Imperium Global : INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2020

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Imperium Group Global Holdings Limited

帝 國 集 團 環 球 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 0776)

INTERIM RESULTS ANNOUNCEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2020

The board (the "Board") of directors (the "Directors") of Imperium Group Global Holdings Limited (the "Company") is pleased to announce the unaudited results of the Company and its subsidiaries (collectively, the "Group") for the six months ended 30 June 2020, together with the unaudited comparative figures for the corresponding period in 2019 as follows:

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS

For the six months ended 30 June 2020

		Unaudited
		Six months ended 30 June
		2020			2019
	Note	HK$'000	HK$'000
REVENUE		79,883			121,390
Cost of goods sold		(77,207)	(110,156)
Gross profit		2,676			11,234
Other income	4	3,822			6,206
Distribution costs		(5,937)	(18,695)
Administrative expenses		(30,270)	(27,951)
Other operating expenses		(7,024)	(5,859)
LOSS FROM OPERATIONS		(36,733)	(35,065)
Finance costs		(3,512)	(1,842)

- 1 -

		Unaudited
		Six months ended 30 June
		2020				2019
	Note	HK$'000	HK$'000
LOSS BEFORE TAX		(40,245)	(36,907)
Income tax expense	5	(153)	(972)
LOSS FOR THE PERIOD		(40,398)	(37,879)
Loss for the period attributable to:
Owners of the Company		(39,006)	(37,398)
Non-controlling interests		(1,392)	(481)
		(40,398)	(37,879)
LOSS PER SHARE
Basic	7	(0.14)	(0.13)
Diluted		(0.14)	(0.13)

- 2 -

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

		Unaudited
		Six months ended 30 June
		2020				2019
		HK$'000	HK$'000
LOSS FOR THE PERIOD	(40,398)	(37,879)
Other comprehensive income/(loss):
Item that will not be reclassified to profit or loss:
Fair value changes of equity instruments at fair value
through other comprehensive income (FVTOCI)	(2,059)	(66)
Item that may be reclassified to profit or loss:
Exchange differences arising on translating foreign
operations	(2,847)	1,993
Other comprehensive (loss)/income for the period,
net of tax	(4,906)	1,927
Total comprehensive loss for the period	(45,304)	(35,952)
Total comprehensive loss for the period
attributable to:
Owners of the Company	(43,912)	(35,471)
Non-controlling interests	(1,392)	(481)
		(45,304)	(35,952)

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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 30 June 2020

		Unaudited		Audited
		At		At
		30 June	31 December
		2020	2019
	Note	HK$'000		HK$'000
Non-current assets
Property, plant and equipment	8	13,764	11,515
Investment properties		22,154	24,540
Right-of-use assets	9	9,854	12,530
Goodwill		8,982	10,982
Financial assets at FVTOCI		-	2,059
Deposits paid for acquisition of long-term assets		13,944	18,427
Intangible assets		18,338	6,858
		87,036	86,911
Current assets
Inventories		13,986	26,399
Contract costs		850	620
Loan receivables	10	10,975	13,643
Trade receivables	11	23,888	25,875
Due from related companies		4,737	4,737
Deposits, other receivables and prepayments		10,672	10,513
Tax recoverable		97		-
Cash and bank balances		33,174	56,962
		98,379	138,749
Current liabilities
Trade payables	12	14,765	10,335
Lease liabilities		3,836	5,027
Due to related companies	13	11,808	7,650
Other payables and accruals		38,205	40,424
Retirement benefit obligations		63	65
Contract liabilities		4,196	3,531
Current tax liabilities		-	208
Bank borrowings		34,366	41,417
		107,239	108,657

- 4 -

		Unaudited		Audited
		At		At
		30 June	31 December
		2020					2019
	Note	HK$'000		HK$'000
NET CURRENT (LIABILITIES)/ASSETS		(8,860)	30,092
TOTAL ASSETS LESS CURRENT LIABILITIES		78,176					117,003
Non-current liabilities
Lease liabilities		2,999					4,149
Long-term loan from related parties	13	93,328					93,328
Retirement benefit obligations		555					541
Deferred tax liabilities		2,632					2,632
		99,514					100,650
NET (LIABILITIES)/ASSETS		(21,338)	16,353
CAPITAL AND RESERVES
Equity attributable to owners to the Company
Share capital	14	2,872					2,872
Reserves		(27,270)	15,719
		(24,398)	18,591
Non-controlling interests		3,060					(2,238)
TOTAL EQUITY		(21,338)	16,353

- 5 -

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2020

	Six months ended 30 June
	2020		2019
	(unaudited)	(unaudited)
	HK$'000	HK$'000
Total equity of the Group at 1 January	16,353		92,316
Changes in equity during the period:
- Exchange differences arising on translating on foreign
operations	(2,847)	1,993
- Loss for the period	(40,398)	(37,879)
- Fair value changes of equity instruments at FVTOCI	(2,059)	(66)
Total comprehensive loss for the period	(45,304)	(35,952)
Acquisition of a subsidiary	6,690		-
Equity settled share-based transactions	923		1,570
Total equity of the Group at 30 June	(21,338)	57,934

- 6 -

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2020

	Six months ended 30 June
	2020		2019
	(unaudited)	(unaudited)
	HK$'000	HK$'000
Net cash from/(used in) operating activities	700		(3,695)
Net cash (used in)/from investing activities	(9,963)	16,239
Net cash used in financing activities	(12,904)	(14,596)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(22,167)	(2,052)
CASH AND CASH EQUIVALENTS AT 1 JANUARY	56,962		47,338
EFFECT OF FOREIGN EXCHANGE RATE CHANGES	(1,621)	1,713
CASH AND CASH EQUIVALENTS AT 30 JUNE	33,174		46,999
ANALYSIS OF CASH AND CASH EQUIVALENTS
Cash and bank balances	33,174		46,999

- 7 -

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

1. GENERAL AND BASIS OF PREPARATION

The Company was incorporated in the Cayman Islands as an exempted company with limited liability under the Companies Law of the Cayman Islands. The address of its registered office is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands. The address of its principal place of business is Room 02, 26/F., One Harbour Square, No. 181 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong. The Company's shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited (the "Stock Exchange").

The Company is an investment holding company. The condensed consolidated financial information are presented in Hong Kong dollars ("HK$") and all values are rounded to the nearest thousand except when otherwise indicated, which is the Company's functional and presentation currency.

In the opinion of the Directors, Diamond State Holdings Limited, a company incorporated in the British Virgin Islands, is the immediate parent and Mr. Cheng Ting Kong is the ultimate controlling parties of the Company.

The condensed consolidated financial information have been prepared in accordance with Hong Kong Accounting Standard ("HKAS") 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA") as well as with the applicable disclosure provision of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules").

As at 30 June 2020, the Group's current liabilities exceed its current asset by approximately HK$8,860,000 and total assets exceed its total liabilities by approximately HK$21,338,000. In the view of these circumstance, there exist uncertainties related to the events and conditions described above that, individually or collectively, may cast doubts on the Group's ability to continue as a going concern and, therefore, that the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.

As at 30 June 2020, the Group's has un-utilised facilities for HK$50,000,000 from a substantial shareholder. The Directors believe that the Group has sufficient working capital to meet the financial obligations when they fall due in the foreseeable future. The Directors are satisfied that it is appropriate to prepare these unaudited condensed interim consolidated financial information on a going concern basis.

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2. PRINCIPAL ACCOUNTING POLICIES

The condensed consolidated financial information have been prepared on the historical cost basis, except for certain properties and financial instruments, which are measured at fair value, as appropriate.

Except as described below, the accounting policies and methods of computation used in the condensed consolidated financial information for the six months ended 30 June 2020 are the same as those followed in the preparation of the Group's annual financial information for the year ended 31 December 2019.

Adoption of new and revised Hong Kong Financial Reporting Standards

In the current period, the Group has adopted all the new and revised Hong Kong Financial Reporting Standards ("HKFRSs") issued by the HKICPA that are relevant to its operations and effective for its accounting year beginning on 1 January 2020. HKFRSs comprise Hong Kong Financial Reporting Standards ("HKFRS"); Hong Kong Accounting Standards ("HKAS"); and Interpretations. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

Amendments to HKFRS 3: Definition of a Business

The amendment to HKFRS 3 clarifies that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. Furthermore, it clarified that a business can exist without including all of the inputs and processes needed to create outputs. These amendments had no impact on the interim condensed consolidated financial information of the Group, but may impact future periods should the Group enter into any business combinations.

Amendments to HKFRS 7, HKFRS 9 and HKAS 39: Interest Rate Benchmark Reform

The amendments to HKFRS 9 and HKAS 39 Financial Instruments: Recognition and Measurement provide a number of reliefs, which apply to all hedging relationships that are directly affected by interest rate benchmark reform. A hedging relationship is affected if the reform gives rise to uncertainties about the timing and or amount of benchmark-basedcash flows of the hedged item or the hedging instrument. These amendments had no impact on the interim condensed consolidated financial information of the Group as it did not have any interest rate hedge relationships that was affected by the interest rate benchmark reform.

Amendments to HKAS 1 and HKAS 8: Definition of Material

The amendments provide a new definition of material that states "information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity."

The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. These amendments had no impact on the interim condensed consolidated financial information of, nor is there expected to be any future impact to the Group.

- 9 -

Conceptual Framework for Financial Reporting issued on 28 June 2018

The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the HKICPA in developing standards, to help preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to understand and interpret the standards.

The revised Conceptual Framework includes some new concepts, provides updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts.

These amendments had no impact on the interim condensed consolidated financial information of the Group.

3. SEGMENT INFORMATION

Information reported to the Executive directors of the Company, being the chief operating decision maker, for the purposes of resource allocation and assessment of segment performance focuses on types of goods delivered. For management purposes, the Group has four (2019: four) reportable segments, stainless steel furnishings, property investment, money lending and online game.

Information about reportable segment revenue, profit or loss and assets:

2020
		Stainless
		steel	Online		Property	Money
	furnishings	game	investment	lending	Total
		HK$'000	HK$'000		HK$'000	HK$'000	HK$'000
Six months ended 30 June 2020
(unaudited)
Revenue from external customers	65,124		12,915		657	1,187		79,883
Intersegment revenue		-	-		-	-	-
Segment loss	(1,754)	(28,260)	(551)	(840)	(31,405)
Interest revenue	119		1			-	1,187		1,307
Interest expense	(1,105)	(38)		-	-	(1,143)
Depreciation	(548)	(947)		-	(369)	(1,864)
Income tax expense		-	(152)		-	-	(152)
Additions to segment non-current
assets	29		358			-	-	387
Other material non-cash items:
- Impairment of assets		-	(5,524)		-	(1,500)	(7,024)
- Fair value change of
investment properties		-	-	(1,208)	-	(1,208)
As at 30 June 2020
Segment assets	73,310		67,539		22,154	13,282		176,285

- 10 -

2019
		Stainless
		steel	Online		Property		Money
	furnishings	game	investment		lending	Total
		HK$'000	HK$'000		HK$'000		HK$'000	HK$'000
Six months ended 30 June 2019
(unaudited)
Revenue from external customers	86,390		30,897		768	3,335		121,390
Intersegment revenue		-	-			-				-	-
Segment (loss)/profit	(146)	(32,575)	1,804	(1,972)	(32,889)
Interest revenue	225		102				-				-	327
Interest expense	(1,342)	(26)			-			(24)	(1,392)
Depreciation	(1,304)	(1,029)			-			(643)	(2,976)
Income tax expense	(907)	(65)			-				-	(972)
Additions to segment non-current
assets	77		1,649				-				-	1,726
Other material non-cash items:
- Impairment of assets		-	(1,315)			-	(4,544)	(5,859)
- Fair value change of
investment properties		-	-	569				-	569
As at 30 June 2019
Segment assets	83,354		87,489		31,495	20,127		222,465
Reconciliations of segment assets:
											At				At
								30 June		31 December
										2020				2019
								(unaudited)				(audited)
								HK$'000				HK$'000
Assets
Total assets of reportable segment						176,285				183,841
Unallocated corporate assets										9,130				41,819
Consolidated total assets						185,415				225,660

- 11 -

	Reconciliation of reportable segment revenue and results:
		Six months ended 30 June
		2020			2019
		(unaudited)	(unaudited)
		HK$'000	HK$'000
	Revenue
	Total revenue of reportable segments	79,883			121,390
	Elimination of intersegment revenue	-	-
	Consolidated revenue	79,883			121,390
	Profit or loss
	Total loss of reportable segments	(31,405)	(32,889)
	Unallocated corporate income	133			-
	Unallocated corporate expenses	(9,126)	(4,990)
	Consolidated loss for the period	(40,398)	(37,879)
4.	OTHER INCOME
		Six months ended 30 June
		2020			2019
		(unaudited)	(unaudited)
		HK$'000	HK$'000
	Government grants	427			1,807
	Gain on disposal of investment property	-	514
	Performance bonus	-	1,800
	Fair value gain on investment property	-	569
	Interest income	122			327
	Net exchange gain	3,273			995
	Others	-	194
		3,822			6,206

- 12 -

1. INCOME TAX EXPENSE
   Under the two-tiered profits tax regime, profit tax rate for the first HK$2 million of assessable profits of qualifying corporations established in Hong Kong will be lowered to 8.25%, profit tax rate for and profits above that amount will be subject to the tax rate of 16.5%.
   PRC Enterprise Income Tax has been provided at a rate of 25% (2019: 25%) on the estimated assessable profits for the period.
   Malaysia Corporate Tax has been provided at a rate of 24% on the estimated assessable profit for the period.
   Tax charge on profits assessable elsewhere have been calculated at the rates of tax prevailing in the countries in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.
2. DIVIDEND
   No dividend was paid, declared or proposed during the period. The Directors have determined that no dividend will be paid in respect of the interim period (2019: Nil).
3. LOSS PER SHARE
   The calculation of basic loss per share is based on the following:

	Six months ended 30 June
	2020		2019
	(unaudited)	(unaudited)
	HK$'000	HK$'000
Loss
Loss attributable to owners of the Company, used in the basic loss
per share calculation	(39,006)	(37,398)
	Six months ended 30 June
	2020		2019
	(unaudited)	(unaudited)
Number of shares
Weighted average number of ordinary shares used in basic loss per
share calculation	287,206,000		287,206,000

No diluted loss per share information presented for the six months periods ended 30 June 2020 and 2019 as the impact of the share options outstanding had an anti-dilutive effect on the basic loss per share.

- 13 -

1. PROPERTY, PLANT AND EQUIPMENT
   During the six months ended 30 June 2020, the Group had additions to property, plant and equipment in the amount of approximately HK$3,978,000 (2019: approximately HK$547,000). The Group has no material disposal of property, plant and equipment on both periods.
2. RIGHT-OF-USEASSETS
   During the six months ended 30 June 2020, the Group had additions to right-of-use assets in the amount of approximately HK$375,000 (2019: approximately HK$6,357,000).
3. LOAN RECEIVABLES
   The maturity profile of loan receivables at the reporting date is analysed by the remaining periods to their contractual maturity dates at follows:

	At		At
	30 June		31 December
	2020	2019
	(unaudited)		(audited)
	HK$'000		HK$'000
Within one year	10,975	13,643

At 30 June 2020 and 31 December 2019, all loan receivables are unsecured, bear interest at fixed rates and are repayable with fixed terms agreed with the customers.

11. TRADE RECEIVABLES

The Group's trading terms with customers are mainly on credit. The credit terms generally range from 30 to 90 days. The aging analysis of the Group's trade receivables, based on the invoice date, and net of allowance, is as follows:

	At		At
	30 June		31 December
	2020	2019
	(unaudited)		(audited)
	HK$'000		HK$'000
0-30 days	21,667	22,595
31-60 days	996	1,124
61-90 days	380	72
over 90 days	845	2,084
Total	23,888	25,875

- 14 -

12. TRADE PAYABLES

	At		At
	30 June		31 December
	2020	2019
	(unaudited)		(audited)
	HK$'000		HK$'000
Trade payables	14,765	10,335

The Group normally obtains credit terms ranging from 30 to 90 days from its suppliers. The aging analysis of the Group's trade payables, based on date of receipt of goods, is as follows:

	At		At
	30 June		31 December
	2020	2019
	(unaudited)		(audited)
	HK$'000		HK$'000
0-30 days	11,158	7,237
31-60 days	1,142	1,402
61-90 days	788		-
Over 90 days	1,677	1,696
Total	14,765	10,335

- 15 -

1. DUE TO RELATED COMPANIES/LONG-TERM LOAN FROM RELATED PARTIES
   As at 30 June 2020, amounts due to related companies represented loan from a related party. The loan was unsecured, interest bearing at 2% per annum and repayable within one year. During the year ended 31 December 2019, the related party extended the term of repayment for two years and the loan was reclassified as long-term loan from related parties. The remaining balances were unsecured, interest- free and have no fixed repayment terms.
   During the year ended 31 December 2019, the Group received long-terms loans from two related parties with principal amount of HK$70,000,000 in total. These long-term loans were unsecured, interest bearing from 1.5% per annum and repayable within three years. The fair value of these loans were estimated at the prevailing market interest rate for equivalent loans of 5% on initial recognition.
2. SHARE CAPITAL

Number of shares

'000 HK$'000

Ordinary shares of HK$0.01 each:

Authorised:

At 1 January 2019 (audited), 31 December 2019 (audited) and
30 June 2020 (unaudited)	5,000,000	50,000
Issued and fully paid:
At 1 January 2019 (audited), 31 December 2019 (audited) and
30 June 2020 (unaudited)	287,206	2,872

15. CAPITAL COMMITMENTS

Capital commitments contracted for at the end of the reporting period but not yet incurred are as follows:

	At		At
	30 June		31 December
	2020	2019
	(unaudited)		(audited)
	HK$'000		HK$'000
Game intellectual properties and licenses	9,276	11,393

- 16 -

16. OPERATING LEASE COMMITMENTS The Group as lessor

The Group's total future minimum lease payments under non-cancellable operating leases are receivable as follows:

	At		At
	30 June		31 December
	2020	2019
	(unaudited)		(audited)
	HK$'000		HK$'000
Within one year	783	925
In the second to fifth years inclusive	65	353
Over five years	-		-
	848	1,278

17. FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following disclosures of fair value measurements use a fair value hierarchy that categorises into three levels the inputs to valuation techniques used to measure fair value:

Level 1 inputs:	quoted prices (unadjusted) in active markets for identical assets or liabilities that
	the Group can access at the measurement date.
Level 2 inputs:	inputs other than quoted prices included within level 1 that are observable for the
	asset or liability, either directly or indirectly.
Level 3 inputs:	unobservable inputs for the asset or liability.

The Group's policy is to recognise transfers into and transfers out of any of the three levels as of the date of the event or change in circumstances that caused the transfer.

- 17 -

1. Disclosure of level in fair value hierarchy at 30 June 2020 and 31 December 2019:

		Fair value measurements using:		Total
										At 30 June
Description		Level 1		Level 2		Level 3	2020
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
		HK$'000		HK$'000		HK$'000		HK$'000
Recurring fair value measurements:
Financial assets
Financial assets at FVTOCI
Unlisted equity instruments		-		-		-		-
Investment properties
Office units - Malaysia		-		-	22,154	22,154
Total		-		-	22,154	22,154
		Fair value measurements using:		Total
										At
									31 December
Description		Level 1		Level 2		Level 3	2019
		(audited)		(audited)		(audited)		(audited)
		HK$'000		HK$'000		HK$'000		HK$'000
Recurring fair value measurements:
Financial assets
Financial assets at FVTOCI
Unlisted equity instruments		-	2,059		-	2,059
Investment properties
Office units - Malaysia		-		-	24,540	24,540
Total
	-	2,059	24,540	26,599

- 18 -

1. Reconciliation of assets measured at fair value based on level 3:

					2020
						Investment
						properties
Description						(unaudited)
						HK$'000
At 1 January 2020					24,540
Total gains or losses recognised in
profit or loss (#)					(1,208)
Exchange difference					(1,178)
At 30 June 2020					22,154
(#) Include gains or losses for assets held
at end of reporting period					(1,208)
	Financial
	assets at
	FVTOCI
	- unlisted
	equity		Investment	2019
	securities		properties		Total
Description	(audited)		(audited)		(audited)
	HK$'000		HK$'000		HK$'000
At 1 January 2019	3,870	31,156	35,026
Total gains or losses recognised in
profit or loss (#)	-	1,081	1,081
Disposal of investment properties	-	(7,814)	(7,814)
Transfer out of Level 3	(3,870)		-	(3,870)
Exchange difference	-	117	117
At 31 December 2019	-	24,540	24,540
(#) Include gains or losses for assets held
at end of reporting period	-	567	567

- 19 -

Total losses recognised in other comprehensive income are presented in fair value change of equity instrument at FVTOCI in the condensed consolidated statement of profit or loss and other comprehensive income.

The total gains or losses recognised in profit or loss including those for assets held at end of reporting period are presented in administrative expenses (2019: other income) in the condensed consolidated statement of profit or loss and other comprehensive income.

1. Disclosure of valuation process used by the Group and valuation techniques and inputs used in fair value measurements at 30 June 2020 and 31 December 2019:
   The Group's financial controller is responsible for the fair value measurements of assets and liabilities required for financial reporting purposes, including level 3 fair value measurements. The financial controller reports directly to the Board for these fair value measurements. Discussions of valuation processes and results are held between the financial controller and the Board at least twice a year.
   For level 3 fair value measurements, the Group will normally engage external valuation experts with the recognised professional qualifications and recent experience to perform the valuations.
   Investment properties:
   Key unobservable inputs used in level 3 fair value measurements are mainly:
2. • Floor level difference (estimated based on actual data)
   • Size difference (estimated based on actual data)
   • Time difference (estimated based on valuation experts' in-house database)
   • Location difference (estimated based on a valuation experts' in-house database)
   • Tenure difference (estimated based on a valuation experts' in-house database)

- 20 -

Level 3 fair value measurements
				Effect on
				fair value for	Fair value	Fair value
	Valuation	Unobservable		increase of	30 June	31 December
Description	technique	inputs	Range	inputs	2020	2019
					(unaudited)	(audited)
					HK$'000	HK$'000
Investment property	Market	Time	-5% (2019: 0%)	Increase	22,154	24,540
- Commercial	comparable	difference
building located	approach
in Malaysia
		Location	0%-5%	Increase
		difference	(2019: 0%-15%)
		Floor level	-4%-3%	Increase
		difference	(2019: -4%-3%)
		Size difference	-2% (2019: -2%)	Increase
		Tenure	0% (2019: 0%)	Decrease
		difference

There were no changes in the valuation techniques used for investment properties as at 30 June 2020 and 31 December 2019.

For equity investment, classified as financial assets at FVOCI, the valuation technique used was changed from market approach to cost approach.

- 21 -

18. RELATED PARTY TRANSACTIONS

In addition to those related party transactions and balances disclosed elsewhere in the condensed consolidated financial information, the Group had the following transactions and balances with related parties during the period:

1. Key management personnel compensation
   The key management personnel of the Group comprise all Directors. Details of their emoluments were disclosed as follows:

Six months ended 30 June

2020 2019

(unaudited) (unaudited)

HK$'000 HK$'000

Directors' remuneration	1,367	1,163

1. Transactions with related parties
   For the period ended 30 June 2020 and 2019, transactions with the following parties are considered to be related party transactions:

寧波捷豐現代傢俱有限公司	A director of the Company, Mr. Leung Kwok Yin,
(Ningbo JF Furniture Co., Limited*)	has beneficial interests.
JF Household Furnishings (BVI) Limited	A director of the Company, Mr. Leung Kwok Yin,
	has beneficial interests.
A.C.R Equipment Supplies Limited	A director of the Company, Mr. Leung Kwok Yin,
	has beneficial interests.
Imperium Credit Limited	A director of the Company, Mr. Cheng Ting Kong,
	has beneficial interests.
Imperium Financial Group Limited	A director of the Company, Mr. Cheng Ting Kong,
	has beneficial interests.

- 22 -

	Six months ended 30 June
	2020	2019
	(unaudited)		(unaudited)
	HK$'000		HK$'000
Purchase from
- 寧波捷豐現代傢俱有限公司
(Ningbo JF Furniture Co., Limited*)	764	1,236
Leasing charges paid to
- 寧波捷豐現代傢俱有限公司
(Ningbo JF Furniture Co., Limited*)	1,473	1,251
License fees paid to
- A.C.R. Equipment Supplies Limited	60	60
Interest expense paid to
- Imperium Credit Limited	1,186	300
- Imperium Financial Group Limited	1,155	150
Salaries to a close family member of a director	-	700

Ningbo JF Furniture Co., Limited has guaranteed bank loans made to the Group of approximately HK$34,366,000 at 30 June 2020 (2019: HK$41,417,000).

(c) Balance with related parties
- Due from related companies
		At		At
		30 June		31 December
		2020	2019
		(unaudited)		(audited)
	Note	HK$'000		HK$'000
JF Household Furnishings (BVI) Limited	(i)	4,737	4,737

- 23 -

- Due to related companies
		At		At
		30 June		31 December
		2020	2019
		(unaudited)		(audited)
	Note	HK$'000		HK$'000
寧波捷豐現代傢俱有限公司	(i)
(Ningbo JF Furniture Co., Limited*)		11,808	7,650
Imperium Credit Limited	(ii)	48,094	48,094
Imperium Financial Group Limited	(ii)	45,234	45,234
		105,136	100,978

*  for identification purpose only Notes:

1. These amount due from/(to) related companies are unsecured interest-free and have no fixed repayment terms.
2. These amounts due to related companies of approximately HK$93,328,000 was unsecured, interest bearing from 1.5% to 2% per annum and repayable within three years.

19. EVENT AFTER REPORTING PERIOD

On 22 July 2020, Wanhui (Suzhou) Digital Technology Co., Ltd. ("Wanhui"), a non-wholly owned subsidiary of the Company, has entered into the interests transfer agreement with the vendor, pursuant to which the vendor has agreed to sell, and Wanhui has agreed to purchase, the interest of XQF Team, together with among others, the eligibility to participate in the 2020 PEL S2 and the contracts with XQF Team. Please refer to the announcement of the Company dated 22 July 2020 for details.

- 24 -

FINANCIAL REVIEW

The Group's revenue for the six months ended 30 June 2020 amounted to approximately HK$79.9 million, representing a decrease of approximately 34.2% over the corresponding period of 2019. Such decrease is mainly due to the decrease of sales of household products and online game business.

Gross profit margin of the Group decreased from 9.3% to approximately 3.3% for the six months ended 30 June 2020 was mainly due to the decease of gross profit margin of household business and low profit margin for online game business during the period.

Other income decreased from approximately HK$6,206,000 for the six months ended 30 June 2019 to approximately HK$3,822,000 for the six months ended 30 June 2020, mainly due to decrease in government grant and no performance bonus during the period.

Distribution costs decreased from approximately HK$18.7 million for the six months ended 30 June 2019 to approximately HK$5.9 million for the six months ended 30 June 2020, as there was decrease in marketing expenses for online games business during the period.

Administrative expenses increased from approximately HK$28.0 million for the six months ended 30 June 2019 to approximately HK$30.3 million for the six months ended 30 June 2020, mainly due to the increase in staff costs and legal and professional fee.

Other operating expenses of approximately HK$7.0 million is mainly due to impairment loss on loan receivables, intangible assets and goodwill during the period.

BUSINESS REVIEW AND OUTLOOK

BUSINESS REVIEW

In the first half of 2020, the outbreak of COVID-19 and the growing tensions between China and the U.S. have brought great challenges to the overall market and the global economy slowed down unavoidably. While under this situation, the emerging trends during pandemic clearly indicates that there are ample opportunities in the game industry, with the growth of smartphone games and esports, as well as the launch of 5G, which would be a strong enabler for more interaction among people.

Other business segments of the Group are all negatively affected by the poor market sentiment and volatile market environment. This calls for a speedy transformation of the Group from a traditional household products manufacturer into a vibrant game company.

- 25 -

Online game business

The revenue from online game business for the six months ended 30 June 2020 was approximately HK$12,915,000 (2019: HK$30,897,000). The reduction was mainly due to lack of attractive products being launched in 2020 as compared to the success of the mobile game "Kaiser". As reported in the 2019 annual report, the Group has delayed launch of three products scheduled for release in the fourth quarter of 2019 until early 2020. Two of these games were eventually launched in March 2020 with disappointing results. As a result, the segment recorded loss of approximately HK$28,260,000 (2019: HK$32,575,000) during the reporting period.

Amid the challenges, the management is still positive on the outlook of this segment. According to forecast report issued by NewZoo recently, the total games industry is expected to make over USD159.3 billion in 2020 across all segment, including digital, physical, hardware and accessories, representing a growth rate of 9.3% year-on-year. The smartphone games segment, especially, is forecast to contribute around USD63.6 billion, with a growth rate of approximately 16%. Besides, the esports segment is expected to increase by approximately 16% to reach USD1,100 million. The firm also expects gaming to break USD200 billion by 2023 in the height of the next console generation and the pivotal 5G era of mobile connectivity.

To seize the opportunities from the market growth the Group has reviewed the performance of the business and identified several key areas for improvements. Geographically speaking, 2020 will see China's return to dominance in games earnings according to Newzoo. Thus, the Group will focus on the fast-growing PRC gaming market and partner with major gaming companies to enhance its product portfolio and quality. The Group believes this strategy will enable the Group to broaden its customer base and enjoy better economy of scale for its operation. At the same time, to encourage more engagement of game players in the region, the Group would put more efforts on online marketing for future products, as well as brand building.

In addition, the Group is diversifying its income streams with potential capital expecting to be gained from game slots. Moreover, in view of the emerging esports segment, the Group has taken prompt action to catch the market opportunities by forming a venture with Nova eSports International Limited ("Nova"), and acquired XQF team, which ranked the first and third in the Esports Contests of Peacekeeper Elite (和平精英) held in 2019 and first half of 2020, respectively. Given the recognised track record of XQF Team, the Group believe that it is lucrative for the Group to participate in the Esports Contests organised by PEL and/or other parties through the acquisition of XQF Team.

- 26 -

For the rest of the year, the Group will integrate with Nova to establish the platform for the growth of esports segment, and partner with leading game developers to publish high-quality and attractive games for the market. With its flexible strategies, the Group is confident in developing the business into a prominent regional game distributor.

Household products business

The revenue from household products business for the six months ended 30 June 2020 was approximately HK$65,124,000 (2019: HK$86,390,000) representing a decrease of 24.6% as compared to last year. Unavoidably, the market demand has decreased due to the growing tension between china and the U.S. and outbreak of COVID-19. With support from the government's relief program and the flexible cost structure of the operation, the gross profit margin of household products business was decrease marginally to 5.8% (2019:

7.0%). The segment loss for the reporting period was approximately HK$1,754,000 (2019: HK$146,000).

The outlook of this segment continued to be filled with challenges as the major customer continued to diversify its supply chain to other countries. The portion of sales from new products during the reported period has further reduced to 2.4%. . To mediate the impact of possible disruption to the relationship with the major customer to the business, the Group has secured new orders from four domestic customers with total value of approximately RMB9 million. Whilst this represented only a small portion of the total revenue of the business, it was a significant milestone in our diversification strategy. Moreover, it would be critical for us to maintain the scale of operation in the next 6 to 12 months, especially for stabilizing the relationship with the segment's suppliers. Hence, the Group will explore opportunities in trading as a temporary measure to sustain the operations.

Property investment business

The Group's revenue from property investment business during the reporting period was approximately HK$657,000 (2019: approximately HK$768,000). The segment loss was approximately HK$551,000 (2019: segment profit of approximately HK$1,804,000), mainly due to fair value loss on investment property which is non-cash in nature.

Money lending business

The Group's revenue from money lending business during the period was approximately HK$1,187,000 (2019: HK$3,335,000). The segment loss of approximately HK$840,000 (2019: HK$1,972,000), mainly due to impairment loss on loan receivables for approximately HK$1,500,000.

- 27 -

Future prospects

Facing with the uncertain and challenging environment, we would accelerate the implementation of expanding the online game business into China to grow the segment into the major pillar of the Group. In addition, we will continue to adopt suitable cost saving measures and evaluate the business operations to enhance the financial position of the Group as well as maximizing returns to the shareholders. Looking ahead, we will broaden our product range to console games to capture the possible opportunities and further expand the market to the PRC region.

LIQUIDITY, FINANCIAL RESOURCES, FUNDING AND TREASURY POLICY

As at 30 June 2020, the Group had cash and bank balances of approximately HK$33.2 million (as at 31 December 2019: approximately HK$57.0 million) and short-term bank borrowings of approximately HK$34.4 million (as at 31 December 2019: approximately HK$41.4 million) respectively.

As at 30 June 2020, the Group had current assets of approximately HK$98.4 million (31 December 2019: HK$138.7 million) and current liabilities of approximately HK$107.2 million (31 December 2019: HK$108.7 million).

As at 30 June 2020, the Group had long-term loan from related parties of approximately HK$93.3 million (31 December 2019: HK$93.3 million).

As at the reporting date, the Group had un-utilised facilities from substantial shareholder amounted to approximately HK$60 million including HK$30 million for Nova eSports International Limited, a non-wholly owned subsidiary of the Company.

GEARING RATIO

As at 30 June 2020, the Group's gearing ratio, which was derived from the total borrowings and loan from related companies to total assets, increased to 68.9% from that of 59.7% as at 31 December 2019.

Commitments

As at 30 June 2020, the Group's capital commitments amounted to approximately HK$9,276,000 (2019: 11,393,000), attributable to acquisition of game intellectual properties and licences.

CAPITAL STRUCTURE

The share capital of the Company comprises of ordinary shares only.

- 28 -

MATERIAL ACQUISITION AND DISPOSAL

On 12 May 2020, Apex Empire International Limited ("Apex"), a wholly-owned subsidiary of a Company, entered into the subscription agreement with Nova eSports International Limited pursuant to which the Company has conditionally agreed to allot and issue and Apex has conditionally agreed to subscribe for to subscription share at the subscription price of HK$15,000,000 for all the subscription shares. For the details, please refer to the announcement of the Company dated 12 May 2020.

EVENT AFTER THE REPORTING PERIOD

On 22 July 2020, Wanhui has entered into the interests transfer agreement with the vendor, pursuant to which the vendor has agreed to sell, and Wanhui has agreed to purchase, the interest of XQF Team, together with among others, the eligibility to participate in the 2020 PEL S2 and the contracts with XQF Team. Please refer to the announcement of the Company dated 22 July 2020 for details.

DIVIDENDS

The Board has resolved not to declare an interim dividend for the six months ended 30 June 2020 (2019: Nil).

FOREIGN EXCHANGE EXPOSURE

Most of the trading transactions, assets and liabilities of the Group were denominated in Renminbi, United States dollars, Hong Kong dollars, Malaysia Ringgit and Thai Baht.

CONTINGENT LIABILITIES

As at 30 June 2020, the Group had no material contingent liabilities.

EMPLOYEES AND REMUNERATION POLICY

As at 30 June 2020, the Group employed 558 staff in the PRC and Hong Kong. The Group's remuneration to employees, including Directors' emoluments, amounted to approximately HK$25,355,000 for the period. The Group reviews employee remuneration annually and rewards its employee with reference to the length of services and performance. The Group also grants share options and bonuses to employees of the Group at the discretion of the Directors and based on the financial performance of the Group.

- 29 -

DIRECTORS' INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY OR ITS ASSOCIATED CORPORATIONS

As at 30 June 2020, the interests and short positions of the Directors 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 (the "Associated Corporations") as notified 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 they were taken or deemed to have under such provisions of the SFO) or as recorded in the register required to be kept by the Company under section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") were as follows:

				Percentage
				of aggregate
				interests to
				total number of
	Personal	Corporate		Shares in issue
Name of Director	interests	interests	Total	(Note 4)
Mr. Cheng Ting Kong	-	214,428,488 (L)	214,428,488 (L)	74.66%
		(Note 2)	(Note 1)

Notes:

1. The letter "L" represents the Director's interests in the Shares and underlying Shares or, as the case may be, the equity interest of the Company or its associated corporations.
2. This represents interests held by Mr. Cheng Ting Kong through Diamond State Holdings Limited ("Diamond State"), which holds 214,428,488 Shares. As Mr. Cheng Ting Kong has 100% interest in Diamond State, he is deemed to be interested in 214,428,488 Shares.
3. Ms. Yeung So Mui is the spouse of Mr. Cheng Ting Kong. Ms. Yeung So Mui is deemed to be interested in all shares held by Diamond State under part XV of the SFO.
4. The percentage has been adjusted based on the total number of Shares in issue as at 30 June 2020 (i.e. 287,206,000 Shares).

Save as disclosed above, as at 30 June 2020, none of the Directors had any other interests or short positions in the shares, underlying shares or debentures of the Company or any of its Associated Corporations as notified 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 they were taken or deemed to have under such provisions of the SFO or which had been entered in the register kept by the Company pursuant to Section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

- 30 -

SUBSTANTIAL SHAREHOLDERS

As at 30 June 2020, the following substantial shareholders had interests or short positions in the shares or the underlying shares of the Company as recorded in the register required to be kept under section 336 of the SFO. Other than the interests disclosed below, the Directors were not aware of any other persons who had interests or short positions in the shares or the underlying shares of the Company as recorded in the register required to be kept under section 336 of the SFO:

			Approximate
			percentage of
			the total issue
	Number of		capital of
	shares		the Company
Name of Substantial Shareholders	interested in	Capacity	(Note 2)
Diamond State (Note 1)	214,428,488	Beneficial owner	74.66%
Mr. Cheng Ting Kong (Note 1)	214,428,488	Interest through a controlled	74.66%
		corporation

Notes:

1. According to the record in the register kept under section 336 of the SFO, Diamond State, which 100% of issued share capital is owned by Mr. Cheng Ting Kong and he is therefore deemed to be interested in 214,428,488 shares of the Company.
2. The percentage has been adjusted based on the total number of shares of the Company in issue as at 30 June 2020 (i.e. 287,206,000 shares).

- 31 -

SHARE OPTION

On 26 November 2008, the Company adopted the existing share option scheme (the "Existing Option Scheme"), which was valid and effective for a period of ten years from its date of adoption. The Existing Share Option Scheme was expired on 25 November 2018.

As at 30 June 2020, there are 6,980,000 share options were granted under the Existing Option Scheme which already cancelled during the period.

On 29 June 2018, a resolution was passed in the 2018 annual general meeting of the Company to adopt a new share option scheme (the "New Share Option Scheme").

The Listing Committee of the Stock Exchange has granted the listing of, and permission to deal in the shares of the Company which may fall to be issued pursuant to the exercise of the options which was granted and/or may be granted under the New Share Option Scheme subsequently.

The following is a summary of the principal terms of the New Share Option Scheme.

New Share Option Scheme

Purpose

To provide an incentive or a reward to eligible persons for their contribution to the Group and/or to enable the Group to recruit and retain high-calibre employees and attract human resources that are valuable to the Group.

Participants

Eligible participants include:

Any directors or employees, consultants and/or advisers, the eligible participants also include any business or joint venture partners, contractors, agents or representatives, suppliers, producers or licensors, licensees (including sub-licensee) or distributors, of the Group or any person who, in the sole discretion of the Board, has contributed or may contribute to the Group.

- 32 -

Exercise price

Determined by the Board and shall not be less than the higher of:

1. the closing price of (1) one share as stated in the Stock Exchange's daily quotation sheets at the offer date, which must be a business day;
2. the average closing price of (1) one share as stated in the Stock Exchange's daily quotation sheets for the (5) five business days immediately preceding the offer date; and
3. the nominal value of the share on the offer date, provided that in case of fractional prices, the exercise price per share shall be rounded upwards to the nearest whole cents.

Total number of shares available for issue and the percentage of the issued share capital that it represents as at the date of this interim report

28,720,600 shares, being approximately 10% of the issued shares of the Company.

Maximum entitlement of each participant

Not exceed 1% of the shares in issue in any 12-month period.

Period within which the securities must be taken up under the option

Subject to the discretion by the Board and, in the absence of which, from the date of acceptance to the earlier of the date on which such option lapses and 10 years from the date of offer.

Minimum period for which an option must be held before it can be exercised

Subject to the discretion by the Board.

Amount payable on acceptance

HK$1.00 payable upon acceptance of the offer.

- 33 -

Remaining life of the scheme

The scheme will be valid and effective until 28 June 2028, after which no further options will be granted but the provisions of the scheme shall remain in full force and effect in all other respects. Options complying with the provisions of the Listing Rules which are granted during the duration of the scheme and remain unexercised immediately prior to 28 June 2028 shall continue to be exercisable in accordance with their terms of grant, notwithstanding the expiry of the scheme.

Employees and other eligible participants

The following table discloses movements of the Company's share options during the six months period ended 30 June 2020:

						Number of share options
												Lapsed/
				Outstanding	Granted		Exercised	cancelled	Outstanding
		Exercise		at 1 January	during the		during the	during the	at 30 June
Name	Date of grant	price	Exercisable period	2020		period		period	period	2020
		HK$
Executive director
Luk Wai Keung	23 May 2018	5.14	23 May 2018-	1,000,000		-		-	(1,000,000)	-
			22 May 2022
Consultants
(in aggregate)	23 May 2018	5.14	23 May 2018-	2,000,000		-		-	(2,000,000)	-
			22 May 2022
(in aggregate)	23 May 2018	5.14	23 November 2018-	2,000,000		-		-	(2,000,000)	-
			22 May 2022
(in aggregate)	23 May 2018	5.14	23 May 2018-	1,980,000		-		-	(1,980,000)	-
			22 May 2022
				6,980,000		-		-	(6,980,000)	-

- 34 -

The estimated fair value of the share options granted under the Scheme on 26 November 2008 was approximately HK$14,939,000, calculated using the Binomial Model (the "Model"). The inputs into the Model were as follows:

	Share options with
	an exercisable period from
	23 May 2018 to 22 May 2022
Share price at date of grant	HK$4.91
Exercise price	HK$5.14
Expected volatility (per annum)	65.50%
Expected life of share options	4 years
Expected dividend yield	0%
Risk-free rate	2.14%
Fair value of share option	HK$2.14

Fair values of the share options were with reference to the valuation carried out by an independent firm of professional valuers.

Expected volatility was determined by using the historical volatility of the Company's share price. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

The risk free interest rate was estimated based on the yield of 5-year exchange fund note issued by the Hong Kong Monetary Authority as of the grant date.

The variables and assumptions used in computing the fair value of the share options are based on the directors' best estimate. The value of an option varies with different variables of certain subjective assumptions.

The Group recognises the total expense of approximately HK$923,000 for the period ended 30 June 2020 (2019: approximately HK$1,570,000) in relation to share options granted by the Company.

- 35 -

DIRECTORS' INTERESTS IN CONTRACTS

No contract of significance to which the Company or any of its subsidiaries or its holding company, was a party and in which a Director had a material interest, whether directly or indirectly, subsisted at the end of the period under review or any time during the period under review save and except for the transactions disclosed as connected and/or related party transactions in accordance with the requirements of the Listing Rules and accounting principles generally accepted in Hong Kong.

PURCHASE, SALE OR REDEMPTION OF SHARES

Neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company's shares for the six months ended 30 June 2020.

CORPORATE GOVERNANCE

In the opinion of the Directors, save as disclosed below, the Company has complied with the code provisions as set out in the Corporate Governance Code and Corporate Governance Report ("CG Code") set out in Appendix 14 of the Listing Rules throughout the six months ended 30 June 2020.

Under the Code Provision A.2.1 of the CG Code, the roles of chairman and chief executive should be separate and should not be performed by the same individual. The role of chief executive officer were shared among the members of the Board during the reporting period. There is no time schedule to change this structure, as the Directors consider that this structure provides the Group with consistent leadership in the Company's decision making process and operational efficiency. The Board shall review this arrangement from time to time to ensure appropriate and timely action is taken to meet changing circumstances.

The Company reviews its corporate governance practices from time to time to ensure compliance with the CG Code.

- 36 -

AUDIT COMMITTEE

The Company has established an Audit Committee with written terms of reference in accordance with the Listing Rules. The primary duties of the Audit Committee are to review the Company's interim and annual reports and accounts and to provide advice and comments thereon to the Board. The Audit Committee is also responsible for reviewing internal control procedures of the Group. The Audit Committee comprises of three independent non- executive Directors, namely Mr. Fung Tze Wa (Chairman), Mr. Ting Wong Kacee and Mr. Tse Ting Kwan.

The Audit Committee has reviewed the unaudited condensed consolidated financial information for the six months ended 30 June 2020.

CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted the Model Code, set out in Appendix 10 to the Listing Rules as its code of conduct regarding securities transactions of the directors of the Company. On specific enquiries made, all directors have confirmed that they have complied with the required standard as set out in the Model Code during the six months ended 30 June 2020.

Employees who are likely to be in possession of unpublished price sensitive information of the Company are also subject to compliance with guidelines on no less exacting terms than the Model Code.

By order of the Board

Imperium Group Global Holdings Limited

Cheng Ting Kong

Chairman

Hong Kong, 7 August 2020

As at the date of this announcement, the executive Directors are Mr. Cheng Ting Kong, Ms. Yeung So Mui, Mr. Luk Wai Keung and Mr. Leung Kwok Yin; and the independent non-executive Directors are Mr. Fung Tze Wa, Mr. Ting Wong Kacee and Mr. Tse Ting Kwan.

- 37 -