Synagistics Limited - Interim / Quarterly Report 2016

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

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**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 UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2015

The Board of Directors (the “Board” or the “Directors”) of OP Financial Investments Limited (the “Company” or “OP Financial”) is pleased to announce the unaudited condensed results of the Company and its subsidiaries (the “Group”) for the six months ended 30 September 2015 (the “Period”) with comparative figures for the corresponding period in 2014 and selected explanatory notes as follows.

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the six months ended 30 September 2015

COMPREHENSIVE INCOME For the six months ended 30 September 2015
		Six months ended
		30 September
		2015	2014
		(Unaudited)	(Unaudited)
	Note	*HK$’000*	HK$’000
Revenue	3	12,825	20,199
Other income	4	–	660
Net change in unrealised (loss)/gain on financial
assets at fair value through profit or loss
– Classified as held for trading		(27,606)	2,538
– Designated as such upon initial recognition		(1,936)	(720)
		(29,542)	1,818
Realised gain/(loss) on redemptions of
investment funds		15,265	(15,892)
Realised gain on sale of financial assets
at fair value through profit or loss		7,269	–
Distribution from capital return on investment
of a joint venture		66,824	–
Impairment loss on available-for-sale financial assets		(14,088)	(3,038)
Equity-settled share-based payments		(387)	(571)
Administrative expenses		(26,937)	(19,993)

For identification purposes only

– 1 –

Note
Profit/(loss) from operations
Share of results of associates
Profit before tax
Taxation
6
Profit for the Period
7
Other comprehensive income
Items that may be reclassified to profit or loss
Available-for-sale financial assets:
Fair value changes
Impairment loss
Share of other comprehensive income of associates:
Fair value changes of available-for-sale financial
assets
Exchange differences
Net other comprehensive income for the Period
Total comprehensive income for the Period
Earnings per share
Basic
8(a)
Diluted
8(b)

Six months ended
30 September
2015
2014
(Unaudited)
(Unaudited)
HK$’000
HK$’000
31,229
(16,817)
13,484
27,080
44,713
10,263
–
–
44,713
10,263
(17,346)
(40,432)
14,088
3,038
(2,456)
(1,823)
(234)
36
(5,948)
(39,181)
38,765
(28,918)
3.65 cents
1.09 cents
3.64 cents
1.09 cents

– 2 –

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 30 September 2015

Note Non-current assets Property, plant and equipment Investments accounted for using equity method 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 and loans receivable 9 Interest receivable Prepayments and other receivables Bank and cash balances TOTAL ASSETS Capital and reserves Share capital Reserves TOTAL EQUITY Current liabilities Other payables Tax payable TOTAL LIABILITIES TOTAL EQUITY AND LIABILITIES NET ASSETS Net asset value per share 10	30 September 2015 (Unaudited) *HK$’000* 52 144,109 195,858 7,417 347,436 27,182 11,652 1,006 2,129 2,263,567 2,305,536 2,652,972 184,140 2,444,748 2,628,888 4,692 19,392 24,084 2,652,972 2,628,888 HK$1.43	31 March 2015 (Audited) HK$’000 26 400,749 213,204 11,823 625,802 143,862 8,399 770 369 513,375 666,775 1,292,577 94,140 1,172,716 1,266,856 6,329 19,392 25,721 1,292,577 1,266,856 HK$1.35

– 3 –

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

For the six months ended 30 September 2015

1 BASIS OF PREPARATION OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

The unaudited condensed consolidated interim financial information for the Period have been prepared in accordance with Hong Kong Accounting Standard 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”).

The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 March 2015, which have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by HKICPA. The accounting policies and methods of computation used in the preparation of these condensed consolidated interim financial information are consistent with those used in the annual financial statements for the year ended 31 March 2015, except as stated in note 2 below.

2 ACCOUNTING POLICIES

The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 March 2015, as described in those annual financial statements, except:

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

There is no standards or interpretations are effective for the first time for this interim period and adopted by the Group.

The following standards and amendments to standards have been issued but are not effective for the financial period beginning 1 April 2015 and have not been early adopted:

i) Amendments to HKFRS 10, HKFRS 12 and HKAS 28 on investment entities: applying the consolidation exception clarifies the application of the consolidation exception for investment entities and their subsidiaries. The amendments to HKFRS 10 clarifies that the exception from preparing consolidated financial statements is available to intermediate parent entities which are subsidiaries of investment entities. The exception is available when the investment entity parent measures its subsidiaries at fair value. The intermediate parent would also need to meet the other criteria for exception listed in HKFRS 10. The amendments also clarifies that an investment entity should consolidate a subsidiary which is not an investment entity and which provides services in support of the investment entity’s investment activities, such that it acts as an extension of the investment entity. However, the amendments also confirm that if the subsidiary is itself an investment entity, the investment entity parent should measure its investment in the subsidiary at fair value through profit or loss. This approach is required regardless of whether the subsidiary provides investment related services to the parent or to third parties. The amendments to HKAS 28 allows an entity which is not an investment entity, but has an interest in an associate or a joint venture which is an investment entity, a relief to retain the fair value measurement applied by the investment entity associate or joint venture, or to unwind the fair value measurement and instead perform a consolidation at the level of the investment entity associate or joint venture for their subsidiaries when applying the equity method. The standard is effective for annual periods beginning on or after 1 January 2016 and earlier application is permitted. The Group is assessing the impact of amendments to HKFRS 10, HKFRS 12 and HKAS 28.

– 4 –

ii) HKFRS 9 “Financial instruments” addresses the classification, measurement and recognition of financial assets and financial liabilities. The complete version of HKFRS 9 was issued in July 2014. It replaces the guidance in HKAS 39 that relates to the classification and measurement of financial instruments. HKFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through other comprehensive income and fair value through profit or loss. The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in other comprehensive income. There is now a new expected credit losses model that replaces the incurred loss impairment model used in HKAS 39. For financial liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss. HKFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the ‘hedged ratio’ to be the same as the one management actually use for risk management purposes.

Contemporaneous documentation is still required but is different to that currently prepared under HKAS 39. The standard is effective for accounting periods beginning on or after 1 January 2018. Early adoption is permitted. The Group is assessing the impact of HKFRS 9.

iii) HKFRS 15 “Revenue from contracts with customers” deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognised when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces HKAS 18 “Revenue” and HKAS 11 “Construction contracts” and related interpretations. The standard is effective for annual periods beginning on or after 1 January 2017 and earlier application is permitted. The Group is assessing the impact of HKFRS 15.

There are no other HKFRSs or HK(IFRIC) interpretations that are not yet effective that would be expected to have a material impact on the Group.

3 REVENUE

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

Dividend income from unlisted investments Performance premium from a co-investment partner Interest income	Six months ended 30 September 2015 2014 (Unaudited) (Unaudited) *HK$’000* HK$’000 2,038 8,293 7,752 7,780 3,035 4,126 12,825 20,199	Six months ended 30 September 2015 2014 (Unaudited) (Unaudited) *HK$’000* HK$’000 2,038 8,293 7,752 7,780 3,035 4,126 12,825 20,199
		20,199

– 5 –

4 OTHER INCOME

Exchange gains Sundry income	Six months ended 30 September 2015 2014 (Unaudited) (Unaudited) *HK$’000* HK$’000 – 69 – 591 – 660	Six months ended 30 September 2015 2014 (Unaudited) (Unaudited) *HK$’000* HK$’000 – 69 – 591 – 660
		660

5 SEGMENT INFORMATION

The chief operating decision maker has been identified as the Board. The Board assesses the operating segments using 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 People’s Republic of China	Six months ended 30 September 2015 2014 (Unaudited) (Unaudited) *HK$’000* HK$’000 5,037 12,345 7,788 7,854 12,825 20,199	Six months ended 30 September 2015 2014 (Unaudited) (Unaudited) *HK$’000* HK$’000 5,037 12,345 7,788 7,854 12,825 20,199
		20,199

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

	30 September	31 March
	2015	2015
	(Unaudited)	(Audited)
	*HK$’000*	HK$’000
Non-current assets other than financial instruments
Hong Kong	144,161	178,617

Information about major investments and co-investment partners

During the Period, performance premiums derived from one of the Group’s unlisted investments and dividend received from one of the investments, which accounted for 10% (2014: 10%) or more of the Group’s total revenue amounted to approximately HK$7,752,000 (2014: HK$7,780,000) and HK$2,038,000 (2014: HK$7,674,000) respectively.

– 6 –

During the Period, performance premiums derived from one of the Group’s co-investment partners, which accounted for 10% (2014: 10%) or more of the Group’s revenue amounted to approximately HK$7,752,000 (2014: HK$7,777,000).

6 TAXATION

No provision for Hong Kong Profits Tax has been made since the Group has sufficient tax losses brought forward to set off against current Period’s assessable profit (2014: nil).

As at 30 September 2015, the Group has unused tax losses of approximately HK$29,741,000 (31 March 2015: HK$33,569,000) available to offset against future profits.

No deferred tax asset has been recognised in the condensed consolidated interim financial information due to the unpredictability of future profit streams.

7 PROFIT FOR THE PERIOD

The Group’s profit for the Period is stated after charging the followings:

	Six months ended	Six months ended
	30 September
	2015		2014
	(Unaudited)	(Unaudited)
	*HK$’000*	HK$’000
Depreciation	8		7
Investment management fee	13,364		9,905
Operating lease payments in respect of office premises	2,236		1,447
Staff costs (including directors’ emoluments)
Salaries and other benefits	8,396		7,007
Retirement benefits scheme contributions	136		110
Equity-settled share based payments	387		571
	8,919		7,688

8 EARNINGS PER SHARE

(a) Basic earnings per share

Basic earnings per share is calculated by dividing the profit for the Period by the weighted average number of ordinary shares in issue during the Period.

Profit for the Period_(HK$’000) Weighted average number of ordinary shares in issue(in thousand)_ Basic earnings per share	Six months ended 30 September 2015 2014 (Unaudited) (Unaudited) 44,713 10,263 1,226,642 941,399 3.65 cents 1.09 cents	Six months ended 30 September 2015 2014 (Unaudited) (Unaudited) 44,713 10,263 1,226,642 941,399 3.65 cents 1.09 cents
		941,399
		1.09 cents

– 7 –

(b) Diluted earnings per share

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of share options. A calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the company’s shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.

Profit for the Period_(HK$’000)
Weighted average number of ordinary shares in issue(in thousand)
Adjustment for shares options(in thousand)
Weighted average number of ordinary shares for diluted earnings
per share(in thousand)
Diluted earnings per share
ACCOUNTS AND LOANS RECEIVABLE
_Note
Accounts receivable
Amount due from associates
(a)
Amount due from a related company
(a)
Loan to an associate
(b)
Other loan
(c)
Analysed as:
Current assets

Six months ended
30 September
2015
2014
(Unaudited)
(Unaudited)
44,713
10,263
1,226,642
941,399
94
–
1,226,736
941,399
3.64 cents
1.09 cents
30 September
2015
31 March
2015
(Unaudited)
(Audited)
HK$’000
HK$’000
11,626
3,877
26
20
–
2
–
1,500
–
3,000
11,652
8,399
11,652
8,399
11,652
8,399

9 ACCOUNTS AND LOANS RECEIVABLE

Note:

(a) Amount due from associates and a related company is interest-free, unsecured and repayable on demand.
(b) Loan to an associate was fully settled during the Period.
(c) The loan to the major shareholder of one of the Group’s associates was fully settled during the Period.

– 8 –

10 NET ASSET VALUE PER SHARE

The net asset value (“NAV”) per share is calculated by dividing the net asset value of the Group at 30 September 2015 of approximately HK$2,628,888,000 (31 March 2015: approximately HK$1,266,856,000) by the number of ordinary shares in issue at that date, being 1,841,396,000 (31 March 2015: 941,396,000).

11 DIVIDEND

The Board has resolved not to pay any interim dividend in respect of the Period (2014: Nil).

MANAGEMENT DISCUSSION AND ANALYSIS

Investment Holdings by Source (HK$ millions, as a percentage of total assets)

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Other Assets Nobel Jin Dou
20.69 147.97 5.76
0.78% 5.58% 0.22% Asset
Managers
Kaisun Energy 150.51
12.29 5.67%
0.46%
Incubated Funds
28.75
1.09%
Cash and Cash
Equivalents
Dance Biopharm
2,263.57
and its associate
85.32% 23.44
0.88%
----- End of picture text -----

The Group’s portfolio performed relatively well during the Period. The Group’s profit for the Period amounted to HK$44.71 million, which is mainly attributable to the distribution from capital return from the Zhonghui Project, the profits from redemption of an incubated fund and disposal of the investment in Technovator International Limited (“Technovator”).

– 9 –

INVESTMENT REVIEW

Nobel

In 2008, OP Financial invested alongside China Investment Corporation (“CIC”) in Nobel Holdings Investments Ltd. (“Nobel”), an independent upstream oil producer in Russia. Nobel’s principal assets include nine subsoil licenses covering seven oil fields and two exploration areas.

During the Period, the global crude oil market saw an excess of supply over demand. OPEC members and non-members’ unwillingness to limit oil output, along with the expectation of a raise of the U.S. Federal Reserve’s interest rate and the RMB’s renewed depreciation have exerted a downward pressure on international oil prices. Moreover, the Russian government has implemented a tax reform system, which increased the mineral extraction tax rate and reduced the export duties on oil products since 1 January 2015.

The low crude oil price and tax reform policy exerted pressure on Russia’s upstream oil producers. Nobel increased its oil exports and control the cost to relieve earning pressure to some extent. However, as the global oil price fell and production costs increased, the fair value of Nobel dropped from HK$162.06 million to HK$147.97 million.

In the long-run, the supply-demand relationship in the global oil market will gradually strike a balance. The Group will continue to seek opportunities for a trade sale of its investment in Nobel to regional players.

Jin Dou

OP Financial invested in a Kazakhstan agriculture project named Jin Dou with CIC in 2009, mandated to diversify the country’s crops and commercialise regional production such as nongenetically modified soybeans for export. OP Financial committed a total of US$15 million, of which only US$1.50 million was drawn.

During the Period, taking into the account of the performance premium received since the launch of Jin Dou, the Group’s investment has effectively maintained a positive return.

An integrated farming and husbandry strategy was applied by Jin Dou management to stabilise the return on the project. During the Period, Jin Dou hired the Surveying and Design Institute of Xinjiang Production and Construction Corps to conduct a feasibility study regarding the implementation plan for a total area of 88,000 hectares. It is expected that crop and livestock projects will be implemented simultaneously in 2016.

The “One Belt and One Road” initiative provides an enormous potential for agricultural cooperation between Kazakhstan and China. Jin Dou will actively explore opportunities in export, investment and cooperation with China.

– 10 –

Asset Managers

OP Financial has non-controlling positions in five (2014: five) asset management companies. The two major positions are CSOP Asset Management Ltd. (“CSOP”) and OP Investment Management (“OPIM”).

CSOP

CSOP holds the world’s largest Renminbi RQFII quota of RMB46.10 billion (equivalent to approximately US$7.23 billion). It manages more than ten ETFs including CSOP FTSE China A50 ETF. As of 30 September 2015, CSOP’s ETF accounted for approximately 64% of the global investment in RQFII ETFs in terms of AUM.

The carrying value of the Group’s CSOP position was HK$132.60 million as at 30 September 2015. The Group received a distribution of HK$45.28 million from CSOP in May 2015.

CSOP actively develops a wide variety of equal weighted index ETF products, e.g. CSOP MSCI T50 ETF, tracking the performance of largest 50 internet giants listed in Hong Kong and United States and CSOP China Chinext ETF, tracking the China GEM Index. In March 2015, CSOP FTSE China A50 ETF was launched on NYSE Arca. It was the largest initial capital investment among all equity ETFs in United States since 2007.

As China’s capital markets become increasingly accessible and standardised, CSOP’s ability to leverage its leading position amongst the Chinese asset managers in investment product design and diversification has earned the recognition from an increasing number of international investors. Given the favourable market outlook and value of CSOP, it is OP Financial’s strategy to continue to hold this position as one of the core investments.

OPIM

OPIM, comprising OP Investment Management (Cayman) Limited and OP Investment Management Limited, is an asset management company and platform which partners with Asian based managers to develop emerging funds across major strategies.

During the Period, the Group’s investment position via ordinary shares and preferences shares as at 30 September 2015 increased to HK$9.58 million.

In the first nine months of 2015, amid market volatilities and slowing growth in China, Chinese investors revived their demands for products to diversify country risks. These demands are driving fund managers to chase offshore capital. With PRC fund managers expanding their product base offshore, OPIM has developed a proprietary platform that helps managers launch new funds with lower AUM thresholds in less time than a traditional fund to meet the demand for fast and affordable Cayman fund structuring. The company has also strengthened its IT systems and staff capabilities to improve its management of UCITs authorised retail funds as well as growing regulatory requirements in Asia.

– 11 –

Incubated Funds

The Group previously invested in a portfolio of unlisted investment funds as part of a larger strategy to incubate new funds developed through OP Financial’s partnership. As those funds have become more established, the Group has been gradually redeeming its seed capital and accordingly the total fund decreased from HK$135.50 million to HK$28.75 million during the Period. The Group recorded a realised gain on redemption of investment funds of HK$15.27 million.

Zhonghui Project

The Group made a special situation investment of HK$197 million through a limited investment partnership in January 2015, which was an interim financing arrangement for the purchase of Zhonghui Plaza in Beijing. The investment attached with call/put options from the controlling shareholder of Zhonghui Plaza’s property developer. During the Period, the call option was exercised and the interim financing was fully repaid. The Group recognised the distribution of HK$88.65 million of which HK$66.82 million from capital return on this project is recognised during the Period.

FINANCIAL REVIEW

Financial position

Net asset value: The Group’s net assets as at 30 September 2015 was HK$1.43 per share or HK$2.63 billion.

Gearing: The gearing ratio, which is calculated on the basis of total liabilities over total equity as at 30 September 2015, was 0.01 (31 March 2015: 0.02). The Group is currently maintaining a low leverage policy for its investments.

Investments accounted for using equity method: This mainly represents the share of the net assets of asset management companies, CSOP and Guotai Junan Fund Management Limited. The value of these investment decreased by 64.04% to HK$144.11 million as at 30 September 2015 (31 March 2015: HK$400.75 million), mainly due to a return of capital and distribution from the Zhonghui Project and the decrease of CSOP’s carrying amount.

Available-for-sale financial assets: An 8.13% decrease from HK$213.20 million to HK$195.86 million during the Period mainly resulted from the net result of increase in fair value of the position of Kaisun Energy Group Limited (“Kaisun Energy”) and a drop from fair value of Nobel.

– 12 –

Financial assets at fair value through profit or loss: The HK$121.09 million or 77.78% decrease from HK$155.69 million to HK$34.60 million during the Period was primarily due to (i) HK$93.20 million in full redemption of Miran Multi Strategy Fund, and (ii) HK$16.84 million on disposal of entire position in Technovator.

Bank and cash balances: As at 30 September 2015, bank and cash balances increased substantially from HK$513.38 million to HK$2.26 billion, mainly attributable to (i) the completion of a placement of the 900 million new shares to raise net proceeds of HK$1.32 billion and (ii) return of capital and distribution from the Zhonghui Project.

RESULTS

The Group was profitable during the Period, gaining HK$44.71 million compared to a profit of HK$10.26 million in the same period of last year. The total comprehensive income recorded a gain of HK$38.77 million compared to a loss of HK$28.92 million in the same period of last year. These are primarily due to the distribution from capital return from the Zhonghui Project as well as gains from disposal of Technovator and redemption of an incubated fund.

Consolidated Statement of Comprehensive Income

Revenue for the six months ended 30 September was as follows:

Dividend income from unlisted investments(1) Performance premium from co-investment partner(2) Interest income(3)	2015 (Unaudited) *HK$’000* 2,038 7,752 3,035 12,825	2014 (Unaudited) HK$’000 8,293 7,780 4,126
		20,199

(1) Dividends received from Real Estate Opportunity Capital Fund during the Period.

(2) CIC, co-investment partner in both Jin Dou and Nobel, awarded OP Financial performance premiums totaling HK$7.75 million (2014: HK$7.78 million) to the Group in return for resources allocated to the Jin Dou.

(3) Interest income of approximately HK$3.04 million (2014: HK$4.13 million) is mainly generated from term deposits in banks.

Net change in unrealised (loss)/gain on financial assets at fair value through profit or loss: The net change in unrealised loss of HK$29.54 million mainly represents the net result of (i) the unrealised loss of HK$9.15 million on incubated funds; (ii) the unrealised gain of HK$2.50 million on listed shares; (iii) the transfer out of net unrealised gain of HK$13.69 million on incubated funds and HK$7.27 million on Technovator.

– 13 –

Realised gain on redemption of investment funds: This represents the realised gain of HK$15.27 million on redemption of Miran Multi Strategy Fund.

Realised gain on sale of financial assets at fair value through profit or loss: This represents the realised gain of HK$7.27 million on disposal of Technovator.

Distribution from capital return on investment of a joint venture: This represents the realised attributable distribution of HK$66.82 million from the Zhonghui Project.

Impairment loss on available-for-sale financial assets: The HK$14.09 million loss represents the further impairment on Nobel.

Equity-settled share-based payments: This represents the net value of share options vested and forfeited during the Period. These share options were granted to certain directors, employees and consultants on 20 April 2010 and 22 May 2015 respectively, which are vested over four to five years from the grant date.

Administrative expenses: The total amount of HK$26.94 million is mainly the result of investment management fee and staff costs.

Share of results of associates: A net amount of HK$13.48 million (2014: HK$27.08 million) accounts for share of results of associates such as CSOP and Guotai Junan Fund Management Limited. These companies generate revenue based on management and performance fees from AUM.

Other comprehensive income: Changes to the Group’s NAV, otherwise not accounted for in “profit for the Period”, are found in “other comprehensive income”. The loss of HK$5.95 million is mainly net of: (i) decrease in fair value of available-for-sale investments by HK$17.35 million and (ii) impairment loss on available-for-sale financial assets transferred to “profit for the Period” of HK$14.09 million. Combining with the “profit for the Period”, the total comprehensive income for the Period was a gain of HK$38.77 million.

– 14 –

Fair value changes recognised in Other Comprehensive Income:

Nobel Kaisun Energy OPIM Jin Dou Dance Biopharm Technovator Fair value decrease	2015 (Unaudited) *HK$’000* (14,088) 1,057 545 (538) (4,322) – (17,346)	2014 (Unaudited) HK$’000 (11,918) (3,039) (17,565) (335) 32 (7,607) (40,432)

NAV Per Share in HK$

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

2.0 1.89
1.69
1.63
1.43
1.5 1.41
1.35 1.35
1.13
1.0
0.5
0.0
31-Mar-2009 31-Mar-2010 31-Mar-2011 31-Mar-2012 31-Mar-2013 31-Mar-2014 31-Mar-2015 30-Sep-2015
----- End of picture text -----

INTERIM DIVIDEND

The Board has resolved not to pay any interim dividend in respect of the Period (2014: nil).

– 15 –

LIQUIDITY AND FINANCIAL RESOURCES

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

During the Period, the Group continued to maintain a significant balance of cash and cash equivalents. As at 30 September 2015, the Group had cash and bank balances of approximately HK$2.26 billion (31 March 2015: HK$513.38 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 96 times (31 March 2015: 26 times). For further analysis of the Group’s cash position, 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

On 4 August 2015, the Company completed the placing of 900,000,000 ordinary shares at a price of HK$1.50 per share. The net proceeds from the placing were approximately HK$1.32 billion.

As at 30 September 2015, the Group’s shareholders’ equity and total number of shares in issue for the Company increased to HK$2.63 billion (31 March 2015: HK$1.27 billion) and 1,841,396,000 (31 March 2015: 941,396,000) respectively.

MATERIAL ACQUISITIONS AND DISPOSALS OF INVESTMENTS

The Group had the following material disposals of investments during the Period.

Return of its attributable capital and distribution of HK$285.65 million from the Zhonghui Project
Redemption of HK$93.20 million from Miran Multi Strategy Fund
Disposal of HK$16.84 million in Technovator

SEGMENT INFORMATION

Segment information of the Group is set out in note 5 on pages 6 to 7 of this report.

– 16 –

EMPLOYEES

During the Period, the Group had 31 (2014: 25) employees, inclusive of all directors of the Group and its subsidiaries. Total staff costs for the Period amounted to HK$8.92 million (2014: HK$7.69 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 employees.

SHARE OPTION SCHEME

The detailed disclosures relating to the Group’s share option scheme and valuation of options are set out in note 19 to the condensed consolidated interim financial information published in the 2015/16 Interim Report.

EXPOSURE TO FLUCTUATIONS IN EXCHANGE RATES AND RELATED HEDGES

At 30 September 2015, the Group had exposure to foreign exchange fluctuation through bank balances and other receivables. These assets were denominated in RMB and the maximum exposure to foreign currency risk was RMB692,000, equivalent to HK$845,000 (at 31 March 2015: RMB691,000, equivalent to HK$864,000).

At 30 September 2015, the Group held certain financial assets which were denominated in US Dollars. The Board is of the opinion that the Group’s exposure to US Dollar foreign currency risk is minimal as Hong Kong Dollar was pegged to US Dollar by the Hong Kong’s Linked Exchange Rate System.

CHARGES ON THE GROUP’S ASSETS AND CONTINGENT LIABILITIES

As at 30 September 2015, there were no charges on the Group’s assets and the Group did not have any significant contingent liabilities.

FUTURE PLANS FOR MATERIAL INVESTMENTS OR CAPITAL ASSETS AND THEIR EXPECTED SOURCES OF FUNDING

As at 30 September 2015, there were no plans for material investments or capital assets, but the Group may, at any point, be negotiating potential investments. The Group considers new investments as part of its ordinary and usual business, and therefore management may publically announce these plans as they become necessarily disclosable to shareholders during the course of the financial year.

PURCHASE, SALE OR REDEMPTION OF SECURITIES

The Company or any of its subsidiaries has not purchased, sold or redeemed any of the Company’s securities during the Period.

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CORPORATE GOVERNANCE CODE

Except otherwise stated herein, none of the Directors is aware of any information that would reasonably indicate that the Company is not, or was not, at any time during the Period, in compliance with the Corporate Governance Code set out in Appendix 14 to the Listing Rules.

Code provision A.6.7 provided that, the independent non-executive Directors and other nonexecutive Directors, as equal Board members, should give the Board and any committees on which they serve the benefit of their skills, expertise and varied backgrounds and qualifications through regular attendance and active participation. They should also attend general meetings and develop a balanced understanding of the views of shareholders. During the Period, due to other business commitment on urgent basis, Mr. Wang Xiaojun, being an independent non-executive Director and the chairman of the remuneration committee of the Company, was not available to attend the extraordinary general meeting of the Company held on 16 July 2015 (“EGM”). However, all of the executive Directors, namely Mr. Zhang Zhi Ping, Mr. Zhang Gaobo and the other two independent non-executive Directors, namely Mr. Kwong Che Keung Gordon and Prof. He Jia attended the EGM.

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS OF LISTED ISSUERS

The Company has adopted a “Policy for Director and Employee Dealings in the Company’s Securities” which supplements the Model Code for Securities Transactions by Directors of Listed Issuers (“Model Code”) set out in Appendix 10 of the Listing Rules and is available on the Company’s website. Following specific enquiry by the Company, all Directors have confirmed, that they have fully complied with the Model Code and the aforesaid internal policy regarding directors’ securities transactions throughout the Period.

DIRECTORS’ RIGHTS TO ACQUIRE SHARES AND DEBENTURES

At no time during the Period was the Company or its associated corporation(s) a party to any arrangements to enable the Directors or chief executive of the Company to acquire any interests or short positions in the shares, underlying shares or debentures of the Company or its associated corporation(s).

AUDIT COMMITTEE

The Company’s audit committee, comprising three independent non-executive Directors, has reviewed with management the accounting principles and practices adopted by the Group and discussed auditing and financial reporting matters including a review of the condensed consolidated financial statements for the period before recommending them to the Board for approval.

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REVIEW OF ACCOUNTS

The external auditor has reviewed the interim financial information for the Period in accordance with Hong Kong Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Hong Kong Institute of Certified Public Accountants.

FORWARD-LOOKING STATEMENTS

This announcement contains certain statements that are forward-looking or which use certain forward-looking terminologies. These forward-looking statements are based on the current beliefs, assumptions and expectations of the Board of the Company regarding the industry and markets in which it invests. These forward-looking statements are subject to risks, uncertainties and other factors beyond the Company’s control which may cause actual results or performance to differ materially from those expressed or implied in such forward-looking statements.

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; 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, 27 November 2015

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