the
Foundations
Building our non-ferrous metals business in China
Interim
Report
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Financial Highlights – Half Year Ended
30 June 2007 2
Milestone 3
Chairman’s Statement 5
Management Discussion and Analysis
Review of Operations 9
Financial Review 11
Outlook 11
Directors’ and Chief Executive’s Interests
and Short Positions in Shares,
Underlying Shares and Debentures 13
Substantial Shareholders 14
Share Option Scheme 15
Additional Information 19
Interim Dividend 21
Closure of Register of Members –
Interim Dividend Payment 22
Financial Results
Condensed Consolidated Income Statement 23
Condensed Consolidated Balance Sheet 24
Condensed Consolidated Statement of
Changes in Equity 25
Condensed Consolidated Cash Flow Statement 26
Notes to the Financial Statements 27
Corporate Inform
| Contents |
| 1Interim Report 2007 |
Financial Highlights – Half Year Ended 30 June 2007
EPI (Holdings) Limited
2 Interim Report 2007
As at As at
30 Jun 2007 31 Dec 2006
(Unaudited) (Audited)
HK$’000 HK$’000
Total assets 949,910 283,518
Total borrowings 196,559 17,870
Shareholders’ funds 753,351 265,648
Net cash 557,772 191,344
Number of shares in issue 4,159,452,570 3,608,212,570
Shareholders’ fund per share (Hong Kong dollars) 0.18 0.07
Net cash per share (Hong Kong dollars) 0.13 0.05
TURNOVER BY BUSINESS SEGMENT
HK$’000
GROSS PROFIT BY BUSINESS SEGMENT
HK$’000
Consumer
Electronics
Copper
Smelting
Metals Sourcing
and Trading
51,385
12.1%
249,663
58.9%
123,053
29.0%
Copper
Smelting
Consumer
Electronics
42,804
84.2%
6,630
13.1%
1,378
2.7%
Metals Sourcing
and Trading
For the six months ended 30 Jun
2007 2006
(Unaudited) (Unaudited)
HK$’000 HK$’000
Turnover 424,101 190,613
Cost of goods sold (373,289) (185,559)
Gross Profi t 50,812 5,054
Other income 4,469 –
Selling and marketing costs (9,237) (116)
Administration expenses (18,545) (3,636)
Operating Profi t 27,499 1,302
Finance costs (460) (15)
Profi t before income tax 27,039 1,287
Income tax expense (3,602) (212)
Net profi t attributable to shareholders 23,437 1,075
Milestone
EPI (Holdings) Limited
3Interim Report 2007
22 Sep 2006 Change of name from Greatwall
Cybertech to EPI (Holdings) Limited
– signifying an “ever profitable” and
continuously growing Group
26 Sep 2006 Resumption of trading in shares on the
Stock Exchange of Hong Kong
26 Nov 2006 Established Qingyuan JCCL EPI Copper
Limited (“Qingyuan JCCL EPI”), a joint
venture partnership with Jiangxi Copper in
copper smelting
5 Dec 2006 Raised HK$172 million via the placement
of 605 million shares to institutional
investors at HK$0.295/ share
13 Feb 2007 Established Guangzhou ( Foshan ) Metals
Company Limited with China’s third
largest asset management company
in Guangdong to engage in metal
warehousing and financing business in
Nanhai
Apr 2007 Acquired a smelting plant in Qingyuan
through Qingyuan JCCL EPI Copper
Limited
22 May 2007 Signed Framework Agreement to form
JVCO with China’s fourth largest SOE
copper leader Daye Non ferrous Metals
Company to invest in 4 mines company in
Hubei, China
6 June 2007 Official opening and full operations of
Qingyuan smelting plant
14 June 2007 Raised total amount of HK$463.03
million of which HK$451.92 million is
from shares and HK$11.11 million is
from warrants via top up subscription
placement of 573.54million shares to
institutional investors at HK$0.81/share
and 143.38 million warrants at HK$0.08
warrant price with exercise price at $0.94/
share for 365 days
Chairman’s Statement
EPI (Holdings) Limited
4 Interim Report 2007
Chairman’s Statement
EPI (Holdings) Limited
5Interim Report 2007
We have delivered immediate results in
the first half of 2007, partnering with the
leading Chinese state-owned enterprises in
non-ferrous metals, to establish sourcing
and smelting operations in less than eight
months of operations. As a result, the Group
achieved a net profit of HK$23.4 million on
revenues of HK$424 million and the Board is
recommending a dividend of HK0.25 cents per
share.
Our strategy was to ensure that our core global
sourcing and smelting businesses entered full
operation in the shortest possible time and
generated immediate profit and cashflow.
The momentum achieved will carry into
the second half of the year, to be joined by
direct investment in mining assets, metals
financing and logistics, which will contribute
to the Group in 2008. As we expand, we will
continue to focus on adding value to our
Chinese partners, helping them to resolve their
immediate concerns and complementing their
businesses.
NON-FERROUS METALS
The global sourcing team was the main
contributor for the first half of 2007 and
despite the volatility in copper and non-ferrous
metal scrap prices, our close attention to risk
management enabled us to achieve our targeted
profi t margin.
The opening of the Qingyuan smelting plant,
under our joint venture with Jiangxi Copper,
Qingyuan JCCL EPI, marked a major success for
the Group. Bringing its two smelting furnaces
into operation in June, a mere seven months
after the joint venture’s establishment, is an
extraordinary achievement. It testifies to our
ability to execute on our business model and
combine our partner’s leading position in
China’s copper industry.
We have signed a Framework Agreement
with China’s fourth largest copper leader
Chinese state-owned enterprises, Daye Non
Ferrous Metals Company (Daye) for a stake
in four mines in China’s Hubei province.
Once completed, this investment will yield
substantial returns, with the potential for a
public listing.
We have also taken steps towards establishing
metals logistics and fi nancing business through
signing a joint venture with Guangdong
Guanghong International Trade (Group)
Limited, Guangzhou (Foshan) Metals Co.
Ltd (GUANGFO). We are now building the
operational infrastructure of the joint venture,
whose services will benefit the thousands of
SMEs in the Pearl River Delta area.
CONSUMER ELECTRONICS
We continue our conservative approach to our
consumer electronic business, while building
deeper relationships with our long-term clients.
Chairman’s Statement
EPI (Holdings) Limited
6 Interim Report 2007
Chairman’s Statement
EPI (Holdings) Limited
7Interim Report 2007
OUTLOOK
A priority during the second half of the year will
be to fi nalise the Daye investment. Investments
in such mining assets offer tremendous upside
and our relationships with the major Chinese
state-owned enterprises will give us access to
many more opportunities that can be developed
quickly.
Our relationship with Jiangxi Copper
is excellent and has deepened as the
complementary nature of our businesses
achieves visible results. We will seek every
opportunity to develop this partnership through
more projects. During the second half of the
year Qingyuan JCCL EPI will aim to double
capacity to 200,000 metric tons by early
2008. We will also set up a joint scrap copper
fi nancing business that will ensure a constant
supply of scrap copper and offer stable and
profi table margins, at the same time, our joint
venture company will also act as a sourcing
and trading partner for Jiangxi Copper to supply
them with no. 2 scrap copper in the fourth
quarter of this year. We are expecting to secure
a 50,000 metric tons additional order of no.2
scrap copper from Jinngxi Copper in the next
6 months. We foresee both additional business
and closer ties with Jiangxi Copper which will
add to Group revenue from 2008 onward.
Our global sourcing business will expand
further globally and trade across a wider range
of non-ferrous metals. In July this year, we
began to expand our sourcing scrap copper to
aluminium and brass. We are expecting to have
an annual turnover of over 30,000 metric tons.
We will open an office in Europe during the
second half of the year.
In addition to furthering negotiations with
Daye, we are in advanced discussions with
other parties on investments in a gold mine and
an iron mine, and expect to announce at least
one agreement before year end.
CONCLUSION
We have moved rapidly towards our goal of
becoming the leading supplier of non-ferrous
and scrap metals in China, through building
a global supply chain network. China’s rapid
industrialisation, combined with its own
limited resources of non-ferrous metals, will
continue to create tremendous opportunities for
the Group.
I would like to thank my fellow directors and
the EPI staff for their very hard work during the
past eight months, which has put us well on
track, and to our shareholders for their support.
Joseph Wong
Chairman and CEO, EPI Holdings Limited
Hong Kong
18 September 2007
Management Discussion and Analysis
EPI (Holdings) Limited
8 Interim Report 2007
Anode casting machine in Qingyuan smelting plant
Management Discussion and Analysis
EPI (Holdings) Limited
9Interim Report 2007
During the first half of 2007, the Group
continued to lay the foundations for becoming
the leading supplier of non-ferrous and scrap
metals in China.
Through its efforts over the six months, the
Group has been able to deliver on solidifying
its business model as a fast growth company. In
only six months of operations, the Group has
generated profi t and positive cash fl ows and has
mapped out the deliverables required to achieve
its goals.
REVIEW OF OPERATIONS
During the period, the Group’s operations
comprised its metals sourcing and trading
business, the JCCL EPI (Qingyuan) Limited
(Qingyuan JCCL EPI) copper smelting joint
venture and its consumer electronics business.
Non-ferrous Metals Business
The Group’s non-ferrous metals business saw
rapid progress during the first half of 2007,
with an encouraging contribution from metals
sourcing and trading, the start of smelting
operations and the signing of two more
important agreements, the Guangzhou (Foshan)
Metals Company Limited (GUANGFO) joint
venture and the framework agreement with
Daye Non Ferrous Metals Company (Daye).
The Market
The non-ferrous metals market in China
remained strong, with consumption exceeding
domestic supply. This led to the tighter supply
of copper concentrate in global markets, where
the Chinese smelters have less bargaining
power than the global mining companies.
Moreover, China suffers from over capacity
in copper concentrate smelting. Given the
imbalance in the market, the global mining
companies were able to squeeze the Chinese
smelters’ treatment and refinery charges,
resulting in higher copper concentrate costs
and a decline in gross profit margins for the
major Chinese copper enterprises.
In light of this situation, Chinese copper
smelters have been actively looking for
alternative supply, investing in copper and
other non-ferrous metals mining assets
to improve their mine reserves as well as
procuring more recycled scrap copper and other
non-ferrous metals from both domestic and
overseas sources.
Metals Sourcing and Trading
Our global metal sourcing and trading team
benefited from the China market situation,
increasing its copper and other non-ferrous
metals recycled scrap purchasing to meet the
demand of our Chinese clients as well as our
joint venture smelting business.
During the period, the Group mainly sourced
copper scrap such as no. 2 copper (94%-96%
copper) and brass (60%-65% copper) from the
United States, Europe and Asia. In total, some
3,000 tons of copper was sourced for clients in
China.
The overseas sourcing and trading team in
Hong Kong was expanded to over ten staff,
while a new sourcing office was established
in Los Angeles in May. In China, the local
sourcing and trading team based in Qingyuan
expanded to a team of ten people.
Copper Smelting
Our 51% smelting joint venture with Jiangxi
Copper Limited (Jiangxi Copper), Qingyuan
JCCL EPI, achieved its goal of starting
production in June, a mere seven months after
the joint venture was established.
Management Discussion and Analysis
10 Interim Report 2007
EPI (Holdings) Limited
The exclusive 15-year joint venture had
acquired an existing smelting plant on a
161,644 square metre block of land at Qingyuan
in Guangdong province. Much works needed
to be done to refurbish the plant, however,
including the smelting equipment, before it
could become operational. Over 26 high level
engineers from Jiangxi Copper, together with
teams of workers, worked around the clock
and the plant was offi cially opened on 6 June
2007 in the presence of the President of Jiangxi
Copper, high ranking government offi cials from
Qingyuan and the Chairman and CEO of EPI
Holdings.
The entire annual production of copper
anode will be purchased by Jiangxi Copper
at the prevailing market price and on general
commercial terms.
Mining Investment
In May, EPI entered into a framework
agreement with Daye Non Ferrous Metals
Company (Daye) which would give the Group
a 25% stake in a joint venture that would
own four mines in China’s Hubei province.
The investment is valued at approximately
RMB 500 million, subject to due diligence
reports and the fi nal joint venture agreement.
Daye proposes to inject into the joint venture
company its interests in three companies
principally engaged in holding and operating
mines in China, Feng Shan Co Limited, Xin Tai
Co. Limited and Xin Ma Co. Limited, as well as
its 66.46% interest in the large Tong Lu Shan
Mine.
Daye is China’s fourth largest non-ferrous
metals company. Its mines have a current
annual production of approximately 23,000
tons of copper, 1 ton of gold and 350,000 tons
of iron, with estimated reserves of 787,374
tons of copper, 29,564 kilogrammes of gold,
455,726 kilogrammes of silver, 13,021 tons of
molybdenum and 19,602 kilotons of iron ore.
Warehousing, Logistics and Financing
In February 2007, the Group took its first
step towards establishing itself in metals
warehousing, logistics and financing,
with the signing of a second joint venture,
Guangzhou (Foshan) Metals Company Limited
(GUANGFO), with Foshan Nanhai Xinweifeng
Trading Co. Ltd. and Guangdong Guanghong
International Trade Group Co. Ltd. The total
investment is estimated at RMB10 million
(HK$10.4 million) and the Group will hold
a 40% stake, with an option to increase its
shareholding to 50% within a year from
signature of the joint venture agreement.
Consumer Electronics Business
The Group’s consumer electronics business
arm, Innovision Enterprises Limited
(Innovision) sells digital video disk (DVD)
combos, home theatres and DVDs and CRT
TV for the US, Latin America and European
markets, outsourcing its production on an OEM
and ODM basis to reliable manufacturers in
China. The Group has been able to retain its
long term clients which has maintained profi t
margin.
Management Discussion and Analysis
11Interim Report 2007
EPI (Holdings) Limited
FINANCIAL REVIEW
Turnover and Gross Profi t Margin
Total turnover of the Group for the six months
ended 30 June 2007 reached HK$424 million,
representing an increase of 122.5% over the
same period of year 2006. The gross profit
margin was 11.98%, up from 2.65% in the same
period last year.
The metal sourcing and trading business was
the main revenue driver. Sales at the metal
sourcing and trading business for the period
were HK$250 million, representing 58.9% of
Group turnover. Gross profi t margin was 17.1%.
The Qingyuan JCCL EPI smelting joint venture
began full operations in June and sales for the
period were HK$123 million, contributing
29% to Group turnover. Gross profit margin
was 5.4%. Sales at the consumer electronics
business were HK$51 million, representing
12.1% of Group turnover, a decrease of 73%
over the same period last year. Gross profit
margin was 2.68%.
EBITDA and Net Profi t
The Group’s EBITDA (earnings before interest,
taxation, depreciation and amortisation less
bank interest income) for the period was
HK$26.3 million, compared to HK$1.3 million
in the same period last year. EBITDA margin
rose strongly to 6.2% from 0.68% as a result of
the successful diversifi cation into non- ferrous
metals business.
Net profit attributable to shareholders also
increased sharply, rising by 2,080.2% to
HK$23.4 million and net profi t margin based on
turnover improved from 0.56% to 5.53%.
Finance Costs
Finance costs of HK$0.46 million mainly
comprised interest expenses on bank loans
and overdraft repayable within one year. The
increase in interest expense was mainly due to
the increase in the utilisation of bank facilities
for the production of copper anode business.
Liquidity and Financial Resources
In view of its expansion plans and of the good
prospects for completion of the Daye joint
venture, the Group decided to raise additional
equity capital in the fi rst half of 2007.
On 14 June the Company raised an aggregate
net proceeds of HK$463.03 million, of which
HK$451.92 million was in the form of shares
and HK$11.11 million in the form of warrants,
via a top up subscription placement of
573,540,000 shares to institutional investors
at HK$0.81 per share than and 143,380,000
warrants at HK$0.08 warrant price with an
exercise price at HK$0.94 per share for 365
days. The proceeds will be applied to the Daye
investment and as working capital for the
Group.
The Group has a strong cash position as at the
period ended 30 June 2007 with cash and bank
balances of HK$558 million on hand.
OUTLOOK
The Group expects to make further rapid
progress in building its integrated non-ferrous
metals business in China during the second
half of the year. Although EPI will remain in
an expansion phase, the addition of revenue
generating operations offers very good prospects
for growth in revenues and earnings.
Management Discussion and Analysis
12 Interim Report 2007
EPI (Holdings) Limited
Finalisation of the Daye mining investment will
be a priority for the second half of the year. Once
completed, this investment will give the Group
access to immediate increases in revenue from
the current metal production, as well as offering
the prospect of further gains from a separate
public listing.
The Group is now working hard with Daye’s
team on the due diligence process and is
expected to complete the joint venture in
the fourth quarter of this year or early 2008.
Meanwhile, the Group will actively seek similar
opportunities for mining investment in China.
Qingyuan JCCL EPI will bring its two smelting
furnaces into full operation, which should
contribute sizeable revenues in the second half
of the year. The joint venture is bringing forward
the construction of two further smelting
furnaces to the third quarter of this year, which
will double the capacity of the plant to 200,000
tons a year by 2008.
In light of the smooth start to operations at
Qingyuan JCCL EPI and ever closer ties with
Jiangxi Copper, its joint venture partner, the
Group is to establish a scrap metal financing
business with Jiangxi Copper in the second half
of the year. This will provide a stable supply
of locally sourced scrap copper for Qingyuan
JCCL EPI and offer additional revenues and
an attractive operating margin, which will
contribute to both the joint venture and the
Group.
The metals sourcing and trading business will
continue to expand and benefit increasingly
from the Group’s other operations. Led by
managers with over 20 years’ experience in the
recycled metal market, the operation is on track
to deliver higher revenue in the second half of
the year. The Group is exploring opportunities
to open a third offi ce in Europe and expanding
its sourcing and trading products from scrap
copper to aluminium and brass and expected
to exceed an annual turnover of 30,000 metric
tons.
On 18 May 2007, the Company entered into
the Subscription Agreement with Vision
Tech International Holdings Limited (Vision
Tech) pursuant to which the Company
has conditionally agreed to subscribe for
750,000,000 new shares at a price of HK$0.10
per new share in Vision Tech.
Completion of the Subscription Agreement is
conditional upon a proposal for the resumption
in trading of shares in Vision Tech on the Stock
Exchange having been approved and accepted
by the Stock Exchange to be viable and which is
satisfactory and acceptable to EPI Holdings and
other relevant parties.
To ensure that the Group’s expansion is
underpinned by solid systems and risk
management, during the second half of the
year the Group will implement an accounting,
trading and management information system
(MIS system), covering management resources,
operations, risk management and human
resources. This will bring greater efficiencies
and management control, as well as allowing
of global sourcing operations to benefit from
working closely together on common data
communication platforms.
Directors’ and Chief Executive’s Interests and Short
Positions in Shares, Undelying Shares and Debentures
EPI (Holdings) Limited
13Interim Report 2007
At 30 June 2007, the interests and short positions of the directors and chief executives in the shares,
underlying shares and debentures of the Company or any of its associated corporations (within the
meaning of Part XV of Securities and Futures Ordinance (“SFO”)), as recorded in the register required
to be kept by the Company pursuant to Section 352 of the SFO, or as otherwise notified to the
Company and 60%
– 50,000,000(S) – 50,000,000(S) 1.20%
Cheng Hairong – – 24,380,000(L) 24,380,000(L) 0.59%
Chu Kwok Chi Robert – – 4,000,000(L) 4,000,000(L) 0.10%
Leung Hon Chuen – – 2,380,000(L) 2,380,000(L) 0.06%
Xu Mingshe – – 2,000,000(L) 2,000,000(L) 0.05%
Poon Kwok Shin, Edmond – – 3,580,000(L) 3,580,000(L) 0.09%
Notes:
1. Climax Associates Limited is 51% owned by Rich Concept Worldwide Limited.
2. Rich Concept Worldwide Limited is wholly owned by Mr. Wong Chi Wing, Joseph, a Director and Chairman of the Company.
3. “L” refers to the long position in the Shares held by such entity, while “S” refers to short position in the Shares held by such entity.
Subsequent to the period, as at 18 September 2007, being the latest practicable date prior to the
printing of this interim report (the “Latest Practicable Date”), the long positions of Mr. Wong
Chi Wing Joseph in the shares and underlying shares increased to a total of 1,737,526,000 shares
representing approximately 42.02% interest (compared to a total of 1,730,190,000 shares representing
approximately 41.60% as at 30 June 2007) by virtue of SFO as a result of his further acquisitions in
aggregate of 10,120,000 shares on the exchange and disposal of 2,784,000 shares off the exchange
pursuant to the exercise of a private warrant by the warrant holders. Corresponding to the exercise
of the private warrant by the warrant holders, the short positions of Mr. Wong Chi Wing Joseph in
the shares and underlying shares reduced to a total of 47,216,000 shares representing approximately
1.14% interest (compared to a total of 50,000,000 shares representing approximately 1.20% as at 30
June 2007) by virtue of SFO.
On 7 August 2007, Mr. Poon Kwok Shin Edmond exercised a share option of 1,200,000 shares and the
Company issued 1,200,000 shares to him accordingly.
Save as disclosed above, no Directors or Chief Executive have any interests or short position 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 would have to be notifi ed to the Company and
the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short
positions which were taken or deemed to be have under such provisions) or which were required,
pursuant to Section 352 of the SFO, to be entered in the register referred to therein or which were
required in the Listing Rules pursuant to the Model Code for Securities Transactions by Directors of
Listed Companies to be notifi ed to the Company and the Stock Exchange.
Substantial Shareholders
EPI (Holdings) Limited
14 Interim Report 2007
As at 30 June 2007, according to the register of interests maintained by the Company pursuant
to section 336 of the Securities and Futures Ordinance (“SFO”) and so far as is known to, or can
be ascertained after reasonable enquiry by the Directors or chief executive of the Company, the
following persons, other than the Directors and the chief executive of the Company, who had an
interest or a short position in the shares or underlying shares of the Company which would fall to be
disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who
were, directly or indirectly, deemed to be interested in 5% or more of the nominal value of any class
of share capital carrying rights to vote in all circumstances at general meetings of any other member
of the Group and the amount of each of such person’s interests in such securities, together with
particulars of any options in respect of such capital were as follows:
Approximate
percentage of the
Number of issued share capital
Name of Shareholders Position Capacity Shares held the Company
Climax Associates Limited Long Benefi cial owner 1,701,810,000 (L) 40.91%
(Note 1) 50,000,000(S) 1.20%
Rich Concept Worldwide Long Interest of a controlled 1,701,810,000 (L) 40.91%
Limited Concept (Note 2) corporation 50,000,000(S) 1.20%
Notes:
1. Climax Associates Limited is 51% owned by Rich Concept Worldwide Limited.
2. Rich Concept Worldwide Limited is wholly owned by Mr. Wong Chi Wing, Joseph, a Director and Chairman of the Company.
3. “L” refers to the long position in the Shares held by such entity, while “S” refers to short position in the Shares held by such entity.
Subsequent to the period, as at 18 September 2007, being the latest practicable date prior to
the printing of this interim report (the “Latest Practicable Date”), the long positions of Climax
Associates Limited and Rich Concept Worldwide Limited in the shares and underlying shares
increased to a total of 1,708,146,000 shares representing approximately 41.31% interest (compared
to a total of 1,701,810,000 shares representing approximately 40.91% as at 30 June 2007) by virtue
of SFO as a result of her further acquisitions in aggregate of 9,120,000 shares on the exchange and
disposal of 2,784,000 shares off the exchange pursuant to the exercise of a private warrant by the
warrant holders. Corresponding to the exercise of the private warrant by the warrant holders, the
short positions of Climax Associates Limited and Rich Concept Worldwide Limited in the shares and
underlying shares reduced to a total of 47,216,000 shares representing approximately 1.14% interest
(compared to a total of 50,000,000 shares representing approximately 1.20% as at 30 June 2007) by
virtue of SFO.
Saved as disclosed above, as at the Latest Practicable Date, so far as is known to, or can be ascertained
after reasonable enquiry by the Directors or chief executive of the Company, no persons had interests
or short positions in the shares or underlying shares of the Company which would fall to be disclosed
to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who are, directly
or indirectly, deemed to be interested in 5% or more of the nominal value of any class of share capital
carrying rights to vote in all circumstances at general meetings of any member of the Group or has
any options in respect of such capital.
Share Option Scheme
EPI (Holdings) Limited
15Interim Report 2007
The Company’s share option scheme (the “Scheme”) was adopted for a period of 10 years
commencing 6 November 2006 pursuant to an Ordinary Resolution passed at the Special General
Meeting of the Shareholders held on 6 November 2006 for he purpose of providing incentives or
rewards to selected employees and directors for their contribution to the Group.
Under the Scheme, the Company may grant options to selected employees and directors of the
Company and its subsidiaries, to subscribe for shares in the Company. Additionally, the Company
may, from time to time, grant share options to eligible vendors, customers, advisors and consultants
to the Company and its subsidiaries at the discretion of the Board of Directors.
The total number of shares in respect of which options may be granted under the Scheme is not
permitted to exceed 10% of the shares of the Company in issue at any point of time, without prior
approval from the Company’s shareholders. The number of shares issued and to be issued in respect
of which options granted and may be granted to any individual in any one year is not permitted
to exceed 1% of the shares of the Company in issue at any point in time, without prior approval
from the Company’s shareholders. Options granted to substantial shareholders, Independent non-
executive directors, or any of their respective associates (including a discretionary trust whose
discretionary objects include a substantial shareholders, Independent non-executive directors, or any
of their respective associates) in excess of 0.1% of the Company’s share capital or with a value in
excess of HK$5,000,000 must be also approved by the Company’s shareholders.
The exercise price of the share options is determinable by the directors, but may not be less than
the higher of (i) the Stock Exchange closing price of the Company’s shares on the sate of the offer of
the share options which must be a business day; (ii) the average Stock Exchange closing price of the
Company’s shares for the fi ve trading days immediately preceding the date of the offer; and (iii) the
nominal value of the Company’s shares.
As at 30 June 2007, options to subscribe for an aggregate of 247,440,000 shares of the Company
granted to the Directors and certain employees pursuant to the Scheme remained outstanding, details
of which were as follows:
Number of share options Exercisable Closing price
Grant Exercised Cancelled/ Outstanding as period immediately
At 1 during during Lapsed during at 30 June Date of (both dates Exercise before the
Name of Director January 2007 the period the period the period 2007 Grant inclusive) price date of grant
Mr. Wong Chi – 8,380,000 – – 8,380,000 31 January 21 February 0.205 0.205
Wing Joseph 2007 2007 to 31
December
2009
– 8,000,000 – – 8,000,000 31 January 1 January 0.205 0.205
2007 2008 to 31
December
2009
Share Option Scheme
16 Interim Report 2007
EPI (Holdings) Limited
Number of share options Exercisable Closing price
Grant Exercised Cancelled/ Outstanding as period immediately
At 1 during during Lapsed during at 30 June Date of (both dates Exercise before the
Name of Director January 2007 the period the period the period 2007 Grant inclusive) price date of grant
– 8,000,000 – – 8,000,000 31 January 1 January 0.205 0.205
2007 2009 to 31
December
2009
Mr. Cheng Hairong – 8,380,000 – – 8,380,000 31 January 21 February 0.205 0.205
2007 2007 to 31
December
2009
– 8,000,000 – – 8,000,000 31 January 1 January 0.205 0.205
2007 2008 to 31
December
2009
– 8,000,000 – – 8,000,000 31 January 1 January 0.205 0.205
2007 2009 to 31
December
2009
Mr. Chu – 1,340,000 – – 1,340,000 31 January 21 February 0.205 0.205
Kwok Chi Robert 2007 2007 to 31
December
2009
– 660,000 – – 660,000 31 January 1 January 0.205 0.205
2007 2008 to 31
December
2009
– 680,000 – – 680,000 21 February 1 January 0.30 0.27
2007 2008 to 31
December
2009
– 1,320,000 – – 1,320,000 21 February 1 January 0.30 0.27
2007 2009 to 31
December
2009
Mr. Leung Hon Chuen – 1,200,000 (1,200,000) – – 31 January 21 February 0.205 0.205
2007 2007 to 31
December
2009
– 800,000 – – 800,000 31 January 1 January 0.205 0.205
2007 2008 to 31
December
2009
Share Option Scheme
17Interim Report 2007
EPI (Holdings) Limited
Number of share options Exercisable Closing price
Grant Exercised Cancelled/ Outstanding as period immediately
At 1 during during Lapsed during at 30 June Date of (both dates Exercise before the
Name of Director January 2007 the period the period the period 2007 Grant inclusive) price date of grant
– 400,000 – – 400,000 21 February 1 January 0.30 0.27
2007 2008 to 31
December
2009
– 1,180,000 – – 1,180,000 21 February 1 January 0.30 0.27
2007 2009 to 31
December
2009
Mr. Poon Kwok Shin, – 1,200,000 – – 1,200,000 31 January 21 February 0.205 0.205
Edmond (note 1) 2007 2007 to 31
December
2009
– 800,000 – – 800,000 31 January 1 January 0.205 0.205
2007 2008 to 31
December
2009
– 400,000 – – 400,000 21 February 1 January 0.30 0.27
2007 2008 to 31
December
2009
– 1,180,000 – – 1,180,000 21 February 1 January 0.30 0.27
2007 2009 to 31
December
2009
Mr. Xu Mingshe – 680,000 – – 680,000 21 February 28 February 0.30 0.27
2007 2007 to 31
December
2009
– 660,000 – – 660,000 21 February 1 January 0.30 0.27
2007 2009 to 31
December
2009
– 660,000 – – 660,000 21 February 1 January 0.30 0.27
2007 2009 to 31
December
2009
Employees (note 2) – 57,500,000 – – 57,500,000 31 January 21 February 0.205 0.205
2007 2007 to 31
December
2009
Share Option Scheme
18 Interim Report 2007
EPI (Holdings) Limited
Number of share options Exercisable Closing price
Grant Exercised Cancelled/ Outstanding as period immediately
At 1 during during Lapsed during at 30 June Date of (both dates Exercise before the
Name of Director January 2007 the period the period the period 2007 Grant inclusive) price date of grant
– 57,500,000 – – 57,500,000 31 January 1 January 0.205 0.205
2007 2008 to 31
December
2009
– 55,320,000 – – 55,320,000 31 January 1 January 0.205 0.205
2007 2009 to 31
December
2009
– 7,200,000 – – 7,200,000 21 February 1 January 0.30 0.27
2007 2009 to 31
December
2009
– 9,200,000 – – 9,200,000 21 February 1 January 0.30 0.27
2007 2009 to 31
December
2009
Total – 248,640,000 (1,200,000) – 247,440,000
Notes:
(1) Subsequent to the period, as at 18 September 2007, being the latest practicable date prior to the printing of this interim report, Mr. Poon Kwok Shin
Edmond had exercised share options amounting to 1,200,000 shares at the subscription price of HK$0.205 per share.
(2) Subsequent to the period, as at 18 September 2007, being the latest practicable date prior to the printing of this interim report, an employee had
exercised share options amounting to 2,000,000 shares at the subscription price of HK$0.205 per share.
Additional Information
EPI (Holdings) Limited
19Interim Report 2007
EMPLOYEES
As at 30 June 2007, the Group had a total of about 27 employees in Hong Kong and 300 in PRC.
Employee’s cost (excluding directors’ emoluments) amounted to approximately 8.9 million (2006: 1.3
million). The Group ensures that the pay levels of its employees are competitive according to market
trend and its employees are rewarded on a performance related basis within the general framework of
the Group’s salary and bonus system.
PURCHASE, SALES OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES
During the six months ended 30 June 2007, the Company repurchased and redeemed the shares as
follows:
Number of Shares Method of Shares Prices per Share
Date repurchased repurchase Highest Lowest
HK$ HK$
5 January 2007 5,900,000 On the Exchange 0.210 0.206
10 January 2007 1,500,000 On the Exchange 0.197 0.192
11 January 2007 1,440,000 On the Exchange 0.195 0.193
12 January 2007 5,360,000 On the Exchange 0.201 0.193
15 January 2007 1,300,000 On the Exchange 0.203 0.201
16 January 2007 2,500,000 On the Exchange 0.200 0.194
17 January 2007 2,300,000 On the Exchange 0.195 0.190
18 January 2007 200,000 On the Exchange 0.189 0.189
19 January 2007 3,000,000 On the Exchange 0.202 0.198
23,500,000
CODE ON CORPORATE GOVERNANCE PRACTICES
The Company has compiled with the code provisions set out in the Code on Corporate Governance
Practices (the “CG Code”) in Appendix 14 of the Rules Governing the Listing of Securities on the
Stock Exchange of Hong Kong Limited (the “Listing Rules”).
For the period ended 30 June 2007, the Company has complied with the CG Code with deviations
from the code provision A.2.1 and A.4.1 of the CG Code as summarized below.
The code provision A.2.1 of the CG Code stipulates that the roles of chairman and chief executive
officer should be separated and should not be performed by the same individual. Mr. Wong Chi
Wing Joseph is the chairman and chief executive offi cer of the company. The Company recognises
the importance of segregating the duties of the chairman and the chief executive offi cer and when
a high calibre executive could be identifi ed, he would be invited to take up either one role in the
forthcoming year.
Additional Information
20 Interim Report 2007
EPI (Holdings) Limited
The code provision A.4.1 of the CG Code stipulates that non-executive directors should be appointed
for a specifi c term, subject to re-election. Currently the non-executive directors were not appointed
for a specifi c term. However, all non-executive directors were subject to the retirement and rotation
requirements in accordance with the Company’s Bye-laws.
MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS
The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers
(the “Model Code”) as set out in Appendix 10 to the Listing Rules. Upon specifi c enquiry by the
Company, all directors have confi rmed that they have complied with the required standards set out
in the Model Code and its code of conduct regarding directors’ securities transactions throughout the
period.
AUDIT COMMITTEE
The Audit Committee has reviewed with management the accounting principles and practices
adopted by the Group and discussed internal controls and financial reporting matters including
a review of the unaudited consolidated accounts for the six months ended 30 June 2007 with the
Directors.
The Audit Committee comprises two Independent Non-executive Directors, namely Mr. Poon Kwok
Shin Edmond (Chairman of the Audit Committee) and Mr. Xu Mingshe and one Non-executive
Director, Mr. Leung Hon Chuen. Mr. Poon is a certifi ed public accountant.
BOARD OF DIRECTORS
As at the date of this report the Board comprises three executive Directors, namely, Mr. Wong Chi
Wing, Joseph, Mr. Cheng Hairong and Mr. Chu Kwok Chi, Robert, one non-executive Director,
namely Mr. Leung Hon Chuen and three independent non-executive Directors, namely, Mr. Xu
Mingshe, Mr. Wu Xiaoke and Mr. Poon Kwok Shin, Edmond.
On behalf of the Board
EPI (Holdings) Limited
Wong Chi Wing Joseph
Chairman
Hong Kong, 18 September 2007
Interim Dividend
EPI (Holdings) Limited
21Interim Report 2007
The Board of directors has resolved to declare an interim dividend of HK0.25 cents per share (30 June
2006: NIL) for the six months ended 30 June 2007 to shareholders whose names appear on the register
of members of the Company on Thursday, 18 October 2007. The interim dividend will be paid on or
around 31 October 2007.
Closure of Register of Members – Interim Dividend Payment
EPI (Holdings) Limited
22 Interim Report 2007
The Registrar of members will be closed from Monday, 15 October 2007 to Thursday, 18 October
2007, both days inclusive, during which period no share transfer will be registered. In order to qualify
for the interim dividend declared for the six months ended 30 June 2007, all transfer documents
should be lodged with the Company’s Hong Kong Branch Share Registrar, Tengis Limited at 26/F.,
Tesbury Centre, 28 Queen’s Road East, Hong Kong, not later than 4:30 p.m. on Friday, 12 October
2007.
Financial Results
EPI (Holdings) Limited
23Interim Report 2007
The Board of Directors (the “Board”) of EPI (Holdings) Limited (the “Company”) is pleased to
announce the unaudited condensed consolidated results of the Company and its subsidiaries
(collectively “EPI” or the “Group”) for the six months ended 30 June 2007 (the “Interim Period”),
together with the comparative fi gures for the corresponding period ended 30 June 2006 as follows:
CONDENSED CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2007
For the six months
period ended 30 June
2007 2006
Notes HK$’000 HK$’000
(Unaudited) (Unaudited)
Turnover 3 424,101 190,613
Cost of sales (373,289) (185,559)
Gross profi t 50,812 5,054
Other income 4,469 –
Selling and distribution costs (9,237) (116)
Administrative expenses (18,545) (3,636)
Operating profi t 4 27,499 1,302
Finance costs 5 (460) (15)
Profi t before income tax 27,039 1,287
Taxation 6 (3,602) (212)
Profi t for the period attributable to
equity holders of the Company 23,437 1,075
Earnings per share for profi t attributable to
the equity holders of the Company 7
– Basic (Hong Kong cents) 0.65 0.01
– Diluted (Hong Kong cents) 0.63 0.01
Financial Results
24 Interim Report 2007
EPI (Holdings) Limited
CONDENSED CONSOLIDATED BALANCE SHEET
As at 30 June 2007
As at As at
30 June 31 December
2007 2006
Notes HK$’000 HK$’000
(Unaudited) (Audited)
ASSETS
Non-current assets
Property, plant and equipment 31,984 779
31,984 779
Current assets
Inventories 79,452 –
Trade and other receivables 8 280,702 91,395
Cash and cash equivalents 557,772 191,344
917,926 282,739
TOTAL ASSETS 949,910 283,518
Capital and reserves
Share capital 10 41,595 36,082
Reserves 711,756 229,566
Total owners’ equity 753,351 265,648
Current liabilities
Trade and other payables 9 119,862 15,832
Bank borrowings – due within one year 71,285 –
Income tax payables 5,412 2,038
196,559 17,870
Total liabilities 196,559 17,870
Total equity and liabilities 949,910 283,518
Net current assets 721,367 264,869
Total assets less current liabilities 753,351 265,648
Financial Results
25Interim Report 2007
EPI (Holdings) Limited
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June, 2007
Capital Contributed Share based Accumulated
Share Share Redemption surplus payment Warrant Exchange (losses)/
Capital Premium Reserve account reserve reserve Reserve profi ts Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
As at 1 January 2006 80,763 792,011 9,924 145,372 – – – (1,322,447) (294,377)
Profi t for the period – – – – – – – 1,075 1,075
At 30 June 2006 80,763 792,011 9,924 145,372 – – – (1,321,372) (293,302)
Capital Reduction (79,955) – – 79,955 – – – – –
Issue of subscription and
additional shares 24,278 62,250 – (3,528) – – – – 83,000
Open offer 1,453 6,851 – – – – – – 8,304
Placing of new shares 3,746 33,529 – – – – – – 37,275
Capital reserve reduction – (894,641) (9,924) 904,565 – – – – –
Set off the entire accumulated
losses of the Company – – – (1,066,042) – – – 1,066,042 –
Shares after debt restructuring 6,050 166,037 – – – – – – 172,087
Shares repurchase (253) (5,330) – – – – – – (5,583)
Profi t for the period – – – – – – – 263,867 263,867
At 31 December 2006 36,082 160,707 – 60,322 – – – 8,537 265,648
Placing of new shares 5,736 446,188 – – – – – – 451,924
Issue of warrants – (358) – – – 11,470 – – 11,112
Recognition of share based
payment expenses – – – – 4,000 – – – 4,000
Issue of shares under share
option scheme 12 234 – – – – – – 246
Profi t for the period – – – – – – – 23,437 23,437
Exchange differences arising on
translation of foreign operations – – – – – – 1,685 – 1,685
Shares repurchase (235) (4,466) – – – – – – (4,701)
At 30 June 2007 41,595 602,305 – 60,322 4,000 11,470 1,685 31,974 753,351
Financial Results
26 Interim Report 2007
EPI (Holdings) Limited
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2007
Six months ended 30 June
2007 2006
HK$’000 HK$’000
(Unaudited) (Unaudited)
Profi t before taxation 27,039 1,287
Bank interest income (1,347) –
Depreciation 167 14
Provision share based payment 4,000 –
Bank interest paid 460 –
Loss on metals future trading contracts 3,208 –
Operating cash fl ow before working capital changes 33,527 1,301
(Increase) in inventories (79,452) –
(Increase)/Decrease in trade receivable and other receivable (192,515) 1,071
Increase/(Decrease) in trade payable and other payable 104,030 (2,419)
Cash used in operations (134,410) (47)
Hong Kong profi ts tax (paid)/received (228) 151
NET CASH (USED IN)/FROM OPERATING ACTIVITIES (134,638) 104
INVESTING ACTIVITIES
Interest received 1,347 –
Bank interest paid (460) –
Purchases of property, plant and equipment (31,372) –
NET CASH USED IN INVESTING ACTIVITIES (30,485) –
FINANCING ACTIVITIES
Inception of bank borrowings 71,285 –
Net payment on repurchase of shares (4,701) –
Net proceeds from issue of shares 452,170 –
Net proceeds from warrants contribution 11,112 –
NET CASH FROM FINANCING ACTIVITIES 529,866 –
NET INCREASE IN CASH AND CASH EQUIVALENTS 364,743 104
EFFECT OF FOREIGN EXCHANGE RATE CHANGES 1,685 –
CASH AND CASH EQUIVALENTS AT 1 JANUARY 191,344 59
CASH AND CASH EQUIVALENTS AT 30 JUNE 557,772 163
ANALYSIS OF THE BALANCES OF CASH AND
CASH EQUIVALENTS
Cash and bank balances 557,772 163
For the six months ended 30 June 2007
Notes to the Financial Statements
EPI (Holdings) Limited
27Interim Report 2007
1. BASIS OF PREPARATION
The condensed consolidated financial statements 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 (the “Stock Exchange”) and with Hong
Kong Accounting Standard (the “HKAS”) 34 Interim Financial Reporting.
The Group adopts the proportionate consolidation method as set out in the Hong Kong
Accounting Standard (“HKAS”) 31 “Interest in Jointly Controlled Entities” for the recognition
of interests in Qingyuan JCCL EPI Copper Limited (“Qingyuan JCCL EPI”). The Directors of
the Company consider that the use of proportionate consolidation method better refl ects the
substance and economic reality of the Group’s interests in Qingyuan JCCL EPI.
Under the proportionate consolidation method, the Group’s share of assets, liabilities, income
and expenses of joint controlled entities is combined on a line-by-line basis with similar items
in the Group’s fi nancial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
The condensed consolidated fi nancial statements have been prepared on the historical cost basis
except for certain fi nancial instruments, which are measured at fair values.
The accounting policies used in the condensed consolidated fi nancial statements are consistent
with those followed in the preparation of the Group’s annual fi nancial statements for the year
ended 31 December 2006. In the current interim period, the Group has applied, for the fi rst time,
the following new standard, amendment and interpretations (“new HKFRSs”) issued by the
Hong Kong Institute of Certifi ed Public Accountants (the “HKICPA”), which are effective for
the Group’s fi nancial year beginning on 1 January 2007.
HKAS 1 (Amendment) Capital Disclosures
1
HKFRS 7 Financial Instruments: Disclosures
1
HK(IFRIC)-INT 7 Applying the Restatement Approach Under HKAS 29
Financial Reporting in Hyperinfl ationary Economies
2
HK(IFRIC)-INT 8 Scope of HKFRS 2
3
HK(IFRIC)-INT 9 Reassessment of Embedded Derivatives
4
HK(IFRIC)-INT 10 Interim Financial Reporting and Impairment
5
1
Effective for annual periods beginning on or after 1 January 2007
2
Effective for annual periods beginning on or after 1 March 2006
3
Effective for annual periods beginning on or after 1 May 2006
4
Effective for annual periods beginning on or after 1 June 2006
5
Effective for annual periods beginning on or after 1 November 2006
The adoption of these new HKFRSs had no material effect on the results or fi nancial position of
the Group for the current or prior accounting periods. Accordingly, no prior period adjustment
has been recognized.
For the six months ended 30 June 2007
Notes to the Financial Statements
28 Interim Report 2007
EPI (Holdings) Limited
2. SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
The Group has not early applied the following new standard, revision and interpretations that
have been issued but are not yet effective.
HKAS 23 (Revised) Borrowing Costs
1
HKFRS 8 Operating Segments
1
HK(IFRIC)-INT 11 HKFRS 2: Group and Treasury Share Transactions
2
HK(IFRIC)-INT 12 Service Concession Arrangements
3
1
Effective for annual periods beginning on or after 1 January 2009
2
Effective for annual periods beginning on or after 1 March 2007
3
Effective for annual periods beginning on or after 1 May 2008
The directors of the Company anticipate that the application of the standard, revision and
interpretations will have no material impact on the results and the fi nancial position of the
Group.
3. TURNOVER AND SEGMENT INFORMATION
For management purposes, the Group has organised its business operation into three segments,
namely, metals sourcing and trading, production of copper anode and consumer electronics.
These segments are the basis on which the Group reports its primary operating information.
Six months ended 30 June
2007 2006
HK$’000 HK$’000
Revenue
– Metals sourcing and trading 249,663 –
– production of copper anode 123,053 –
– consumer electronics 51,385 190,613
424,101 190,613
Segment results
– Metals sourcing and trading 35,677 –
– production of copper anode 3,502 –
– consumer electronics 563 2,716
39,742 2,716
Unallocated income 1,348 –
Unallocated expenses (13,591) (1,414)
Finance costs (460) (15)
Profi t before taxation 27,039 1,287
Income tax charge (3,602) (212)
Profi t for the period 23,437 1,075
For the six months ended 30 June 2007
Notes to the Financial Statements
29Interim Report 2007
EPI (Holdings) Limited
4. OPERATING PROFIT
The following items have been charged/(credited) to the operating profi t during the period:
Six months ended 30 June
2007 2006
HK$’000 HK$’000
Bank interest income (1,347) –
Depreciation of property, plant and equipment 167 14
Operating leases on land and building 1,570 370
Restructuring expenses – 1,414
Loss on metals future trading contracts 3,208 –
Staff costs, including directors’ emoluments 11,117 1,271
Share-based payment under options scheme 4,000 –
5. FINANCE COSTS
Six months ended 30 June
2007 2006
HK$’000 HK$’000
Interest on:
Bank loans, overdraft and borrowings
wholly repayable within one year 460 15
6. TAXATION
Hong Kong profi ts tax has been provided at the rate of 17.5% (2006: 17.5%) on the estimated
assessable profi ts for the six months ended 30 June 2007 and the six months ended 30 June 2006.
For the six months ended 30 June 2007
Notes to the Financial Statements
30 Interim Report 2007
EPI (Holdings) Limited
7. EARNINGS PER SHARE
The calculation of basic and diluted earnings per share attributable to the ordinary equity
holders of the Company is based on the following data:
Six months ended 30 June
2007 2006
HK$’000 HK$’000
Profi t for the period attributable to equity Holders of the
Company for the purpose of basic and diluted earnings
per share 23,437 1,075
’000 ’000
Number of shares
Weighted average of ordinary shares
for the purpose of basic earnings per share 3,621,048 8,076,257
Effect of dilutive potential ordinary shares issuable
under the Company’s share option scheme 103,370 –
Weighted average number of ordinary shares for the
purposes of diluted earnings per share 3,724,418 8,076,257
As there were no dilutive potential ordinary shares outstanding as at 30 June 2006, the diluted
earnings per share for the six months ended 30 June 2006 is the same as the basic earnings per
share of HK0.01 cents.
8. TRADE AND OTHER RECEIVABLES
As at As at
30 June 31 December
2007 2006
HK$’000 HK$’000
(Audited)
Trade receivables 170,761 2,797
Other receivables and prepayment 109,941 88,598
280,702 91,395
For the six months ended 30 June 2007
Notes to the Financial Statements
31Interim Report 2007
EPI (Holdings) Limited
8. TRADE AND OTHER RECEIVABLES – CONTINUED
The Group generally granted credit terms to its customers ranging from cash on delivery to 90
days. The ageing analysis of trade receivables, net of impairment losses, is as follows:
As at As at
30 June 31 December
2007 2006
HK$’000 HK$’000
(Audited)
0 – 30 days 149,027 2,521
31 – 60 days 20,476 77
61 – 90 days 421 –
Over 90 days 837 199
170,761 2,797
9. TRADE AND OTHER PAYABLES
As at As at
30 June 31 December
2007 2006
HK$’000 HK$’000
(Audited)
Trade payables 61,777 –
Other payables and accruals 58,085 15,832
119,862 15,832
The ageing analysis of the trade payables is as follows:
As at As at
30 June 31 December
2007 2006
HK$’000 HK$’000
(Audited)
0 – 30 days 61,777 –
31 – 60 days – –
61 – 90 days – –
Over 90 days – –
61,777 –
For the six months ended 30 June 2007
Notes to the Financial Statements
32 Interim Report 2007
EPI (Holdings) Limited
10. SHARE CAPITAL
Number
of shares Amount
HK$’000
Ordinary shares of HK$0.01 each
Authorised:
At 31 December 2006 and 30 June 2007 25,000,000,000 250,000
Issued and fully paid:
At 1 January 2007 3,608,212,570 36,082
Shares placing 573,540,000 5,736
Shares repurchase (23,500,000) (235)
Exercise of share options 1,200,000 12
At 30 June 2007 4,159,452,570 41,595
(a) On 14 June 2007, the Company entered into a subscription with Climax Associates
Limited, the controlling shareholder of the Company to allot and issued 573,540,000
ordinary shares of HK$0.01 each to her at a subscription price of HK$0.81 per share. The
subscription agreement is conditional upon completion of the placing made by the placing
agent on behalf of Climax Associates Limited. On 20 June 2007, following the completion
of the placing, 573,540,000 ordinary shares of HK$0.01 were issued to Climax Associates
Limited pursuant to the subscription agreement.
(b) The Company repurchased a total of 23,500,000 ordinary shares on the Stock Exchange as
follows:
Aggregate
Ordinary shares Price per share consideration
Month of repurchase of HK$0.1 each Highest Lowest paid
HK$ HK$ HK$’000
January 2007 23,500,000 0.228 0.189 4,689
(c) During the period, 1,200,000 ordinary shares of HK$0.01 each were issued at HK$0.205 per
share upon the exercise of the share options of the Company by a share option holder and
all these shares rank pari passu with other ordinary shares of the Company in all respects.
For the six months ended 30 June 2007
Notes to the Financial Statements
33Interim Report 2007
EPI (Holdings) Limited
11. WARRANTS
On 14 June 2007, the Company entered into the Warrant Placing Agreement with the placing
Agent pursuant to which the placing Agent agreed to place Warrants attaching the rights to
subscribe for 143,380,000 Shares on the basis of the initial exercise price of HK$0.94 per Warrant
Share, on behalf of the Company, to placees who are independent of the Company and its
connected persons, at the issue price of HK$0.08 per Warrant. The Warrants were exercisable
from 29 June 2007 to 28 June 2009. The Warrants are not dilutive to the earnings per share for
the period ended 30 June 2007.
12. SHARE-BASED PAYMENT TRANSACTIONS
The Company has share options scheme for eligible employees and director of the Company.
Details of the options are as follows:
Number of Share Vesting period
Date of grant Options granted (Date) Exercise period Exercise price
31 January 2007 78,000,000 21.02.2007 21.02.2007 – 31.12.2009 HK$0.205
31 January 2007 75,760,000 01.01.2008 01.01.2008 – 31.12.2009 HK$0.205
31 January 2007 71,320,000 01.01.2009 01.01.2009 – 31.12.2009 HK$0.205
21 February 2007 680,000 28.02.2007 28.02.2007 – 31.12.2009 HK$0.3
21 February 2007 9,340,000 01.01.2008 01.01.2008 – 31.12.2009 HK$0.3
21 February 2007 13,540,000 01.01.2009 01.01.2009 – 31.12.2009 HK$0.3
The following table discloses movements of the Company’s share options held by certain
employees and directors during the period:
Date of grant
31.01.2007 21.02.2007 Total
Number of share options
granted 225,080,000 23,560,000 248,640,000
Exercised during the period (1,200,000) – (1,200,000)
Outstanding at 30.06.2007 223,880,000 23,560,000 247,440,000
Exercisable as at 30.06.2007 76,800,000 680,000 77,480,000
The closing price of the Company’s share immediately before 31 January 2007 and 21 February
2007 was HK$0.205 and HK$0.27 respectively.
For the six months ended 30 June 2007
Notes to the Financial Statements
34 Interim Report 2007
EPI (Holdings) Limited
The average closing price of the Company’s shares immediately before the date on which the
options were exercised was HK$0.81.
The Group recognised expense of approximately HK$4 million for the six months ended 30
June 2007 (six months ended 30 June 2006: HK$NIL) in relation to share options granted by the
Company.
Corporate Information
EPI (Holdings) Limited
35Interim Report 2007
EPI (HOLDINGS) LIMITED
(Incorporated in Bermuda with limited
liability)
STOCK CODE
The Stock Exchange of Hong Kong Limited:
0689
WEBSITE ADDRESS
http://www.epiholdings.com
REGISTERED OFFICE
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
PRINCIPAL PLACE OF BUSINESS IN
HONG KONG
Suite 6303, 63/F., Central Plaza
18 Harbour Road
Wanchai
Hong Kong
Telephone: (852) 2616 3689
Facsimile: (852) 2481 2902
DIRECTORS
Executive Directors:
Mr. Wong Chi Wing Joseph (Chairman & CEO)
Mr. Cheng Hairong (Deputy Chairman)
Mr. Chu Kwok Chi Robert
Non-Executive Director:
Mr. Leung Hon Chuen
Independent Non-Executive Directors:
Mr. Poon Kwok Shin Edmond
Mr. Xu Mingshe
Mr. Wu Xioake
COMPANY SECRETARY AND
QUALIFIED ACCOUNTANT
Hong Kin Choy
PRINCIPAL BANKERS
Citic Ka Wah Bank Limited
Hang Seng Bank Limited
Standard Chartered Bank (Hong Kong) Limited
SOLICITORS
Vincent T. K. Cheung & Yap
AUDITORS
Ting Ho Kwan & Chan
AUDIT COMMITTEE
Mr. Leung Hon Chuen
Mr. Poon Kwok Shin Edmond
Mr. Xu Mingshe
PRINCIPAL SHARE REGISTRAR
Butterfi eld Fund Services (Bermuda) Limited
Rosebank Centre
11 Bermudiana Road
Pembroke
Bermuda
BRANCH SHARE REGISTRAR
Tengis Limited
26/F., Tesbury Centre
28 Queen’s Road East
Hong Kong
INVESTOR’S CONTACT
Vice President:
Miss Rose Cheung
Telephone: (852) 2116 8339
Email: rose.cheung@epiholdings.com
Aluminium Radiator Y
Taint/Tabor OY
Honey ;Tense [Y
Taint/Tabor OY
Tense [Y
Communication cable e
No.2 copper Z
No.1 copper S
Bright and Shinny
Copper nodules
Enamel wire
