

Part of the Group’s strategy to build a proprietary asset management platform is to incubate or acquire funds with a strong track record and sound management. We provide seed capital, infrastructures, technology, and administrative support to fund managers, allowing them to focus on building performance.

The Group maintains investments in two funds managed by the OP Calypso Capital Group, which grew by approximately HK$25.98 million to HK$256.24 million from HK$230.26 million in 2009. One new fund series of additional HK$30 million was added to the portfolio during the Year.

OUTLOOK

This Year is a milestone for OP Financial. We delivered on promises we made only a few years ago, and we met strategic objectives ahead of schedule. Looking ahead, our goals center around organic growth and optimizing existing investments. At the same time, we intend to strengthen our financial position to meet the demands of investments specific to the institutional and sovereign market.

We will deepen existing relationships with our institutional co-investors, building on the businesses we began in financial year 2009. Meanwhile, we are on schedule to complete the exit of our existing investments this year, and the success has helped initiate new opportunities for the coming financial year.

FINANCIAL REVIEW

Results

The Group made significant developments in its main investments this year, both strategic and operational in both of our main investment focuses; consequently generating net profits of HK$473.07 million (2009: loss of HK$25.62 million), including new investments, grew our net assets to approximately HK$1.48 billion, a net increase of 67% from the previous year. Earnings per share grew to HK$0.60 from a loss of (HK$0.035) in 2009.

– 12 –

Income statement

Revenue during the Year was as follows:

Dividend income from listed and unlisted investments(1) Performance premiums from co-investment partners(2) Interest income(3)	2010 HK$’000 330,657 121,097 6,447 458,201	2009 HK$’000 72 — 7,591
		7,663

The substantial growth in revenue to HK$458.20 million (2009: HK$7.66 million) was mainly due to the following:

• (1) Dividend income mainly from the Kaisun Energy divestment including dividend in-specie of Kaisun convertible bonds and shares totalling HK$314.70 million and cash dividend of HK$7.03 million.

• (2) Co-investment partners in both the Kaisun Energy and Nobel oil projects awarded performance premiums totalling HK$121.10 million to the Group in return for our resources devoted to the investment projects.

• (3) Interest income year-on-year to approximately HK$6.45 million (2009: HK$7.59 million) as we increased our investment activities, intermittently reducing our bank balance.

Net gain/(loss) on financial assets at fair value through profit or loss: This mainly represents (i) the gain from change in fair value of approximately HK$29.83 million on the three investment funds managed by OP Calypso Capital Group, (ii) the gain arising from change in fair value of conversion option embedded in the convertible bonds of Kaisun Energy of approximately HK$57.74 million and (iii) the gain from change in fair value of investment in Meichen Finance of approximately HK$13.52 million.

Loss on redemption of available-for-sale financial assets: This represents the loss arising from the preference share redemptions in the Kaisun Energy co-investment holding vehicle. For the overall returns (inclusive of dividend income) in Kaisun Energy, please refer to paragraphs headed ‘‘Kaisun Energy’’ under the Management Discussion and Analysis section above, in this announcement.

Fair value gain on other financial liabilities: This represents the write back of the remaining financial liabilities increased for the contingent consideration payable in connection with the investment in OP Calypso Capital Group in August 2008.

Administrative expenses: The significant increase in expenses is a result of the investment management and performance fee paid and payable to the investment manager, totalling HK$83.00 million (2009: HK$18.38 million).

– 13 –

The remaining administrative expenses totalling HK$19.92 million (2009: HK$12.53 million) represent mainly staff costs, rental expenses, and overhead costs incurred to maintain and support the operations of the Group.

Share of results of associates: A net amount of approximately HK$22.95 million (2009: loss of HK$4.81 million) was accounted for our share of results of associates from joint ventures such as CSOP, OP Calypso Capital Group and Guotai Junan. These companies generate revenue based on management and performance fees according to assets under management.

Income tax: Total income tax in 2010 increased to HK$5.30 million (2009: HK$Nil) due to the increase in assessable profits.

Comprehensive income statement

Changes to the Group’s net asset value otherwise not accounted for in the income statement are found in the comprehensive income statement under ‘‘other comprehensive income on page 2.’’ The profit of HK$473.07 million for the Year is carried through from the income statement. The remaining unrealized gains from long term investments, otherwise identified as ‘‘Available-for-sale financial assets’’, totalling HK$154.92 million. Total comprehensive income for the Year totals HK$593.33 million equal to the total net asset value gain for the Year.

Fair Value Changes For the Year Ending 31 March

Kaisun Energy Ordinary Shares Convertible Bond Nobel Oil Meichen Finance OP Calypso Capital Group Total	2010 HK$’000 11,633 7,435 19,068 91,176 40,016 4,661 154,921	2009 HK$’000 n.a. n.a. 34,664note — — 6,797 41,461

Note: In 2009, the Group’s investment interest was through a co-investment holding vehicle formed with syndicate investors until its dissolution in 2010.

– 14 –

Financial position

Net asset value: The Group’s net assets as at 31 March 2010 have significantly increased by 67% to HK$1.48 billion from HK$886.77 million a year ago. Consequently, the net asset value per share increased by 67% to HK$1.89 (31 March 2009: HK$1.13). The substantial increase in the net assets represents mostly the partial realization of our investments in Kaisun Energy. This also observes significant growth in our Nobel Oil and Meichen Finance investments. Performance premiums from coinvestors worth HK$121.10 million also contributed to the increased net assets.

Net current assets: The Group had net current assets of HK$539.54 million (31 March 2009: HK$621.22 million) and no borrowings as at 31 March 2010. Whilst relatively unchanged, the cash portion has been reduced from approximately HK$391.76 million to HK$261.37 million due to increased investment activities and additional administrative costs paid to our investment manager. Our bank balance however remains healthy and well positioned to pursue new opportunities in 2011.

Gearing: The gearing ratio, which was calculated on the basis of total liabilities over total equity as at 31 March 2010 was 0.05 (31 March 2009: 0.02). We are currently maintaining a low leverage policy for our investments. While some debt financing instruments may be used at the investment level; moving forward in 2011, we shall maintain debt to a minimum at the Group level.

Investments in associates: Representing our share of the net assets of joint venture asset management companies, CSOP Asset Management Limited, and Guotai Junan Fund Management Limited. The increase of 38% to HK$82.64 million as at 31 March 2010 (31 March 2009: HK$59.65 million) reflects their operating performance for the Year.

Available-for-sale financial assets: The significant increase in available-for-sale financial assets to HK$694.89 million (31 March 2009: HK$209.64 million) is largely the result of (i) our investment in Nobel Oil and Meichen Finance; and (ii) the fair value appreciation of our Kaisun Energy investments. For further details of these three investments, please refer to the Management Discussion and Analysis section.

– 15 –

Bank and cash balances: As at 31 March 2010, the Group had cash and bank balances of HK$261.37 million (31 March 2009: HK$391.76 million). The slight decrease in bank and cash balances is the net difference between the cash investment in Nobel Oil, Meichen Finance as well as other investments made during the Year and the cash received from the exit of the Kaisun co-investment holding vehicle during the Year.

Accrued charges: This mainly represents the investment management and performance fees payable to our investment manager calculated based on the increase in the net asset value performance of the Group.

Liquidity and financial resources

Dividend income from investment held, performance premiums, and interest income from bank deposits and financial instruments held are currently the Group’s major source of revenue.

During the Year, the Group’s cash and cash equivalents remain strong. As at 31 March 2010, the Group had bank balances of HK$261.37 million (31 March 2009: HK$391.76 million).

The Group had no bank borrowings and did not pledge any assets as collateral for overdrafts or other loan facilities during the period under review. The debt-to-equity ratio (interest bearing external borrowings divided by shareholders’ equity) stood at zero while the current ratio (current assets divided by current liabilities) was 8 times (2009: 61 times). For further analysis of the Group’s cash position, net current assets and gearing, please refer to paragraphs under sub-sections headed ‘‘Financial position’’ above.

The Board believes that the Group has sufficient financial resources to satisfy its immediate investments and working capital requirements.

Capital structure

There has been no change in the Company’s capital structure during the Year.

Employees

During the Year, the Group had 15 (2009: 10) employees, inclusive of the two executive directors. Total staff costs for the Year amounted to HK$11.85 million (2009: HK$7.84 million). The Group’s remuneration policies are in line with the market practice and are determined on the basis of the performance and experience of individual employee.

Exposure to fluctuations in exchange rates and related hedges

The Group’s assets and liabilities are denominated in Hong Kong Dollars or United States Dollars and, therefore, the Group had no significant exposure to foreign exchange fluctuations.

– 16 –

Charges on the Group’s assets and contingent liabilities

As at 31 March 2010, there were no charges on the Group’s assets and the Group did not have any significant contingent liabilities.

PURCHASE, SALE OR REDEMPTION OF SHARES

The Company or any of its subsidiaries has not purchased, sold or redeemed any of its shares during the Year.

EVENTS AFTER THE REPORTING PERIOD

On 4 May 2010, the Company entered into a placing agreement with a placing agent pursuant to which the Company has conditionally agreed to place, through the placing agent an aggregate of 156,900,000 new shares of the Company to independent third party placees at a price of HK$1.90 per placing share. The net proceeds from the placing amounted to approximately HK$283.10 million. The placing was completed on 5 July 2010. Further details of the placing of new shares were set out in the announcement of the Company dated 5 July 2010.

CORPORATE GOVERNANCE

The Board recognises the importance of corporate governance to the Group’s healthy growth and is dedicated to maintaining good standards of corporate governance so as to enhance corporate transparency and protect the interests of shareholders.

The Company has complied with the Code on Corporate Governance Practices as set out in Appendix 14 to the Listing Rules during the Year.

AUDIT COMMITTEE

The Company established an audit committee in accordance with rule 3.21 of the Listing Rules. Amongst other duties, the principal duties of the audit committee are to review and supervise the financial reporting process and internal control system of the Company.

The Company’s audit committee comprised three independent non-executive directors, namely, Mr. KWONG Che Keung, Gordon, Prof. HE Jia and Mr. WANG Xiaojun.

The audited financial statements for the Year have been reviewed by the audit committee.

– 17 –

PRELIMINARY ANNOUNCEMENT OF THE RESULTS AGREED BY AUDITOR

The figures in respect of this preliminary announcement of the Group’s results for the year ended 31 March 2010 have been agreed by the Group’s auditor, RSM Nelson Wheeler, to the amounts set out in the Group’s audited consolidated financial statements for the year ended 31 March 2010. The work performed by RSM Nelson Wheeler in this respect did not constitute an assurance engagement in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the Hong Kong Institute of Certified Public Accountants and consequently no assurance has been expressed by RSM Nelson Wheeler on the preliminary announcement.

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the ‘‘Model Code’’) as set out in Appendix 10 of the Listing Rules. All directors have confirmed, following specific enquiry by the Company, that they have fully complied with the Model Code throughout the Year.

PUBLICATION OF FINANCIAL INFORMATION

This results announcement is published on the websites of the Stock Exchange (www.hkex.com.hk) and the Company (www.opfin.com.hk). The Group’s annual report for the Year will be dispatched to the shareholders of the Company and available on the above websites in due course.

BOARD OF DIRECTORS

As at the date of this announcement, the Board comprises two executive directors, namely, Mr Zhang Zhi Ping and Mr Zhang Gaobo; one non-executive director, Mr Liu Hongru; and three independent non-executive directors, namely, Mr Kwong Che Keung, Gordon, Professor He Jia and Mr Wang Xiaojun.

By order of the Board

OP Financial Investments Limited Zhang Gaobo

Executive Director and CEO

Hong Kong SAR, 22 July 2010

– 18 –