Financial Statements and Related Announcement::Second Quarter and/ or - - PDF document

Financial Statements and Related Announcement::Second Quarter and/ or Half Yearly Results Issuer & Securities Issuer/ Manager IFS CAPITAL LIMITED Securities IFS CAPITAL LIMITED - SG1A35000706 - I49 Stapled Security No Announcement Details Announcement Title Financial Statements and Related Announcement Date & Time of Broadcast 12-Aug-2015 19:49:27 Status New Announcement Sub Title Second Quarter and/ or Half Yearly Results Announcement Reference SG150812OTHRSR0R Submitted By (Co./ Ind. Name) Chionh Yi Chian Designation Company Secretary Description (Please provide a detailed description of the event in the box below - Refer to the Online help for the format) The following are attached: (1) Second Quarter and Half Year Financial Results for the period ended 30 June 2015 (2) Presentation Slides for the Half Year 2015 Results Additional Details For Financial Period Ended 30/06/2015 Attachments 2QHY2015FinancialResults.pdf HY2015PresentationSlides.pdf Total size =209K

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Page No. 2 - 3 4 - 5 6 7 - 8 9 9 10 - 12 13 -14 14 14 15 15 15 16 16 17 17 18 19

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1

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Second Qua Period Ende

1(a)(i) Consol Interes Interes Net inte Gross w Chang unex Gross Written Reinsu provis Reinsu Net earn Fee an Investm Other i Non-inte Income Busine Comm Staff co Genera Operati Chang Reinsu provis Gross Reinsu Net clai Operati Allowan impair (Loss)/p Tax exp (Loss)/p (Loss)/p Owner Non-c (Loss)/p

stration no: 1987

arter And H ed 30 June 2

idated Statem st income st expense erest income written premium e in gross prov xpired risks earned premiu n premiums ced urers’ share of c sion for unexpir ured premium e ned premium nd commission ment income ncome erest income before operat ess developmen ission expense

• sts

al and administ ng expenses e in provision f urers’ share of c sion for insuran claims paid urers’ share of c ms incurred ng profit befo ces for loan los rment of investm profit before ta ense profit for the p profit attributa rs of the Comp

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ment of Profit ms vision for m revenue ded to reinsure change in red risks expense revenue income ting expenses nt expenses es trative expense for insurance cl change in nce claims claims paid re allowances sses and ments ax period able to: pany erests period

audited Fin

t or Loss for t Note 1(a) (ii) rs (a) (b) (c) (d) s es laims (e) s (f)

ancial State

the Second Q 2nd Q 2015 S$’000 6,241 (1,752) 4,489 1,385 752 2,137 (587) (619) (1,206) 931 1,740 905 70 2,715 8,135 (224) (171) (2,981) (2,084) (5,460) (1,561) 1,015 (71) 1 (616) 2,059 (2,187) (128) (41) (169) (474) 305 (169)

ements and

Quarter And H uarter 2014 S$’000 6,178 (1,491) 4,687 1,639 917 2,556 (941) (656) (1,597) 959 2,876 817 104 3,797 9,443 (173) (141) (3,417) (1,782) (5,513) 2,002 (1,498) (4,379) 3,059 (816) 3,114 (2,174) 940 (237) 703 372 331 703

Dividend A

Half-Year Ende +/(-) % 20 S$ 1.0 12, 17.5 (3, (4.2) 9, (15.5) 3, (18.0) 1, (16.4) 4, (37.6) (1, (5.6) (1, (24.5) (2, (2.9) 2, (39.5) 3, 10.8 1, (32.7) (28.5) 5, (13.9) 17, 29.5 ( 21.3 ( (12.8) (6, 16.9 (3, (1.0) (10, NM ( NM (98.4) (100.0) (24.5) ( (33.9) 5, 0.6 (4, NM (82.7) ( NM NM ( (7.9) NM

Announceme

ed 30 June 1st Half 015 ’000 2 S$ ,711 12 ,487) (2 ,224 9 ,684 4 ,261 ,945 4 ,809) (2 ,096) ,905) (3 ,040 1 ,753 4 ,894 1 157 ,804 7 ,068 17 (370) (360) ,486) (6 ,697) (3 ,913) (10 (765) 1 363 (1 (88) (4 (18) 3 (508) ,647 6 ,881) (3 766 2 (306) 460 1 (159) 1 619 460 1 2

ent for the

014 $’000 +/(-) % 2,058 5.4 ,954) 18.0 9,104 1.3 4,353 (15.4 603 109.1 4,956 (0.2 ,291) (21.0 (825) 32.8 3,116) (6.8 ,840 10.9 4,789 (21.6 ,933 (2.0 327 (52.0 7,049 (17.7 7,993 (5.1 (371) (0.3 (287) 25.4 6,828) (5.0 3,338) 10.8 0,824) 0.8 ,812 NM ,439) NM 4,387) (98.0 3,057 NM (957) (46.9 6,212 (9.1 3,765) 29.6 2,447 (68.7 (571) (46.4 ,876 (75.5 ,242 NM 634 (2.4 ,876 (75.5 4 3 4) 1 2) 0) 8 8) 9 6) 0) 0) 7) 1) 3) 4 0) 8 8 0) 9) 1) 6 7) 4) 5) 4) 5)

3 Consolidated Statement of Comprehensive Income for the Second Quarter And Half-Year Ended 30 June Note 2nd Quarter 1st Half 1(a) (ii) 2015 S$’000 2014 S$’000 +/(-) % 2015 S$’000 2014 S$’000 +/(-) % (Loss)/profit for the period (169) 703 NM 460 1,876 (75.5) Other comprehensive income Items that are or may be reclassified subsequently to profit or loss Net change in fair value of available-for-sale financial assets (g) 510 (5) NM 675 171 NM Net change in fair value of available-for-sale financial assets reclassified to profit or loss (h) (506)

• NM

(747) (1,067) (30.0) Foreign currency translation differences

• f foreign operations

(i) (2,866) (985) 191.0 (787) 143 NM Tax on other comprehensive income (1)

• NM

12 152 (92.1) Other comprehensive income for the period, net of tax (2,863) (990) 189.2 (847) (601) 40.9 Total comprehensive income for the period (3,032) (287) NM (387) 1,275 NM Attributable to: Owners of the Company (2,673) (532) NM (933) 651 NM Non-controlling interests (359) 245 NM 546 624 (12.5) Total comprehensive income for the period (3,032) (287) NM (387) 1,275 NM

NM – not meaningful/more than +/- 200%

4 1(a)(ii) Explanatory Notes to Consolidated Statement of Profit or Loss The following items have been included in arriving at Group net (loss)/profit for the period: 2nd Quarter 1st Half 2015 S$’000 2014 S$’000 +/(-) % 2015 S$’000 2014 S$’000 +/(-) % Investment income

• dividend, fee and interest income

692 416 66.3 1,051 774 35.8

• gain on disposal of equity securities

33 128 (74.2) 88 114 (22.8)

• gain on partial redemption of convertible loan

506

• NM

747 1,067 (30.0)

• net change in fair value of financial assets

at fair value through profit or loss (267) 275 NM 3 (23) NM

• amortisation of held-to-maturity debts securities

(18) (2) NM (42) 1 NM

• exchange (loss)/gain

(41)

• NM

47

• NM

905 817 10.8 1,894 1,933 (2.0) Gain on disposal of property, plant and equipment 16

• NM

16 6 166.7 Amortisation of intangible assets (103) (56) 83.9 (189) (159) 18.9 Depreciation of property, plant and equipment (259) (247) 4.9 (529) (487) 8.6 Foreign currency differences

• exchange loss, net

(153) (68) 125.0 (124) (49) 153.0

• fair value gain on foreign exchange

forward contracts 1

• NM

1

• NM

(152) (68) 123.5 (123) (49) 151.0 Reversal of/(provision for) unexpired risks, net of reinsurers’ share

• change in gross provision for unexpired risks

752 917 (18.0) 1,261 603 109.1

• reinsurers’ share of change in

provision for unexpired risks (619) (656) (5.6) (1,096) (825) 32.8 133 261 (49.0) 165 (222) NM Claims incurred, net of reinsurers’ share

• net change in provision for insurance claims

(546) 504 NM (402) 373 NM

• net claims paid

(70) (1,320) (94.7) (106) (1,330) (92.0) (616) (816) (24.5) (508) (957) (46.9) (Allowances for)/reversal of loan losses and impairment of investments

• loans and receivables

(2,187) (2,183) 0.2 (4,881) (3,623) 34.7

• equity securities
• 9

(100.0)

• (142)

(100.0) (2,187) (2,174) 0.6 (4,881) (3,765) 29.6 Tax expense

• current tax expense

(241) (411) (41.4) (586) (707) (17.1)

• deferred tax credit

200 174 14.9 345 140 146.4

• underprovision of prior years’ tax
• (65)

(4) NM (41) (237) (82.7) (306) (571) (46.4)

5

1(a)(ii) Explanatory Notes to Consolidated Statement of Profit or Loss (cont’d) Comments on Major Consolidated Statement of Profit or Loss and Consolidated Statement of Comprehensive Income Variances (a) The decline in gross written premiums of the insurance subsidiary, ECICS Limited (“ECICS”) for 2nd Quarter 2015 (“2Q 2015”) and 1st Half 2015 (“1H 2015”) was largely due to lower bonds and guarantee business. Taking into account the change in gross provision for unexpired risks, gross earned premium revenue decreased 16% to $2.1 million for 2Q 2015 and remained almost flat at $4.9 million for 1H 2015. However, with lower premium ceded to reinsurers, net earned premium revenue dropped 3% to $0.9 million for 2Q 2015 but increased 11% to $2.0 million for 1H 2015. (b) The lower fee and commission income for 2Q 2015 and 1H 2015 was mainly due to lower reinsurance commission received and lower loans fee earned. (c) The higher investment income for 2Q 2015 was mainly from gain on partial redemption of convertible loan and higher dividend income, partly offset by fair value loss. For 1H 2015, investment income was largely flat with lower realised gain on partial redemption of convertible loan, mitigated by higher dividend income. The gain on partial redemption of convertible loan for both 1H 2015 and 1st Half 2014 (“1H 2014”) was reclassified from other comprehensive income. (d) The lower other income for both 2Q 2015 and 1H 2015 was mainly due to lower bad debts recoveries from factoring and loan accounts previously written off. (e) The lower net claims incurred for both 2Q 2015 and 1H 2015 was mainly due to lower net claims paid on bond calls. (f) The higher allowances for loan losses and impairment of investments for 1H 2015 were mainly due to higher individual impairment on loans. (g) The increase in the net change in fair value of available-for-sale financial assets for 2Q 2015 and 1H 2015 resulted mainly from the mark-to-market gain on an equity security and property- related projects. (h) For both 1H 2015 and 1H 2014, there was a reclassification from other comprehensive income

• net change in fair value of available-for-sale financial assets to realised gain as explained in

(c) above. (i) The foreign currency translation differences arose from the translation of financial statements of foreign operations whose functional currencies were different from that of the Group’s presentation currency. The translation loss for 2Q 2015 and 1H 2015 was mainly due to the weakening of Indonesian Rupiah and Thai Baht for translation against the Singapore Dollar as at 31 March 2015 and 31 December 2014 respectively.

6

1(a)(iii) (Loss)/Earnings Per Ordinary Shares

Group 2nd Quarter 1st Half 2015 2014 2015 2014 (Loss)/earnings per ordinary share

• on weighted average number of ordinary shares in issue (cents)

(0.32) 0.25 (0.11) 0.83

• on fully diluted basis (cents)

(0.32) 0.25 (0.11) 0.83

(Loss)/earnings per ordinary share on existing issued share capital is computed based on the weighted average number of shares in issue during the financial period of 150,387,866 (30 June 2014: 150,387,866). The basic and fully diluted (loss)/earnings per ordinary share are the same as the Group did not have any potential dilutive ordinary share outstanding for the above reporting financial periods.

7

1(b)(i) Statements of Financial Position

Group Company Note 30/06/2015 S$’000 31/12/2014 S$’000 30/06/2015 S$’000 31/12/2014 S$’000 Non-current assets Property, plant and equipment 18,142 17,231 14,801 15,111 Intangible assets 831 642 145 184 Investment property (a) 1,322

• Subsidiaries
• 75,845

75,845 Other investments (b) 55,129 48,704 8,172 7,000 Loans, advances, hire purchase and leasing receivables (c) 57,640 48,785 47,079 40,483 Deferred tax assets 6,966 6,832 427 230 140,030 122,194 146,469 138,853 Current assets Reinsurers’ share of insurance contract provisions 18,377 19,110

• Insurance receivables

727 1,052

• Trade and other receivables

(d) 217,101 212,745 111,838 107,246 Other investments (e) 20,788 24,794 497

• Derivative financial assets

80 190 80 190 Cash and cash equivalents 23,622 24,013 8,111 7,510 Assets held for sale 171 167

• 280,866

282,071 120,526 114,946 Total assets 420,896 404,265 266,995 253,799 Equity Share capital 88,032 88,032 88,032 88,032 Other reserves (4,373) (3,599) 992 863 Accumulated profits 33,733 36,148 25,167 27,585 Equity attributable to

• wners of the Company

117,392 120,581 114,191 116,480 Non-controlling interests 11,014 11,221

• Total equity

128,406 131,802 114,191 116,480 Non-current liabilities Interest-bearing borrowings (f) 35,233 46,683 28,212 35,610 Employee benefits 1,009 931

• 36,242

47,614 28,212 35,610 Current liabilities Trade and other payables 6,101 8,275 2,069 5,068 Insurance payables 2,270 2,418

• Interest-bearing borrowings

(f) 216,746 182,419 122,067 96,173 Insurance contract provisions for

• gross unexpired risks

12,251 13,512

• gross insurance claims

17,670 16,905

• Current tax payable

1,210 1,320 456 468 256,248 224,849 124,592 101,709 Total liabilities 292,490 272,463 152,804 137,319 Total equity and liabilities 420,896 404,265 266,995 253,799

8

Comments on Major Statements of Financial Position Variances (a) The increase in investment property of the Group was due to the reclassification from non- current assets - property, plant and equipment, as part of the new office unit purchased by our Thailand subsidiary was recently leased out. (b) The increase in other investments under non-current assets was mainly due to ECICS’ purchase of debts securities. (c) The increase in loans, advances, hire purchase and leasing receivables under non-current assets of the Group and the Company was mainly due to the Company’s and its local subsidiary, IFS Capital Assets Private Limited’s new loans drawdown. (d) The increase in trade and other receivables under current assets of the Group and the Company was mainly due to higher factoring receivables recorded by the Company and its Indonesian subsidiary. (e) The decrease in other investments under current assets of the Group was mainly due to maturity of ECICS’ held-to-maturity debt securities. The investment at Company level related to the conversion of a convertible loan into equity. (f) The decrease in interest-bearing borrowings under non-current liabilities of the Group and the Company was mainly due to the reclassification of interest-bearing borrowings maturing within the next twelve months to current liabilities. This has resulted in the negative working capital at the Company level. The Group’s overall interest-bearing borrowings increased from $229.1 million as at 31 December 2014 to $252.0 million as at 30 June 2015 mainly due to additional bank borrowings to fund factoring business and new loans drawdown.

9

1(b)(ii) Group’s Borrowings Unsecured As at 30/06/2015 S$’000 As at 31/12/2014 S$’000 Amount repayable in one year or less, or on demand 216,746 182,419 Amount repayable after one year 35,233 46,683 251,979 229,102 Details of any collateral Nil. 1(b)(iii) Net Asset Value Group Company 30/06/2015 31/12/2014 30/06/2015 31/12/2014 Net asset value per ordinary share based on issued share capital at end of the financial period (cents) 78.1 80.2 75.9 77.5

10

1(c) Consolidated Statement of Cash Flows for the Second Quarter And Half-Year Ended 30 June

2nd Quarter 1st Half Note 2015 S$’000 2014 S$’000 2015 S$’000 2014 S$’000 Cash flows from operating activities (Loss)/profit for the period (169) 703 460 1,876 Adjustments for: Amortisation of intangible assets and held-to-maturity debt securities 121 58 231 158 Net foreign exchange (gain)/loss (23) 29 (112) 24 Depreciation of property, plant and equipment 259 247 529 487 Gain on disposal of equity securities (33) (128) (88) (114) Gain on partial redemption of convertible loans (506)

• (747)

(1,067) Gain on disposal of property, plant and equipment (16)

• (16)

(6) Net change in fair value of financial assets at fair value through profit or loss 267 (275) (3) 23 Allowance for impairment of investments

• (9)
• 142

(Reversal of)/provision for, net of reinsurers’ share

• unexpired risks

(133) (261) (165) 222

• insurance claims

546 (504) 402 (373) Interest income (6,241) (6,178) (12,711) (12,058) Interest income from investments and fixed deposits (298) (280) (597) (510) Dividend income from investments (394) (136) (454) (264) Interest expense 1,752 1,491 3,487 2,954 Fixed assets written off

• 18
• 18

Tax expense 41 237 306 571 Operating cashflows before changes in working capital (4,827) (4,988) (9,478) (7,917) Changes in working capital: Factoring receivables (1,648) 285 (4,104) 10,442 Factoring amounts due to clients 123 (276) (228) (537) Loans, advances, hire purchase and leasing receivables (11,032) 109 (9,041) (7,742) Insurance and other receivables (2,202) (1,330) (1,845) (934) Assets held for sale (3)

• (12)
• Trade, other and insurance payables

(326) (1,142) (1,697) (3,106) Cash used in operations (19,915) (7,342) (26,405) (9,794) Interest received 6,447 6,328 13,333 12,418 Interest paid (1,766) (1,485) (3,452) (3,013) Taxes paid, net (733) (1,228) (694) (1,567) Net cash used in operating activities (a) (15,967) (3,727) (17,218) (1,956)

11

1(c) Consolidated Statement of Cash Flows for the Second Quarter And Half-Year Ended 30 June (cont’d)

2nd Quarter 1st Half Note 2015 S$’000 2014 S$’000 2015 S$’000 2014 S$’000 Cash flows from investing activities Proceeds from sale of property, plant and equipment 15

• 15

6 Purchase of property, plant and equipment ^^ 1,322 (161) (1,453) (376) Purchase of investment property (1,328)

• (1,328)
• Purchase of intangible assets

(52) (382) (379) (401) Purchase of investments (10,168) (17,090) (16,498) (23,680) Proceeds from redemption/disposal of investments 8,122 1,692 14,959 6,079 Dividend received from investments 394 136 454 264 Net cash used in investing activities (b) (1,695) (15,805) (4,230) (18,108) Cash flows from financial activities Dividends paid

• by the Company

(2,256) (3,008) (2,256) (3,008)

• by a subsidiary company to non-controlling interests

(753) (660) (753) (660) Proceeds from interest-bearing borrowings 16,695 2,900 24,155 (1,720) Net cash from/(used in) financing activities (c) 13,686 (768) 21,146 (5,388) Net decrease in cash and cash equivalents (d) (3,976) (20,300) (302) (25,452) Cash and cash equivalents at beginning of period 28,043 57,175 24,013 62,142 Effect of exchange rate fluctuations on cash held (445) (184) (89) 1 Cash and cash equivalents at end of period 23,622 36,691 23,622 36,691 Analysis of cash and cash equivalents Fixed deposits 11,159 23,007 11,159 23,007 Cash at banks and on hand 12,463 13,684 12,463 13,684 Cash and cash equivalents at end of period 23,622 36,691 23,622 36,691

^^ $1,322 was due to the reclassification of an office unit purchased by our Thailand subsidiary to investment property during the second quarter of 2015 as explained in (a) of the Comments on Major Statements of Financial Position Variances under Page 8.

12

Explanatory Notes to Consolidated Statement of Cash Flows (a) Net cash used in operating activities The higher net cash used in operating activities in 2Q 2015 and 1H 2015 was mainly due to higher drawdown of factoring receivables as well as loans, advances, hire purchase and leasing receivables as compared to the same periods last year. (b) Net cash used in investing activities The lower net cash used in investing activities in 2Q 2015 and 1H 2015 was mainly due to lower purchase of investments, partly offset by higher proceeds from redemption/disposal of investments as compared to the same periods last year. Details of the purchase of investments of $10.2 million and proceeds from redemption/disposal of investments of $8.1 million in 2Q 2015 were as follows:- Details Purchase of investments Proceeds from redemption/ disposal of investments S$’000 S$’000 ECICS Limited *

• Quoted equity securities

3,668 2,295

• Unquoted debts securities

6,000 3,500 IFS Group (excluding ECICS Limited)

• Quoted equity securities

500

• Unquoted debt securities
• 800
• Convertible loan
• 1,527

Total 10,168 8,122

* MAS regulated insurance company, within the exception of Rules 704(17) and 704(18) of the Listing Manual.

(c) Net cash from/(used in) financing activities The net cash from financing activities in 2Q 2015 and 1H 2015 was mainly due to higher proceeds from interest-bearing borrowings to fund drawdown of factoring receivables and new loans, partly offset by lower dividend payments as compared to the same periods last year. (d) Net decrease in cash and cash equivalents Overall, the lower net decrease in cash and cash equivalents for 2Q 2015 and 1H 2015 was mainly due to higher proceeds from interest-bearing borrowings, lower purchase of investments and higher proceeds from redemption/disposal of investments, partly offset by higher drawdown

• f factoring receivables and new loans as compared to the same periods last year.

13

1(d)(i) Statements of Changes in Equity

Attributable to owners of the Company Group Share capital S$’000 Capital reserve S$’000 Fair value reserve S$’000 Translation reserve S$’000 Accumulated profits S$’000 Total S$’000 Non- controlling interests S$’000 Total equity S$’000 2014 At 1 January 2014 88,032 (236) 1,507 (8,794) 47,047 127,556 10,078 137,634 Total comprehensive income for 1st quarter Profit for 1st quarter

• 870

870 303 1,173 Other comprehensive income

• (739)

1,052

• 313

76 389 Total comprehensive income for 1st quarter

• (739)

1,052 870 1,183 379 1,562 At 31 March 2014 88,032 (236) 768 (7,742) 47,917 128,739 10,457 139,196 Total comprehensive income for 2nd quarter Profit for 2nd quarter

• 372

372 331 703 Other comprehensive income

• (5)

(899)

• (904)

(86) (990) Total comprehensive income for 2nd quarter

• (5)

(899) 372 (532) 245 (287) Dividends paid to owners

• f the Company
• (3,008)

(3,008)

• (3,008)

Dividends paid to non- controlling interests

• (660)

(660) At 30 June 2014 88,032 (236) 763 (8,641) 45,281 125,199 10,042 135,241 2015 At 1 January 2015 88,032 (39) 3,702 (7,262) 36,148 120,581 11,221 131,802 Total comprehensive income for 1st quarter Profit for 1st quarter

• 315

315 314 629 Other comprehensive income

• (63)

1,488

• 1,425

591 2,016 Total comprehensive income for 1st quarter

• (63)

1,488 315 1,740 905 2,645 At 31 March 2015 88,032 (39) 3,639 (5,774) 36,463 122,321 12,126 134,447 Total comprehensive income for 2nd quarter (Loss)/profit for 2nd quarter

• (474)

(474) 305 (169) Other comprehensive income

• 3

(2,202)

• (2,199)

(664) (2,863) Total comprehensive income for 2nd quarter

• 3

(2,202) (474) (2,673) (359) (3,032) Dividends paid to owners

• f the Company
• (2,256)

(2,256)

• (2,256)

Dividends paid to non- controlling interests

• (753)

(753) At 30 June 2015 88,032 (39) 3,642 (7,976) 33,733 117,392 11,014 128,406

14

1(d)(i) Statements of Changes in Equity (cont’d)

Company Share capital $’000 Fair value reserve S$’000 Accumulated profits S$’000 Total equity S$’000 2014 At 1 January 2014 88,032 1,485 22,445 111,962 Total comprehensive income for 1st quarter Profit for 1st quarter

• 393

393 Other comprehensive income

• (749)
• (749)

Total comprehensive income for 1st quarter

• (749)

393 (356) At 31 March 2014 88,032 736 22,838 111,606 Total comprehensive income for 2nd quarter Profit for 2nd quarter

• 72

72 Other comprehensive income

• 35
• 35

Total comprehensive income for 2nd quarter

• 35

72 107 Dividend paid

• (3,008)

(3,008) At 30 June 2014 88,032 771 19,902 108,705 2015 At 1 January 2015 88,032 863 27,585 116,480 Total comprehensive income for 1st quarter Loss for 1st quarter

• (1,221)

(1,221) Other comprehensive income

• 25
• 25

Total comprehensive income for 1st quarter

• 25

(1,221) (1,196) At 31 March 2015 88,032 888 26,364 115,284 Total comprehensive income for 2nd quarter Profit for 2nd quarter

• 1,059

1,059 Other comprehensive income

• 104
• 104

Total comprehensive income for 2nd quarter

• 104

1,059 1,163 Dividend paid

• (2,256)

(2,256) At 30 June 2015 88,032 992 25,167 114,191

1(d)(ii) Changes in Company’s Share Capital Since 31 December 2014, there was no change in the issued share capital of the Company. The share capital of the Company as at 30 June 2015 was 150,387,866 ordinary shares. There were no outstanding convertibles as at 30 June 2015 (30 June 2014: Nil). 1(d)(iii) Total Number of Issued Shares Excluding Treasury Shares The total number of issued shares as at 30 June 2015 was 150,387,866 (31 December 2014: 150,387,866 issued shares). The Company does not hold any treasury shares as at 30 June 2015 (30 June 2014: Nil).

15

1(d)(iv) Sales, Transfers, Disposal, Cancellation and/or use of Treasury Shares Not applicable. 2 Audit The figures have not been audited or reviewed by the Company’s auditors. 3 Auditors’ Report Not applicable. 4 Accounting Policies Except as disclosed in paragraph 5, the Group has applied the same accounting policies and methods

• f computation in the financial statements for the current financial period as compared with those of the

audited annual financial statements for the year ended 31 December 2014. 5 Changes in Accounting Policies The financial statements are prepared in accordance with Singapore Financial Reporting Standards (FRSs). For the current financial period, the Group adopted the new/revised FRSs that are effective for annual periods beginning on or after 1 January 2015. The following are the new or amended FRSs that are relevant to the Group:

• Amendments to FRS 19 Defined Benefit Plans: Employee Contributions
• Improvements to FRSs (January 2014)
• Improvements to FRSs (February 2014)

The adoption of the above amended FRS does not have any significant impact on the financial statements for the financial period under review.

16

6 Review of Group Performance 2nd Quarter 2015 (“2Q 2015”) versus 2nd Quarter 2014 (“2Q 2014”) Group’s operating profit before allowances for 2Q 2015 of $2.1 million was 34% lower compared to $3.1 million for 2Q 2014 due to lower operating income, mitigated by lower operating expenses and net claims incurred. After taking into account the allowances for loan losses, the Group reported a net loss

• f $169,000 compared to a net profit of $0.7 million for 2Q 2014.

1st Half 2015 (“1H 2015”) versus 1st Half 2014 (“1H 2014”) The Group’s operating income for 1H 2015 of $17.1 million was 5% lower compared to 1H 2014 mainly due to lower non-interest income but helped by higher net interest income and net earned premium

• revenue. After taking into account a lower net claims incurred and marginal increase in operating

expenses, the Group’s operating profit before allowances of $5.6 million was 9% lower compared to $6.2 million a year ago. With higher allowances for loan losses, the Group reported a lower net profit of $460,000 compared to $1.9 million in 1H 2014. Net loss attributable to shareholders after non-controlling interests (“NCI”) was $159,000. The Group’s gross loan assets including factoring receivables outstanding were $355.2 million as at 30 June 2015. This was an increase of 3% and 6% against the bases of $345.5 million as at 31 December 2014 and $336.2 million as at 30 June 2014 respectively due to higher factoring receivables and new loans drawdown. For the regional operations, our Thailand subsidiary’s net profit after NCI was almost flat at $1.7

• million. Our Indonesia subsidiary posted a net loss of $168,000 compared to a net profit of $127,000 in

1H 2014, mainly impacted by higher allowances for loan losses. Our Malaysia subsidiary reported a lower net loss of $145,000 compared to $168,000 in 1H 2014 mainly on lower operating expenses. Overall, regional operations recorded a 23% decrease in net profit after NCI of $1.0 million compared to $1.3 million in 1H 2014. 7 Variance from Prospect Statement The current announced results are in line with the prospect statement as disclosed in the Group’s 1st Quarter 2015 results announcement dated 8 May 2015.

17

8 Prospects The regional business environment remains challenging, with economic growth slowing and sharp currency depreciation. Business volumes in Singapore continued to improve in the second quarter of 2015 as compared to same quarter last year with factoring and loan volumes growing by 7% and 18% respectively. Our pipeline deals indicate that growth will continue. In Thailand, economic activity is likely to slow in the second half of the year, hurting business volumes. However, our subsidiary should remain profitable. In Malaysia, business volumes have picked up and are expected to increase further, while losses are expected to narrow in the second half of the year. For Indonesia, we continue to manage our existing portfolios and our focus is on credit risk management. While ECICS’ bonds and guarantee businesses have scaled down, the general insurance volumes continue to improve. ECICS will focus on full range of general insurance products through engagement of more agents or brokers as well as promotion campaigns. 9 Dividend (a) Current financial period reported on Nil. (b) Corresponding period of the immediately preceding financial year Nil. (c) Dividend payment date Not applicable. (d) Book closure date Not applicable. 10 If no dividend has been declared (recommended), a statement to that effect No dividend is declared for the period ended 30 June 2015 (30 June 2014: Nil).

18

11 Interested Person Transactions Mandate There is no general mandate obtained from shareholders on Interested Person Transactions. By Order of the Board Chionh Yi Chian Company Secretary 12 August 2015

IFS Capital Limited

IFS Capital Limited Half Year 2015 Unaudited Results Presentation 13 August 2015

1

IFS Capital Limited

Contents

S lide

1. Highlights 3 - 5 2. (a) Group S tatement of Profit or Loss 6 (b) Group S tatement of Comprehensive Income 7 (c) Group Operating Expenses 8 3. Key Financial Ratios 9 4. Group Performance Review 10 - 11

• 5. Results of S

ubsidiaries

• Regional Operations

12 - 13

• ECICS

14 - 15

• 6. Prospects

16 2

Disclaimer The following presentation may contain forward looking statements by the management of IFS Capital Limited (“ IFS ") relating to events and financial trends or performance for future period. S uch forward looking statements are based on current views of management and a number of estimates and assumptions including, but not limited to, prevailing economic and market conditions, which are subj ect to uncertainties as these may change over time. In many cases these are outside the control of IFS and thus no assurance can be given that these events or financial trends or performance will happen. In part icular, such statement s are not, and should not be construed, as a representation as to or a forecast or proj ection of the future performance of IFS . It should be noted t hat t he actual performance of IFS may vary significantly from such statements. This presentation is not and does not constitute or form part of any offer, invitation, advice or recommendation to sell, purchase or subscribe for any securities and no part of it shall form the basis or be relied upon in connection with any contract, commitment or investment decision in relation thereto. This presentation may not be used or relied upon by any third party, or for any other purposes, and may not be reproduced, disseminated or quoted without the prior written consent of IFS . “ $” means S ingapore dollars unless otherwise indicated. IFS Capital Limited (Reg. No. 198700827C)

IFS Capital Limited

3

Highlights



Lower Group net profit of $460,000 (1H 2014: $1.9m).



Higher net earned premium revenue of $2.0m (1H 2014: $1.8m).



Lower non-interest income of $5.8m (1H 2014: $7.0m).



Operating expenses little changed at $10.9m (1H 2014: $10.8m).



Lower net claims incurred of $508,000 (1H 2014: $957,000).



Higher allowances for loan losses of $4.9m (1H 2014: $3.8m).



After non-controlling interests (“ NCI” ), loss attributable to shareholders was $159,000 (1H 2014: profit of $1.2m).

IFS Capital Limited

4

Highlights (cont’d)



Regional operations posted lower net profit after NCI of $1.0m (1H 2014: $1.3m).



EPS (cents) : Loss 0.11(1H 2014: Earning 0.83) NAV per S hare (cents) : 78.1 (FY 2014: 80.2)



S table net interest margin at around 5.9% .

IFS Capital Limited

5

Highlights (cont’d)

2Q 2015 vs 1Q 2015



Turnaround in 2Q 2015 business volume in S ingapore and Malaysia.



While factoring volume under S ingapore financing

• perations

remains unchanged, loan business volume grew by 28% , resulting in improvement in performance Q-o-Q.



S ingapore financing operations reported lower net loss before tax of $175,000 (1Q 2015: $1.4m).



However, such improvement was dragged down by losses reported by subsidiaries in Indonesia and ECICS .



Group loss before tax and NCI was $128,000.

IFS Capital Limited

6

Group Statement of Profit or Loss

($’000)

1H 2015 1H 2014 +/(-) %

Net Interest Income 9,224 9,104 1.3 Net Earned Premium Revenue ^ 2,040 1,840 10.9 Non-Interest Income 5,804 7,049 (17.7) Total Income 17,068 17,993 (5.1) Operating Expenses (10,913) (10,824) 0.8 Operating Profit before Net Claims & Allowances 6,155 7,169 (14.1) Net Claims Incurred (508) (957) (46.9) Allowances & Impairments (4,881) (3,765) 29.6 Profit before Tax 766 2,447 (68.7) Tax Expense (306) (571) (46.4) Profit after Tax 460 1,876 (75.5) Attributable (Loss)/Profit after NCI (159) 1,242 NM ^ After intra-group transactions elimination NM –not meaningful/more than +/- 200%

IFS Capital Limited

($’000)

1H 2015 1H 2014 +/(-) %

Profit for the period 460 1,876 (75.5) Other comprehensive income

Items that are or may be reclassified subsequently to profit

• r loss

Net change in fair value of available-for-sale financial assets 675 171 NM Net change in fair value of available-for-sale financial assets reclassified to profit or loss (747) (1,067) (30.0) Foreign currency translation differences of foreign

• perations

(787) 143 NM Tax on other comprehensive income 12 152 (92.1) Other comprehensive income for the period (847) (601) 40.9 Total comprehensive income for the period (387) 1,275 NM

7

Group Statement of Comprehensive Income

IFS Capital Limited

8

Group Operating Expenses

($’000)

1H 2015 % 1H 2014 % +/(-) %

Commission 360 3.3 287 2.6 25.4 Business Development 370 3.4 371 3.4 (0.3) Staff Costs 6,486 59.4 6,828 63.1 (5.0) Depreciation & Amortisation 718 6.6 646 6.0 11.1 General Administration 2,979 27.3 2,692 24.9 10.7 Total 10,913 100.0 10,824 100.0 0.8 Cost-to-Income Ratio 62.7% 58.9% 6.5

Total operating expenses for 1H 2015 of 10.9m were comparable to 1H 2014

IFS Capital Limited

9

Key Financial Ratios

1H 2015 1H 2014 % Return on Ave Equity –After Tax (% ) (0.1) 1.0 NM Earnings per Ordinary Share (cts) (0.11) 0.83 NM Net Asset Value per Share (cts) 78.1 83.3 (6.2) Leverage (times) 2.52 2.12 18.9 Gross Gearing (times) 2.15 1.78 20.8

IFS Capital Limited

10

Group Performance Review – 1H 2015 vs 1H 2014



Group’s operating income of $17.1m was $0.9m or 5% lower compared to 1H 2014 of $18.0m mainly due to:

• Lower fee and commission income largely on lower reinsurance commission

received and lower loans fee earned.

• Lower other income largely on lower bad debts recoveries, partly offset

by:

• Higher net earned premium of $2.0m (1H 2014: $1.8m) on lower premium

ceded to reinsurers.

IFS Capital Limited

11

Group Performance Review – 1H 2015 vs 1H 2014 (cont’d)



Group’s operating expenses almost flat at $10.9m (1H 2014: $10.8m).



With lower net claims incurred of $0.5m (1H 2014: $1.0m) mainly due to lower net claims paid

• n

bond calls, Group’s operating profit before allowances was $5.6m, 9%lower compared to $6.2m in 1H 2014.



Due to higher allowances for loan losses of $4.9m (1H 2014: $3.8m), net profit after tax was lower at $460,000 compared to $1.9m in 1H 2014.



Net loss attributable to shareholders after NCI was $159,000 (1H 2014: profit

• f $1.2m).



Group’s gross loan assets including factoring receivables outstanding were $355.2m, increased 3% and 6% against the bases of $345.5m as at 31 December 2014 and $336.2m as at June 30 2014 respectively due to higher factoring receivables and new loans drawdown.

IFS Capital Limited

12

Regional Operations –Thailand, Indonesia & Malaysia

($’000)

1H 2015 1H 2014 +/(-) %

Net Interest Income 5,600 5,354 4.6 Non-Interest Income 2,883 3,018 (4.5) Operating Expenses (3,875) (3,889) (0.4) Operating Profit before Allowances 4,608 4,483 2.8 Allowances (2,558) (1,974) 29.6 Profit before Tax 2,050 2,509 (18.3) Tax Expense (413) (548) (24.6) Profit after Tax (PAT) 1,637 1,961 (16.5) Group’s share of PAT based on %

• f shareholdings

1,018 1,327 (23.3)

IFS Capital Limited

13

Regional Operations (cont’d)

• Thailand, Indonesia & Malaysia



Thailand subsidiary’s net profit after NCI was almost flat at $1.7m.



Indonesia subsidiary posted a net loss of $168,000 (1H 2014: profit of $127,000) mainly impacted by higher allowances for loan losses.



Malaysia subsidiary reported a lower net loss of $145,000 compared to $168,000 in 1H 2014 mainly on lower operating expenses.

IFS Capital Limited

14

ECICS Limited

($’000)

1H 2015 1H 2014 +/(-) %

Gross Written Premiums 3,699 4,378 (15.5) Net Earned Premium Revenue 2,055 1,865 10.2 Fee and Investment Income 1,420 2,154 (34.1) Claims Incurred (508) (957) (46.9) Operating Expenses (2,875) (2,375) 21.1 Operating Profit before Allowances 92 687 (86.6) Reversal of Impairment on Insurance Receivables 158 122 29.5 Profit before Tax 250 809 (69.1) Tax Expense (45) (25) 80.0 Profit after Tax 205 784 (73.9)

N.B. (Before intragroup transactions elimination)

IFS Capital Limited

15

ECICS Limited (cont’d)



Net profit after tax lower at $205,000 (1H 2014: $784,000) due to lower fee and investment income and higher operating expenses, partly offset by higher net earned premium revenue and lower net claims incurred.



Higher net earned premium revenue of $2.1m (1H 2014: $1.9m) mainly due to lower premium ceded to reinsurers.



Lower underwriting commission fee income of $0.4m (1H 2014: $1.1m) mainly due to lower reinsurance commission received.



Lower net claims incurred of $508,000 (1H 2014: $957,000) mainly due to lower net claims paid on bond calls.



Remains substantially well capitalized above the minimum statutory requirement.

IFS Capital Limited

16

Prospects



Regional business environment remains challenging, with economic growth slowing and sharp currency depreciation.



Business volumes in S ingapore continued to improve in 2Q 2015 as compared to same quarter last year with factoring and loan volumes growing by 7% and 18%

• respectively. Pipeline deals indicate that growth will continue.



In Thailand, economic activity is likely t o slow in the 2nd half of the year. However, our subsidiary should remain profitable.



In Malaysia, business volumes have picked up and are expected to increase further, while losses are expected to narrow in the 2nd half of the year.



For Indonesia, we continue to manage our existing portfolios and our focus is on credit risk management.



While ECICS ’ bonds and guarantee businesses have scaled down, general insurance volumes continue to improve. ECICS will focus on full range of general insurance products through engagement of more agents or brokers as well as promotion campaigns.

IFS Capital Limited

17

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