JES INTERNATIONAL HOLDINGS LIMITED (Company Registration No: K) Unaudited Results for the Fourth Quarter ended 31 December 2017

Transcription

1 JES INTERNATIONAL HOLDINGS LIMITED (Company Registration No: K) Unaudited Results for the Fourth Quarter ended 31 December 2017

2 PART I - INFORMATION REQUIRED FOR QUARTERLY ANNOUNCEMENTS Explanatory notes: On 4 March 2015, the Company has requested for mandatory trading suspension over the Company s shares from the Singapore Exchange Securities Trading Limited ( SGX-ST ) as Jiangsu Eastern Heavy Industries Co., Ltd ( JEHI ), a major subsidiary of the Company in the People s Republic of China (the PRC ), had filed an application in Taizhou Intermediate People s Court, Jiangsu Province (the Taizhou Court ) in the PRC for a proposed restructuring scheme between JEHI and certain of its creditors (the Application ) for the purposes of implementing and facilitating the Group s consensual restructuring of its debt and liabilities in a manner which would maximise the value of the Company and its assets for its creditors and shareholders (the Proposed Restructuring ). However, the Application had been rejected by the Taizhou Court and that JEHI had subsequently submitted an appeal to the next higher court in the Chinese judiciary hierarchy, the Jiangsu High People's Court (the Jiangsu High Court ) (the Appeal ). Referring to the Announcement made by the Company on 30 September 2016 where it was announced that Jingjiang Court has released a public notice on 20 September 2016, it is noted that Xingrui Accountant Office Ltd Co and Jiangsu Tianzi Law Offices have been appointed as the Managers of the Restructuring. The Managers have applied to the court as its Proposal to treat the PRC Subsidiaries as a single merged entity for the purposes of conducting of the Restructuring as the PRC Subsidiaries have largely the same group of creditors. The application to treat the PRC Subsidiaries as a single merged entity has been approved by the Jingjiang Court on 25 October had on 12 February 2016 entered into a conditional sale and purchase agreement (the SPA ) with Hong Kong Victo International Limited (the Purchaser ), pursuant to which the Company has agreed to sell and the Purchaser has agreed to purchase the whole of the registered capitals of JEHI and Jiangsu New Eastern Marine Engineering Equipment Co., Ltd ( JNEME ) and 49% of the registered capital of Jiangsu Nereus Shipyard Co., Ltd ( JNS ) (the Proposed Disposal ). The Proposed Disposal will result in the disposal of the Group s shipbuilding business, which as at the date of this report would comprise of JEHI, JNEME, JNS, Jingjiang Eastern Heavy Steel Structure Co., Ltd ( JEHSS ) and JYJJP Eastern Shipyard Supplies Co., Ltd ( JES Supplies ) (collectively, the PRC Subsidiaries ). Neither the Proposed Restructuring nor the Proposed Disposal is conditional upon the other, and accordingly, the Proposed Restructuring is independent of the Proposed Disposal. Regardless of the Proposed Restructuring, the Company will proceed with the Proposed Disposal provided that all of the conditions in the SPA are fulfilled. It was also agreed that the Purchaser will assume all responsibilities, duties and obligations of the Company in all matters relating to the Proposed Restructuring from the date of the SPA, including but not limited to liaising with the all Relevant Authorities and affected parties on the Proposed Restructuring. As previously announced by the Company on 2 July 2015 and 20 August 2015, the Group does not currently have in its possession all of its accounting and/or administrative records of the PRC Subsidiaries. There was no proper handover of accounting records from Mr Jin Xin to the current Management. In fact, some of the Group s electronic and paper records have been either removed or destroyed by relatives of Mr Jin Xin and the local police are still continuing their investigations in relation to the unrecovered records. Whilst some of such electronic and paper records have since been recovered, such records are currently not in the possession of the Group but in the possession of local courts and/or the local police (as the case may be) due to the Proposed Restructuring and misappropriation by the said individuals. The remaining records of the PRC Subsidiaries are not in the possession of the local courts and/or police have yet to be recovered by the Company. Some records have been destroyed by relatives of Mr Jin Xin and the local police are still continuing their investigations in relation to the unrecovered records. Accordingly, the current Board is of the view that it may be misleading to consolidate the accounts of the PRC Subsidiaries when the Company and the Auditors are unable to verify the completeness, accuracy, or truthfulness of such records. The Company s Hong Kong and Singapore subsidiaries are dormant companies and management is in the process of striking off the same. On 28 October 2016, the Company had entered into a framework acquisition agreement (the Framework Agreement ) with Teo Woon Tiong, Tan Hin Kon, Teo Chew Peter Chang, Lo Chia Chen, Pang Jet Seng, Pang Lay Seng, Teo Lay Seng and Khoo Hin Keat (collectively, the Vendors ) pursuant to which the Vendors propose to sell, and the Company acquire, 100% of the entire issued and paid-up share capital of Maya Asia Resources Sdn. Bhd. (the Target Company ). The Target Company is an investment holding company and certain of its subsidiaries are engaged in, inter alia, the trading and manufacturing of plastic products, foodstuffs, household insecticides, seasoning, beverages and infant products. As announced by the Company on 29 November 2016, the Company has entered into a conditional sale and purchase agreement to acquire 100% of the entire issued and paid-up share capital of Maya Asia Resources Sdn. Bhd. (the Target Company ) (the Proposed Acquisition ). On 1 March 2017, First Completion of the Proposed Acquisition has taken place and following the First Completion of the Proposed Acquisition, all beneficial interest in the entire issued and paid-up share capital of the Target Company have been transferred to the Company and the Company then beneficially owns 100% of the issued and paid up share capital of the Target Company. Following the First Completion, the Company has majority board seats in the Target Company. As announced by the Company on 8 September 2017, the Proposed Acquisition has been terminated by mutual agreement of the Company and the Vendors and transactions undertaken pursuant to the Proposed Acquisition will be unwound. As a result, the Company will treat the unwinding of the Proposed Acquisition as a disposal of the Target Company. In this instance, the Company shall derecognise the assets (including any goodwill that was capitalised as a result of the business combination) and liabilities of the Target Company at its carrying amounts at the date when control is lost and recognise the fair value of consideration received from the transaction that led to the loss of control, if any. The resulting difference is recognised in the income statement as gain or loss on disposal of the subsidiary attributable to the Company. In light of the above, the Company has consolidated the Target Company s financial information for the period commencing 1 March 2017 and ended 1 September would like to advise shareholders to act with caution when reviewing such financial information. Page 1

3 1(a)(i) An income statement and statement of comprehensive income, or a statement of comprehensive income, for the group, together with a comparative statement for the corresponding period of the immediately preceding financial year. Unaudited Consolidated Statement of Comprehensive Income Three months ended 31 Dec Three months ended 31 Dec % % MYR 000 MYR 000 Change MYR 000 MYR 000 Change +/ (-) +/ (-) Continuing operations Revenue Cost of sales Gross profit Other operating income NM Administrative expenses (1,978) NM Other operating expenses (724) - NM (724) (23,770) (97%) Finance costs (2) - NM (2) - NM Loss from continuing operations before income tax (726) - NM (726) (25,741) (97%) Income tax expense Loss after taxation from continuing operations (726) - NM (726) (25,741) (97%) Net profit from discontinued operations, net of tax Loss for the period (726) - NM (726) (25,741) (97%) Other Comprehensive expense: Items that may be reclassified to profit or loss: Foreign currency translation difference NM 375 2,467 (85%) Total Comprehensive expense for the period (351) - NM (351) (23,274) (98%) NM - Not meaningful. Unaudited Consolidated Statement of Comprehensive Income Twelve months ended 31 Dec Twelve months ended 31 Dec % % MYR 000 MYR 000 Change MYR 000 MYR 000 Change +/ (-) +/ (-) Continuing operations Revenue 3 - NM 3 - NM Cost of sales Gross profit 3 - NM 3 - NM Other operating income 19,858 - NM 19,858 93,378 (79%) Administrative expenses (626) - NM (626) (5,624) (89%) Other operating expenses (3,910) - NM (3,910) (23,770) (84%) Finance costs (14) - NM (14) - NM Profit / (Loss) from continuing operations before income tax 15,311 - NM 15,311 63,984 (76%) Income tax expense Profit / (Loss) after taxation from continuing operations 15,311 - NM 15,311 63,984 (76%) Net profit from discontinued operations, net of tax NM - - Profit / (Loss) for the period 14,639 - NM 15,311 63,984 (76%) Other Comprehensive expense: Items that may be reclassified to profit or loss: Foreign currency translation difference (305) - NM (305) (4,963) (94%) Total Comprehensive income / (expense) for the period 14,334 - NM 15,006 59,021 (75%) NM - Not meaningful. Page 2

4 1(a)(i) An income statement and statement of comprehensive income, or a statement of comprehensive income, for the group, together with a comparative statement for the corresponding period of the immediately preceding financial year (cont d). Results from discontinued operations in respect of Maya Asia Resources and its subsidiaries for the period from 1 March 2017 to 31 August 2017 Twelve months ended 31 Dec % MYR 000 MYR 000 Change +/ (-) Revenue 49,615 - NM Cost of sales (39,367) - NM Gross profit 10,248 - NM Other operating income NM Administrative expenses (411) - NM Other operating expenses (8,748) - NM Finance costs (632) - NM Share of associate s results 461 Profit for the period before income tax 1,027 - NM Income tax expense (355) - NM Profit for the period representing total comprehensive income NM NM - Not meaningful. 1(a)(ii) The following items (with appropriate breakdowns and explanations), if significant, must either be included in the income statement or in the notes to the income statement for the current financial period reported on and the corresponding period of the immediately preceding financial year: - Income/(expense) Twelve months ended 31 Dec MYR 000 MYR 000 Other operating income Waiver of payables to subsidiaries 19,778 - Other operating expenses Professional Fee (1,167) - Loss on disposal of a subsidiary (672) - Impairment for other receivable - (22,523) Income/(expense) Twelve months ended 31 Dec MYR 000 MYR 000 Other operating income Waiver of payables to subsidiaries 19,778 93,327 Other operating expenses Impairment for other receivable - (22,523) Page 3

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. Unaudited Statement of Financial Position 31-Dec Dec-16 MYR 000 MYR 000 ASSETS Non-current assets Property, plant and equipment Subsidiary Current assets Trade receivable 31 - Other receivables, prepayments and deposits 11,434 11,508 Amounts due from subsidiaries 3,089 2,249 Cash and cash equivalents Total current assets 14,574 13,881 Less: current liabilities Due to ultimate holding company - 22,748 Due to subsidiaries 2,012 19,451 Borrowings - 16,950 Trade payable 588 2,973 Other payable 28,640 - Income tax payable - 12 Total current liabilities 31,240 62,134 Less: Non-current liabilities Borrowings 16,578 - Total non-current liabilities 16,578 - Net liabilities (33,178) (48,184) EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY Share capital 641, ,523 Capital reserve 27,692 27,692 Foreign currency translation reserve 235, ,606 Accumulated losses (937,694) (953,005) Total equity (33,178) (48,184) NB: s statement of financial position as at 31 December 2017 is essentially the same as that of the Company, following the disposal of the Target Company as at 31 August Page 4

6 1.(b) (ii) In relation to the aggregate amount of the group's borrowings and debt securities, specify the following as at the end of the current financial period reported on with comparative figures as at the end of the immediately preceding financial year:- (A) the amount repayable in one year or less, or on demand and (C) whether the amounts are secured or unsecured; 31 Dec Dec 2016 Secured Unsecured Secured Unsecured MYR'000 MYR'000 MYR'000 MYR'000 Borrowings - 16,950 - (B) The amount repayable after one year and (C) whether the amounts are secured or unsecured; and 31 Dec Dec 2016 Secured Unsecured Secured Unsecured MYR'000 MYR'000 MYR'000 MYR'000 Borrowings 16,578 (C) Details of any collateral. 31 Dec 2017 MYR' Dec 2016 MYR'000 Secured by guarantee from ultimate holding company 16,578 16,950 16,578 16,950 Page 5

7 1.(c) A statement of cash flows (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year. Unaudited Consolidated Statement of Cash Flows FY17 FY16 FY17 FY16 MYR 000 MYR 000 MYR 000 MYR 000 Cash flows from operating activities Profit before taxation from continuing operation 14,639-15,311 63,985 Profit before taxation from discontinued operation Profit before income tax 15,311-15,311 63,985 Adjustments for: Depreciation of property, plant and equipment Impairment on other receivables ,523 Gain on disposal of property, plant and equipment (69) - (69) - Loss on disposal of subsidiaries Unrealised exchange loss ,255 Waiver of payables to subsidiaries (19,778) - (19,778) (93,323) Operating cash flows before movements in working capital (3,854) - (4,526) (5,545) Changes in operating receivables (31) - (31) - Changes in operating payables (2,385) - (2,385) - Changes in other receivables, prepayment and deposits Changes in other payables and accruals 5,220-5,892 4,144 Changes in amounts due from subsidiaries Cash used in operations (173) - (173) - Income tax paid Net cash used in operating activities (173) - (173) (1,176) Cash flows from investing activities Proceeds from disposal of property, plant and equipment Advances to a subsidiary (11) Net cash generated from investing activities (11) Cash flows from financing activities Advances from subsidiaries ,029 Net cash from financing activities ,029 Net decrease in cash and cash equivalents (104) - (104) (158) Net effect of exchange rate changes on the balance of cash held in foreign currencies Cash and cash equivalents at beginning of the financial period Cash and cash equivalents at end of the financial period Page 6

8 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 capitalization issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year. Unaudited Statement of Changes in Shareholders Equity Share Capital Capital Reserve Foreign Currency Translation Reserve Revaluation Reserve Accumulated Profits/ (losses) Non- Controlling Interest Equity Attributable to Owners of the Company MYR'000 MYR'000 MYR'000 MYR'000 MYR'000 MYR'000 MYR'000 At 1 January ,523 27, ,102 - (929,516) - (112,199) Total comprehensive expense for the period ,078-31,900-90,978 At 31 December ,523 27, ,180 - (897,616) - (21,221) At 1 January ,523 27, ,606 - (953,005) - (48,184) Total comprehensive expense for the period - - (305) - 15,311-15,006 At 31 December ,523 27, ,301 - (937,694) - (33,178) At 1 January ,523 27, ,606 - (953,005) - (48,184) Acquisition of subsidiaries ,446 Total comprehensive income/ (expense) for the period - - (305) - 15,311-15,006 Disposal of subsidiaries - - (591) (821) (34) (1,446) - - (305) - 15,311-15,006 At 31 December ,523 27, ,301 - (937,694) - (33,178) Page 7

9 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 held as treasury shares, if any, against the total number of shares excluding treasury shares of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. Not applicable. 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. The share capital of the Company comprised 1,208,028,000 ordinary shares as at 31 December 2017 and 31 December 2016 respectively. did not hold any treasury share as at 30 September 2017 and 31 December 2016 respectively. 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 report on. Not applicable. 2. Whether the figures have been audited or reviewed, and in accordance with which auditing standard or practice. The financial information for the fourth quarter ended 31 December 2017 have neither been audited nor reviewed by the Company s auditors. 3. Where the figures have been audited or reviewed, the auditors report (including any qualifications or emphasis of a 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. The accounting policies and methods of computation adopted for the current period reported on are consistent with the latest audited financial statements for the financial year ended 31 December However, the presentation currency of the Group for the financial statements of 4Q2017 has been changed from RMB to Malaysian Ringgit ( MYR ). 5. 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 accounting policies and methods of computation adopted for the current period reported on are consistent with the latest audited financial statements for the financial year ended 31 December has adopted all the Singapore Financial Reporting Standards ( FRS ) that are applicable for financial years beginning on or after 1 January The application of these FRS has no material impact to financial statements of the Group and the Company. The functional currency of the Company remains as Singapore Dollar. However, with the acquisition of Maya Asia Resources Sdn Bhd and its subsidiaries (the Sale Group Companies ) with effect from 1 March 2017, the Board of Directors is of the view that the financial statements of the Group and the Company should be presented in MYR instead of RMB given that the principal activities of the Sale Group Companies are domiciled in Malaysia. Accordingly, the assets and liabilities are translated based on the exchange rate at the comparative reporting date, while items of income and expenses in the previous period are translated using the average exchange rate. The components of equity are translated at the relevant historical transaction rates and the differences are accounted for in the foreign currency translation reserve in the statement of changes in equity. Page 8

10 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: - (a) Based on the weighted average number of ordinary shares on issue; and (b) On a fully diluted basis (detailing any adjustments made to the earnings). 31 Dec Dec Dec Dec 2016 Earnings per ordinary share (MYR Cents) 1.21 NM Number of issued ordinary shares as at end of the period 1,208,028,000 1,208,028,000 1,208,028,000 1,208,028, Net asset value (for the issuer and group) per ordinary share based on the total 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. 31 Dec Dec 2016 Net asset value per ordinary share (MYR Cents) (2.75) (3.98) Number of issued ordinary shares as at end of the period 1,208,028,000 1,208,028, 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 affected the cash flow, working capital, assets or liabilities of the group during the current period reported on. Explanatory Note did not present the financial figures of the PRC, Hong Kong and Singapore subsidiaries for the fourth quarter ended 31 December 2016 ( 4Q2016 ) for comparison purposes in this announcement as the Company did not consolidate the financial statements of the PRC, Hong Kong and Singapore subsidiaries for 4Q2016 due to the unavailability of the complete accounting records of the PRC subsidiaries and in light of the fact that the Company s Hong Kong and Singapore subsidiaries were dormant companies for the corresponding period. Similarly, due to the unavailability of the complete accounting records of the PRC subsidiaries and the Company s Hong Kong and Singapore subsidiaries being dormant companies, the Group has also not consolidated the financial statements of the PRC, Hong Kong and Singapore subsidiaries for 4Q2017. For reasons as stated paragraph 1 of this announcement, the Company took the position that the PRC Subsidiaries should be treated as a single merged entity in preparation of the financial statements for 4Q2017. As announced by the Company on 29 November 2016, the Company has entered into a conditional sale and purchase agreement to acquire 100% of the entire issued and paid-up share capital of Maya Asia Resources Sdn. Bhd. (the Target Company and together with its subsidiaries, the Sale Group Companies ). On 1 March 2017, First Completion of the Proposed Acquisition has taken place and following the First Completion of the Proposed Acquisition, all beneficial interest in the entire issued and paid-up share capital of the Target Company have been transferred to the Company and the Company then beneficially owns 100% of the issued and paid up share capital of the Target Company. As announced by the Company on 8 September 2017, the Company and the Vendors have agreed to terminate the CSPA by mutual agreement and the Company has lost majority seats on the board of directors of the Target Company on 31 August Accordingly, management has consolidated the Sale Group Companies unaudited financial information from 1 March 2017 to 31 August 2017 under net profit from discontinued operations, net of tax in the consolidated statement of comprehensive income for the 12 months period ended 31 December Page 9

11 Review of Financial Performance (4Q2017 vs 4Q2016) did not generate any revenue in 4Q2017. generated a net loss of MYR 726,000 in 4Q2017 compared with a net loss of MYR 25.7 million in 4Q2016, mainly due to a decrease in administrative and other operating expenses incurred. s financial performance is essentially the same as that of the Company in 4Q2017. Review of Financial Position (31 December 2017 vs 31 December 2016) 31 December 2017, the non-current assets of the Company is recorded as MYR 66, December 2017, the Company s current assets mainly comprised other receivables, prepayments and deposits, and amounts due from the PRC subsidiaries, which increased from MYR 13.9 million as at 31 December 2016 to MYR 14.6 million as at 31 December December 2017, the Company s current liabilities stood at MYR 31.2 million compared to MYR 62.1 million as at 31 December The decrease is mainly due to the decrease in amounts due to subsidiaries, which decreased from MYR 19.5 million as at 31 December 2016 to MYR 2 million as at 31 December 2017 in line with the waiver of payables to JES Universal Co. Pte Ltd and JES Global Ltd. 31 December 2017, the Company s other payable increased to MYR28.6 million in line with the assignment of due to the ultimate holding company of MYR 22.7 million as at 31 December The non-current liabilities as at 31 December 2017 comprised long term borrowings amounting to MYR 16.6 million. Cash Flow (as at 31 December 2017 vs as at 31 December 2016) Net cash used in operating activities by the Company was approximately MYR 173,000 for the 12 months period ended 31 December 2017, compared with net cash used in operating activities by the Company of MYR 1.2 million for the 12 months period ended 31 December Net cash inflow from investing activities of the Company was approximately MYR 69,000 for the 12 months period ended 31 December 2017, and there was no cash generated from investing activities of the Company in FY2016. The increase was due to proceeds from disposal of a motor vehicle. There was no cash generated from financing activities for the Company. 9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results. There is no variance from paragraph 10 of the previous announcement on unaudited results for the third quarter ended 30 September 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 announced by the Company on 29 November 2016, the Company has entered into a conditional sale and purchase agreement with the vendors of Maya Asia Resources Sdn. Bhd (the Vendors ) pursuant to which the Vendors propose to sell, and the Company acquire, 100% of the entire issued and paid-up share capital of Maya Asia Resources Sdn. Bhd. Maya Asia Resources Sdn. Bhd. is an investment holding company and certain of its subsidiaries (the Sale Group Companies ) are engaged in, inter alia, the trading and manufacturing of plastic products, foodstuffs, household insecticides, seasoning, beverages, and infant-care products. First completion of the aforesaid proposed acquisition has taken place on 1 March 2017 and accordingly, all beneficial interest in the entire issued and paid-up share capital of Maya Asia Resources Sdn Bhd have been transferred to the Company. Further and as stated in the announcement released by the Company on 6 April 2017, final completion of the Proposed Acquisition will be conditional and will take place upon, inter alia, resumption in trading of the Company s shares on the SGX- ST. and the Vendors had also agreed that the Long-stop Date for the Proposed Acquisition whereupon all the conditions precedent to final completion would have to be fulfilled would be 31 August As announced by the Company on 8 September 2017, the Company and the Vendors have agreed to terminate the CSPA by mutual agreement. Accordingly, the Company has undertaken steps to de-recognise the assets and liabilities of the Target Company at their carrying amounts as at 31 August 2017, and has recorded the financial results of the Target Company under the discontinued operations segment. In relation to the proposed disposal of the PRC Subsidiaries, as previously announced on 5 February 2018, the parties will be entering into a termination and settlement agreement with a view to mutually terminate the proposed disposal of the shipbuilding subsidiaries, with no claims to be made by either party against the other party. will continue to be the legal and beneficial owner of the shipbuilding subsidiaries. Further and as previously announced, the Managers have been responsible for the management of the shipbuilding subsidiaries, and the Company has not and will not be liable for any outgoings of the shipbuilding subsidiaries. Page 10

12 will continue to be the legal and beneficial owner of the shipbuilding subsidiaries. Further and as previously announced, the Managers have been responsible for the management of the shipbuilding subsidiaries, and the Company has not and will not be liable for any outgoings of the shipbuilding subsidiaries. In relation to the restructuring of the PRC Subsidiaries, as announced by the Company on 20 October 2017 and on 5 February 2018, the Managers have informed the Company that they are currently negotiating with several parties who have expressed interests in investing in the PRC Subsidiaries and have made preliminary contacts to conduct due diligence. The Managers have also indicated that formal proposals may be submitted by any interested investor(s) after completion of the due diligence process. As announced by the Company on 18 September 2017, the Company has been classified as a cash company pursuant to Rule 1018 of the Listing Manual. At this juncture, the Board is currently considering the options available to the Company as it becomes a cash company and will update shareholders as and when there are material developments on any of the matters above. Further to the above, the Company will endeavour to source for additional sources of funds and revenue streams by acquiring new businesses, and will update shareholders as and when there are material developments on the aforementioned matters. If the Company is unable to source for new funds and/or additional revenue streams, it may not be able to continue as a going concern. 11. If a decision regarding dividend has been made: - (a) Whether an interim ordinary dividend has been declared; and None (b) Corresponding Period of the Immediately Preceding Financial Year Any dividend declared for the corresponding period of the immediately preceding financial year? None (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 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 Registerable 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 or recommended for the period ended 30 September If the group 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. There is no general mandate obtained from the shareholders for IPTs pursuant to Rule 920(1)(a)(ii) of the Listing Manual. PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL-YEAR ANNOUNCEMENTS 14. Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer s most recently audited financial annual financial statements, with comparative information for the immediately preceding year. Not Applicable. 15. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments. Not Applicable. 16. A breakdown of sales as follows:- Not Applicable. Page 11

13 17. A breakdown of the total annual dividend (in dollar value) for the issuer s latest full year and its previous full year as follows:- (a) Ordinary (b) Preference (c) Total Not applicable. 18. Disclosure of person occupying a managerial position in the issuer or any of its principal subsidiaries who is a relative of a director or chief executive officer or substantial shareholder of the issuer pursuant to Rule 704 (13) in the format below. If there are no such persons, the issuer must make an appropriate negative statement. Name Age Family Relationship with any director and/or CEO and/or substantial shareholder Current position and duties, and the year position was first held Details of changes in duties and position held, if any, during the year N.A. 19. Confirmation that the issuer has procured undertakings from all its directors and executive officers under Rule 720(1). hereby confirms that it has procured undertakings from all its directors and executive officers in accordance with Rule 720(1). By order of the Board Jin Yu Executive Director and Chief Executive Officer 23 March 2018 Page 12