abc Multiactive Limited - Annual Report 2005

abc Multiactive Limited �� !"#$%[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 8131)

ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 30 NOVEMBER 2005

CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET (“GEM”) OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE “STOCK EXCHANGE”)

GEM has been established as a market designed to accommodate companies to which a high investment risk may be attached. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. Furthermore, there may be risks arising out of the emerging nature of companies listed on GEM and the business sectors or countries in which the companies operate. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

The principal means of information dissemination on GEM is publication on the Internet website operated by the Stock Exchange. Listed companies are not generally required to issue paid announcements in gazetted newspapers. Accordingly, prospective investors should note that they need to have access to the GEM website in order to obtain up-todate information on GEM-listed issuers.

The Stock Exchange takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement, for which the directors of abc Multiactive Limited collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange for the purpose of giving information with regard to abc Multiactive Limited. The directors, having made all reasonable enquires, confirm that, to the best of their knowledge and belief: (1) the information contained in this announcement is accurate and complete in all material respects and not misleading; (2) there are no other matters the omission of which would make any statement in this announcement misleading; and (3) all opinions expressed in this announcement have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

For identification purposes only

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FINAL RESULTS

The board of directors (the “Board”) of abc Multiactive Limited (the “Company”) is pleased to announce the audited consolidated results of the Company and its subsidiaries (the “Group”) for the year ended 30 November 2005, together with the comparative figures for the previous year as follows:

CONSOLIDATED INCOME STATEMENT

Notes Turnover 3 Cost of sales Gross profit Other revenue 3 Other income 5 Software research and development expenses Selling and marketing expenses Administrative expenses (Loss)/profit from operating activities 5 Finance costs 6 (Loss)/profit before taxation Taxation 7 (Loss)/profit for the year (Loss)/earnings per share Basic 8 Dividends 9	2005 *HK$’000* 22,094 (8,308) 13,786 35 – (4,319) (3,886) (8,288) (2,672) (1,148) (3,820) – (3,820) HK(2.38) cents –	2004 HK$’000 23,050 (9,021) 14,029 64 2,972 (3,672) (4,523) (7,137) 1,733 (1,169) 564 – 564 HK0.35 cents –

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CONSOLIDATED BALANCE SHEET

at 30 November 2005

Notes Non-current assets Fixed assets 10 Current assets Inventories 11 Work in progress Trade and other receivables 12 Cash and bank balances Less: Current liabilities Trade and other payables 13 Deferred revenue Amounts due to customers Net current liabilities Total assets less current liabilities Less: Non-current liabilities Promissory notes payable to a shareholder 14 Promissory note payable to a related company 14 Amount due to the ultimate holding company 15 Net liabilities Represented by: Share capital 16 Reserves 17 Shareholders’ deficits	2005 *HK$’000* 408 131 513 3,285 3,726 7,655 7,586 3,070 666 11,322 (3,667) (3,259) 12,500 4,634 5,813 22,947 (26,206) 16,059 (42,265) (26,206)	2004 HK$’000 329 50 1,048 2,891 1,526 5,515 7,302 3,036 – 10,338 (4,823) (4,494) 9,500 4,634 6,021 20,155 (24,649) 16,059 (40,708) (24,649)

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 30 November 2005

At 1 December 2003 Exchange difference arising on translation of financial statements of foreign subsidiaries Profit for the year At 30 November 2004 and 1 December 2004 Exchange difference arising on translation of financial statements of foreign subsidiaries Loss for the year At 30 November 2005	Issued share capital HK$’000 16,059 – – 16,059 – – 16,059	Reserve Share Contributed Exchange Accumulated premium surplus reserve losses HK$’000 HK$’000 HK$’000 HK$’000 106,118 37,600 (10,507) (171,711) – – (2,772) – – – – 564 106,118 37,600 (13,279) (171,147) – – 2,263 – – – – (3,820) 106,118 37,600 (11,016) (174,967)	Total HK$’000 (22,441) (2,772) 564 (24,649) 2,263 (3,820) (26,206)
		Share Contributed premium surplus HK$’000 HK$’000 106,118 37,600 – – – – 106,118 37,600 – – – – 106,118 37,600

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Notes:

1. CORPORATE INFORMATION

The Company was incorporated in Bermuda on 2 March 2000 as an exempted company with limited liability under the Companies Act 1981 of Bermuda (as amended) and its shares are listed on the Growth Enterprise Market (“GEM”) of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). The registered office of the Company is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

The principal activity of the Company is investment holding.

The directors consider the Company’s ultimate holding company to be Maximizer Software Inc. (“MSI”), which was incorporated in Canada and listed on the Toronto Stock Exchange.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Hong Kong Institute of Certified Public Accountants (“HKICPA”) has issued a number of new and revised Hong Kong Financial Reporting Standards and Hong Kong Accounting Standards (collectively referred to as the “new HKFRSs”) which are effective for accounting periods commencing on or after 1 January 2005. The Group has not early adopted these new HKFRSs in the financial statements for the year ended 30 November 2005. The new HKFRSs may result in changes in the future as to how the Group’s financial performance and financial position are prepared and presented.

The financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards (which also include Statements of Standard Accounting Practice and Interpretations) issued by the HKICPA, accounting principles generally accepted in Hong Kong and the disclosure requirements of the Hong Kong Companies Ordinance and applicable disclosure provisions of The Rules Governing the Listing of Securities on the Stock Exchange (“Listing Rules”).

Basis of preparation

The measurement basis used in the preparation of the financial statements is historical cost convention.

At the balance sheet date, the Group’s current liabilities exceeded its current assets by approximately HK$3,667,000 and the Group’s shareholders’ deficits amounted to approximately HK$26,206,000.

Notwithstanding the above results, the financial statements have been prepared on a going concern basis, the validity of which is dependent upon the success of the Group’s future operations, its ability to generate adequate cash flows in order to meet its obligations as and when fall due and its ability to refinance or restructure its borrowings such that the Group can meet its future working capital and financing requirements. A shareholder of the Company, Pacific East Limited confirmed that the promissory notes in the amount of HK$12,500,000 will not be repayable within the next twelve months of the balance sheet date. On 18 November 2005, Pacific East Limited has agreed to extend the maturity date of one of the promissory notes in the amount of HK$9,500,000 to 22 May 2007. The ultimate holding company, MSI, has also confirmed that it will not demand repayment of the amount due to it of approximately HK$5,813,000 within the next twelve months of the balance sheet date. Furthermore, a party connected to a non-executive director of the Company, Wickham Group Limited, has also

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confirmed that it will not demand repayment of the promissory note in the amount of HK$4,634,000 within the next twelve months of the balance sheet. On 18 November 2005, Wickham Group Limited has agreed to extend the maturity date of the promissory note by fifteen months to 21 May 2007. The directors are confident that the Group’s future operations will be successful and able to generate sufficient cash flows in order to meet its obligations as they fall due over the next twelve months. Accordingly, the directors are satisfied that it is appropriate to prepare the financial statements on a going concern basis.

3. TURNOVER AND REVENUE

The Group is principally engaged in the design and sale of computer software products and the provision of professional and maintenance services for such products. An analysis of the Group’s turnover and other revenue is as follows:

Turnover: Sales of computer software licences, software rental and provision of related services Provision of maintenance services Sales of computer hardware Other revenue: Bank interest income Sundry income	2005 *HK$’000* 14,271 6,332 1,491 22,094 13 22 35 22,129	2004 HK$’000 15,250 6,100 1,700
		23,050
		64 –
		64
		23,114

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4. SEGMENT INFORMATION

(a) Business segments

eFinance 2005 2004 *HK$’000* HK$’000 Turnover 13,174 13,108 Segment results 3,175 3,453 Other revenue Exchange (loss)/gain Unallocated expenses (Loss)/profit from operating activities Finance costs (Loss)/profit before taxation Taxation (Loss)/profit for the year	eBusiness 2005 2004 *HK$’000* HK$’000 8,920 9,942 (330) (281)	Consolidated 2005 2004 *HK$’000* HK$’000 22,094 23,050 2,845 3,172 35 64 (2,402) 2,178 (3,150) (3,681) (2,672) 1,733 (1,148) (1,169) (3,820) 564 – – (3,820) 564	Consolidated 2005 2004 *HK$’000* HK$’000 22,094 23,050 2,845 3,172 35 64 (2,402) 2,178 (3,150) (3,681) (2,672) 1,733 (1,148) (1,169) (3,820) 564 – – (3,820) 564

			3,172 64 2,178 (3,681)
			1,733 (1,169)
			564 –
			564

(b) Geographical segments

The Group’s segment turnover, segment profit/(loss), segment assets and capital expenditure for the year, analysed by geographical market, are as follows:

Hong Kong and other Asian countries Australia and New Zealand	Segment turnover *HK$’000* 14,233 7,861 22,094	2005 Segment Segment profit/(loss) assets *HK$’000* *HK$’000* (1,752) 5,747 (2,068) 2,316 (3,820) 8,063	Capital expenditure *HK$’000* 198 103
			301

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The operation of the Australia and New Zealand segment was ceased on 1 December 2005. The Group have no intention to liquidate the subsidiaries in Australia within the next twelve months of the balance sheet date.

At 30 November 2005, the carrying amount of the total assets and liabilities of the Australia and New Zealand segment were approximately HK$2,316,000 and HK$5,010,000 respectively. During the year, the segment earned turnover from eBusiness of approximately HK$7,861,000, incurred expenses of approximately HK$9,929,000, and incurred a pre-tax operating loss of approximately HK$2,068,000. During the year, Australia and New Zealand segment’s cash inflow from operating activities was approximately HK$299,000, cash outflow from investing activities was approximately HK$90,000, and cash outflow from financing activities was approximately HK$90,000.

Hong Kong and other Asian countries Australia and New Zealand	Segment turnover HK$’000 14,609 8,441 23,050	2004 Segment Segment profit/(loss) assets HK$’000 HK$’000 (1,072) 3,764 1,636 2,080 564 5,844	Capital expenditure HK$’000 166 26
			192

5. (LOSS)/PROFIT FROM OPERATING ACTIVITIES

(Loss)/profit from operating activities is stated after charging: Auditors’ remuneration Bad debts written off Provision for doubtful debts Depreciation on owned assets Loss on disposal of fixed assets Operating leases in respect of – land and buildings – plant and equipment Staff costs (excluding directors’ remuneration) – salaries and allowances – retirement benefit costs Cost of computer hardware sold Exchange loss and after crediting: Other income: Exchange gain Gain on disposal of a subsidiary Reversal of provision for doubtful debts	2005 *HK$’000* 262 11 31 206 8 793 30 14,803 744 1,201 2,402 – – – –	2004 HK$’000 125 – 51 802 53 982 30 14,142 814 1,502 –

		2,178 780 14
		2,972

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6. FINANCE COSTS

Interest on promissory notes – wholly repayable within five years Interest on amount due to the ultimate holding company – wholly repayable within five years	2005 *HK$’000* 994 154 1,148	2004 HK$’000 792 377
		1,169

7. TAXATION

No provision for Hong Kong profits tax has been made as the Group had either no estimated assessable profits or had estimated tax losses brought forward to set off the estimated assessable profits for the year (2004: Nil).

No Australian income tax has been provided by the Australia subsidiaries as they had no estimated assessable profits for the year.

The Group has tax losses arising in Hong Kong of approximately HK$64,812,000 that are available indefinitely for offsetting against future taxable profits of the companies in which the losses arose. Deferred tax assets have not been recognised due to the unpredictability of the future profit streams.

8. (LOSS)/EARNINGS PER SHARE

The calculation of basic (loss)/earnings per share is based on the following data:

(Loss)/profit for the year for the purpose of basic (loss)/earnings per share_(in HK$’000)_ Weighted average of ordinary shares for the purpose of basic (loss)/earnings per share	2005 (3,820) 160,590,967	2004 564

		160,590,967

No diluted (loss)/earnings per share has been presented as there was no dilutive potential ordinary share during the years ended 30 November 2005 and 2004.

9. DIVIDENDS

The directors do not recommend the payment of any dividend in respect of the year ended 30 November 2005 (2004: Nil).

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10. FIXED ASSETS

Leasehold improvements HK$’000 Group Cost: At 1 December 2004 153 Additions 72 Disposals (18) Exchange difference (1) At 30 November 2005 206 Accumulated depreciation: At 1 December 2004 28 Charge for the year 61 On disposal written back (18) Exchange difference (1) At 30 November 2005 70 Net book value: At 30 November 2005 136 At 30 November 2004 125 11. INVENTORIES	Furniture and fixtures HK$’000 956 1 (20) (41) 896 860 62 (12) (35) 875 21 96	Office equipment HK$’000 7,829 228 (1,235) (176) 6,646 7,721 83 (1,235) (174) 6,395 251 108	Total HK$’000 8,938 301 (1,273) (218) 7,748 8,609 206 (1,265) (210) 7,340 408 329

Inventories represent merchandise. As at 30 November 2005, no inventories are stated at net realisable value (2004: HK$50,000).

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12. TRADE AND OTHER RECEIVABLES

Trade receivables_(Note)_ Prepayments and deposits	Group 2005 2004 *HK$’000* HK$’000 2,483 1,914 802 977 3,285 2,891	Group 2005 2004 *HK$’000* HK$’000 2,483 1,914 802 977 3,285 2,891
		2,891

Note : As at 30 November 2005, the aging analysis of the trade receivables was as follows:

Current 31 – 60 days 61 – 90 days Over 90 days	Group 2005 2004 *HK$’000* HK$’000 1,474 1,075 869 676 87 76 53 87 2,483 1,914	Group 2005 2004 *HK$’000* HK$’000 1,474 1,075 869 676 87 76 53 87 2,483 1,914
		1,914

13. TRADE AND OTHER PAYABLES

Accruals Receipt in advance Other payables	Group 2005 2004 *HK$’000* HK$’000 5,027 4,212 1,492 2,241 1,067 849 7,586 7,302	Group 2005 2004 *HK$’000* HK$’000 5,027 4,212 1,492 2,241 1,067 849 7,586 7,302
		7,302

14. PROMISSORY NOTES PAYABLE TO A SHAREHOLDER/RELATED COMPANY

As at 30 November 2005, the promissory note of HK$9,500,000 payable to the shareholder and the promissory note of HK$4,634,000 payable to the related company are interest bearing at Hong Kong prime rate and are repayable on 22 May 2007 and 21 May 2007 respectively. Another promissory note of HK$3,000,000 was issued on 30 November 2005 to the shareholder with interest bearing at Hong Kong prime rate. The shareholder and the related company have confirmed that the promissory notes in the amount of HK$12,500,000 and HK$4,634,000 respectively will not be repayable within the next twelve months of the balance sheet date.

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15. AMOUNT DUE TO THE ULTIMATE HOLDING COMPANY

The amount due to the ultimate holding company mainly represents payables for development costs, purchases of software merchandise, royalty fee and expenses paid on behalf of the Group. The balance due is unsecured and HK$3,162,000 of which carries interest at the annual Canadian prime rate as quoted by the Hong Kong and Shanghai Banking Corporation Limited plus 2% compounded monthly (2004: Annual Canadian prime rate as quoted by the Hong Kong and Shanghai Banking Corporation Limited plus 2% compounded monthly). The ultimate holding company has confirmed that it will not demand repayment within the next twelve months of the balance sheet date.

16. SHARE CAPITAL

Ordinary shares Number of shares Authorised: At 1 December 2003, ordinary shares of HK$0.01 each 100,000,000,000 Share consolidation_(Note) (90,000,000,000) At 30 November 2004 and 30 November 2005, ordinary shares of HK$0.10 each 10,000,000,000 Ordinary shares Number of shares Issued and fully paid: At 1 December 2003 ordinary shares of HK$0.01 each 1,605,909,668 Share consolidation(Note)_ (1,445,318,701) At 30 November 2004 and 30 November 2005 ordinary shares of HK$0.10 each 160,590,967	HK$’000 1,000,000 –
	1,000,000

	HK$’000 16,059 –
	16,059

Note: Pursuant to a resolution in writing of the shareholders of the Company on 6 January 2004, every ten of the authorised, issued and unissued ordinary shares of HK$0.01 each in the share capital of the Company were consolidated into one share of HK$0.10 each.

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17. RESERVES

Group

(a) The amounts of the Group’s reserves and the movements therein for the current and prior years are presented in the consolidated statement of changes in equity.
(b) The contributed surplus arises from a share for share exchange in acquiring a subsidiary. The amount represents the difference between the nominal value of the Company’s shares issued and the fair value of net assets of the subsidiary. Under the Companies Act 1981 of Bermuda (as amended), the contributed surplus shall not be distributed to the shareholders if there are reasonable grounds for believing that:
(i) the Company is, or would after the payment be, unable to pay its liabilities as they become due; or
(ii) the realisable value of the Company’s assets would thereby be less than the aggregate of its liabilities and its issued share capital and share premium account.

18. COMPARATIVE FIGURES

Certain comparative figures have been reclassified to conform with the current year’s presentation.

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BUSINESS REVIEW

Financial Review

The Group recorded a turnover of approximately HK$22,094,000 for the year ended 30 November 2005, a 4% decrease from approximately HK$23,050,000 for the same period of the previous year. Of the total turnover amount, HK$10,689,000 or 48% was generated from software license sales, HK$3,582,000 or 16% was generated from professional services, HK$6,332,000 or 29% was generated from maintenance services, and HK$1,491,000 or 7% was generated from sales of hardware. At 30 November 2005, the Group had approximately HK$4,683,000 worth of contracts that were in progress. The net loss attributable to shareholders for the year ended 30 November 2005 was HK$3,820,000, whereas the Group recorded a net profit of approximately HK$564,000 for the same period of the previous year. The difference was mainly attributed to an exchange loss of approximately HK$2,346,000 from the depreciation of the Australian dollar in 2005.

The operating expenditures (excluded exchange loss) amounted to HK$14,091,000 for the year ended 30 November 2005, a 8% decrease from HK$15,332,000 for the corresponding period of the previous year. The decrease was mainly due to operating cost control over the company’s Australian operation and depreciation of Australian dollar in the year.

As most of the fixed asset in the Group was fully depreciated in previous years, depreciation expenses decreased from approximately HK$802,000 for the year ended 30 November 2004 to approximately HK$206,000 in the current fiscal year.

The Group did not have any amortisation expenses for the year ended 30 November 2005 due to the write-off of the remaining amounts of goodwill and intellectual property rights at the end of fiscal year 2002.

During the current period, the Group invested approximately HK$4,319,000 in developing new modules for its OCTO Straight Through Processing (“STP”) system.

At 30 November 2005, a provision of approximately HK$1,498,000 was carried in the balance sheet for long outstanding trade receivables. The directors were uncertain whether the amount would ultimately be collected due to the sluggish economy and considered that it was prudent to make such a provision.

Total staff costs (excluding directors’ remuneration) amounted to approximately HK$15,547,000 for the year ended 30 November 2005, a 4% increase from approximately HK$14,956,000 for the same period of the previous year. The increase was mainly attributed to headcount increase in the company’s Hong Kong operation.

Operation Review

For the year ended 30 November 2005, eFinance turnover excluding sales of hardware amounted to HK$11,683,000, a increase of 2% when compared to HK$11,408,000 for the same period of the previous year. The Group benefited from the increased turnover in the Hong Kong stock markets, as brokerage house and financial institutions have increased their budgets for IT spending. As a result, the Group was able to sign new contracts (excluding hardware sales) with total contract sum of approximately HK$8,482,000 for deploying and implementing the Group’s eFinance well known OctoSTP solutions in the year of 2005.

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During the year, the Group continued to invest in the development of additional add-on modules for its OctoSTP trading system and furthered the development of its OctoWEB trading module. In 2005, the Group had successfully delivered and launched our newly developed Fortune Maker, a download application for Equity Web Trading System, to one Hong Kong brokerage house. The Fortune Maker is a more efficient and stable web trading application designed for professional investor. Without heavy download burden of graphics and data from internet, Fortune Maker can process trade order more efficiently through internet as compared to traditional web page trading system.

For the year ended 30 November 2005, sales of customer relationship management (“CRM”) software amounted to HK$8,920,000, a 10% decrease compared to HK$9,942,000 for the same period of the previous year. The decrease mainly contributed from Australian operation due to decrease in sales and depreciation of Australian dollar. In 2005, the Group had successfully secured a letter of award from a Hong Kong based airline to purchase nearly 200 seats of Maximizer Enterprise, our globally well known customer relationship management solution (“CRM”), for its global rollout in coming years.

During the year, the Group continues its focus on marketing activities in the region and appointing additional resellers in the region to build up a stronger and comprehensive reseller channel. In May 2005, the Group had participated in the Cebit Exhibition held in Shanghai and launch out the newly Maximizer Enterprise simplified Chinese version in China market.

Considering the Group’s CRM operation in Australia has been suffering operating loss since 2004, during the year, the management had reviewed the business model of existing Australia operation and carried out several measures to improve its operating efficiency including payroll cost controls and negotiation of office rental. However, the Australian operation still suffered from operation loss in this year. To improve the overall profitability of Group, Management had decided to cease its CRM operation in Australia in financial year 2006 and maintain only Hong Kong CRM operation to focus on developing CRM market in Greater China region and other Asian countries.

Liquidity and Financial Resources

The Group operates a conservative set of treasury policies to ensure that no unnecessary risks are taken with the Group’s assets. No investments other than cash and other short-term bank deposits are currently permitted.

At 30 November 2005, the Group had outstanding borrowings of approximately HK$5,813,000 representing a current account with Maximizer Software Inc., the ultimate holding company, which was unsecured and interest bearing at the annual Canadian prime rate as quoted by the Hong Kong and Shanghai Banking Corporation Limited plus 2% compounded monthly (Maximizer Software Inc. has confirmed that it will not demand repayment of the current account within twelve months from 30 November 2005); HK$9,500,000 representing a shareholder’s loan from Pacific East Limited which was unsecured, interest bearing at the Hong Kong prime rate and maturing on 22 May 2007; and HK$3,000,000 representing a shareholder’s loan from Pacific East Limited which was unsecured, interest bearing at the Hong Kong prime rate and will not be repayable within the next twelve months of 30 November 2005 and approximately HK$4,634,000 representing a loan from Wickham Group Limited, a party connected to a non-executive director of the Company, which was unsecured, interest bearing at the Hong Kong prime rate and maturing on 21 May 2007. The Group expresses its gearing ratio as a percentage of borrowings and long term debts over total assets. At 30 November 2005, the Group’s gearing ratio was 2.8.

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Pledge of Assets

The Group did not have any mortgage or charge over its assets at 30 November 2005.

Exchange Rate Exposure

All the Group’s assets, liabilities and transactions are denominated either in Hong Kong dollars, Canadian dollars, or Australian dollars. Except for the current account between the Company and its Australian subsidiaries which is denominated in Hong Kong dollars, it is the Group’s policy for each operating entity to borrow in local currencies where necessary in order to minimize currency risk.

Contingent Liabilities

At 30 November 2005, 23 employees had completed the required number of years of service under the Employment Ordinance (the “Ordinance”) to be eligible for long service payments on termination of their employment with the Group. The Group is only liable to make such payments where termination meets the required circumstances specified in the Ordinance. At 30 November 2005, the estimated contingent liabilities not provided for in the accounts for such purpose amounted to HK$1,180,000.

Significant Investments

Except for investment in subsidiaries, the Group has not held any significant investment for the year ended 30 November 2005.

Major Events

The Group has not made material acquisitions or disposals during the current year. At 30 November 2005, the Group had no material capital commitments and no future plans for material investments or capital assets.

Employee and Remuneration Policy

The directors believe that the quality of its employees is the most important factor in sustaining the Group’s growth and improving its profitability. The Group’s remuneration package is structured with reference to the individual performance, working experience and prevailing salary levels in the market. In addition to basic salaries and mandatory provident fund, staff benefits include medical coverage scheme and share options.

PENSION SCHEME

Effective from 1 December 2000, the Group joined the Mandatory Provident Fund Scheme (the “MPF Scheme”) for all of its employees employed under the jurisdiction of the Hong Kong Employment Ordinance. The MPF Scheme is registered with the Mandatory Provident Fund Authority under the Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong) in Hong Kong. The assets of the MPF Scheme are held separately from those of the Group in funds under the control of an independent trustee. Under the rules of the MPF Scheme, the Group and its employees are each required to make contributions to the MPF Scheme at 5% of the employees’ relevant income, subject to a cap of monthly relevant income of HK$20,000.

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The Group participated in a defined contribution retirement scheme for its employees in Australia. The assets of the scheme are held separately from those of the Group. Contributions to the scheme by the Group and employees are calculated as a percentage of employees’ basic salaries.

The retirement benefit scheme cost charged to the income statement represents contributions payable by the Group to the retirement funds and is expensed as incurred. During the year, the retirement benefit scheme contributions borne by the Group amounted to HK$744,000 (2004: HK$814,000). No forfeited contribution for the Group’s HK and Australia region is available to reduce the contribution payable in the future years. Contributions to the scheme vest immediately.

PROSPECTS

The Group’s will continue to focus on the Group’s fundamentals to achieve profitability. The Group will continue to look for opportunities to cooperate with new technology partners that can complement its own products and business and further enhance its established customer base.

Considering the keen competition in Hong Kong eFinance market, the Group will more proactive in seeking for overseas opportunities and focus on development of new financial solutions to diversify the Group’s eFinance product coverage in the market. The directors believed that the Group is well equipped to catch up with the economy rebound in domestic market and ready for new challenge from the overseas market.

The Group believes the growth of CRM market in the Asian region especially in Greater China region is prosperous. The Group will continue to focus on development of CRM market in the region by recruitment of more resale partners and implement target marketing strategies in the Asian region.

The directors believe that the Group is well positioned for growth, as the Group’s integrated multi-product systems for eFinance and eBusiness will offer customers the tools to expand their operations and services as the economy continues to improve.

BOARD PRACTICES AND PROCEDURES

The Stock Exchange has issued Code on Corporate Goverance Practices (the “Code”) as set out in Appendix 15 of the GEM Listing Rules which are effective for accounting periods beginning on or after 1 January 2005.

In the opinion of Directors, the Company is not required to comply with the Code for the year ended 30 November 2005. The Company is scheduled to comply with this Code in the financial year of 2006.

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AUDIT COMMITTEE

Pursuant to the GEM Listing Rules, an audit committee, comprising three independent nonexecutive directors, namely Messrs. Ronald Kwok Fai Poon, Clifford Sau Man Ng and Kwong Sang Liu, was established on 22 January 2001. Messrs. Ronald Kwok Fai Poon and Clifford Sau Man Ng were the audit committee member when it was established on 22 January 2001. At 28 September 2004, Kwong Sang Liu was appointed as independent non-executive director and member of audit committee of the Company.

The written terms of reference which describe the authorities and duties of the audit committee were prepared and adopted with reference to “A Guide for the Formation of an Audit Committee” published by the Hong Kong Institute of Certified Public Accountants.

The audit committee provides an important link between the board of directors and the Company’s auditors in matters coming within the scope of the Group audit. It also reviews the financial reporting process and the adequacy and effectiveness of the Group’s internal control system.

During the twelve months ended 30 November 2005, the audit committee held four meeting for the purpose of reviewing the Company’s reports and accounts, and providing advice and recommendations to the Board of Directors.

The Group’s audited results for the year ended 30 November 2005 have been reviewed by the audit committee, which was of the opinion that the preparation of such results complied with the applicable accounting standards and requirements and that adequate disclosures have been made.

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PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES

The Company has not redeemed any of its listed securities during the year. Neither the Company nor any of its subsidiaries has purchased or sold any of the Company’s listed securities during the year (2004: Nil).

By order of the Board Terence Chi Yan Hui Chairman

Mr. Terence Chi Yan HUI (Executive Director)
Mr. Joseph Chi Ho HUI (Executive Director)
Mr. Kau Mo HUI (Non-executive Director)
Mr. Ronald Kwok Fai POON (Independent Non-executive Director)
Mr. Clifford Sau Man NG (Independent Non-executive Director)
Mr. Kwong Sang LIU (Independent Non-executive Director)

Hong Kong, 21 February 2006

This announcement will remain on the GEM website on the “Latest Company Announcements” page for at least 7 days after its posting.

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AI assistant

abc Multiactive Limited — Annual Report 2005

51286_rns_2006-02-22_6507d289-695b-46da-b0dc-fecb7dfc1be1.pdf