POU SHENG INTERNATIONAL (HOLDINGS) LIMITED 寶勝國際（控 股）有限公司 (Incorporated in Bermuda with limited liability) (Stock Code：3813) CONTENTS 1 The Group’s Financial Highlights Interim Results 2 Condensed Consolidated Income Statement 3 Condensed Consolidated Statement of Comprehensive Income 4 Condensed Consolidated Statement of Financial Position 6 Condensed Consolidated Statement of Changes in Equity 8 Condensed Consolidated Statement of Cash Flows 9 Notes to The Condensed Consolidated Interim Financial Information 38 Management Discussion and Analysis 44 Other Information www.pousheng.com INTERIM RESULTS 1 THE GROUP’S FINANCIAL HIGHLIGHTS For the six months Percentage ended June 30, increase 2013 2012 (decrease) Revenue (US$’000) 886,245 887,799 (0.2)% Operating profit (loss) (US$’000) 7,646 (678) – Loss attributable to owners of the Company (US$’000) (16,582) (37,243) 55.5% Basic loss per share (US cent) (0.31) (0.86) 64.0% Interim Report 2013 POU SHENG INTERNATIONAL (HOLDINGS) LIMITED www.pousheng.com 2 INTERIM RESULTS The board (the “Board”) of directors (the “Directors”) of Pou Sheng International (Holdings) Limited (the “Company”) is pleased to announce the unaudited condensed consolidated results of the Company and its subsidiaries (collectively referred to as the “Group”) for the six months ended June 30, 2013 with comparative figures for the corresponding period in 2012 as follows: CONDENSED CONSOLIDATED INCOME STATEMENT For the six months ended June 30, 2013 For the six months ended June 30, 2013 2012 NOTES US$’000 US$’000 (unaudited) (unaudited) Revenue 3 886,245 887,799 Cost of sales (636,877) (620,779) Gross profit 249,368 267,020 Other income and gains/losses 11,366 6,008 Selling and distribution expenses (220,436) (233,303) Administrative expenses (32,652) (40,403) Operating profit (loss) 7,646 (678) Interests on bank borrowings wholly repayable within five years (8,026) (9,551) Finance income 1,104 2,123 Finance costs – net (6,922) (7,428) Share of results of associates (192) 322 Share of results of joint ventures (3,339) (4,681) Gain on disposal of properties – 4,685 Impairment losses of interests in an associate and joint ventures – (7,497) Impairment losses on loans to joint ventures (2,443) – Fair value changes on derivative financial instruments 281 (14,655) Fair value changes on consideration payable for acquisition of business 14(c) (361) (1,542) Loss before taxation (5,330) (31,474) Income tax expense 4 (10,233) (4,505) Loss for the period 5 (15,563) (35,979) Attributable to: Owners of the Company (16,582) (37,243) Non-controlling interests 1,019 1,264 (15,563) (35,979) Loss per share 7 – Basic US(0.31) cent US(0.86) cent – Diluted US(0.31) cent US(0.86) cent POU SHENG INTERNATIONAL (HOLDINGS) LIMITED Interim Report 2013 www.pousheng.com INTERIM RESULTS 3 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the six months ended June 30, 2013 For the six months ended June 30, 2013 2012 US$’000 US$’000 (unaudited) (unaudited) Loss for the period (15,563) (35,979) Other comprehensive income (expense) An item that will not be reclassified subsequently to profit or loss Exchange difference arising on translation 7,794 (5,838) Total comprehensive expense for the period (7,769) (41,817) Attributable to: Owners of the Company (8,690) (43,004) Non-controlling interests 921 1,187 (7,769) (41,817) Interim Report 2013 POU SHENG INTERNATIONAL (HOLDINGS) LIMITED www.pousheng.com 4 INTERIM RESULTS CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION At June 30, 2013 At At June 30, December 31, 2013 2012 NOTES US$’000 US$’000 (unaudited) (audited) Non-current assets Property, plant and equipment 8 114,994 124,449 Deposit paid for acquisition of property, plant and equipment 300 470 Prepaid lease payments 24,501 24,466 Rental deposits and prepayments 21,456 23,159 Intangible assets 8 131,905 134,031 Goodwill 82,977 82,977 Interests in associates 2,478 2,611 Loans to associates – 2,407 Interests in joint ventures 16,336 19,373 Loans to joint ventures 29,034 30,491 Long-term loan receivables 839 827 Available-for-sale investment – – Deferred tax assets 2,376 4,051 427,196 449,312 Current assets Inventories 576,117 591,670 Derivative financial instruments 9 284 – Trade and other receivables 10 359,874 323,233 Taxation recoverable 929 6,033 Bank balances and cash 82,971 128,488 1,020,175 1,049,424 Assets classified as held for sale 11 1,674 1,674 1,021,849 1,051,098 POU SHENG INTERNATIONAL (HOLDINGS) LIMITED Interim Report 2013 www.pousheng.com INTERIM RESULTS 5 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued) At June 30, 2013 At At June 30, December 31, 2013 2012 NOTES US$’000 US$’000 (unaudited) (audited) Current liabilities Trade and other payables 12 162,937 193,259 Taxation payable 6,695 6,867 Bank overdrafts 8,763 – Bank borrowings 262,182 313,040 440,577 513,166 Net current assets 581,272 537,932 Total assets less current liabilities 1,008,468 987,244 Non-current liabilities Bank borrowings 42,747 14,247 Consideration payable for acquisition of business 14(c) 18,329 17,980 Deferred tax liabilities 37,097 36,945 98,173 69,172 Net assets 910,295 918,072 Capital and reserves Share capital 13 6,850 6,850 Reserves 886,175 894,873 Equity attributable to owners of the Company 893,025 901,723 Non-controlling interests 17,270 16,349 Total equity 910,295 918,072 Interim Report 2013 POU SHENG INTERNATIONAL (HOLDINGS) LIMITED www.pousheng.com 6 INTERIM RESULTS CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the six months ended June 30, 2013 Equity attributable to owners of the Company Share-based Non– Non– Share Share Special Other Revaluation compensation distributable Translation Accumulated controlling capital premium reserve reserve reserve reserve reserve reserve profits Total interests Total US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 (note (i)) (note (ii)) (note (iii)) (note (iv)) At January 1, 2012 (unaudited) 5,465 688,600 96,269 (214,250) 8,108 4,834 26,310 92,946 189,446 897,728 14,698 912,426 Exchange difference arising on translation of financial statements – – – – – – – (5,761) – (5,761) (77) (5,838) (Loss) profit for the period – – – – – – – – (37,243) (37,243) 1,264 (35,979) Total comprehensive (expense) income for the period – – – – – – – (5,761) (37,243) (43,004) 1,187 (41,817) Recognition of equity-settled share-based payments – – – – – 853 – – – 853 – 853 Recognition of consideration for acquisition of business – – – 3,412 – – – – – 3,412 – 3,412 Realised on deregistration of subsidiaries – – – – – – – (105) 105 – – – Deemed partial disposal of interests in subsidiaries without losing control – – – 1,614 – – – – – 1,614 1,123 2,737 Transfer – – – – – – 1,166 – (1,166) – – – At June 30, 2012 (unaudited) 5,465 688,600 96,269 (209,224) 8,108 5,687 27,476 87,080 151,142 860,603 17,008 877,611 At January 1, 2013 (audited) 6,850 755,014 96,269 (210,594) 8,108 6,063 28,744 101,031 110,238 901,723 16,349 918,072 Exchange difference arising on translation of financial statements – – – – – – – 7,892 – 7,892 (98) 7,794 (Loss) profit for the period – – – – – – – – (16,582) (16,582) 1,019 (15,563) Total comprehensive income (expense) for the period – – – – – – – 7,892 (16,582) (8,690) 921 (7,769) Recognition of equity-settled share-based payments, net of amount forfeited relating to share options not yet vested – – – – – (604) – – 596 (8) – (8) Realised on deregistration of subsidiaries – – – – – – – (171) 171 – – – Transfer – – – – – – 1,229 – (1,229) – – – At June 30, 2013 (unaudited) 6,850 755,014 96,269 (210,594) 8,108 5,459 29,973 108,752 93,194 893,025 17,270 910,295 POU SHENG INTERNATIONAL (HOLDINGS) LIMITED Interim Report 2013 www.pousheng.com INTERIM RESULTS 7 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued) For the six months ended June 30, 2013 notes: (i) The special reserve represents the difference between the nominal value of the share capital issued by the Company and the share premium and the nominal value of the share capital of the subsidiaries comprising the Group prior to the group reorganisation in 2008. (ii) The other reserve represents (a) the difference between the fair value of the consideration paid or received and the relevant share of carrying value of the subsidiaries’ net assets acquired from or disposed of to the non-controlling interests and (b) the fair values of the share-settled consideration at the dates of acquisition of subsidiaries’ business in prior years that, less the amount already settled by the issue of the Company’s shares in prior years, will be settled by the Company by the issue of a fixed number of its ordinary shares in a future date. (iii) The revaluation reserve represents the fair value adjustments on intangible assets attributable to the equity interest previously held by the Group at the date of acquisition of subsidiaries. The amount recognised in the revaluation reserve will be transferred to accumulated profits upon disposal of these subsidiaries or the relevant assets, whichever is earlier. (iv) According to the relevant laws in the People’s Republic of China (the “PRC”), the subsidiaries of the Group established in the PRC are required to transfer at least 10% of their net profit after taxation, as determined under the PRC accounting regulations, to a non- distributable reserve fund until the reserve balance reaches 50% of their registered capital. The transfer to this reserve must be made before the distribution of a dividend to equity owners.