LED International Holdings Limited

(the "Company")

                                                               Interim results

For the six-month period ended 31 December 2014

LED International Holdings Limited (AIM: LED) and its subsidiaries (together the "Group") announces its interim results for the six-month period ended 31 December 2014.

Overview

·    Increase in revenue to HK$12,388,000 (approximately £1,077,000) over H1 2013 (HK$10,769,000)

·     Increase in gross profit to HK$3,183,000 (approximately £277,000) (2013: HK$21,000) as a result of an increase in operating revenue and decreased manufacturing and production costs

·    Decrease in Loss Attributable to Shareholders to HK$3,773,000 (approximately £328,000) (2013: HK$6,057,000)

·    Issued equity to raise RMB25,000,000 (approximately HK$32,170,000 or £2,350,000) at a price of 75 pence per share representing a premium of 780 per cent. to the then closing mid-price

·    Amended agreement relating to capitalisation of liabilities of approximately HK$3,461,000 (approximately £300,000) at an increased share price approximately 160 per cent. higher that the original settlement share price determined in March 2014

·    Disposal of Kepu Electronic Technology (Shenzhen) Company Limited

·    Proposed acquisition of Shenzhen Ruihetai Industry Co. Limited leading to a suspension in the trading of the Company's shares. This was restructured post-period end and a proposed new joint venture will seek to establish a new distribution business instead of the acquisition. The temporary suspension in trading of the Company's shares was lifted with effect from 7:30am on 31 March 2015

Post-period end

·    Leasing finance business continues to gain traction by a lease-financing contract with Jiangsu Siyuan Port Company Limited

For further information:

Notes to Editors:

LED International Holdings Limited and its subsidiaries specialize in the provision of EMC contracts under which the Group installs energy saving products in its customers' premises, including lighting and reactance filtering equipment supplied by the Group, and the subsequent savings made by the customers in their electricity charges are then shared between the Group and the customers thereby enabling the Group to generate recurring revenue rather than one-off sales revenue. Historically, the Group's business has been the development, manufacture and sale of low-powered light-emitting diode ("LED") display screens and modules.

Under EMC contracts, the Group provides energy efficiency solutions, including LED lighting, reactance filtering energy saving and other energy efficiency solutions. Specifically, the Group overhauls its customers' existing lighting and power consumption systems (which are based on traditional lighting technology and power generation equipment) with proprietary LED lighting products, reactance filtering equipment and other solutions provided by the Group. These energy efficiency products are installed in customers' premises. The Group bears all the upfront costs associated with the supply and installation of the energy efficiency solutions and these costs are then recouped by sharing in the monthly energy savings generated by the customers' use of the energy efficiency solutions over the period of the contracts. The Group receives revenue from customers on several different payment terms including on a pre-payment, monthly or quarterly basis.

The Company's wholly-owned direct subsidiary, Green Pearl Leasing (China) Co. Ltd. operates a lease financing business having been granted a highly sought after leasing finance licence to enable the Group to provide lease financing to customers.

For more information, please visit: http://www.led-intl.com

CHAIRMAN'S STATEMENT

LED International Holdings Limited (AIM: LED) (the "Company") and its subsidiaries (together the "Group") specialise in the provision of energy management contract services ("EMC contracts") or energy performance contracting services under which the Group installs energy saving products in its customers' premises, including lighting and reactance filtering equipment supplied by the Group. The subsequent savings made by customers in their electricity charges are then shared between the Group and the customers thereby enabling the Group to generate recurring revenue rather than one-off sales revenue. Through the Company's wholly-owned direct subsidiary, Green Pearl Leasing (China) Co. Ltd. ("GP Leasing Co"), the Group operates a lease financing business in China having been granted a highly sought after leasing finance licence to enable the Group to provide lease financing to customers.

The Board of Directors (the "Board") is pleased to report on the interim results of the Group for the period ended 31 December 2014.

MARKET REVIEW

According to its 12th Five-Year Plan (the "Five-Year Plan"), China plans to lower its energy consumption by 16 per cent. and cut its carbon dioxide emission by 17 per cent. by 2015. Against the background of the Chinese government's introduction of a series of policies and regulations designed to promote, encourage and regulate energy conservation within the People's Republic of China (the "PRC"), the Chinese government intends to continue to build its economic growth on energy sustainability and ecological conservation. This signifies energy savings and conservation, promising opportunities in the energy management market and the Group aims to become one of the leading energy and green management service providers in the PRC.

OPERATING REVIEW

China experienceda gradual slow down in growth during the period under review as structural transformation of its economy continued during the financial period. This resulted in continued difficult trading conditions for the Group and, domestically, its operation was also burdened by inflation and slowing economic growth within the PRC for the financial period. These factors impacted on the Group's gross margin and resulted in an operating loss for the financial period ended 31 December 2014.

Over the past few years, the Group has provided EMC services in the PRC. The Group's EMC company ("EMCO") has been operated through Shenzhen Green Pearl Energy Management Services Company Limited ("GPEMCO"), a company with a valid and effective EMCO registration with the National Development and Reform Commission. Operating through GPEMCO enables the Group to take advantage of certain favorable policies and terms for the EMC industry within the PRC. In previous periods, the Group secured a number of contracts to support the Group's strategy and mark the commencement of the successful implementation of its energy efficiency solutions under the EMC business model. On 5 December 2014, GPEMCO was awarded an EMC contract by Tianjin Tian Gang United Special Steels Company Limited, a subsidiary of Tianjin Iron & Steel Group Company Limited, based in Tianjin, the PRC, for a contract amount of RMB1,830,000 (approximately HK$2,283,000 or £189,000) over a six-year period. Further contracts continue to be negotiated, details of which will be announced as appropriate.

The Board continues gradually to drive the Group to secure meaningful revenues from the domestic PRC EMC market, as well as implementing measures to reduce the Group's overhead expenditure. The Board remains convinced that the Group's overall operations remain sound.

The Group has not engaged in any manufacturing operation after the disposal of its remaining effective equity interest (60%) in Kepu Electronic Technology (Shenzhen) Company Limited ("Kepu").

On 5 December 2014 the Company announced that the required capital contribution to be made to its leasing finance company, GP Leasing Co in an amount of approximately USD2,692,000 (equivalent to approximately RMB16,535,000, HK$20,996,000 or GBP1,700,000) has been made as required.

FINANCIAL REVIEW

Revenue and loss attributable to shareholders of the Company for the financial period ended 31 December 2014 amounted to HK$12,388,000 (approximately £1,077,000) (2013: HK$10,769,000) and HK$3,773,000 (approximately £328,000) (2013: HK$6,057,000) respectively. During the financial period ended 31 December 2014, the Group recorded a rise in operating revenue by HK$1,619,000 (approximately £140,700) over 2013. The rise in operating revenue was brought about mainly by general demand for LED element products in the domestic market in the PRC. Furthermore, the Group generated a gross profit in the amount of HK$3,183,000 (approximately £277,000) for the financial period as a result of strengthening controls over manufacturing and production costs.

Operating revenue for the financial period generated from LED element products mainly supplied to major home appliance manufacturers in the PRC, increased by HK$1,633,000 (approximately £142,000) from the same period in 2013. The Group strengthened its product quality controls and customer relationships with existing major customers and attempted to diversify these sources of revenue and customers during the financial period. The Group's operating revenue from EMC contracts decreased by HK$14,000 (approximately £1,200) over 2013.

An operating gross profit for LED element products of approximately 25.69 per cent. was attained during the financial period, 25.49 per cent. higher than 2013, as a result of lower manufacturing and production costs. The operating gross margin of EMC contracts was approximately 50 per cent. (2013: 52 per cent.) for the financial period.

CAPITALISATION OF LIABILITIES

As announced on 31 March 2014 (the "March Announcement"), the Company agreed to allot 3,536,606 ordinary shares in the Company (the "Ordinary Shares") at a price per Ordinary Share of HK$2.50 (approximately 19.37 pence) in settlement and/or in reduction of its liability in the outstanding loans, service fees and salaries owed to various directors, employees and other creditors.

In the event, as further announced on 30 September 2014, the arrangements outlined in the March Announcement did not take place since, as specified in the March Announcement, these were conditional on the calling of an Extraordinary General Meeting of the Company which was not subsequently called.

The Company subsequently agreed revised arrangements in settlement and/or in reduction of its certain liabilities in the outstanding sums owed to various creditors and allotted a total of 532,875 ordinary shares at a price per ordinary share of HK$6.496 (approximately 51.00 pence) (the "Settlement"). An aggregate amount of approximately HK$3,461,000 (approximately £300,000) is treated as paid to the various creditors under the Settlement.

PROVISION AND CONVERSION OF WORKING CAPITAL LOAN AND PLACING OF NEW ORDINARY SHARES

The Company entered into a working capital loan on 16 December 2013 in the sum of RMB6,000,000 (approximately HK$7,720,000 or £600,000) provided by Rubyfield Holdings Limited and Speedy Dragon Holdings Limited (collectively, the "Subscribers") in equal tranches (the "Loan"). On 30 December 2013, the Company completed a conditional placing of new ordinary shares with the Subscribers, raising RMB31,000,000 (approximately HK$39,890,000 or £3,090,000) (including fees and expenses) (the "Placing"). The RMB31,000,000 (approximately HK$39,890,000 or £3,090,000) would be satisfied as to the first RMB25,000,000 (approximately HK$32,170,000 or £2,500,000) (the "Subscription Funds")by way of new funds and, as to the balance, by the application of the current outstanding balance of the Loan (currently RMB6,000,000, approximately HK$7,720,000 or £600,000) (the "Conversion"). Pursuant to the Placing, the Subscribers were to subscribe for 3,875,000 new ordinary shares (the "Placing Shares") at a price of HK$10.29 (being approximately 79.96 pence) per Placing Share (the "Placing Price"). The Conversion was also to take place at the Placing Price on 26 February 2014, further details of which were contained in the Company's previous announcements on 16 December 2013, 30 December 2013 and 26 February 2014.

As announced on 11 July 2014, the Company and the Subscribers reached a supplementary agreement in relation to the placing of the Placing Shares and the conversion of the Loan under the terms of which payment of the Subscription Funds to the Company had been made in full and final settlement of all of the Subscribers' legal obligations under the Placing. The Placing Shares were issued at a price of 75 pence per share representing a premium of 780 per cent. to the closing mid price on 10 July 2014 and the Company, via its indirect subsidiary, Shenzhen Green Pearl Energy Management Services Company Limited, received the Subscription Funds from the Subscribers at that time. The Company is utilising the proceeds of the Subscription Funds for general working capital purposes and to provide the necessary capital contribution to GP Leasing Co.

ENERGY MANAGEMENT CONTRACT UPDATE

The Company's indirect subsidiary, GPEMCO, was awarded an energy management contract (the "EMC Contract") on 5 December 2014 by Tianjin Tian Gang United Special Steels Co., Ltd. ("TG United"), a subsidiary of Tianjin Iron & Steel Group Co., Ltd., based in Tianjin, China. The projected revenue under the EMC Contract to GPEMCO is approximately RMB1,830,000 (approximately HK$2,283,000 or £190,000) over a six year period.

Under the EMC Contract, GPEMCO will fit out one of TG United's manufacturing facilities with its energy-saving solutions. Specifically, GPEMCO will incorporate reactance filtering equipment into TG United's existing power consumption systems which are based on traditional power generation equipment. It is expected that the new energy-saving solutions introduced by GPEMCO will bring about energy cost savings in the region of 10% to TG United.

DISPOSAL OF KEPU ELECTRONIC TECHNOLOGY (SHENZHEN) COMPANY LIMITED ("KEPU")

On 17 December 2014 the Company entered into a sale and purchase agreement with Mr. Fu Wei ("Fu"), a director of Kepu, relating to the disposal by the Group of the remaining effective equity interest (60%) in Kepu.

Kepu specialises in the research, development and manufacturing of its own brand of opto-electronic products, such as LED modules, LED unit boards and LED bar-screens, which are used in consumer electronic goods such as air-conditioners, microwave ovens, conventional ovens, refrigerators, washing machines and fixed line telephones.

This disposal was brought about following the Board's determination that the activities of Kepu presented considerable, but different opportunities from LED's primary focus of its EMC business model.

The proceeds of the sale of Kepu have been used to facilitate the Group's working capital and support its EMC development plans.

PROPOSED ACQUISITION OF SHENZHEN RUIHETAI INDUSTRY CO. LIMITED

The Company entered into a conditional agreement on 22 December 2014 under which it, or a nominated member of its Group, will acquire the majority of the issued share capital of Shenzhen Ruihetai Industry Co. Limited ("RHT") (the "Acquisition") from Ms. Li Sai Ying and Mr. Lin Zhong (together, the "Vendors") at a maximum consideration of approximately RMB11,260,000 (approximately HK$14,048,000 or £1,136,000) (the "Consideration"). The exact shareholding of RHT after the Acquisition is to be determined and is subject to the local laws and regulations governing foreign investments in PRC companies.

RHT is a large-scale grain enterprise incorporated in the PRC. It is mainly engaged in the business of rice storage, processing, distribution, and the wholesale and retail sale of rice. RHT has long established relationships with business partners in major grain-producing areas in Northeast China, Hunan, Hubei, Jiangxi, Jiangsu, Guangxi as well as internationally in Thailand. RHT has established rice counters in major shopping malls, supermarkets and chain stores in residential areas throughout the PRC and, in doing so, RHT has built a strong and reputable food distribution network in the PRC.

By reason of the size of RHT in relation to the Company, the Acquisition is classified as a reverse takeover under the AIM Rules. In pursuance of the AIM Rules, trading in the Company's shares was suspended from 8 a.m. on 22 December 2014.

Since the announcement in relation to the Acquisition made on 22 December 2014, the Board has been in discussion with the Vendors and has consulted its PRC lawyers regarding the appropriate structure of the Acquisition. The Company has received a legal opinion from its PRC lawyers advising that the industry area in which RHT operates falls under the category of "restricted foreign investment industries".

Under the current Foreign Investment Laws, foreign investors cannot invest directly in Chinese companies that operate in sensitive industries prohibited or restricted to foreign investments. However, foreign investors can take effective control of the restricted foreign investment industries through the use of variable interest entity ("VIE") arrangements. The current proposed structure of the Acquisition is that it would be effected through the use of a VIE arrangement.

However, subsequent to the Company entering into terms relating to the Acquisition, on 19 January 2015 the PRCMinistry of Commerce announced a review of VIE arrangements and published a draft of a new Foreign Investment Law to define foreign investment in terms of the "actual controller" of a PRC company. There is no proposed grandfathering provision for the existing foreign controlled VIE arrangements in the restricted industries. Therefore, if enacted, the new Foreign Investment Law would increase the risks for the Company in proceeding with the Acquisition by way of a VIE arrangement since it may retrospectively invalidate the structure of the Acquisition.

Having considered the legal and regulatory implications of various options of the structure of the Acquisition, the Board has decided not to proceed with the Acquisition but instead to form a new joint venture with the Vendors (the "Joint Venture"). The Joint Venturewill seek to establish a new distribution business, in part by utilising the Vendor's network of long established relationships with business partners in the PRC as well as internationally in Thailand and through the establishment of new relationships. The Joint Venture will primarily distribute rice and other food substances and will look to establish counters in major shopping malls, supermarkets and chain stores in residential areas throughout the PRC. The Company envisages that through the Joint Venture the Company will be able to leverage the distribution network to market its "Green Pearl" green products.

It is anticipated that 99 per cent. of the Joint Venture will be owned by the Company with 1 per cent. being owned by the Vendors. The Company will provide a working capital loan to the Joint Venture in the amount of RMB50 million, the proceeds of which will be utilised for business development and general working capital. In order to finance this working capital loan, the Company intends to raise additional funding through equity and/or debt financing.

The Vendors will be responsible for the management and operation of the Joint Venture. Also, the Vendors will provide a profit guarantee that the annual net profit of the Joint Venture shall be at least RMB70 million per year for each of the three years following the formation of the Joint Venture, and such amount shall exclude the green products introduced by the Company and distributed through the Joint Venture within the PRC during the three-year period.

As part of the Joint Venture, the Vendors will be issued with up to 1,114,000 new ordinary shares in the Company (the "Shares"), which represents 11.80 per cent. of LED's current issued share capital. The Shares will be issued in three equal annual tranches commencing on the date of formation of the Joint Venture. The Shares will be issued at a price of 12.49806 per Share. In the event that the profit guarantee is not met, the number of Shares to be issued to the Vendors will reduce proportionately.

On the basis that the Acquisition is no longer proceeding, the temporary suspension to trading in the Company's ordinary shares was lifted with effect from 7:30am on 31 March 2015 and trading in the Company's ordinary shares resumed on the same day.

Further announcements in relation to the Joint Venture will be made at the appropriate time.

LEASE FINANCE CONTRACT UPDATE

As announced on 2 January 2015, the Company's wholly-owned direct subsidiary, Green Pearl Leasing (China) Company Limited ("GP Leasing Co"),entered into a leasing finance contract (the "Contract") with Siyuan, based in Jiangsu, China. The projected total interest receivable by GP Leasing Co under the Contract is approximately RMB1,320,000 (approximately HK$1,647,000 or £137,000) over a two-year period.

Pursuant to the Contract, GP Leasing Co purchased various port loading and reloading equipment (the "Equipment") from Siyuan at a consideration of RMB12,000,000 (approximately HK$14,971,000 or £1,246,000) and the Equipment will be leased back to Siyuan for a term of two years from 25 December 2014 to 25 December 2016.

BOARD CHANGES

Mr. Kevin Miu resigned as a Non-Executive Director with effect from 30 November 2014.

DIVIDENDS

The Directors do not recommend the payment of any dividend for the period under review and the Board is committed to an ongoing review of the Company's dividend policy.

CURRENT OUTLOOK AND PROSPECTS

EMC business

The Group is focused on the domestic PRC economy and adopts a conservative but proactive approach towards entering into the growing EMC market under the brand name "Green Pearl". Notwithstanding the recent slowdown in China's GDP growth, the Board believes that the Chinese government will implement fiscal and monetary policies to stimulate continuing economic growth in the PRC.

The energy saving and environmental protection industry ranks top among the seven strategic emerging industries outlined in the Five-Year Plan. Following the gradual import and sale of incandescent lamps complemented by fiscal subsidies, this presents a tremendous market opportunity for green lighting. In view of rising national power consumption, the Board believes that measures that the Chinese government has taken to reduce energy consumption and carbon emissions will lead to increasing opportunities for energy saving and carbon reduction products, services and solutions within the PRC.

In addition to the supply of LED lighting and reactance filtering equipment to the domestic PRC market, the Group has also been considering the introduction of other carbon reduction solutions to offer a total carbon reduction solution. On 22 December 2014, the Company entered into a conditional agreement subject to shareholder approval to acquire a distribution network in the PRC through RHT. The Board envisages that the acquisition will enable the Group to take advantage of the operating cash flows, market its "Green Pearl" green products and give the Group immediate access to this distribution network through which the Group will be able to better promote its EMC business in the PRC.

The Group is also exploring the possible export of its energy saving and carbon reduction products, services and solutions, mainly solar lighting products and solutions, to the emerging markets in the African and Pacific regions, where potential demand for solar related products and services is prominent.

The Board remains cautiously optimistic and confident in the Group's business, market and products as well as its long-term growth potential in the PRC. Furthermore, the Board considers that the overall operations of the Group remain sound and that the transformation of the Group into an energy management service provider in the PRC is the correct strategy.

Green Pearl Leasing (China) Company Limited

As announced previously the Shanghai Municipal Commission of Commerce granted the Group a highly sought after leasing finance licence to enable the Company to provide lease financing to customers. The Company formed a new wholly owned direct subsidiary, GP Leasing Co, in order to carry on this business.

GP Leasing Co was formed as the Board believes that the Group's EMC business model will be financed substantially by debt capital finance, mainly bank finance for the Group or equipment leasing finance for its customers. The Board believes that equipment leasing finance will become one of the major sources of finance for EMC contracts in the foreseeable future.

As announced on 5 December 2014, the Company made the required capital contribution to GP Leasing Co in an amount of approximately USD2,692,000 (approximately RMB16,535,000, HK$20,996,000 or GBP1,700,000) (the "Contribution"). An independent certified public accounting firm in China confirmed that the Company had made the Contribution as required.

In order to focus on its EMC business model, the Company has been considering forming joint ventures to develop this aspect of the business further and identify how the Company can leverage knowledge, experience and contacts.

APPRECIATION

Finally, on behalf of the Board, I would like to thank all of our management team and staff members for their valuable contribution and dedication to the Group. I would also like to thank Mr. Miu for his invaluable contribution to the Group during his tenure. I also express my gratitude to our customers, suppliers and government authorities for their continuous support.

Stephen Weatherseed

Non-Executive Director and Chairman

Hong Kong, 31 March 2015

LED INTERNATIONAL HOLDINGS LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER 2014

LED INTERNATIONAL HOLDINGS LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2014

LED INTERNATIONAL HOLDINGS LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

AS AT 31 DECEMBER 2014

LED INTERNATIONAL HOLDINGS LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER 2014

1.     GENERAL INFORMATION

LED International Holdings Limited (the "Company") was domiciled and incorporated in Hong Kong with limited liability under the Hong Kong Companies Ordinance. The address of the Company's registered office and principal place of business is Unit A1, 6/F., One Capital Place, 18 Luard Road, Wan Chai, Hong Kong.

The principal activity of the Company is investment holding. The principal activities of the Company's subsidiaries (together with the Company referred to as the "Group") are specialising in the provision of energy management contract services ("EMC contracts") under which the Group installs energy saving products in its customers' premises, including lighting and reactance filtering equipment supplied by the Group, and the subsequent savings made by the customers in their electricity charges are then shared between the Group and the customers thereby enabling the Group to generate recurring revenue rather than one-off sales revenue. Historically, the Group's business has been the development, manufacture and sale of low-powered light-emitting diode ("LED") display screens and modules.

On 23 October 2006, the Company was admitted to trading on the AIM Market of the London Stock Exchange.

The interim financial information is presented in Hong Kong dollars ("HK$"), which is the functional currency of the Company, and all values are rounded to the nearest thousand except when other indicated.

2.     BASIS OF PREPARATION

(a)     Statement of compliance

These consolidated financial statements have been prepared in accordance with all applicable IFRSs, which collective term includes all applicable individual International Financial Reporting Standards, International Accounting Standards, ("IAS") and Interpretations issued by the International Accounting Standards Board and the Hong Kong Companies Ordinance, which concern the preparation of financial statements, which for this financial year and the comparative period continue to be those of the Hong Kong Companies Ordinance, Cap.32 in accordance with the transitional and saving arrangements for Part 9 of the Hong Kong Companies Ordinance, Cap.622 "Accounts and Audit" which are set out in sections 76 to 87 of Schedule 11 to that Ordinance. The consolidated financial statements also comply with IFRS as issued by the IASB as adopted by the European Union. The differences between IFRS as adopted by the European Union and IFRS as issued by the IASB have not had a material impact on the consolidated financial statements for the years presented.

(b)     Basis of measurement

The financial statements have been prepared under the historical cost convention. The measurement bases are fully described in the accounting policies below.

The Group incurred a loss of approximately HK$5,350,000 for the period ended 31 December 2014 and, as of that date, the Group had net current liabilities and net liabilities of approximately HK$26,390,000 and HK$32,310,000 respectively. These conditions indicate the existence of material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern, with a potential consequence that the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.

The management have taken certain measures ("Measures") including to secure further contracts, which the management have assessed to be profitable, negotiate with certain directors to obtain their undertakings not to demand repayments of amounts due to them until there are funds available for repayment, secure new funding from existing shareholders and/or new investors, and negotiate with its banker to renew bank facilities of the Group. In the opinion of the directors, based on the successful execution of the Measures, the Group will have sufficient cash resources to satisfy its working capital and other financing requirements for the foreseeable future. Accordingly, the directors are of the opinion that it is appropriate to prepare the consolidated financial statements on a going concern basis.

These financial statements have been prepared on a going concern basis, the validity of which depends upon the ongoing financial support from the Company's substantial shareholder and successful execution of the Group's business plan, attainment of profitable operations and securing of new financing. These include successful securing of further EMC contracts which the management have assessed to be profitable, obtaining of undertakings from certain directors and a former director not to demand repayments of amounts due to them until there are funds available for the repayments and the renewal of bank facilities after the reporting date.

Should the use of the going concern basis in preparing the consolidated financial statements be determined to be inappropriate, adjustments might have to be made to reduce the value of assets to their recoverable amounts, to provide for any further liabilities which might arise and to reclassify non-current assets and liabilities as current assets and liabilities.

(c)     Deconsolidation of a subsidiary, Shenzhen China-LED Photo-Technology Limited ("Shenzhen LED")

The Group entered into a preliminary sale and purchase agreement dated 11 February 2009 to dispose of its entire interest in a wholly-owned subsidiary, Shenzhen LED. The assets and liabilities of Shenzhen LED had been reclassified as held for sale as at 30 June 2009 and the results of Shenzhen LED were previously presented under discontinued operations in the consolidated financial statements for the year ended 30 June 2009. However, the disposal of Shenzhen LED did not proceed. The sale and purchase agreement dated 11 February 2009 was effectively terminated on 17 April 2010.

Notwithstanding that the Group owned the entire equity interests in Shenzhen LED, Shenzhen LED was no longer regarded as a subsidiary of the Group as the directors of the Company are of the opinion that the control of Shenzhen LED had been lost in the prior year.

The directors of Company considered that Shenzhen LED is not under the control of the Company given (i) the Company was unable to obtain any books and records from Shenzhen LED; (ii) the Company had not been provided with any up-to-date financial reports of Shenzhen LED and thus had no information as to the current financial situation of Shenzhen LED and (iii) the current management of the Group had lost contact with the then management of Shenzhen LED.  As a result, the Company expressed a lack of confidence in its ability to properly control and manage Shenzhen LED.  In light of this situation, the directors of the Company resolved to deconsolidate Shenzhen LED from the effective date of 17 April 2010.

(d)     Use of estimation and judgements

It should be noted that accounting estimates and assumptions are used in preparation of these financial statements.  Although these estimates and assumptions are based on management's best knowledge and judgement of current events and actions, actual results may ultimately differ from those estimates and assumptions.  The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements.

3.      REVENUE

An analysis of the revenue from the Group's principal activities (note 1), which is also the Group's turnover, is as follows:

4.      SEGMENT INFORMATION

Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess their performance.

Segment information reported was analysed on the basis of the types of products sold by the Group's operating division (i.e. LED element products and energy management contracts services). The Group's reportable segments are as follows:

Operations:

-   LED element products

-   Energy management contracts services

-   Leasing services

Segment revenues and results

The following is an analysis of the Group's revenue and results from operations by reportable segment.

Revenue reported above represents revenue generated from external customers.  There were no inter-segment sales during the periods ended 31 December 2014 and 2013.

The accounting policies of the reportable segment are the same as the Group's accounting policies described.

Segment loss represents the loss incurred by each segment without allocation of certain administration costs including directors' salaries, finance costs and income tax expense.  This is the measure reported to the chief operation decision maker for the purposes of resource allocation and assessment of segment performance.

Segment assets and liabilities

For the purposes of monitoring segment performance and allocating resources between segments:

·        all assets are allocated to reportable segments other than unallocated assets including amounts due from a former director and a related company and pledge bank deposit.  Goodwill is allocated to respective reportable segment. Assets used jointly by reportable segments are allocated on the basis of the revenue earned by individual reportable segments; and

·        all liabilities are allocated to reportable segment other than current tax liabilities and unallocated liabilities including interest payables, bank overdrafts, amounts due to a director and related companies, loans from a director and a former director and convertible loan notes.  Liabilities for which a reportable segment is jointly liable are allocated in proportion to segment assets.

The Group's revenue from its operations from its major products and services is disclosed in "segment revenue and results".

5.      LOSSES PER SHARE

The calculation of the basic and diluted losses per share attributable to owners of the Company is based on the following:

In calculating the diluted losses per share attributable to the owners of the Company for the six month ended 31 December 2014 and 2013, the potential issue of shares arising from the exercise of share options would decrease the losses per share attributable to the owners of the Company and is not taken into account as they have an anti-dilutive effect. Therefore, the diluted losses per share attributable to the owners of the Company for the six month ended 31 December 2014 and 2013 is based on the loss attributable to the owners of the Company of approximately HK$3,733,000 (2013: HK$5,688,000) and on the weighted average of 8,969,566 (2013: 5,032,934 (restated)) ordinary shares outstanding during the six month ended 31 December 2014, which are the amounts used in calculating the basic losses per share for the period.

The weighted average number of ordinary shares held in 2013, for the purpose of calculating basic and diluted loss per share, has been retrospectively adjusted for the ten-for-one share consolidation during the period ended 31 December 2014.

6.      LOANS FROM A DIRECTOR / A FORMER DIRECTOR

As at 30 June 2013, a loan from a director of approximately US$1,282,000 (equivalent to HK$10,000,000) to the Group was interest-bearing at its rate of 9% per annum and due for repayment within the next twelve months and the interest will be settled in the form of the shares of the Company. The fair value of the liability component and the equity component were determined at inception of the received loan. The fair value of the liability component was calculated using a market interest rate for a similar loan and subsequently measured at amortised cost. The residual amount, representing the value of the equity as shares to be issued, was included in shareholders' equity. The loan was secured by a charge over Green Pearl BVI's entire shareholding in its subsidiaries, Carten and Yanford Limited.

The loan was due on 26 April 2013 and became immediately repayable on demand. On 27 March 2014, the loan was settled by convertible loan notes (the "Convertible Loan Notes") issued by Green Pearl Energy Conservation Holdings Limited ("Green Pearl BVI") in the aggregate principal amount of US$1,282,000 with maturity date of 31 December 2015. The Convertible Loan Notes are interest-bearing at a rate of 9% per annum and convertible into shares of Green Pearl BVI at a conversion price of US$2.589 per share of Green Pearl BVI. At any time on or after the date of issuance of the Convertible Loan Notes, the noteholder may require the issuer to convert any or all his Convertible Loan Notes (in multiples of not less than US$1,000) into shares of Green Pearl BVI at the conversion price by written notice. A total of 495,172 shares of Green Pearl BVI will be allotted and issued upon full conversion of the Convertible Loan Notes. Green Pearl BVI has a right to redeem the Convertible Loan Notes at their principal amount and interest accrued up to the date of redemption by a 7 day written notice to the director at any time from the date of issuance. The interest on the Convertible Loan Notes shall be satisfied by the issue of ordinary shares of the Company on redemption or maturity date, calculated by reference to the closing middle market price of the Company's share on the date of redemption or maturity.

As at 30 June 2014, a loan from a former director to the Group and the Company of approximately HK$600,000 was interest-bearing at a rate of three months LIBOR plus 4% per annum and repayable on demand and approximately HK$3,379,000 was interest-bearing at the rate of three months LIBOR plus 4% per annum and repayable on 7 September 2014. On 30 September 2014, 442,118 ordinary shares of the Company were issued to the former director to settle the liabilities with him in the net amount of approximately HK$2,872,000.

7.      DEPOSIT PAID FOR ACQUISITION OF A SUBSIDIARY

The amount represented deposit paid for acquisition of a 100% equity interest in Shenzhen Green Pearl Energy Management Services Company Limited as at 31 December 2014.

8.      PLEDGED BANK DEPOSIT

The amount represented deposit pledged to a bank to secure banking facilities granted to the Group.

9.      CASH AND BANK BALANCES

10.    RELATED PARTY TRANSACTIONS

In addition to the transactions and balances disclosed elsewhere in these consolidated financial statements, the Group had the following significant transactions with related parties during the period:

Notes:

(a)     Interest on Convertible Loan Notes (note 6) of approximately HK$1,061,000 (2013: nil) was charged at a rate of 9% per annum on the aggregate principal amount and shall be satisfied by the issue of ordinary shares of the Company on redemption or maturity date to a director, calculated by reference to the closing middle market price of the Company's shares on the date of redemption or maturity. 

(b)   Loan interest payable was accrued as payable to a former director of the Company.

(c)     Consultancy and management fee expense of HK$360,000 (2013: HK$366,000) was charged by a non-controlling interest for the provision of consultancy services in relation to EMC contracts.

(d)     On 22 December 2014, the Company disposed of its entire interest in Osmar Limited at a consideration of USD2,500 to a related company, in which a director, Mr. Stephen Chan, has an interest.

The directors of the Company are of the opinion that the above related party transactions were conducted on normal commercial terms and in the ordinary course of business.

Compensation to key management personnel

The remuneration of directors and other members of key management during the year were as follows:

11.    EVENTS IN REPORTING PERIOD

(a)     Placing of new shares

The Placing of 3,875,000 new ordinary shares to two potential investors was completed on 11 July 2014 with settlement of the balancing payment of RMB25,000,000 (approximately HK$31,040,000).

(b)     Capitialisation of liabilities

On 29 September 2014, the Company entered into agreements to settle liabilities of certain creditors with an aggregate amount of approximately HK$3,461,000 by issuing 532,875 ordinary shares of the Company (the "Settlement"). The price per ordinary share was HK$6.496 (approximately 51 pence) represented the closing mid-market price on 26 September 2014. On 30 September 2014, 532,875 ordinary shares were issued, including 442,118 ordinary shares being issued to a former director to settle the liabilities with him of approximately HK$2,872,000.

(c)     Disposal of Kepu

          On 17 December 2014, the Company entered into a sale and purchase agreement with Mr. Fu Wei ("Fu"), a director of Kepu, relating to the disposal by the Group of the remaining effective equity interest (60%) in Kepu.

Kepu specialises in the research, development and manufacturing of its own brand of opto-electronic products, such as LED modules, LED unit boards and LED bar-screens, which are used in consumer electronic goods such as air-conditioners, microwave ovens, conventional ovens, refrigerators, washing machines and fixed line telephones. 

As announced on 17 May 2012 and as a part of its ongoing business review, the Board had determined that the activities of Kepu present considerable, but different opportunities from LED's primary focus of its EMC business model. As currently structured, the Company does not have the resources to take full advantage of the opportunities available to Kepu nor does the Board foresee Kepu becoming a profitable member of the Group in the foreseeable future. For this reason, the Company has taken the decision to sell its remaining interest in Kepu. This will provide the Company with further resources to promote and focus on the EMC business model.

In pursuance of this strategy, the Company entered into a sale and purchase agreement with Mr. Fu to dispose of its effective equity interest in Kepu to Fu for a consideration of RMB360,000 (approximately HK$450,000 or £37,000). Included within the sale was Far East, the immediate holding company of Kepu and a subsidiary of the Company in which the Company held 60% and in which Mr. Weng Xiao Yong holds the remaining 40 % equity interest.

The proceeds of the sale of Kepu will be used to facilitate the Group's working capital and support its EMC development plans.

Further details are set out in the Company's announcements dated 17 December 2014.

(d)     Proposed acquisition of Shenzhen Ruihetai Industry Co. Limited

           On 22 December 2014, the Company entered into a conditional agreement under which it, or a nominated member of its Group, will acquire the majority of the issued share capital of Shenzhen Ruihetai Industry Co. Limited ("RHT") (the "Acquisition") from Ms. Li Sai Ying and Mr. Lin Zhong (together, the "Vendors") at a maximum consideration of RMB11,259,903 (approximately £1,136,000) (the "Consideration"). The exact shareholding of RHT after the Acquisition is to be determined and is subject to the local laws and regulations governing foreign investments in PRC companies.

           RHT is a large-scale grain enterprise incorporated in the PRC. It is mainly engaged in the business of rice storage, processing, distribution, and the wholesale and retail sale of rice. RHT has long established relationships with business partners in major grain-producing areas in Northeast China, Hunan, Hubei, Jiangxi, Jiangsu, Guangxi as well as internationally in Thailand. RHT has established rice counters in major shopping malls, supermarkets and chain stores in residential areas throughout the PRC and, in doing so, RHT has built a strong and reputable food distribution network in the PRC.

           By reason of the size of RHT in relation to the Company, the Acquisition is classified as a reverse takeover under the AIM Rules. In pursuance of the AIM Rules, trading in the Company's shares was suspended from 8 a.m. on 22 December 2014.

Since the announcement in relation to the Acquisition made on 22 December 2014, the Board has been in discussion with the Vendors and has consulted its PRC lawyers regarding the appropriate structure of the Acquisition. The Company has received a legal opinion from its PRC lawyers advising that the industry area in which RHT operates falls under the category of "restricted foreign investment industries".

Under the current Foreign Investment Laws, foreign investors cannot invest directly in Chinese companies that operate in sensitive industries prohibited or restricted to foreign investments. However, foreign investors can take effective control of the restricted foreign investment industries through the use of variable interest entity ("VIE") arrangements. The current proposed structure of the Acquisition is that it would be effected through the use of a VIE arrangement.

However, subsequent to the Company entering into terms relating to the Acquisition, on 19 January 2015 the PRC Ministry of Commerce announced a review of VIE arrangements and published a draft of a new Foreign Investment Law to define foreign investment in terms of the "actual controller" of a PRC company. There is no proposed grandfathering provision for the existing foreign controlled VIE arrangements in the restricted industries. Therefore, if enacted, the new Foreign Investment Law would increase the risks for the Company in proceeding with the Acquisition by way of a VIE arrangement since it may retrospectively invalidate the structure of the Acquisition.

Having considered the legal and regulatory implications of various options of the structure of the Acquisition, the Board has decided not to proceed with the Acquisition but instead to form a new joint venture with the Vendors (the "Joint Venture"). The Joint Venture will seek to establish a new distribution business, in part by utilising the Vendor's network of long established relationships with business partners in the PRC as well as internationally in Thailand, gained through their operation of RHT, and through the establishment of new relationships. The Joint Venture will primarily distribute rice and other food substances and will look to establish counters in major shopping malls, supermarkets and chain stores in residential areas throughout the PRC. The Company envisages that through the Joint Venture the Company will be able to leverage the distribution network to market its "Green Pearl" green products.

It is anticipated that 99 per cent. of the Joint Venture will be owned by the Company with 1 per cent. being owned by the Vendors. The Company will provide a working capital loan to the Joint Venture in the amount of RMB50 million, the proceeds of which will be utilised for business development and general working capital. In order to finance this working capital loan, the Company intends to raise additional funding through equity and/or debt financing.

The Vendors will be responsible for the management and operation of the Joint Venture. Also, the Vendors will provide a profit guarantee that the annual net profit of the Joint Venture shall be at least RMB70 million per year for each of the three years following the formation of the Joint Venture, and such amount shall exclude the green products introduced by the Company and distributed through the Joint Venture within the PRC during the three-year period.

As part of the Joint Venture, the Vendors will be issued with up to 1,114,000 new ordinary shares in the Company (the "Shares"), which represents 11.80 per cent. of LED's current issued share capital. The Shares will be issued in three equal annual tranches commencing on the date of formation of the Joint Venture. The Shares will be issued at a price of 12.49806 per Share. In the event that the profit guarantee is not met, the number of Shares to be issued to the Vendors will reduce proportionately.

On the basis that the Acquisition is no longer proceeding, the temporary suspension to trading in the Company's ordinary shares was lifted with effect from 7:30am on 31 March 2015 and trading in the Company's ordinary shares resumed on the same day.

Further announcements in relation to the Joint Venture will be made at the appropriate time.

(e)     Disposal of Osmar Limited

           On 22 December 2014, the Company disposed of its entire interest in Osmar Limited at a consideration of USD2,500 to a related company, in which a director, Mr. Stephen Chan, has an interest. Osmar Limited is principally engaged in investment holding.