Rykadan Capital : INTERIM RESULTS ANNOUNCEMENT FOR THE SIX-MONTH PERIOD ENDED 30 SEPTEMBER 2019

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

RYKADAN CAPITAL LIMITED

宏 基 資 本 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2288)

INTERIM RESULTS ANNOUNCEMENT

FOR THE SIX-MONTH PERIOD ENDED 30 SEPTEMBER 2019

FINANCIAL HIGHLIGHTS
	For the six-month period ended
	30 September	30 September
	2019		2018
RESULTS:
Loss for the period (HK$'000)	(30,807)	(50,306)
FINANCIAL INFORMATION PER SHARE:
Loss per share - Basic and diluted (HK Cents)	(5.6)	(9.2)
	At 30 September	At 31 March
	2019		2019
Net assets per share (HK$) (Net assets/number of issued
ordinary shares of the Company)	2.92		3.08

INTERIM DIVIDEND:

The Board does not recommend the payment of an interim dividend for the six-month period ended 30 September 2019.

1

UNAUDITED INTERIM RESULTS

The board of directors (the "Board") of Rykadan Capital Limited 宏基資本有限公司(the "Company") hereby announces the unaudited consolidated interim results of the Company and its subsidiaries (the "Group") for the six-month period ended 30 September 2019 together with the unaudited comparative figures for the corresponding period ended 30 September 2018 as follows:

CONSOLIDATED INCOME STATEMENT

FOR THE SIX-MONTH PERIOD ENDED 30 SEPTEMBER 2019 - UNAUDITED

(Expressed in Hong Kong dollars)

				Six-month period
				ended 30 September
			Note	2019	2018
						(Note)
				$'000	$'000
Revenue	3	41,820	51,673
Cost of sales and services		(20,017)	(29,030)
Gross profit		21,803		22,643
Other revenue		6,737		7,321
Other net loss		(14,934)	(28,644)
Selling and marketing expenses		(1,813)	(1,499)
Administrative and other operating expenses		(23,628)	(23,824)
Loss from operations		(11,835)	(24,003)
(Decrease)/increase in fair value of investment properties		(889)	6,553
Finance costs	4(a)	(6,992)	(12,232)
Share of profit less losses of associates		1,260		(5,167)
Share of profit less loss of joint ventures		(11,910)	(13,346)
Loss before taxation	4	(30,366)	(48,195)
Income tax	5	(441)	(2,111)
Loss for the period		(30,807)	(50,306)
Attributable to:
	-	Equity shareholders of the Company		(26,817)	(43,849)
	-	Non-controlling interests		(3,990)	(6,457)
Loss for the period		(30,807)	(50,306)
Loss per share	6
Basic and diluted		(5.6) cents	(9.2) cents

Note: The Group has initially applied HKFRS 16 at 1 April 2019 using the modified retrospective approach. Under this approach, comparative information is not restated. See note 2.

2

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX-MONTH PERIOD ENDED 30 SEPTEMBER 2019 - UNAUDITED

(Expressed in Hong Kong dollars)

Six-month period

ended 30 September

20192018 (Note)

$'000$'000

Loss for the period

(30,807)

(50,306)

Other comprehensive income for the period (after tax and reclassification adjustments):

Items that may be reclassified subsequently to profit or loss:
-	Exchange differences arising on translation of
	foreign operations	(10,567)	(20,278)
-	Share of translation reserve of joint ventures	(2,401)	(4,401)
		(12,968)	(24,679)

Item that will not be reclassified subsequently to profit or loss:

• Financial assets measured at fair value through
    other comprehensive income - movement in fair

value reserve (non-recycling)	(1,000)	-
Other comprehensive income for the period	(13,968)	(24,679)
Total comprehensive income for the period	(44,775)	(74,985)
Attributable to:
- Equity shareholders of the Company	(36,507)	(60,593)
- Non-controlling interests	(8,268)	(14,392)
Total comprehensive income for the period	(44,775)	(74,985)

Note: The Group has initially applied HKFRS 16 at 1 April 2019 using the modified retrospective approach. Under this approach, comparative information is not restated. See note 2.

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 30 SEPTEMBER 2019 - UNAUDITED (Expressed in Hong Kong dollars)

		At 30 September	At 31 March
	Note	2019	2019
			(Unaudited)	(Audited)
					(Note)
			$'000	$'000
Non-current assets
Investment properties	8	495,441	512,845
Other properties, plant and equipment		40,821	41,407
Right-of-use assets		65	-
Interests in associates	9	215,532	215,861
Interests in joint ventures	10	387,406	201,343
Financial assets measured at fair value through other
comprehensive income			-	1,000
			1,139,265		972,456
Current assets
Properties for sale		502,622		469,236
Inventories		9,386		12,935
Trade receivables	11	98,403		104,012
Other receivables, deposits and prepayments		15,472		29,911
Bank deposits and cash on hand		201,389		435,767
		827,272		1,051,861
Current liabilities
Trade and other payables	12	73,555		72,540
Contract liabilities		5,774		5,277
Lease liabilities		66		-
Bank loans	13	324,154		338,459
Loans from non-controlling shareholders		78,542		78,218
Dividend payable		28,647		-
Taxation payable		47,735		46,954
		558,473		541,448
Net current assets		268,799		510,413
Total assets less current liabilities		1,408,064		1,482,869

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	At 30 September	At 31 March
Note	2019	2019
		(Unaudited)	(Audited)
				(Note)
		$'000	$'000
Non-current liability
Deferred tax liability	12,052	13,435
NET ASSETS	1,396,012		1,469,434
CAPITAL AND RESERVES
Share capital	4,774		4,774
Reserves	1,369,358		1,434,512
Total equity attributable to equity shareholders of
the Company	1,374,132		1,439,286
Non-controlling interests	21,880		30,148
TOTAL EQUITY	1,396,012		1,469,434

Note: The Group has initially applied HKFRS 16 at 1 April 2019 using the modified retrospective approach. Under this approach, comparative information is not restated. See note 2.

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NOTES TO THE UNAUDITED INTERIM RESULTS ANNOUNCEMENT

(Expressed in Hong Kong dollars unless otherwise indicated)

1. BASIS OF PREPARATION
   These interim financial statements have been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, including compliance with Hong Kong Accounting Standard ("HKAS") 34, Interim financial reporting, issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA"). It was authorised for issue on 28 November 2019.
   These interim financial statements have been prepared in accordance with the same accounting policies adopted in the 2019 annual financial statements, except for the accounting policy changes that are expected to be reflected in the 2020 annual financial statements. Details of any changes in accounting policies are set out in note 2.
   The preparation of interim financial statements in conformity with HKAS 34 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses on a year to date basis. Actual results may differ from these estimates.
   The interim results have not been audited or reviewed by the auditor pursuant to the Hong Kong Standard on Review Engagements 2410, Review of interim financial information performed by the independent auditor of the entity, issued by the HKICPA.
2. CHANGES IN ACCOUNTING POLICIES
   The HKICPA has issued a number of new and amendments to Hong Kong Financial Reporting Standards ("HKFRSs") that are first effective for the current accounting period of the Group. Of these, the following development is relevant to the Group's financial statements:
   HKFRS 16, Leases
   HKFRS 16 has resulted in almost all leases being recognised in the consolidated statement of financial position, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are short-term and low-value leases.
   The Group has adopted HKFRS 16 from 1 April 2019 and has not restated comparative information for the six-month reporting period ended 30 September 2018 and at 31 March 2019, as permitted under the specific transitional provisions in the standard. The reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening consolidated statement of financial position at 1 April 2019.
   On adoption of HKFRS 16, the Group recognised lease liabilities in relation to leases which had previously been classified as "operating leases" under the principles of HKAS 17, Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate at 1 April 2019. The weighted average lessee's incremental borrowing rate applied to the lease liabilities at 1 April 2019 was 4% per annum.

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			At 31 March
			2019
			$'000
Operating lease commitments disclosed at 31 March 2019 (Audited)	853
Discounted using lesseeʼs incremental borrowing rate at 1 April 2019
850
Less: short-term leases recognised on a straight-line basis as expense	(729)
Lease liabilities recognised at 1 April 2019
121
Analysed into:
	Current lease liabilities	112
	Non-current lease liabilities	9
			121

The associated right-of-use assets were measured at the amount equal to the lease liabilities relating to that lease recognised in the consolidated statement of financial position.

The change in accounting policy affected the following items in the consolidated statement of financial position at 1 April 2019:

1. Lease liabilities increased by $121,000
2. Right-of-useassets increased by $121,000

Right-of-use assets mainly represent warehouses leased by the Group.

The Group is not required to make any adjustments to the accounting for assets held as lessor under operating leases as a result of the adoption of HKFRS 16.

Except for HKFRS 16, none of the developments have had a material effect on how the Group's results and financial position for the current or prior periods have been prepared or presented in these interim financial statements.

The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period.

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3. REVENUE AND SEGMENT REPORTING

1. Revenue
   The principal activities of the Group are property development, property investment, asset, investment and fund management and distribution of construction and interior decorative materials.
2. 1. Disaggregation of revenue
      Disaggregation of revenue from contracts with customers by major products or service lines is as follows:

	Six-month period
	ended 30 September
	2019		2018
	$'000	$'000
Revenue from contracts with customers within the scope
of HKFRS 15
Disaggregated by major products or service lines
- Sales of completed properties	16,950		-
- Distribution of construction and interior decorative materials	7,619		35,793
- Asset, investment and fund management income	6,309		6,527
- Property management fee and utility income	3,294		2,254
	34,172			44,574
Revenue from other sources
- Rental income	7,648			7,099
	41,820			51,673

For the period ended 30 September 2019, the Group's customer base is diversified and no customers (six- month period ended 30 September 2018: three customers) whose transactions have exceeded 10% of the Group's revenue.

For the period ended 30 September 2018, revenue from distribution of construction and interior decorative materials to the three customers amounted to approximately $19,936,000, $6,678,000 and $6,194,000 respectively.

1. Revenue expected to be recognised in the future arising from contracts with customers in existence at the reporting date
2. 1. 
      At 30 September 2019, the aggregated amount of the transaction price allocated to the remaining performance obligations under the Group's existing contracts is $78,301,000 (31 March 2019: $61,440,000). This amount represents revenue expected to be recognised in the future from pre-completion sales contracts for properties for sale, distribution of construction and interior decorative materials and provision of services entered into by the customers with the Group. The Group will recognise the expected revenue in the future when (i) the properties are assigned to the customers, (ii) the customers take possession of and accept the products or
   2. the relevant services are provided to the customers, which are expected to occur within the next 12 to 42 months.

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The amount discussed above does not include any amounts of incentive bonuses that the Group may earn in the future by meeting the conditions set out in the Group's contracts with customers for the provision of asset, investment and fund management, unless at the reporting date it is highly probable that the Group will satisfy the conditions for earning those incentive bonuses.

1. Total future minimum lease payment receivable by the Group
   Total minimum lease payment under non-cancellable operating leases in place at the reporting date will be receivable by the Group in future periods as follows:

	At 30 September		At 31 March
	2019	2019
		$'000		$'000
Within one year	9,215	9,236
After one year but within five years	22,134	24,705
After five years	14,006	17,394
	45,355	51,335

1. Segment reporting
   The Group manages its businesses by divisions, which are organised by business lines (products and services). To be consistent with the way how information is reported internally to the Group's most senior executive management for the purposes of resource allocation and performance assessment, the Group has presented the following four reportable segments. No operating segments have been aggregated to form the following reportable segments.
2. • Property development - This segment derives its revenue from repositioning and value enhancement of property with a focus on development projects in prime locations in Hong Kong, the United Kingdom and the United States of America (the "U.S.A.").
   • Property investment - This segment derives its revenue from leasing of premises included in the Group's investment properties portfolio in Hong Kong and the People's Republic of China (the "PRC").
   • Asset, investment and fund management - This segment derives its revenue from investing in and managing a portfolio of real estates in Hong Kong.
   • Distribution of construction and interior decorative materials - This segment derives its revenue from distribution of stone composite surfaces products in the Greater China region.

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Information regarding the above operating and reportable segments is reported below.

Segment results

For the six-month period ended 30 September 2019

									Distribution of
							Asset,			construction
							investment			and interior
			Property	Property	and fund			decorative
	development	investment	management			materials	Elimination	Total
			$'000	$'000	$'000			$'000	$'000	$'000
Disaggregated by timing of revenue
recognition
Point in time	16,950	-	-	7,619	-	24,569
Over time			-	10,942	6,309			-	-	17,251
External revenue
16,950		10,942	6,309		7,619	-	41,820
Inter-segment revenue			-	1,775	-			-	(1,775)	-
Total
16,950		12,717	6,309		7,619	(1,775)	41,820
Segment profit from operations
6,360		5,920	959		801	-	14,040
Corporate expenses															(32,388)
Corporate income															6,513
Decrease in fair value of investment
properties															(889)
Finance costs															(6,992)
Share of profit less losses of associates															1,260
Share of profit less loss of joint ventures															(11,910)
Loss before taxation
														(30,366)

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For the six-month period ended 30 September 2018
							Distribution of
					Asset,				construction
					investment				and interior
	Property	Property	and fund				decorative
	development	investment	management				materials	Elimination	Total
	$'000	$'000	$'000				$'000	$'000	$'000
Disaggregated by timing of revenue
recognition
Point in time	-	-	-	35,793	-	35,793
Over time	-	9,353	6,527				-	-	15,880
External revenue	-	9,353	6,527		35,793	-	51,673
Inter-segment revenue	-	1,775	1,441				-	(3,216)	-
Total	-	11,128	7,968		35,793	(3,216)	51,673
Segment (loss)/profit from operations	(353)	5,144	1,380		6,785	-	12,956
Corporate expenses														(43,112)
Corporate income														6,153
Increase in fair value of investment properties														6,553
Finance costs														(12,232)
Share of losses of associates														(5,167)
Share of profit less loss of joint ventures														(13,346)
Loss before taxation														(48,195)

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4. LOSS BEFORE TAXATION

Loss before taxation is arrived at after charging/(crediting):

Six-month period

ended 30 September

20192018 (Note(iii))

$'000$'000

a.	Finance costs
	Interest on bank loans	7,173	13,184
	Interest on loan from a non-controlling shareholder	128	129
	Interest on lease liabilities	2	-
	Less: interest expenses capitalised into properties under development for sale
	(Note(i))	(311)	(1,081)
		6,992		12,232
b.	Other items
	Cost of properties recognised for sales	8,605		-
	Cost of inventories	4,818		24,385
	Direct cost for management services provided (Note(ii))	3,107		2,455
	Rental, property management fee and utility income receivable from
	investment properties less direct outgoings of $3,487,000 (six-month period
	ended 30 September 2018: $2,190,000)	7,455		7,163
	Depreciation of other properties, plant and equipment	943		1,536
	Depreciation of right-of-use assets	56		-
	Loss on disposal of other properties, plant and equipment	-	2
	Impairment loss of trade receivables	-	695
	Net foreign exchange losses	15,095		28,693
	Interest income on loans to joint ventures	(6,286)	(6,038)
	Interest income on bank deposits	(31)	(64)

Notes:

1. Interest was capitalised at an average annual rate of approximately 5.0% (six-month period ended 30 September 2018: 2.9%).
2. Direct cost for management services provided includes $2,911,000 (six-month period ended 30 September 2018: $2,231,000) relating to staff costs.
3. The Group has initially applied HKFRS 16 at 1 April 2019 using the modified retrospective approach. Under this approach, comparative information is not restated. See note 2.

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5. INCOME TAX
	Six-month period
	ended 30 September
	2019		2018
	$'000	$'000
Current tax
Hong Kong Profits Tax
- Provision for the period	704		94
- Under-provision in respect of prior year	-	22
	704			116
PRC Enterprise Income Tax ("EIT")
- Provsion for the period	89			1,992
- Over-provision in respect of prior year	(380)		-
	(291)		1,992
	413			2,108
Deferred tax
- Origination and reversal of temporary differences	28			3
	441			2,111

The provision for Hong Kong Profits Tax is calculated at 16.5% (six-month period ended 30 September 2018: 16.5%) of the estimated assessable profits for the six-month period ended 30 September 2019.

Under the Law of the PRC on Enterprise Income Tax (the "EIT Law") and Implementation Regulation of the EIT Law, the PRC EIT tax rate is 25% (six-month period ended 30 September 2018: 25%) for the six-month period ended 30 September 2019.

6. LOSS PER SHARE

1. Basic loss per share
   The calculation of the basic loss per share is based on the loss attributable to equity shareholders of the Company of $26,817,000 (six-month period ended 30 September 2018: $43,849,000) and 477,447,000 (six-month period ended 30 September 2018: 477,447,000) ordinary shares in issue during the interim periods.
2. Diluted loss per share
   The diluted loss per share is the same as the basic loss per share as there are no potential dilutive ordinary shares in existence during the six-month periods ended 30 September 2019 and 30 September 2018.

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7. DIVIDEND

1. The Board does not recommend the payment of an interim dividend for the six-month period ended 30 September 2019 (six-month period ended 30 September 2018: $Nil per share).
2. Dividends payable to equity shareholders attributable to the previous financial year, approved and/or paid during the period.

Six-month period

ended 30 September

20192018

$'000$'000

	Final dividend in respect of the previous financial year, approved during the
	interim period, of 6 cents per share (six-month period ended 30 September
	2018: approved and paid of 3 cents per share)	28,647	14,323
8.	INVESTMENT PROPERTIES
			2019	2018
			$'000	$'000
	At the beginning of the period/year	512,845	529,716
	Additions	-	297
	Revaluation (deficit)/surplus	(889)	5,585
	Exchange adjustments	(16,515)	(22,753)
	At the end of the period/year	495,441		512,845
9.	INTERESTS IN ASSOCIATES
			At	At
			30 September	31 March
			2019	2019
			$'000	$'000
	Share of net assets	15,534	19,868
	Amounts due from associates	201,637		198,026
	Share of net liabilities	(1,639)	(2,033)
			199,998		195,993
			215,532		215,861
	Dividend received from an associate	5,200		103,309

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At 30 September 2019 and 31 March 2019, the amounts due from associates are unsecured, interest-free and have no fixed terms of repayment. All the amounts are not expected to be recovered within the next twelve months from the end of the reporting period and they are neither past due nor impaired.

10. INTERESTS IN JOINT VENTURES
	At	At
	30 September	31 March
	2019		2019
	$'000	$'000
Share of net assets	14,990		15,140
Amounts due from joint ventures	411,978		210,634
Share of net liabilities	(39,562)	(24,431)
	372,416		186,203
	387,406		201,343
Dividend received from a joint venture	970		1,192

At 30 September 2019, the amount due from a joint venture of $190,000,000 (31 March 2019: $190,000,000) is interest bearing at 4.5% per annum over 3-month Hong Kong Interbank Offer Rate, unsecured and has no fixed terms of repayment while the remaining balance of $221,978,000 (31 March 2019: $20,634,000) is interest-free, unsecured and has no fixed terms of repayment. All the amounts are not expected to be recoverable within the next twelve months from the end of the reporting period and they are neither past due nor impaired.

11. TRADE RECEIVABLES

As of the end of the reporting period, the ageing analysis of trade receivables based on invoice date, net of loss allowance, is as follows:

	At		At
	30 September		31 March
	2019	2019
	$'000		$'000
1-30 days	3,506	11,151
31-60 days	2,227	9,954
61-90 days	1,366	3,437
Over 90 days	91,304	79,470
	98,403	104,012

The Group negotiates with customers on individual basis in accordance with contract terms, i.e. an average credit period of 90 days (31 March 2019: 90 days) after the issuance of invoices, except for sales of properties the proceeds from which are receivable pursuant to the terms of agreements, rental income which are receivable in the month the tenants

15

use the premises and property management fee and utility income and asset, investment and fund management income which are receivable in the month the Group provides the services.

Before accepting any new customers of the distribution of construction and interior decorative materials business, the Group assesses the potential customers' credit quality and defines credit limits by customers. Recoverability of the existing customers is reviewed by the Group regularly.

12. TRADE AND OTHER PAYABLES

At 30 September 2019, included in trade and other payables are trade payables of $11,212,000 (31 March 2019: $6,566,000) and the ageing analysis of trade payables, based on invoice date, is as follows:

		At	At
		30 September	31 March
		2019		2019
		$'000	$'000
1-30 days	7,596		2,783
31-60 days	6		-
61-90 days	-	-
Over 90 days	3,610		3,783
		11,212		6,566
13. BANK LOANS
The analysis of the carrying amount of bank loans is as follows:
		At	At
		30 September	31 March
		2019	2019
		$'000	$'000
Current liabilities
Portion of bank loans due for repayment within 1 year	79,416	102,119
Portion of bank loans due for repayment after 1 year which contain a repayment
on demand clause	244,738		236,340
		324,154		338,459

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At 30 September 2019, the bank loans are due for repayment as follows:
	At		At
	30 September		31 March
	2019	2019
	$'000		$'000
Portion of bank loans due for repayment within 1 year	79,416	102,119
Bank loans due for repayment after 1 year (Notes (e) and (f))
After 1 year but within 2 years	85,256	75,454
After 2 years but within 5 years	128,256	126,403
After 5 years	31,226	34,483
	244,738	236,340
	324,154	338,459

At 30 September 2019, the secured bank loans and unsecured bank loans are as follows:

	At		At
	30 September		31 March
	2019	2019
	$'000		$'000
Secured bank loans	324,154	323,459
Unsecured bank loans	-	15,000
	324,154	338,459
Notes:

1. At 30 September 2019, bank loans drawn in Hong Kong bear interest at rates ranging from 1.5% to 3.0% (31 March 2019: 1.8% to 3.0%) per annum over the Hong Kong Interbank Offer Rate. The interests are repriced every one to three months.
2. At 31 March 2019, bank loans drawn in the U.S.A. bear interest at 5.0% per annum.

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1. As of the end of the reporting period, certain of the banking facilities of the Group were secured by mortgages over:

	At		At
	30 September		31 March
	2019	2019
	$'000		$'000
Investment properties	173,720	173,720
Buildings held for own use	39,635	40,350
Properties for sale	69,513	69,222
	282,868	283,292

Such banking facilities amounted to $389,153,000 (31 March 2019: $396,052,000) were utilised to the extent of

$324,154,000 at 30 September 2019 (31 March 2019: $323,459,000).

1. Certain of the Group's banking facilities are subject to the fulfilment of covenants relating to certain of the Group's statement of financial position ratios. If the Group was to breach the covenants, the utilised facilities would become repayable on demand. The Group regularly monitors its compliance with these covenants.
   None of the covenants relating to the utilised facilities had been breached for the six-month periods ended 30 September 2019 and 30 September 2018.
2. The amounts due are based on the scheduled repayment dates set out in bank loan agreements and ignore the effect of any repayment on demand clause.
3. Certain of the Group's bank loan agreements contain clauses which give the lenders the right at their sole discretion to demand immediate repayment at any time irrespective of whether the Group has met the scheduled repayment obligations.
   The Group does not consider it probable that banks will exercise their discretion to demand repayment as long as the Group continues to meet the scheduled repayment obligations.

14. COMPARATIVE FIGURES

The Group has initially applied HKFRS 16 at 1 April 2019 using the modified retrospective method. Under this approach, comparative information is not restated. Further details of the changes in accounting policies are disclosed in note 2.

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BUSINESS AND FINANCIAL REVIEW

Overview

The Group continued to further develop its property development business and asset, investment and fund management business during the six-month period under review. In addition to directly funding high-potential real estate redevelopment projects, the Group commenced real estate projects in partnership with institutional investors through private equity funds managed by its asset, investment and fund management business.

The Group is currently focusing on two promising real estate redevelopment projects in Hong Kong - the Wong Chuk Hang Project and the Jaffe Road Project, both located in emerging business districts. Both projects are progressing well along the construction stage. Meanwhile, the Group continued to market its overseas property projects in the United Kingdom (the "U.K.") and in the United States of America (the "U.S.A.") during the six-month period under review.

In line with its strategy of securing high-potential investments, growing asset values and exiting within

1. three-to-fiveyear horizon, the Group is prudently exploring promising local and overseas residential, industrial and commercial properties and projects that meet its investment mandate and complement its existing portfolio. It also continues to leverage on its asset, investment and fund management business to tap a broader base of development capital, while generating recurring fee income throughout the life of its various real estate development projects.

During the six-month period under review, the Group's investments included commercial, industrial and residential property developments in Hong Kong, the People's Republic of China (the "PRC"), the U.S.A. and the U.K.. It has also invested in a leading international distributor of construction and interior decorative materials, as well as hospitality operations.

As of 30 September 2019, the Group's total assets were valued at HK$1,967 million (31 March 2019: HK$2,024 million), of which HK$827 million (31 March 2019: HK$1,052 million) were current assets, approximately 1.48 times (31 March 2019: 1.94 times) of current liabilities. Equity attributable to the owners of the Company was HK$1,374 million (31 March 2019: HK$1,439 million).

Overall Performance

The Group's consolidated revenue for the six-month period amounted to HK$42 million (six-month period ended 30 September 2018: HK$52 million). Decrease in revenue was attributable to shifting the majority of the revenue from the distribution of construction and interior decorative materials business to the joint ventures of the Group. Such effect was slightly offset by recognising income from the sales of completed properties during the six-month period ended 30 September 2019. The gross profit and gross profit margin was HK$22 million (six-month period ended 30 September 2018: HK$23 million) and 52.1% (six-month period ended 30 September 2018: 43.8%) respectively.

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Loss for the period was HK$31 million (six-month period ended 30 September 2018: HK$50 million). Loss attributable to equity shareholders of the Company was HK$27 million (six-month period ended 30 September 2018: HK$44 million).

The loss was mostly attributable to the decrease in revenue as aforementioned, net foreign exchange losses from Renminbi and British Pound during the period, as well as losses incurred by joint ventures.

Basic and diluted loss per share for the six-month period ended 30 September 2019 was HK5.6 cents (six-month period ended 30 September 2018: HK9.2 cents per share).

The Board does not recommend the payment of an interim dividend for the six-month period ended 30 September 2019.

Material Acquisition and Disposal

There was no material acquisition and disposal during the period.

Investment Portfolio

As of 30 September 2019, the Group's bank deposits and cash was HK$201 million (31 March 2019: HK$436 million), representing 10.2% (31 March 2019: 21.5%) of the Group's total assets.

The following table shows the Group's investments as of 30 September 2019.

Real estate investments

			Group		Total gross	Attributable
Investment	Location	Type	interest	Status as of 30/9/2019	floor area	gross floor area
					(Note 1)
Winston Project	1135 Winston Avenue,	Residential property	100%	Under construction.	3,973	3,973
	San Marino, CA 91108,			Expected to be	square feet	square feet
	the U.S.A.			completed in
				January 2020
265 Naomi Project	265 W Naomi Avenue,	Residential property	100%	Completed and being	8,064	8,064
	Arcadia, CA 91007,			marketed to buyer	square feet	square feet
	the U.S.A.
263 Naomi Project	263 W Naomi Avenue,	Residential property	100%	Completed. Handed	8,010	8,010
	Arcadia, CA 91007,			over in November	square feet	square feet
	the U.S.A.			2019
Monterey Park	100, 120, 150, 200 South	Residential and retail	100%	Under planning	189,663	189,663
Towne Centre	Garfield and 114 East	property			square feet	square feet
	Garvey and City Parking
	Lot, Monterey Park,
	CA 91755, the U.S.A.

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			Group		Total gross	Attributable
Investment	Location	Type	interest	Status as of 30/9/2019	floor area	gross floor area
					(Note 1)
Singing Wood	960 Singing Wood Drive,	Residential property	100%	Under planning	9,124	9,124
Project	Arcadia, CA 91006,				square feet	square feet
	the U.S.A.
Shoreditch Project	79-81 Paul Street, Shoreditch,	Commercial property	100%	Completed and being	10,939	10,939
	London, EC2A 4NQ,			marketed to buyer	square feet	square feet
	the U.K.
Kailong Nanhui	An industrial complex located	Commercial and	59.1%	Being marketed to	52,304	30,911
Business Park	at No. 2300 Xuanhuang	industrial property		tenants	square metres	square metres
("Business Park")	Road, Huinan County,
(Note 2)	Pudong New District,
	Shanghai, the PRC
Jaffe Road Project	216, 216A, 218, 220 and	Commercial and retail	3.55%	Under construction.	48,997	1,739
	222A Jaffe Road, Wanchai,	property		Expected to be	square feet	square feet
	Hong Kong			completed in
				December 2021
Wong Chuk Hang	23 Wong Chuk Hang Road,	Commercial and retail	20.8%	Under construction.	107,202	22,298
Project	Hong Kong	property		Expected to be	square feet	square feet
				completed in March
				2022
Maple Street Project	124-126, 130, 132 and 134	Industrial property	100%	Completed. Remaining	7,359	7,359
	Bedford Road, Tai Kok			5 workshops, 2	square feet	square feet
	Tsui, Kowloon			floors and various
				car parking spaces
				being marketed to
				buyers
2702, 2802, 2803,	135 Hoi Bun Road, Kwun	Commercial property	100%	Completed (classified	13,467	13,467
2804 and various	Tong, Kowloon			as investment	square feet	square feet
car parking spaces				properties)
of Rykadan
Capital Tower
Various car parking	135 Hoi Bun Road, Kwun	Commercial property	100%	Completed (classified	N/A	N/A
spaces of Rykadan	Tong, Kowloon			as properties for
Capital Tower				sales)

Note 1: Gross floor area is calculated on the Group's development plans, which may be subject to change.

Note 2: In June 2019, a new framework agreement has been entered between the Group and the purchaser, an independent third party, by way of disposal of the entire equity interests in Bestlinkage NHI Co., Ltd ("Bestlinkage"), an indirect subsidiary of the Company, as a result of the re-assessment and further negotiation on the deal structure for the disposal of the entire Business Park. Details of such proposed disposal were disclosed in the circular of the Company dated 23 August 2019.

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Other investments
Investment	Business/type	Group interest
Q-Stone Building Materials Limited	Distribution of construction and interior	87%
	decorative materials
Quarella Holdings Limited	A joint venture, producer of quartz	43.5%
	and marble-based engineered stone
	composite surfaces products
RS Hospitality Private Limited	A joint venture for operating a 24-suite	50%
	boutique resort in Bhutan

SUMMARY AND REVIEW OF INVESTMENTS

Property development/Asset, investment and fund management

During the six-month period under review, the Group completed construction of the 263 Naomi Project and the 265 Naomi Project in Arcadia, the U.S.A., in which the former will be delivered in November 2019 while the latter is currently being marketed to prospective buyers. The Group's Monterey Park Towne Centre redevelopment project in the U.S.A. is currently at the design approval and planning phase. The construction of the Group's two commercial and retail redevelopment projects in Hong Kong

- namely the Wong Chuk Hang Project and the Jaffe Road Project are progressing well.

Each of the Wong Chuk Hang Project and the Jaffe Road Project is jointly-funded by the Group and a private equity fund managed by the Group's asset, investment and fund management business and is being developed jointly in accordance with the mandate of the respective fund. The Group continues to develop the internal structure and add personnel to the asset, investment and fund management business as part of its strategy to broaden its capital base and tap larger-scale projects. It is also seeking new investors and potential projects to further develop its asset, investment and fund management business.

The Group also continues to provide property development management services for the Wong Chuk Hang Project and the Jaffe Road Project via its wholly-owned subsidiary, Rykadan Project Management Limited. These services are provided with service fees at a fixed percentage of the actual total construction costs.

In addition to the projects and initiatives outlined above, the Group will keep on seeking new opportunities, while assessing its projects on hand with a view of materialising investments at appropriate time.

Property investment

The Group also holds several properties as investments in Hong Kong, the PRC and Bhutan.

In Hong Kong, the Group retains two floors of Rykadan Capital Tower and various car parking spaces for its own use and for rental income or potential rental income.

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In the PRC, the Group remains invested in the Business Park as of 30 September 2019. Following an Extraordinary General Meeting held in September 2019, the Company's shareholders approved a new framework agreement with an independent third party. The previous framework agreement and property sale and purchase agreement has been terminated and the new framework agreement has become effective.

In Bhutan, the Group invests in a 24-suite boutique resort located in Bhutan's Punakha Valley, for which operations and occupancy remain stable.

Distribution of construction and interior decorative materials

As of 30 September 2019, Q-Stone Building Materials Limited ("Q-Stone"), the Group's subsidiary that engages in distribution of construction and interior decorative materials business, had minimal contracts on hand as the Group has shifted the majority of its outstanding orders to Quarella Holdings Limited, a joint-venture partner of the Group.

Quarella was established over 50 years ago and currently is a world leader in the production of quartz and marble-based engineered stone composite surfaces products with factories and research and development centres in Italy. Its products are used in a number of prominent hotels, airports, train stations, commercial buildings and shopping malls in markets around the world.

While Quarella's business in the U.S.A. is currently expanding, its management are proactively seeking new opportunities in Australia, Europe and South-East Asia.

OUTLOOK

Despite the uncertain geopolitical and macroeconomic environment, including the recent social unrest in Hong Kong and the ongoing U.S.A.-PRC trade tensions, the Group remains positive towards the prospects of its existing real estate development portfolio.

The Group remains cautiously optimistic about the underlying strength of the commercial and industrial property markets in Hong Kong, which could benefit from ongoing trends including favourable government policies to revitalise local industrial districts, as well as the continuing movement of multinational firms out of the traditional CBD area into emerging CBD districts in Hong Kong where the Group is focused.

The Group is cautiously optimistic about the outlook for its investment portfolio in the U.S.A., although the short-to-medium term prospects may be impacted by the upcoming 2020 United States Presidential Election. In the meantime, the Group is closely monitoring the impact of the upcoming elections in the U.K., as well as the implications of Brexit, but continues to see opportunities that are worth considering in this market.

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Taking advantage of the low interest rate environment and supportive government policies, the Group will continue to seek high-potential and larger-scale projects in Hong Kong, overseas markets and the PRC's Greater Bay Area, combining the capital contributions from its asset, investment and fund management business together with its other existing resources.

The Group will strive for opportunities to expand its asset management business to further diversify its investment portfolios and deliver quality performance to its shareholders and project investors.

The above proactive but cautious strategy will be maintained to support the Group's future performance and create further value for its shareholders.

CORPORATE FINANCE AND RISK MANAGEMENT

Liquidity and Financial Resources

The Group adheres to the principle of prudent financial management to minimise financial and operational risks across its various business units in Hong Kong and overseas. In order to implement this principle, the control of the Group's financial, capital management and external financing functions are centralised at its headquarters in Hong Kong.

The Group mainly relies upon internally generated funds and bank borrowings to finance its operations and expansion.

As of 30 September 2019, the Group's total debts (representing total interest-bearing bank borrowings) to total assets ratio was 16.5% (31 March 2019: 16.7%). The net gearing ratio (net debts, as defined by total debts less unrestricted bank balances and cash, to equity attributable to equity shareholders of the Company) was 9.2% (31 March 2019: Nil) as the Group has net debts of HK$127 million as of 30 September 2019 (31 March 2019: net cash of HK$93 million).

As of 30 September 2019, the total bank borrowings of the Group amounted to HK$324 million (31 March 2019: HK$338 million). The bank borrowings of the Group were mainly used to finance the retaining of two floors of Rykadan Capital Tower, the property development projects and investment in Quarella. The total bank borrowings were secured by investment properties, properties for sale and buildings held for own use. Further costs for developing the property redevelopment projects and the Quarella business will be financed by unutilised banking facilities or internally generated funds.

As of 30 September 2019, the Group's current assets and current liabilities were HK$827 million (31 March 2019: HK$1,052 million) and HK$558 million (31 March 2019: HK$541 million) respectively. The Group's current ratio decreased to 1.48 (31 March 2019: 1.94). The internally generated funds, together with unutilised banking facilities enable the Group to meet its business development needs.

The Group will cautiously seek new investment and development opportunities in order to balance risks and opportunities and maximise shareholders' value.

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Contingent Liabilities and Financial Guarantees

At the end of the reporting period, the Company has issued guarantees to banks in respect of banking facilities granted to certain indirect subsidiaries and a joint venture of HK$393,496,000 (31 March 2019: HK$393,426,000) and HK$20,000,000 (31 March 2019: HK$20,000,000) respectively. Such banking facilities were utilised by its subsidiaries and the joint venture to the extent of HK$127,494,000 (31 March 2019: HK$120,674,000), including the bank guarantee in favour of a utility service provider to secure the payment obligation of a subsidiary of the joint venture for an amount up to Euro Nil (equivalent to HK$Nil) (31 March 2019: Euro250,000 (equivalent to HK$2,215,000)), and HK$20,000,000 (31 March 2019: HK$20,000,000) respectively.

The directors do not consider it probable that a claim will be made against the Company under any of the guarantees and have not recognised any deferred income in respect of these guarantees and no transaction price was incurred.

Exposure to Fluctuations in Exchange Rates and Interest Rates and Corresponding Hedging

Arrangement

The Group operates in various regions with different foreign currencies including Euro, United States Dollars, British Pounds and Renminbi.

The Group's bank borrowings have been made at floating rates.

The Group has not implemented any foreign currencies and interest rates hedging policy. However, management of the Group will monitor the fluctuation in foreign currencies and interest rates for each business segment and consider appropriate hedging policies in future when necessary.

Credit Exposure

The Group has adopted prudent credit policies to deal with credit exposure. The Group's major customers are institutional organisations and reputable property developers. Therefore, the Group is not exposed to significant credit risk.

Given tightening credit conditions in the PRC, the Group's management is closely monitoring and reviewing from time to time the credit policy, the recoverability of trade receivables and the financial position of its customers in order to keep the Group's credit risk exposure at a very low level.

Employees and Remuneration Policies

As at 30 September 2019, the total number of employees of the Group is 28 (31 March 2019: 27). The Group offers an attractive remuneration policy, including reward to employees on a performance basis with reference to market rate, and subsidies for job-related continuing education. Total remuneration for employees (including the directors' remuneration) was HK$15 million for the period (six-month period ended 30 September 2018: HK$14 million).

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CORPORATE GOVERNANCE AND OTHER INFORMATION

Interim Dividend

The Board does not recommend the payment of an interim dividend for the six-month period ended 30 September 2019.

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

Neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company's listed securities during the period.

Corporate Governance

During the period, the Company had followed the principles and complied with all applicable code provisions and certain recommended best practices set out in the Corporate Governance Code (the "CG Code") contained in Appendix 14 to the Listing Rules, except the deviations from code provisions A.2.1 and A.6.7 of the CG Code, details of which are set out below:

Mr. Chan William ("Mr. Chan") has been appointed as Chief Executive Officer of the Company on 1 July 2012 and is now both the Chairman and the Chief Executive Officer of the Company, and that the functions of the Chairman and the Chief Executive Officer in the Company's strategic planning and development process overlap. These constitute a deviation from code provision A.2.1 of the CG Code which stipulates that the roles of the Chairman and the Chief Executive should be separate and should not be performed by the same individual. However, in view of the present composition of the Board, the in-depth knowledge of Mr. Chan of the operations of the Group and of the property development and real estate/asset management business, his extensive business network and the scope of operations of the Group, the Board believes it is in the best interests of the Company for Mr. Chan to assume the roles of Chairman and Chief Executive Officer at this time and that such arrangement be subject to review by the Board from time to time.

Under code provision A.6.7 of the CG Code, the independent non-executive directors should attend general meetings of the Company. One independent non-executive director was absent from the last annual general meeting and extraordinary general meeting held on 25 September 2019 due to other business commitments.

Directors' Securities Transactions

The Company has adopted a code of conduct regarding securities transactions of the directors, senior management and relevant employees (who, because of their office or employment, is likely to possess inside information in relation to the Company or its securities) of the Group (the "Securities Code") with terms no less exacting than that of the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") as set out in Appendix 10 to the Listing Rules.

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Having made specific enquiries, all of the directors and relevant employees of the Group confirmed that they have complied with the Securities Code and the Model Code during the interim reporting period.

Audit Committee Review

The Audit Committee, which comprises all of the three independent non-executive directors, namely Mr. Ho Kwok Wah, George (Chairman of the Audit Committee), Mr. To King Yan, Adam and Mr. Wong Hoi Ki, with the chairman possessing the appropriate professional qualifications and accounting expertise, has reviewed with the management for the Group's interim results for the period.

Publication of Interim Results Announcement

This interim results announcement is available for viewing on the websites of the Hong Kong Exchanges and Clearing Limited (http://www.hkexnews.hk) and the Company (http://www.rykadan.com) and the interim report for the six-month period ended 30 September 2019 of the Company containing all the information required by the Listing Rules will be dispatched to the Company's shareholders and published on the above websites in due course.

By Order of the Board

Rykadan Capital Limited

宏基資本有限公司

Chan William

Chairman and Chief Executive Officer

Hong Kong, 28 November 2019

As at the date of this announcement, the Board comprises Mr. CHAN William (Chairman and Chief Executive Officer) and Mr. YIP Chun Kwok (Chief Operating Officer) as executive directors, Mr. NG Tak Kwan as a non-executive director and Mr. TO King Yan, Adam, Mr. WONG Hoi Ki and Mr. HO Kwok Wah, George as independent non-executive directors.

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