CHINESE GLOBAL INVESTORS GROUP LTD. (Incorporated in Singapore) (Company Registration Number: D)

Transcription

1 CHINESE GLOBAL INVESTORS GROUP LTD. (Incorporated in Singapore) (Company Registration Number: D) Unaudited Financial Statements and Dividend Announcement for the Third Quarter And Nine Months Ended 31 March May 2016 This announcement has been prepared by the Company and its contents have been reviewed by the Company s sponsor, RHT Capital Pte. Ltd. (the Sponsor ), for compliance with the relevant rules of Singapore Exchange Securities Trading Limited (the Exchange ). The Sponsor has not independently verified the contents of this announcement. This announcement has not been examined or approved by the Exchange and the Exchange assumes no responsibility for the contents of this announcement, including the correctness of any of the statements or opinions made or reports contained in this announcement. If you require any clarification on this announcement, please contact Ms. Kemmy Koh, CFO, at the following address: kemmykoh@cgigroup.com.sg The contact person for the Sponsor is: Name: Mr Chew Kok Liang, Registered Professional, RHT Capital Pte. Ltd. Address: Six Battery Road #10-01, Singapore Tel: (65)

2 CHINESE GLOBAL INVESTORS GROUP LTD. UNAUDITED RESULTS FOR THE NINE MONTHS ENDED 31 MARCH 2016 TABLE OF CONTENTS PAGE 1. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME STATEMENT OF FINANCIAL POSITION GROUP S BORROWINGS AND DEBT SECURITIES CONSOLIDATED STATEMENT OF CASH FLOWS STATEMENTS OF CHANGES IN EQUITY SHARE CAPITAL AUDIT BASIS OF PREPARATION CHANGES IN ACCOUNTING POLICIES EARNINGS PER ORDINARY SHARE NET ASSET VALUE PER ORDINARY SHARE REVIEW OF GROUP PERFORMANCE PROSPECT STATEMENT OUTLOOK DIVIDEND INTERESTED PERSON TRANSACTIONS USAGE OF PROCEEDS 17 Page 1 of 18

3 CHINESE GLOBAL INVESTORS GROUP LTD. (Incorporated in the Republic of Singapore) (Company Registration No D) Third Quarter Financial Statements for the Financial Period Ended 31 March 2016 PART 1 - INFORMATION REQUIRED FOR ANNOUNCEMENT OF QUARTERLY (Q1, Q2, Q3), HALF-YEAR AND FULL YEAR RESULTS 1(a) A statement of comprehensive income (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year. + / - + / - Third Quarter Ended 9 Months Ended Note 31-Mar Mar Mar Mar-15 S$ S$ % S$ S$ % Revenue 2,558,977 3,760,190 (31.9) 8,489,094 10,327,097 (17.8) Cost of Sales (1,975,833) (2,527,720) (21.8) (6,169,133) (7,332,395) (15.9) Gross Profit 583,144 1,232,470 (52.7) 2,319,961 2,994,702 (22.5) Other Income i 47, ,665 (95.0) 232,191 3,066,778 (92.4) Distribution Expenses (244,522) (246,642) (0.9) (865,827) (661,961) 30.8 Administrative Expenses (814,937) (881,963) (7.6) (2,594,513) (2,697,580) (3.8) Other Expenses ii (1,954,790) (105,625) 1,750.7 (2,588,376) (1,422,223) 82.0 Finance Cost (18,602) (46,091) (59.6) (48,560) (159,563) (69.6) (Loss)/Profit before Income Tax iii (2,402,348) 902,814 (366.1) (3,545,124) 1,120,153 (416.5) Income Tax Expense (4,606) (12,640) (63.6) (34,197) (28,450) 20.2 (Loss)/Profit for the Period (2,406,954) 890,174 (370.4) (3,579,321) 1,091,703 (427.9) Other Comprehensive Income/(Loss): Currency translation differences arising from consolidation 48,759 (614,704) (11,211) (1,534,268) (99.3) Available-for-sale investments: - Fair value (losses)/gains - 13,324 (100.0) 1,408 (381,685) Reclassfication - (119,941) (100.0) - (893,749) (100.0) Other comprehensive income/(loss) for the period, net of tax 48,759 (721,321) (9,803) (2,809,702) (99.7) Total Comprehensive (Loss)/Income for the Period (2,358,195) 168,853 (1,496.6) (3,589,124) (1,717,999) (Loss)/Profit for the Period Attributable to Owners of the Company (2,406,954) 890,174 (370.4) (3,579,321) 1,091,703 (427.9) Total Comprehensive (Loss)/Profit Attributable to O wners of the Company (2,358,195) 168,853 (1,496.6) (3,589,124) (1,717,999) Page 2 of 18

4 1(a)(i) Other income includes the following: Third Quarter Ended 9 Months Ended 31-Mar Mar Mar Mar-15 S$ S$ S$ S$ Allowance for doubtful debts written back ,591 Bad debts recovered - - 8,756 6,964 Dividend income - - 1,250 - Fair value gain on held-for-trading investments - 30, Foreign exchange translation gain - 720,286 1,335 1,792,860 Gain on disposal of available-for-sale investments - 17, ,691 Gain on disposal of property, plant and equipment - 4,000-83,328 Gain on disposal of an associate Government grants/subsidies 33,723 2,644 48,002 13,638 Interest income Realised gain on available-for-sale investment - 119, ,749 Sundry income 13,464 54, ,588 74,338 47, , ,191 3,066,778 1(a)(ii) Other expenses include the following: Third Quarter Ended 9 Months Ended 31-Mar Mar Mar Mar-15 S$ S$ S$ S$ Allowances for doubtful debts 9,942-30,402 - Bad debts written off Fair value loss on held-for-trading investments 1,681,004-1,782,385 1,135,255 Foreign exchange translation loss 12, Inventory written off 1,845 16,200 2,211 20,975 Loss on disposal of held-for-trading investments 241,123 85, , ,886 Sundry expense 8,189 3,553 22,564 15,235 1,954, ,625 2,588,376 1,422,223 1(a)(iii) Profit/(Loss) before income tax is arrived at after charging the following: Third Quarter Ended 9 Months Ended 31-Mar Mar Mar Mar-15 S$ S$ S$ S$ Amortisation of intangible assets Depreciation of property, plant and equipment 36,677 34, ,933 93,697 Page 3 of 18

5 1(b)(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year. Company 31-Mar Jun Mar Jun-15 S$ S$ S$ S$ ASSETS Non-current assets: Property, plant and equipment 581, , ,000 Intangible assets 2,912 3, Subsidiaries , ,340 Associates Goodwill 633, Deferred tax assets 19,251 19, Total non-current assets 1,237, , , ,340 Current assets: Inventories 915,894 1,126, Gross amount due from contract customers 349, , Trade and other receivables 5,900,776 6,160, , ,137 Held-for-trading investments 1,386,493 3,998, Available-for-sale investments 15,147 15, Cash and bank balances 1,262,635 1,513,478 10,848 24,761 Total current assets 9,830,792 13,048, , ,898 Total assets 11,068,199 13,696,805 1,209,740 1,316,238 LIABILITIES AND EQUITY Current liabilities: Trade and other payables 5,832,492 4,581, , ,836 Gross amount due to contract customers 149, , Lease obligations 39,724 52, Bank overdrafts 161, , Income tax payable 50, , Total current liabilities 6,233,630 5,311, , ,836 Non-current liabilities: Lease obligations 94,095 61, Deferred tax liabilities 6, Total non-current liabilities 100,858 62, Capital and reserves: Share capital 40,310,404 40,310,404 40,310,404 40,310,404 Statutory reserve 346, , Foreign currency translation reserves (780,158) (768,947) - - Fair value reserve 17,114 15, Reserve on put option 49,247 49, Accumulated losses (35,209,306) (31,629,985) (39,892,762) (39,597,002) Total equity 4,733,711 8,322, , ,402 Total liabilities and equity 11,068,199 13,696,805 1,209,740 1,316,238 Working capital 3,597,162 7,736,961 Total borrowings 295, ,784 Gross gearing (times)* Net borrowings** (967,360) (1,022,694) Net gearing (times)* (0.20) (0.12) *Gross gearing = total borrowings/total equity; Net gearing = net borrowings/total equity Page 4 of 18

6 1(b)(ii) Aggregate amount of group s borrowings and debt securities Amount repayable in one year or less, or on demand As at 31 March 2016 S$ As at 30 June 2015 S$ Secured Unsecured Secured Unsecured 201, ,291 - Amount repayable after one year As at 31 March 2016 S$ As at 30 June 2015 S$ Secured Unsecured Secured Unsecured 94,095-61,493 - Details of any collaterals The s secured borrowings comprise bank overdrafts and finance leases. The bank overdrafts are secured on: (i) (ii) fixed deposits pledged; and corporate guarantees of the Company. The finance leases are secured on the plant and equipment. The net book value of these plant and equipment as at 31 March 2016 is S$225,310 (30 June 2015: S$244,533). Page 5 of 18

7 1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year Third Quarter Ended 9 Months Ended 31-Mar Mar Mar Mar-15 S$ S$ S$ S$ Cash flows from operating activities: (Loss)/Profit before tax (2,402,348) 902,814 (3,545,124) 1,120,153 Adjustments for: Amortisation of intangible assets Allowances for doubtful debts written back - (198) - (10,591) Allowances for doubtful debts 9,942-30,402 - Bad debts written off Bad debts recovered - - (8,756) (6,964) Depreciation of property, plant and equipment 36,677 34, ,933 93,697 Dividend income - - (1,250) - Fair value loss/(gain) on held-for-trading investments 1,681,004 (30,971) 1,782,385 1,135,255 Foreign exchange (gain)/loss (38,557) (42,596) (43,173) (51,091) Interest expense 18,602 46,091 48, ,563 Interest income (172) (203) (540) (619) Inventory written off 1,845 16,200 2,211 20,975 Loss on disposal of held-for-trading investments 241,123 85, , ,886 Gain on disposal of available-for-sale investment - (17,749) - (190,691) Gain on disposal of property, plant and equipment - (4,000) - (83,328) Gain disposal of associate - - (720) - Provision for warranties 62, ,990 30,000 Realised gain on available-for-sale investment - (119,941) - (893,749) Operating (loss)/gain before working capital changes (388,929) 869,982 (705,677) 1,573,959 Trade and other receivables 880, , ,408 (942,287) Amount due from/to contract customers (55,803) (424,143) (107,578) 368,985 Inventories 66, , ,903 66,403 Net (increase)/decrease in held-for-trading investments (141,263) 241, ,295 (466,470) Trade and other payables 232,303 (326,681) 603,176 (310,066) Cash generated from operations 593, , , ,524 Interest paid (18,602) (46,091) (48,560) (159,563) Income tax paid (97,116) (65,567) (144,981) (53,667) Net cash generated from operating activities 477, , ,986 77,294 Cash flows from investing activities: Dividend income - - 1,250 - Interest received Proceeds from disposal of property, plant and equipment ,299 Proceeds from disposal of available-for-sale investment - 332,043-2,122,383 Proceeds from disposal of an associate Acquisition of a subsidiary (Note 1) - - (171,376) - Purchase of property, plant and equipment (Note 2) (26,018) (133,519) (34,918) (240,302) Net cash (used in)/generated from investing activities (25,846) 199,698 (203,784) 1,962,999 Page 6 of 18

8 1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year cont d Third Quarter Ended 9 Months Ended 31-Mar Mar Mar Mar-15 S$ S$ S$ S$ Cash flows from financing activities: Net repayments from finance leases 9,765 75,323 (28,852) 12,001 Restricted cash (10,510) - 6,665 9,948 Net cash used in/(generated from) financing activities (745) 75,323 (22,187) 21,949 Net effect of exchange rate changes in consolidating subsidiaries (5,178) (951,316) 5,475 (2,343,693) Net increase/(decrease) in cash and cash equivalents 445,927 (108,134) (24,081) (281,452) Cash and cash equivalents at beginning of period (74,637) (317,674) 395,371 (144,356) Cash and cash equivalents at end of period 371,290 (425,808) 371,290 (425,808) 31-Mar Mar Mar Mar-15 S$ S$ S$ S$ Cash at end of period includes the following: Cash and bank balances 1,262,635 1,184,707 1,262,635 1,184,707 Bank overdrafts (161,456) (860,882) (161,456) (860,882) 1,101, ,825 1,101, ,825 Restricted cash (Note 3) (729,889) (749,633) (729,889) (749,633) Cash and cash equivalents at end of period 371,290 (425,808) 371,290 (425,808) Notes: (1) Acquisition of a subsidiary Third Quarter Ended 9 Months Ended On 16 October 2015, the acquired Success Finance Limited for a total consideration of HK$4.0 million for which an initial payment of HK$1.0 million (S$0.17 million) was made and the remaining outstanding payable to be paid in tranches. (2) Property, plant and equipment For 3QFY2016, the acquired mainly plant and equipment by cash with an aggregate cost of S$26,018 (2015: S$133,519). For 9MFY2016, the acquired property, plant and equipment with an aggregate cost of S$83,438 (2015: S$240,302) of which S$34,918 (2015: S$240,302) was paid by cash and S$48,520 (2015: S$Nil) was acquired by means of finance leases. Page 7 of 18

9 (3) Restricted cash Restricted cash pertains to fixed deposits of certain subsidiaries which have been pledged with banks as securities for banking facilities granted. 1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year. Share Capital Statutory Reserve Foreign Currency Translation Reserve Fair Value Reserve on AFS Reserve on Put Options Accumulated Losses Total Equity S$ S$ S$ S$ S$ S$ S$ Balance at 1 July ,310, ,410 (906,983) 1,468,464 49,247 (32,207,781) 9,059,761 Total comprehensive income/(expense) for the period - - (1,534,268) (1,275,434) - 1,091,703 (1,717,999) Balance at 31 March ,310, ,410 (2,441,251) 193,030 49,247 (31,116,078) 7,341,762 Balance at 1 July ,310, ,410 (768,947) 15,706 49,247 (31,629,986) 8,322,834 Total comprehensive - - (11,211) 1,408 - (3,579,321) (3,589,124) income/(expense) for the period Balance at 31 March ,310, ,410 (780,158) 17,114 49,247 (35,209,307) 4,733,710 Share Capital Share Option Accumulated Total Company Reserve Losses S$ S$ S$ S$ Balance at 1 July ,310,404 - (38,987,097) 1,323,307 Total comprehensive loss for the period - - (418,648) (418,648) Balance at 31 March ,310,404 - (39,405,745) 904,659 Balance at 1 July ,310,404 - (39,597,002) 713,402 Total comprehensive loss for the period - - (295,760) (295,760) Balance at 31 March ,310,404 - (39,892,762) 417,642 1(d)(ii) Details of any changes in the company s share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles, as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. There were no changes in the Company's share capital arising from rights issue, bonus issue, share buybacks, exercise of share options or warrants, conversion of other issue of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose in the nine month period ended 31 March The number of ordinary shares that may be issued upon exercise of all the outstanding share options under the Hitchins Employees Share Option Scheme at 31 March 2016 and 31 March 2015 was Nil. Save as disclosed above, the Company has no other convertible securities. As at 31 March 2016 and 31 March 2015, the Company had no treasury shares. Page 8 of 18

10 1(d)(iii)To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year. 31 March June 2015 The total number of issued shares excluding treasury shares 915,977, ,977,500 1(d)(iv)A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on. The Company did not hold any treasury shares as at 31 March 2016 and 31 March 2015, the end of the corresponding period of the immediately preceding year. There were also no sales, transfer, disposal, cancellation and / or use of treasury shares during the third quarter and nine months ended 31 March 2016 and the year ended 30 June Whether the figures have been audited, or reviewed and in accordance with which standard or practice. The figures have not been audited nor reviewed by our auditors. 3. Where the figures have been audited or reviewed, the auditors report (including any qualifications or emphasis of matter). Not applicable. 4. Whether the same accounting policies and methods of computation as in the issuer s most recently audited annual financial statements have been applied. Except as disclosed in paragraph 5 below, the has applied the same accounting policies and methods of computation in the financial statements for the current financial period, compared with those of the most recently audited financial statements as at 30 June If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change The adopted the following revised FRSs or FRS amendments that are effective for annual periods beginning on or after 1 July 2015: The following are the new or amended FRSs that are relevant to the : FRS 11 Regulatory Deferral Accounts Amendments to FRS 27 Equity Method in Separate Financial Statements Amendments to FRS 16 and 38 Clarification of Acceptable Methods of Depreciation and Amortisation Amendments to FRS 16 and 41 Agriculture: Bearer Plants Amendments to FRS 111 Accounting for Acquisitions of Interests in Joint Operations Page 9 of 18

11 Amendments to FRS 110 and 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Improvements to FRSs (November 2014) - Amendment to FRS 105 Non-current Assets Held for Sale and Discontinued Operations - Amendment to FRS 107 Financial Instruments: Disclosure - Amendment to FRS 19 Employee Benefits - Amendment to FRS 34 Interim Financial Reporting Amendments to FRS 1 Disclosure Initiative Amendments to FRS 110, Investment Entities: Applying the Consolidation Exception FRS 112 and FRS 28 FRS 115 Revenue Contracts with Customers FRS 109 Financial Instruments The adoption of the above FRSs did not result in any substantial change to the s accounting policies nor have any significant impact on the financial statements. 6. Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends. Third Quarter Ended 9 Months Ended 31-Mar Mar Mar Mar-15 (i) Based on weighted average number of ordinary shares in (0.26) cents 0.10 cents (0.39) cents 0.12 cents issue (ii) On a fully diluted basis (0.26) cents 0.10 cents (0.39) cents 0.12 cents (iii) Weighted average number of ordinary shares issued 915,977, ,977, ,977, ,977,500 Basic earnings per share ( EPS ) is computed based on the weighted average number of ordinary shares in issue during the financial period. The weighted average number of ordinary shares represents the number of ordinary shares at the beginning of the financial period, adjusted for new ordinary shares issued during the financial period, multiplied by a time-weighted factor. Options were not included in the calculation of diluted EPS in the preceding financial year because they are anti dilutive. The outstanding share options under the Hitchins Employees Share Option Scheme at 31 March 2016 and 31March 2015 was Nil. 7. Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the (a) current financial period reported on; and (b) immediately preceding financial year. Company 31-Mar Jun Mar Jun-15 Net asset value per ordinary share (in cents) 0.52 cents 0.91 cents 0.05 cents 0.08 cents Total number of issued ordinary shares used in calculating net asset value 915,977, ,977, ,977, ,977,500 Page 10 of 18

12 8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group s business. It must include a discussion of the following:- (a) any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and (b) any material factors that affect the cash flow, working capital, assets or liabilities of the group during the current financial period reported on. Overview For the third quarter ended 31 March 2016 ( 3QFY2016 ), the group reported revenue of S$2.56 million, which is 31.9% decrease over the third quarter of last year. The recorded a net loss attributable to shareholders in 3QFY2016 of S$2.41 million from an income of S$0.89 million in 3QFY2015. Total comprehensive income attributable to shareholders decreased to a loss of S$2.36 million from an income of S$0.17 million compared with the previous quarter resulting from a significant net loss in 3QFY2016 mainly from the impairment losses on held-for-trading investments and the decrease in turnover from the waterproofing business. For the nine months ended 31 March 2016 ( 9MFY2016 ), the reported revenue of S$8.49 million, a 17.8% decrease over the third quarter last year. Net loss attributable to shareholders amounted to S$3.58 million in 9MFY2016 from an income of S$1.09 million in the comparative period. Total comprehensive loss attributable to shareholders further increased 108.9% to a loss of S$3.59 million with a higher impairment loss on held-for-trading and lower revenue. Earnings per share were (0.26) cents for the quarter and (0.39) cents for the nine months period, down from 0.10 cents and 0.12 cents respectively in the comparative periods. Net asset value per share decreased to 0.52 cents at 31 March 2016, from 0.91 cents at the previous year-end. Review of Financial Performance Revenue 3QFY2016 3QFY2015 +/(-) Change % 9MFY2016 9MFY2015 S$ 000 S$ 000 S$ 000 S$ 000 +/(-) Change % Waterproofing business 2,524 3,760 (32.9%) 8,431 10,327 (18.4%) Financial services and Investment business % % Total 2,559 3,760 (6.1%) 8,489 10,327 (9.7%) Revenue by geographic segments for waterproofing business 3QFY2016 vs 3QFY2015 and 9MFY2016 vs 9MFY2015 3QFY2016 3QFY2015 +/(-) Change % 9MFY2016 9MFY2015 S$ 000 S$ 000 S$ 000 S$ 000 +/(-) Change % Singapore 1,876 3,105 (39.6%) 6,560 7,948 (17.5%) Malaysia (17.4%) 1,265 1,766 (28.4%) China % (1.1%) Total 2,524 3,760 (32.9%) 8,431 10,327 (18.4%) Page 11 of 18

13 Revenue decreased by approximately S$1.20 million or 31.9% quarter-on-quarter ( qoq ) from approximately S$3.76 million in 3QFY2015 to approximately S$2.56 million in 3QFY2016. The decrease is mainly attributable to decrease in revenue from waterproofing contracts. Revenue was S$8.49 million for 9MFY2016, down by 17.8% respectively year-on-year ( yoy ) mainly due to difference in stages of revenue recognition for various construction contracts. The decrease was partly offset by a maiden contribution amounting to S$0.06 million to revenue for the period by Success Finance Ltd which was acquired in October Gross Profit The s gross profit for 9MFY2016 at S$2.32 million recorded a decline of 22.5% from the s gross profit of S$2.99 million achieved in the previous period. For 3QFY2016, the s gross profit at S$0.58 million recorded a steep decline of 52.7% from the s gross profit of S$1.23 million achieved in the previous corresponding quarter. For 3QFY2016, the s gross profit margin declined to 22.8% as compared to 32.8% for the comparative quarter while the gross profit margin for 9MFY2016 declined to 27.3% as compared to 29.0% in 9MFY2015. The decline in gross profit margin yoy and qoq was largely due to lower subcontracting costs for our waterproofing business in this current competitive and challenging environment in the waterproofing industry. Other Income A decrease in other income of approximately S$0.90 million from S$0.95 million in 3QFY2015 to S$0.05 million in 3QFY2016 was mainly due to foreign exchange translation gain of S$0.72 million and realized gain on available-for-sale investment of S$0.12 million in 3QFY2015 wherein none were recognized in 3QFY2016. The s other income decreased by S$2.83 million from S$3.07 million in 9MFY2015 to S$0.23 million in 9MFY2016. This resulted as there was no realised gain on disposal and reclassification from other comprehensive income upon disposal of available-for-sale investments due to the disposal of all PME shares as at 30 June 2015 wherein a total of S$1.08 million was recognised in the comparative quarter. The decrease in foreign exchange gain also contributed to the decrease in other income for 9MFY2016. Distribution Expenses The s distribution expenses from the s waterproofing business, remained relatively stable in 3QFY2016 as compared with the previous period. For 9MFY2016, the s distribution expenses increased by 30.8% from S$0.66 million in 9MFY2015 to S$0.87 million in 9MFY2016 due largely to an increase in overseas travelling, salaries and third party administrative fees for establishing the sales and marketing infrastructures for the waterproofing business product offerings. Page 12 of 18

14 Administrative Expenses Administrative expenses were 7.6% and 3.8% lower for 3QFY2016 and 9MFY2016 respectively at S$0.81 million and S$2.59 million, as compared to S$0.88 million and S$2.7 million incurred in 3QFY2015 and 9MFY2015. The decrease was mainly due to the net effect of lower salaries and technical sales support from our waterproofing business offset by higher legal and professional fees from holding company and higher office rental from our subsidiary, CGI(HK). Other Expenses Other expenses increased to S$1.95 million in 3QFY2016 from S$0.11 million in 3QFY2015 due to the high fair value loss on disposal of the s held-for-trading investments for the current quarter. The s other expenses increased to S$2.59 million for 9MFY016 due to the higher loss on impairment of held for trading investment for the current year and loss on disposal of trading investments. Finance Cost Finance costs decreased by 59.6% and 69.6% for the 3QFY2016 and 9MFY2016 respectively. This is due mainly to increase in interest recognized in the comparative periods from the extension of trust receipts and the utilization of bank overdraft limit. Income Tax Expense The increase in income tax expense for 9MFY2016 to S$34,197 from S$28,450 for 9MFY2015 was due to higher provision of income tax expense in 3QFY2016 by s Malaysia waterproofing subsidiary in relation to the sales for the year. (Loss)/Profit for the Period The recorded a loss of S$2.41 million in 3QFY2016 as compared to a profit of S$0.89 million in 3QFY2015. The loss was a combination of lower gross profit from the s waterproofing division and a higher fair value loss on held-for-trading investments for the period. For 9MFY2016, the recorded a loss of S$3.58 million compared with a profit of S$1.09 million in 9MFY2015. The loss for the period resulted from the higher distributions costs for the s waterproofing division and the significantly higher fair value loss and loss on disposal from the s quoted securities. Other Comprehensive Income/(Loss) The other comprehensive income for 3QFY2016 and 9MFY2016 comprised mainly of the gain on the exchange difference on the translation of foreign operations due to the appreciation of HK dollar against SGD dollar during the period. The significant movement for 3QFY2016 and 9MFY2016 resulted from the disposal of all of the s PME shares which mainly comprised the s available-for-sale investments in the comparative periods. Page 13 of 18

15 Review of Financial Position Total Assets (Current and Non-Current) As at 31 March 2016, the s total assets decreased by 19.1% to S$11.07 million from S$13.70 million at the previous year-end. The decrease was due predominately to lower cash and bank balances as a result of repayment of financial loans and a decrease in the mark-up of held-for-trading invesments made on the s quoted securities. Trade and other receivables amounted to S$5.9 million or approximately 53.3% of total assets, a decrease of approximately S$0.26 millions compared to at 30 June The decrease was mainly due to the decrease in retention sums from progressively completed waterproofing projects in their active stage of completion. As at 31 March 2016, the s fair value of held-for-trading investments decreased by 65.3% or S$2.61 million from S$4.00 million as at 30 June 2015 to S$1.39 million. This was after the purchase and disposal of investments totalling S$5.10 million and S$5.26 million respectively, and fair value loss of S$1.78 million after the mark-to-market of the quoted equities portfolio at the end of 3QFY2016. The goodwill of S$0.63 million as at 31 March 2016 was from the acquisition of Success Finance Limited. Total Liabilities (Current and Non-Current) As at 31 March 2016, total liabilities amounted to S$6.33 million, an increase of approximately 17.9% or S$0.96 million as compared to 30 June Current liabilities increased by S$0.92 million to S$6.23 million as at 31 March 2016 due mainly to an increase in trade and other payables and gross amount due from contract customers mainly from the certification of claims by our waterproofing customers relating to the progress of the contract. Total borrowings as at 31 March 2016 were S$0.30 million, compared with S$0.49 million as at 30 June Lower borrowings reflected mainly from the reduction in the overdrafts from the banks. Equity Shareholders funds decreased 43.1% to S$4.73 million as compared to S$8.32 million at the previous year end. The decrease reflects the losses recognised for the period and a minimal increase in loss in relation to foreign currency translation reserve. Share capital remained unchanged as there were no new shares issued during the quarter. Review of Statement of Cash Flows 3QFY2016 3QFY2016 3QFY2015 S$ 000 S$ 000 Net cash generated from operating activities Net cash (used in)/generated from investing activities (26) 200 Net cash (used in)/generated from financing activities 1 75 Net increase/(decrease) in cash and cash equivalents 446 (108) Cash and cash equivalents for the period 371 (426) Free cash inflow for the period *Free cashflow = operating cash flow + investing cash flow Page 14 of 18

16 For the 3 months ended 31 March 2016, the recorded a net cash inflow from operating activities of approximately S$0.45 million, as compared to S$0.57 million net cash inflow in the previous corresponding period. This comprised of cash used in operating activities before changes in working capital of S$0.39 million, net of working capital inflow of S$0.99 million, and net cash outflow amounting to S$0.12 million from interest and income tax paid. The net working capital outflow was a result of : (a) an decrease in trade and other receivables of S$0.88 million, increase in amount due from contract customers of S$0.06 million and decrease in inventories of S$0.07 million; (b) net of an increase in trade and other payables of S$0.21million; and (c) net increase in held-for-trading investments of S$0.14 million. For the 3 months ended 31 March 2016, the recorded a net cash outflow from investing activities of S$0.03 million, decreased by S$0.22 million as compared to the previous corresponding period. For the 3 months ended 31 March 2016, net cash used in financing activities relate mainly to net repayments of finance leases due to acquisition of motor vehicles under finance lease and movement in fixed deposits pledged. 9MFY2016 9MFY2016 9MFY2015 S$ 000 S$ 000 Net cash generated from operating activities Net cash (used in)/generated from investing activities (204) 1,963 Net cash (used in)/generated from financing activities (22) 22 Net decrease in cash and cash equivalents 24) (281) Cash and cash equivalents for the period 371 (426) Free cash (outflow)/inflow for the period (34) 2,040 *Free cashflow = operating cash flow + investing cash flow The recorded a net cash inflow from operating activities of approximately S$0.170 million in 9MFY2016 as compared to S$0.08 million in the same period last year. This comprised of cash used in operating activities before changes in working capital of S$0.71 million, net working capital inflow of S$1.10 million, and net cash outflow amounting to S$0.19 million from interest and income tax paid. The net working capital outflow was a result of : (a) an decrease in trade and other receivables of S$0.23 million, an increase in amount due from/to contract customers of S$0.11 million and decrease in inventories of S$0.18 million; (b) net decrease in held-for-trading investments of S$0.16 million; and (c) net increase in trade and other payables of S$0.60 million. For the period ended 31 March 2016, the recorded a net cash outflow from investing activities of S$0.20 million, decreased by S$2.17 million as compared to the previous corresponding year ended 30 June This was mainly due to the acquisition of a subsidiary. Financing activities accounted for a net cash outflow of S$0.02 million due mainly to net repayments of finance leases. Overall, the s cash and cash equivalents increased to a net cash of S$0.38 million as at 31 March 2016 from a net cash of (S$0.43) million as at 31 March Free cash flow of (S$0.03) million was generated during 9MFY2016 as compared to S$2.04 million in the corresponding period last year. Page 15 of 18

17 9. Where a forecast, or a prospect statement, has been previously disclosed to shareholder, any variance between it and the actual results. No forecast or prospect statement has been previously disclosed to shareholders. 10. A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months. As Asia s financial hub, Singapore is feeling the effects of the global downturn and China s weakening economy. Growth was stagnant in the first quarter, with gross domestic product posting zero expansion on an annualized basis compared with the fourth quarter as reported by the trade ministry. The economy remains mired in an extended spell of deflation and steadily lower growth. As such, the continues to view the slowdown in China, persistently low oil prices and chronic weakness in advanced economies to have a scarring effects on the s potential growth and investment. The will continue to manage a cautious stance and be selective in its investment decisions. On 31 March 2016, an announcement was made by the Company that it had extended the long stop date of the sale and purchase agreement to dispose its wholly-owned subsidiary, Hitchins International Private Limited to 31 December If a decision regarding dividend has been made: (a) Whether an interim (final) ordinary dividend has been declared (recommended); and Nil. (b) (i) Amount per share... cents (ii) Previous corresponding period... cents Nil. (c) Whether the dividend is before tax, net of tax or tax exempt. If before tax or net of tax, state the tax rate and the country where the dividend is derived. (If the dividend is not taxable in the hands of shareholders, this must be stated). Not applicable. (d) The date the dividend is payable. Not applicable. (e) The date on which Registrable Transfers received by the company (up to 5.00 pm) will be registered before entitlements to the dividend are determined. Not applicable. 12. If no dividend has been declared (recommended), a statement to that effect. No dividend has been declared / recommended for the period ended 31 March Page 16 of 18

18 13. If the has obtained a general mandate from shareholders for IPTs, the aggregate value of such transactions as required under Rule 920(1)(a)(ii). If no IPT mandate has been obtained, a statement to that effect. The Company does not have a shareholders mandate on Interested Person Transactions and no Interested Person Transactions being carried out for the period ended 31 March Confirmation by the Board pursuant to Rule 720(1) of the listing manual On behalf of the Board of Directors of the Company, we hereby confirm that we have procured all the required undertakings to comply with the Exchange s listing rules from all the Directors and Executive Officers of the Company. 15. Usage of Proceeds pursuant to Rule 704(30) of the Listing Manual Section B: Rules of Catalist Not applicable. BY ORDER OF THE BOARD So Yuen Chun Executive Director 6 May 2016 Page 17 of 18

19 CHINESE GLOBAL INVESTORS GROUP LTD. (Incorporated in Singapore) (Company Registration Number: D) Rule 705(5) NEGATIVE ASSURANCE CONFIRMATION Confirmation by the Board of Directors Pursuant to Rule 705(5) of the SGX-ST Listing Manual Section B: Rules of Catalist, we, So Yuen Chun and Tan Sri Datuk Henry Chin Poy-Wu, being two Directors of Chinese Global Investors Ltd. (the Company ), do hereby confirm on behalf of the Board of Directors of the Company that, to the best of their knowledge, nothing has come to the attention of the Board of Directors of the Company which may render the s unaudited financial results for the third quarter ended 31 March 2016 to be false or misleading in any material aspect. On behalf of the Board of Directors: So Yuen Chun Executive Director Tan Sri Datuk Henry Chin Poy-Wu Non Executive Director/Chairman Singapore, 6 May 2016 Page 18 of 18