Vision Values Holdings Ltd. — Interim / Quarterly Report 2012

Mar 8, 2012

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Vision Values Holdings Limited Stock Code: 862

2011/12 INTERIM REPORT

Chairman’s Statement

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Dear Shareholders,

On behalf of the board of directors (the “ Board” ), I hereby present to the shareholders the interim results of Vision Values Holdings Limited (the “ Company ”) and its subsidiaries (together the “ Group ”) for the six months period ended 31 December 2011 (the “ Financial Period ”).

Financial Results Summary

• Revenue from continuing operations was HK$18.3 million (2010: HK$14.3 million)

• Loss attributable to owners of the Company was HK$1.2 million (2010: HK$2.1 million)

• — Loss per share attributable to owners of the Company from continuing operations and discontinued operation was HK cents 0.09 (2010: HK cents 0.15)

Management Discussion and Analysis

Business Review

(A) Continuing Operations

1. Network Solutions and Project Services (“NS&PS”) During the Financial Period, NS&PS achieved total revenue of HK$18.1 million (2010: HK$14.1 million) with segment profit of HK$5.1 million (2010: HK$4.2 million). The main contributor to the increase in revenue was the selling of mobile TV transmitters. The increase in segment profit was primary based on the tight control of overall costs by the management team of NS&PS and increase in turnover.

Among the achieved revenue, approximately HK$12.6 million was generated from the sales of both telecom and enterprise networking solutions whilst the remaining was generated from the project and engineering service.

By the end of the Financial Period, the total project contract sum on hand was approximatel y HK$15 million.

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During the Financial Period, the project services division focused on the trunk radio system installation for the Hong Kong Fire Services Department and one of the public utilities in Hong Kong by being one of their main sub-contractors. The solutions sales team kept focusing on the sales and promotion of the products that are distributed by the NS&PS. Albeit severe market competition, the business of telecom solutions remained stable but the business of enterprise solutions was still below expectation. However, there were positive signs indicating that the business of enterprise solution was picking up gradually.

Apart from the selling of the mobile TV transmitters during the Financial Period, NS&PS also promoted the wireless LAN and digital signage solutions to clients with diverse backgrounds such as educational and financial institutes. In addition to the enterprise solution sales, NS&PS also discussed with other system integrators and system vendors in order to be qualified as one of t heir contractors for the project service. By end of November 2011, NS&PS has been qualified by one of the system integrators and became its contractor. Equipped with this qualification, NS&PS assisted this system integrator to win an indoor installation project from her client. In return, an installation of indoor cellular radio communication antenna system for a hospital with project sum of approximately HK$4.9 million was awarded to us.

2. Property Investment

During the Financial Period, the lease of the office unit in Beijing was expired in December 2011. A new lease was signed with an independent third party with an approximately 54% increase in rental income when compared to the old lease. The villa in Beijing remained vacant.

(B) Discontinued operation

The Group discontinued its aircraft leasing business on 12 September 2011 after entered into a conditional sale and purchase agreement to dispose of the Group’s sole aircraft to an independent third party at a consideration of US$8.8 million (equivale nt to HK$68.8 million). The disposal was completed on 11 January 2012.

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Financial Review

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1. Results Analysis

For the Financial Period, the Group’s revenue from continuing operations increased by 27.9% to HK$18.3 million (2010: HK$14.3 million). Around 99% of the Group’s total revenue was generated from the business segment of NS&PS.

Other losses was mainly arising from exchange difference released on deregistration of a subsidiary.

Loss for the period attributable to owners of the Company was approximately HK$1.2 million (2010: HK$2.1 million).

2. Liquidity and Financial Resources

As at 31 December 2011, the capital and reserves attributable to owners of the Company were HK$152.9 million (30 June 2011: HK$153.1 million).

As at 31 December 2011, the Group had no bank or other borrowings (30 June 2011: Nil). The Group has sufficient liquidity and financial resources to meet its daily operational needs.

3. Gearing

The Group has no gearing as at 31 December 2011 (30 June 2011: Nil).

4. Foreign Exchange

The key operations of the Group are located in Hong Kong and Mainland China. The Group’s assets and liabilities are mainly denominated in Hong Kong dollars, United States dollars and Renminbi. The Group does not establish a foreign currency hedging policy. However, management of the Group continues to monitor foreign exchange exposure and will consider hedging significant currency exposures should the need arises.

5. Contingent Liabilities

As at 31 December 2011, the Group did not have significant contingent liabilities (30 June 2011: Nil).

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Business Outlook

By the end of the Financial Period, the business segment of NS&PS has a total amount of approximately HK$15 million projects sum on hand which are under work in progress. Among these projects, 40% is coming from the sales of the network solution and the remaining is coming from the project services.

However, the management foresees a slowdown of business due to the European debt crisis which affected globally. We noticed some of our clients are cuttin g their purchasing budgets or beginning to hold up some of the projects under discussion.

In order to alleviate this negative trend, we are actively seeking new business opportunities by leveraging on our strength in mobile wireless communication. We are now in discussion with several hotels to install wireless LAN system projects and also a cellular network performance monitoring system for one of the mobile operators in Hong Kong.

With the popularity of tablets and mobile phones with Wi-Fi connectivity, users start to aware the security issues relating to Wireless LAN network. Since we are the gold partner of Motorola, we are capable to deliver a wireless intrusion prevention solution. In the coming months, we are going to promote Motorola’s AirDefense system which can help those large organizations to protect their Wireless LAN network from being attack or hack by hackers.

With the introduction of the new Precision Time Protocol (“ PTP ”) IEEE1588 standard, this PTP will help the high frequency tra ders such as stock exchanges to have a more accurate time stamping on all the transactions. We have noticed a lot of financial institutes are looking for these solutions and systems. Being the distributor of Symmetricom (a market leader in providing the time servers equipped with this new PTP functionality) together with our expertise in this area, we are going to spend more effort to promote this solution to all the financial institutes in the next couple of months in order to arouse the awareness of the adoption of PTP.

For the mobile transmitters, we do not expect more business coming in the second half of this financial year. It is because the licensed mobile TV operator targets to roll out its mobile TV service in first quarter of this calendar year. It plans to expand the radio coverage along the Mass Transit Railway stations as well as other open areas uncovered at current moment until after the official launch date. According to its installation plan, we expect more sales opportunity of the mobile TV transmitters in next financial year.

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After the Financial Period, the disposal of G200 aircraft was completed. The Company intends to apply the net proceeds from such disposal as general working capital and for any future potential investment opportunities that may arise from time to time for enhancing the return of the Group. The Company has not identified any specific investment at the date of this report.

Appreciation

On behalf of the Board, I would like to take this opportunity to express my sincere gratitude to all our management and all colleagues for their valuable contribution to the Group. Moreover, I would also like to express appreciation to our valued shareholders, customers and business partners who have stood by the Group.

Lo Lin Shing, Simon

Chairman

Hong Kong, 24 February 2012

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Corporate Governance and Other Information

Interim Dividend

The directors of the Company (the “ Directors ”) have resolved not to declare any interim dividend for the six months ended 31 December 2011 (2010: Nil).

Directors’ Interests and Short Positions

As at 31 December 2011, the interests or short positions of the Directors in the shares and underlying shares of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the “ SFO ”)) as recorded in the register required to be kept by the Company under Section 352 of the SFO or as otherwise notified to the Company and The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) pursuant to the Model Code for Securities Transactions by Directors of Listed Companies (the “ Model Code ”) were as follows:

(a) Long positions in the shares

		Number of
		shares	Percentage of
Name of Directors	Capacity	interested	shareholding
Mr. Lo Lin Shing, Simon	Beneficial owner/	554,334,060	39.30%
(“Mr. Lo”)	Interest of a controlled
	corporation (Note)
Mr. Ho Hau Chong,	Beneficial owner	780,000	0.06%
Norman

Note: Among the 554,334,060 shares, 780,000 shares represent interest of Mr. Lo on an individual basis; while 553,554,060 shares represent interest of Moral Glory International Limited (“ Moral Glory ”), a company wholly-owned by Mr. Lo.

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(b) Long positions in the underlying shares

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		Number of
		underlying
		shares	Percentage of
Name of Directors	Capacity	interested	shareholding
Mr. Lo	Personal	12,000,000	0.85%
Mr. Ho Hau Chong, Norman	Personal	5,000,000	0.35%
Mr. Tsui Hing Chuen, William_JP_	Personal	5,000,000	0.35%
Mr. Lee Kee Wai, Frank	Personal	5,000,000	0.35%
Mr. Lau Wai Piu	Personal	5,000,000	0.35%

Save as disclosed above and the section headed “Share Option Scheme”, as at 31 December 2011, none of the Directors, chief executives and their respective associates had any interests in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be recorded in the register maintained by the Company under Section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

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Discloseable Interests and Short Positions of Substantial Shareholders/Other Persons under the SFO

The register of interests in shares and short positions maintained under Section 336 of the SFO showed that as at 31 December 2011, the Company had been notified of the following interests in shares representing 5% or more of the Company’s issued share capital:

Long position of substantial shareholders in the shares and/or underlying shares

			Percentage of
			nominal
		Number of	value of issued
Name	Capacity	shares	share capital
Ms. Ku Ming Mei, Rouisa (Note 1)	Interest of spouse	566,334,060	40.15%
Moral Glory (Note 2)	Beneficial owner	553,554,060	39.25%

Notes:

1. Ms. Ku Ming Mei, Rouisa is the spouse of Mr. Lo and accordingly, she is deemed to be interested in 566,334,060 shares under the SFO.

2. Moral Glory is wholly-owned by Mr. Lo.

Save as disclosed above and those disclosed under “Directors’ Interests and Short Positions”, the Company had not been notified of other interests representing 5% or more of the issued share capital of the Company as at 31 December 2011.

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Share Option Scheme

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Under the share option schemes adopted by the Company on 28 May 2002 (the ” Terminated Option Scheme ”) and 23 November 2011 (the “ Existing Option Scheme ”), options were granted to certain Directors, employees and other eligible participants of the Company entitling them to subscribe for shares of HK$0.1 each in the capital of the Company. The Terminated Option Scheme was terminated on 23 November 2011 upon the adoption of the Existing Option Scheme by the Company.

Details of the movement in outstanding share options, which have been granted under the Terminated Option Scheme, during the period are as follows:

				Number of shares	Number of shares	subject to options	subject to options
				As at	Cancelled	Exercised	As at
	Date of	Exercise		1 July	during	during	31 December
Name of Directors	grant	price	Exercise period	2011	the period	the period	2011
		HK$
Mr. Lo	13/04/2010	0.4000	13/04/2010 to	12,000,000	—	—	12,000,000
			12/04/2013
Mr. Ho Hau Chong,	13/04/2010	0.4000	13/04/2010 to	5,000,000	—	—	5,000,000
Norman			12/04/2013
Mr. Tsui Hing Chuen,	13/04/2010	0.4000	13/04/2010 to	5,000,000	—	—	5,000,000
William_JP_			12/04/2013
Mr. Lee Kee Wai, Frank	13/04/2010	0.4000	13/04/2010 to	5,000,000	—	—	5,000,000
			12/04/2013
Mr. Lau Wai Piu	13/04/2010	0.4000	13/04/2010 to	5,000,000	—	—	5,000,000
			12/04/2013
Employees and others	13/04/2010	0.4000	13/04/2010 to	30,000,000	—	—	30,000,000
in aggregate (including a director of certain subsidiaries)			12/04/2013	62,000,000	—	—	62,000,000

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Purchase, Sale or Redemption of the Company’s Listed Securities

Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company’s listed securities during the six months ended 31 December 2011.

Corporate Governance

The Board recognises the importance of maintaining a high standard of corporate governance to protect and enhance the benefits of shareholders. A good corporate governance practice, in the Board’s view, can facilitate healthy growth of a company and strengthen the confidence of the shareholders and investors. The Company has applied the principles of the code provisions of the Code on Corporate Governance Practices contained in Appendix 14 (the “ CG Code ”) of the Rules Governing the Listing Securities on the Stock Exchange (the “ Listing Rules ”).

For the six months ended 31 December 2011, the Company has complied with the code provisions of the CG Code except the deviations as mentioned below:

• i. In accordance with the CG Code provision A.2.1 stipulates that the roles of chairman and chief executive officer (“ CEO ”) should be separated and should not be performed by the same individual.

Mr. Lo is the chairman of the Company (the “ Chairman ”) and has also carried out the responsibility of CEO. Mr. Lo possesses the essential leadership skills to manage the Board and extensive knowledge in the business of the Group. The Board considers the present structure is more suitable for the Company because it can promote the efficient formulation and implementation of the Company’s strategies.

• ii. Under the code provision A.4.1 of the CG Code, non-executive directors should be appointed for a specific term and subject to re-election.

None of the existing non-executive Directors is appointed for a specific term. This constitutes a deviation from code provision A.4.1 of the CG Code. However, they are subject to the retirement by rotation in accordance with the provisions of the Company’s articles of association. As such, the Company considers that sufficient measures have been taken to ensure that the Company’s corporate governance practices are no less exacting than those in the CG Code.

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• iii. The code provision E.1.2 of the CG Code stipulates that the chairman of the board should attend the annual general meeting (“ AGM ”).

The Chairman did not attend the 2011 AGM due to another business engagement. An executive Director had chaired the 2011 AGM and answered questions from shareholders. The AGM of the Company provided a channel for communication between the Board and the shareholders. The chairman of the audit and remuneration committees of the Company was also available to answer questions at the 2011 AGM. Other than the AGM, shareholders may also communicate with the Company through the contact information listed on the Company’s website.

Compliance with Model Code for Securities Transactions

The Company has adopted its own Code for Securities Transactions by Directors and Employees (the “ Code ”) who are likely to be in possession of unpublished price sensitive information of the Company on terms no less exacting than those set out in the Model Code.

In the period of 30 days immediately preceding and including the publication of the half year results or, if shorter, the period from the end of the relevant quarterly or half year period up to and including the publication date of the results, all Directors and relevant employees are restricted to deal in the securities and derivatives of the Company until such results have been published.

Upon specific enquiry by the Company, all Directors have confirmed that they have complied with the required standards set out in the Code during the six months ended 31 December 2011.

Human Resources

At 31 December 2011, the Group employed 20 full-time employees (at 30 June 2011: 19) in Hong Kong and Mainland China. Remuneration packages are structured to take into account the level and composition of pay and the general market conditions in the respective geographical locations and business in which the Group operates. The remuneration policies of the Group are reviewed on periodic basis. Apart from retirement schemes, year-end bonuses and share options are awarded to the employees according to the assessment of individual performance and industry practice. Appropriate training programs are also offered for staff training and development.

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Audit Committee

The audit committee of the Company (the “ Audit Committee ”) currently comprises Mr. Tsui Hing Chuen, William JP , Mr. Lee Kee Wai, Frank and Mr. Lau Wai Piu (the chairman of the Audit Committee) who are the independent non-executive Directors.

The Audit Committee has reviewed the unaudited interim financial information of the Group for the six months ended 31 December 2011.

By Order of the Board

Vision Values Holdings Limited Lo Lin Shing, Simon

Chairman

Hong Kong, 24 February 2012

During the period, the Board comprises the following members:

Executive Directors

Lo Lin Shing, Simon (Chairman) Ho Hau Chong, Norman

Independent Non-executive Directors

Tsui Hing Chuen, William JP Lee Kee Wai, Frank Lau Wai Piu

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Condensed Consolidated Income Statement

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For the six months ended 31 December 2011

For the six months ended 31 December 2011
		Six months ended
		31 December
		2011		2010
		HK$’000		HK$’000
	Notes	(unaudited)	(unaudited)
Continuing operations:
Revenue	3	18,266		14,281
Other income		149		177
Other losses — net	4	(1,128)		(78)
Employee benefit expenses		(3,417)		(3,339)
Depreciation		(96)		(107)
Other expenses	5	(14,412)		(11,238)
Fair value gain on investment properties		588		816
(Loss)/profit before taxation		(50)		512
Income tax expense	6	(454)		(354)
(Loss)/profit for the period from
continuing operations		(504)		158
Discontinued operation:
Loss from discontinued operation	7	(743)		(2,251)
Loss for the period attributable to
owners of the Company		(1,247)		(2,093)
(Loss)/earnings per share attributable to
owners of the Company during the period	8
From continuing operations and
discontinued operation
— Basic loss per share (HK cents)		(0.09)		(0.15)
— Diluted loss per share (HK cents)		(0.09)		(0.15)
From continuing operations
— Basic (loss)/earnings per share (HK cents) — Diluted (loss)/earnings per share (HK cents) From discontinued operation — Basic loss per share (HK cents) — Diluted loss per share (HK cents)		(0.04) (0.04) (0.05) (0.05)		0.01 0.01 (0.16) (0.16)

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Condensed Consolidated Statement of Comprehensive Income

For the six months ended 31 December 2011

	Six months ended	Six months ended
	31 December
	2011	2010
	HK$’000	HK$’000
	(unaudited)	(unaudited)
Loss for the period	(1,247)	(2,093)
Other comprehensive income/(expense) for the period:
— Currency translation differences	—	(38)
— Reclassification adjustment of exchange differences on
deregistration of a subsidiary	1,137	—
Total comprehensive expense for the period	(110)	(2,131)

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Condensed Consolidated Statement of Financial Position

As at 31 December 2011

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As at 31 December 2011
		As at	As at
		31 December	30 June
		2011	2011
		(unaudited)	(audited)
	Notes	HK$’000	HK$’000
ASSETS
Non-current assets
Property, plant and equipment	9	304	68,968
Investment properties	9	20,172	19,584
Goodwill		3,334	3,334
Current assets		23,810	91,886
Trade receivables	10	7,548	5,269
Inventories	11	4,460	3,880
Prepayments, deposits and other receivables		1,661	1,915
Cash and bank balances		65,471	64,922
Non-current asset classified as held for sale	9	67,064	—
		146,204	75,986
Total assets		170,014	167,872
EQUITY
Capital and reserves attributable to
owners of the Company
Share capital	13	141,038	141,038
Other reserves		120,720	119,583
Accumulated losses		(108,810)	(107,563)
Total equity		152,948	153,058
LIABILITIES
Non-current liabilities
Deferred income tax liabilities		928	869
Current liabilities
Trade payables	12	5,994	7,057
Accrued charges, other payables,
deposits received and deferred revenue Total liabilities Total equity and liabilities Net current assets Total assets less current liabilities		10,144 16,138 17,066 170,014 130,066 153,876	6,888 13,945 14,814 167,872 62,041 153,927

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Condensed Consolidated Statement of Cash Flows

For the six months ended 31 December 2011

Unaudited
Six months ended
31 December
2011	2010
HK$’000	HK$’000
Net cash generated from operating activities 464 Net cash generated from/(used in) investing activities 85 Net cash generated from financing activities — Net increase in cash and cash equivalents 549 Cash and cash equivalents at beginning of the period 64,922 Effect on foreign exchange rate changes — Cash and cash equivalents at end of the period 65,471	3,799 (35) 98 3,862 61,378 (38) 65,202

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Condensed Consolidated Statement of Changes in Equity

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For the six months ended 31 December 2011

Six months ended	Six months ended	31 December 2011	31 December 2011
Attributable to owners of the Company
Share	Other	Accumulated
capital	reserves	losses	Total
HK$’000 HK$’000 At 1 July 2011 (audited) 141,038 119,583 Comprehensive expense: Loss for the period — — Other comprehensive income: Reclassification adjustment of exchange differences on deregistration of a subsidiary — 1,137 Total comprehensive income/ (expense) for the period — 1,137 At 31 December 2011 (unaudited) 141,038 120,720		HK$’000 (107,563) (1,247) — (1,247) (108,810)	HK$’000 153,058 (1,247) 1,137 (110) 152,948

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	Six	months ended	31 December 2010
	Attributable to owners of the Company
	Share	Other	Accumulated
	capital	reserves	losses	Total
	HK$’000	HK$’000	HK$’000	HK$’000
At 1 July 2010 (audited)	140,960	118,511	(88,078)	171,393
Comprehensive expense:
Loss for the period	—	—	(2,093)	(2,093)
Other comprehensive expense:
Currency translation differences	—	(38)	—	(38)
Total comprehensive expense for
the period	—	(38)	(2,093)	(2,131)
Transaction with owners:
Issue of ordinary shares
— Exercise of share options	78	20	—	98
At 31 December 2010
(unaudited)	141,038	118,493	(90,171)	169,360

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Notes to the Condensed Consolidated Financial Statements

1. General Information

The Company is a limited liability company incorporated in the Cayman Islands. The address of its principal place of business is Unit 309, 3/F Fook Hong Industrial Building, 19 Sheung Yuet Road, Kowloon Bay, Hong Kong.

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

The Company and its subsidiaries (together the “ Group ”) are principally engaged in the provision of network solutions and project services, aircraft leasing and property investment. During the period, the Group discontinued the aircraft leasing business as set out in Note 7.

2. Basis of Preparation and Accounting Policies

The condensed consolidated interim financial statements (the “ Interim Financial Statements ”) for the six months ended 31 December 2011 have been prepared in accordance with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited and with Hong Kong Accounting Standard (“ HKAS ”) 34 “Interim Financial Reporting”, issued by the Hong Kong Institute of Certified Public Accountants (“ HKICPA ”).

The Interim Financial Statements have been prepared on the historical cost basis except for investment properties which are measured at fair value.

The basis of preparation and accounting policies used in the preparation of the Interim Financial Statements are consistent with those used in the annual accounts for the year ended 30 June 2011.

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2. Basis of Preparation and Accounting Policies (Continued)

The HKICPA has issued a number of new and revised Hong Kong Financial Reporting Standards (“ HKFRSs ”), HKASs and interpretations (collectively the “ new and revised HKFRSs ”) which are effective for accounting periods beginning on or after 1 July 2011. The adoption of these new and revised HKFRSs has no material impact on the results and financial positions of the Group. For those which are not yet effective and have not been early adopted in prior accounting periods, the Group is in the process of assessing their impact on the Group’s results and financial position.

3. Turnover and Segment Information

The Group’s reportable operating segments are (i) network solutions and project services and (ii) property investment.

The chief operating decision maker has been identified as the Executive Directors. The Executive Directors review the Group’s internal reports in order to assess performance and allocate resources. The Executive Directors determined the operating segments based on these reports. On 12 September 2011, the Group discontinued the business of aircraft leasing after entering into a conditional sale and purchase agreement on disposal of a G200 aircraft with an independent party. The disposal was completed on 11 January 2012 (Note 7).

The Executive Directors assess the performance of operating segments based on a measure of segment results. This measurement basis is revenue less direct attributable expenses to revenue but excluding depreciation. Other information provided, except as noted below, to the Directors is measured in a manner consistent with that in the financial statements.

Segment assets exclude other assets that are managed on a central basis.

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3. Turnover and Segment Information (Continued)

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The segment revenue and results for the six months ended 31 December 2011

Continuing operations Network solutions and project services Property investment Total HK$’000 HK$’000 HK$’000	Continuing operations Network solutions and project services Property investment Total HK$’000 HK$’000 HK$’000
	Total HK$’000
Segment revenue 18,079 187
	18,266
Segment results 5,131 98
	5,229
Depreciation on property, plant and equipment (35) — Unallocated expenses (Note) Interest income from bank deposits Fair value gain on investment properties Other losses — net Loss before taxation
	(35)
	(4,851)
	147
	588
	(1,128)
	(50)

Note: Unallocated expenses mainly include unallocated employee benefit expenses.

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3. Turnover and Segment Information (Continued)

The segment revenue and results for the six months ended 31 December 2010

Continuing operations Network solutions and project services Property investment Total HK$’000 HK$’000 HK$’000	Continuing operations Network solutions and project services Property investment Total HK$’000 HK$’000 HK$’000
	Total HK$’000
Segment revenue 14,118 163	14,281
Segment results 4,190 106 Depreciation on property, plant and equipment (31) — Unallocated expenses (Note) Interest income from bank deposits Fair value gain on investment properties Other loss Profit before taxation	4,296 (31) (4,590) 99 816 (78)
	512

Note: Unallocated expenses mainly include unallocated employee benefit expenses.

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3. Turnover and Segment Information (Continued)

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The following is an analysis of the Group’s assets by operating segments:

At 31 December 2011 Network solutions and project services Property investment Aircraft leasing (discontinued) HK$’000 HK$’000 HK$’000
	Total HK$’000
Total segment assets 12,553 20,243 67,731
	100,527
Unallocated: Cash and bank balances Other unallocated assets Consolidated total assets
	65,471
	4,016
	170,014

At 30 June 2011

Network solutions and project services Property investment Aircraft leasing (discontinued) HK$’000 HK$’000 HK$’000	Total HK$’000
Total segment assets 10,676 19,643 68,640 Unallocated: Cash and bank balances Other unallocated assets Consolidated total assets	98,959 64,922 3,991
	167,872

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4. Other Losses — Net

	Six months ended	Six months ended
	31 December
	2011	2010
	HK$’000	HK$’000
Continuing operations:
Gain on disposal of property, plant and equipment	9	—
Loss on exchange differences on deregistration
of a subsidiary	(1,137)	—
Others	—	(78)
	(1,128)	(78)

5. Expenses by Nature

Major expenses included in other expenses are analysed as follows:

	Six months ended	Six months ended
	31 December
	2011	2010
	HK$’000	HK$’000
Continuing operations:
Cost of inventories	8,384	6,008
Subcontracting fees for project services	3,938	3,168
Independent auditor’s remuneration	396	390
Direct operating expenses from investment
property that generate rental income	39	11
Direct operating expenses from investment
property that do not generate rental income	40	38
Exchange losses/(gains) — net	15	(64)
Operating lease rentals for land and building	215	218

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6. Income Tax Expense

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Hong Kong profits tax has been provided at the rate of 16.5% (2010: 16.5%) on the estimated assessable profits for the period. Taxation on overseas profits has been calculated on the estimated assessable profits for the period at the rates of taxation prevailing in the countries in which the Group operates.

	Six months ended	Six months ended
	31 December
	2011	2010
	HK$’000	HK$’000
Continuing operations:
Current tax
— Hong Kong profits tax	395	280
Deferred tax
— Origination of temporary differences	59	74
Total income tax expense	454	354

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7. Discontinued Operation

An analysis of the results and cash flows of the discontinued operation is as follows:

Six months ended	Six months ended
31 December
2011	2010
HK$’000	HK$’000
Revenue 936	1,872
Other income 3	—
Depreciation (1,576) Other expenses (106) Loss for the period (743) Cash flows from discontinued operation Net cash (used in)/generated from operating activities (668) Net cash generated from investing activities 3 Net cash (outflows)/inflows (665)	(3,915) (208) (2,251) 1,217 — 1,217

As set out in Note 3, the Group discontinued its aircraft leasing business on 12 September 2011 after Glory Key Investments Ltd. (“ Glory Key ”), a subsidiary of the Group, entered into a conditional sale and purchase agreement to dispose of a G200 aircraft to an independent third party at a consideration of US$8,825,000 (equivalent to HK$68,835,000) (the “ Disposal Transaction ”). The results of the aircraft leasing business were reported as a discontinued operation. The Disposal Transaction is subject to fulfillments of certain conditions and shareholders’ approval. The Disposal Transaction was approved by shareholders on 23 November 2011 and was completed on 11 January 2012.

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8. (Loss)/Earnings Per Share

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The calculations of basic and diluted (loss)/earnings per share are based on the following data:

Six months ended	Six months ended
31 December
2011	2010
HK$’000	HK$’000
(Loss)/profit for the period attributable to owners of
the Company, as used in the calculation of
basic and diluted (loss)/earnings per share
Loss from continuing operations and
discontinued operation (1,247)	(2,093)
(Loss)/profit from continuing operations (504)	158
Loss from discontinued operation (743)	(2,251)
Six months ended
31 December
2011	2010
Number of shares
Weighted average number of ordinary shares in
issue for calculation of basic (loss)/earnings
per share 1,410,380,690 1,409,732,103
Effect of dilutive potential ordinary shares:
Share options issued by the Company — 10,538,735
Adjusted weighted average number of ordinary shares for calculation of diluted (loss)/earnings per share (Note) 1,410,380,690 1,420,270,838

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8. (Loss)/Earnings Per Share (Continued)

Note:

From continuing and discontinued operations

The computation of 2011 and 2010 diluted loss per share from continuing and discontinued operations does not assume exercise of share options since the exercise would result in a decrease in loss per share.

From continuing operations

The computation of 2011 diluted loss per share from continuing operations is the same as basic loss per share presented as there was no diluting effect from the exercise of share options on the loss attributable to shareholders.

From discontinued operation

The computation of 2011 and 2010 diluted loss per share from discontinued operation does not assume exercise of share options since the exercise would result in a decrease in loss per share.

9. Movements in Property, Plant and Equipment and Investment Properties

During the period, the Group spent approximately HK$3,000 (31 December 2010: HK$Nil) on furniture, fixtures and equipment and HK$72,000 (31 December 2010: HK$27,000) on office equipment. The Group disposed of obsolete office equipment with net book value of HK$4,000, resulting in a gain on disposal of HK$9,000.

The investment properties were revalued on an open market value basis by Ascent Partners Transaction Service Limited, an independent qualified valuer, at 31 December 2011. As a result, the investment properties were revalued to approximately HK$20,172,000, which represents their recoverable amount, and a revaluation gain of approximately HK$588,000 was recorded in the condensed consolidated income statement during the period.

During the period, the aircraft and engines with net book value of approximately HK$67,064,000 was reclassified as asset held for sale, details please refer to Note 7.

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10. Trade Receivables

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The Group allows an average credit period of 30 to 60 days to customers. The ageing analysis of the trade receivables is as follows:

	As at	As at
	31 December	30 June
	2011	2011
	HK$’000	HK$’000
1–30 days	4,139	2,458
31–60 days	1,676	1,177
61–90 days	194	643
91–180 days	938	463
Over 180 days	601 7,548	528 5,269

As of 31 December 2011, trade receivables of HK$5,043,000 (30 June 2011: HK$2,394,000) were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default.

11. Inventories

	As at	As at
	31 December	30 June
	2011	2011
	HK$’000	HK$’000
Raw materials	5	8
Work in progress	3,236	3,206
Finished goods	1,219 4,460	666 3,880

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12. Trade Payables

The ageing analysis of trade payables is as follows:

	As at	As at
	31 December	30 June
	2011	2011
	HK$’000	HK$’000
1–30 days	4,417	5,278
31–60 days	333	398
61–90 days	212	305
Over 90 days	1,032 5,994	1,076 7,057

13. Share Capital

	The Company	The Company
	Ordinary shares of	HK$0.10 each
	No. of shares	HK$’000
Authorised:
At 30 June 2011 and 31 December 2011 20,000,000,000		2,000,000
Issued and fully paid:
At 1 July 2010	1,409,600,690	140,960
Issue of ordinary shares
— Exercise of share options (Note) 780,000		78
At 30 June 2011, 1 July 2011 and 31 December 2011 1,410,380,690		141,038

Note: During the year ended 30 June 2011, share options to subscribe for 780,000 shares were exercised, of which HK$78,000 was credited to share capital and the balance of approximately HK$20,000 was credited to the share premium account.

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14. Related Party Transactions

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The Group is controlled by Moral Glory International Limited (incorporated in the British Virgin Islands), which owns 39.25% of the Company’s shares. The remaining 60.75% of the shares are widely held.

• (a) Significant related party transactions, which were carried out in the normal course of the Group’s business and at terms negotiated between the Group and the respective parties, were as follows:

Six months ended	Six months ended
31 December
2011	2010
HK$’000	HK$’000
Aircraft leasing income from亞聯公務機 有限公司(“亞聯公務機”) 936	1,872

亞聯公務機 is an associate of Wellington Equities Inc., a company wholly and beneficially owned by Mr. Lo Lin Shing, Simon, a Director and the controlling shareholder of the Company.

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14. Related Party Transactions (Continued)

• (b) Key management compensation of the Group for the period is as follows:

	Six months ended	Six months ended
	31 December
	2011	2010
	HK$’000	HK$’000
Salaries and other employee	benefits 646	635

15. Subsequent Event

Save as disclosed in Note 7 of the notes to the Interim Financial Statements, there were no significant subsequent events for the Group.

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