Final Results

Resource Holding Management Limited

('RHM' or the 'Company')

Audited Financial Results

Year Ended 31 December 2012

28 June 2013

Resource Holding Management Limited is pleased to announce its audited results for the 12 months ended 31 December 2012.

The Annual Report and Accounts of the Company and its subsidiaries (the "Group") will be posted to shareholders today and will be available shortly on the Company's website (www.redhot.asia).

Commending on the performance for the year, the Company's Chairman, Datuk Oh Chong Peng said:

"The Group maintained a strong profit margin this year which has contributed positively to profits attributable to shareholders, despite a decline in revenue by 22%.

This decline in revenue though is not unexpected. Back in 2011, the Group focused on gaining higher market share in the advertising sector in 2011 which resulted in its successful acquisition of new clientele.

In 2012, the Group leveraged on its enlarged client base and successfully achieved its clients' marketing objectives whilst rolling out advertising projects and campaigns that contributed higher profit margins to the Group. Increased efforts were placed on introducing higher margin products and services to advertisers, consisting mostly of a continued drive in offering out-of-home media, and increasing service offering to clients for digital media campaigns and creative services.

The strategy for 2012 has faired well and contributed higher profit margins to the Group while at the same time allowed the Group to acquire new blue chip clients with strong domestic brand names, and retain clients with internationally renowned brands.

The same overall business strategy was applied to the Group's market segments in Malaysia and China. Revenue contributions from Malaysia and China in 2012 represented 53% and 47% respectively compared to 56% and 44% respectively in 2011.

Of course, we would not have achieved these encouraging results without the faith and loyalty of our clients and partners. We will continue to deliver the best and most effective services to meet their needs.

Our management team and employees have performed remarkably well in achieving these positive results and deserve praise for their relentless efforts.

I am also pleased to mention that the board will propose further scrip dividend as a bonus issue of shares to shareholders at its upcoming AGM. Further details will be announced in due course when the notice of annual general meeting is posted to shareholders.

With our strong business fundamentals, determined team players and satisfied clients and partners, I believe the Group shall continue to thrive."

DATUK OH CHONG PENG

Non-Executive Chairman

28 June 2013

Group Managing Director, Mr. Cheong Chia Chieh summarised the operations of the Group as follows:

Business performance for the Group continued to perform well for the year 2012.

Financial highlights

It gives me great pleasure to present our financial highlights for the 2012 financial year:

 Total revenue for 2012 decreased by 22% to RM45.6 million (2011: RM58.9 million)

 Gross profit improved by 3% to RM19.2 million (2011: RM18.8 million)

 Gross margin increased to 42% (2011: 32%)

 Profit before tax was RM9.9 million (2011: RM10.4 million)

 Net profit was RM10.0 million (2011: RM10.2 million)

 Net profit margin increased to 22% (2011: 17%)

 Basic earnings per share decreased by 8.1% to 25.90 sen per share (2011: 28.17 sen per share)

 Cash balances available for use after deducting bank overdraft at 31 December 2012 was RM2.3 million (31 December 2011: RM0.2 million)

 Net assets of RM62.0 million at 31 December 2012 (31 December 2011: RM50.5 million)

Business during the year

The Group's strategy has once again proven to be successful as it increased gross profit margins from 32% to 42%. This strategy in 2012 was to deliver equal, if not better, results to advertisers with higher margin advertising products and services.

Although total revenue fell short of expectations, the decline was expected, on the back of improved gross profits of RM19.3million, and a margin of 42%. As a result, our net profits margins also improved to 22% compared to 17% in 2011.

Notable Client Wins

Our business in Shanghai won an open tender from the Hangzhou Tourism Ministry for its integrated marketing project ("Hangzhou Tourism Project"). Hangzhou is the capital of Zhejiang Province, China and is renowned for its world heritage site - West Lake. The Hangzhou Tourism Project has been created by the Hangzhou government to promote Hangzhou as a tourism destination for holidaymakers from Singapore, Malaysia, Thailand, and the rest of Southeast Asia in 2013. The intention is to increase the popularity and reputation of Hangzhou tourism in the region.

We believe this is a testimony to the Group's strength in cross-border advertising and media services and is part of RHM's ongoing goal for further growth through notable business deals to significantly increase its strategic market reach, and is a strong statement of the Company's commitment to building a result-focused marketing ecosystem, and continue to demonstrate the ability of RHM to deliver targeted advertising to mass audiences.

We are proud to be entrusted by the Chinese government to promote China's heaven on earth to the SEA market. And believe it is an opportunity for the Group to form a long term strategic relationship with the Hangzhou Tourism Ministry, and act as a catalyst in propelling its credibility and reputation in the media industry in China and the SEA markets.

Our proven strategies and continuously improving services constantly exceed client expectations year on year. This has allowed us to win over new clients as well as continue to serve recurring clients.

In Malaysia, business was secured with notable new advertising clients including City University College, MCIS Zurich, SP Setia, Bank Islam, Polo House and Trend MicroSystems. At the same time, business continued to thrive with reputable existing blue chip clients of RHM's such as Acson, Porsche Malaysia, Canon Printers, Singer Malaysia, Must Ehsan Development, LBS, Huawei, HiSense,Midea, SegI, Joven Marketing and Celmonze.

RHM's financial services division, Ausscar Group, continues to contribute to the Group at a slow pace. The management has renewed business partnerships with MSIG, AIG, Kurnia Insurance, RedTone Telecommunications, Mobile Money International, NV Alliance, Lanfar Malaysia, Phillips Capital,Tokio Marine Life Insurance. Ausscar Group intends to continue to leverage on the core strengths of its people to focus on more streamlined services for its clients.

Shareholder value

In January 2012 and March 2012, RHM was ranked 2nd and 4th most traded AIM stock in Asia respectively (according to Allenby Capital Limited's market reports during 2012) which testifies the confidence towards RHM.

In July 2012, resolutions for scrip dividends were passed at the Annual General Meeting. This was the Group's reward to its shareholders for their trust in the Group. A bonus share issue of one new ordinary share for every 10 ordinary shares held by shareholders was implemented on 20 July 2012.

In 2013, the management intends to propose further scrip dividends to the shareholders. We believe this will contribute positively with increased liquidity and marketability of RHM shares.

Strategic corporate developments

PUC Founder

The Group's transaction with PUC Founder MSC Berhad ("Founder") continues to progress, and updates to reflect the new financial periods have been required to be submitted to Bursa Malaysia Securities, the stock exchange of Malaysia, as a result of the transaction delays. In the meantime, the Group continues to explore opportunities with Founder through its vast presence in China.

On 22 April 2013, Bursa Securities resolved to approve the Proposed Disposal of the entire issued share capital of the Company's subsidiary, Red Media Asia Limited, including all operating subsidiary companies PUC Founder (MSC) Berhad ("Founder"), listed on the Malaysian Stock Exchange Bursa Malaysia Securities Berhad, subject to a number of conditions. These conditions include, inter alia, Founder complying with various requirements relating to the implementation of the Proposed Disposal, as stipulated in the ACE Market Listing Requirements of Bursa Securities, and the submission of additional information. The Board of RHM expects the Proposed Disposal to be completed during the 2nd half of 2013. The completion of this exercise is expected to result in RHM holding a 60% stake in Founder.

We look forward to the completion of the transaction with Founder soon as the board of RHM believes it will be advantageous to the company in its strategic positioning for the Chinese markets.

2013

The outlook for 2013 continues to show promise for the Group's business. Our established organization that has dynamically adapted during the most challenging of times and continued to deliver results is a testimony of our capabilities and the promising potential our business has to offer.

We believe that with the successfully implemented strategies of enlarging our market share in 2011 and improving profit margins in 2012, the Group's business is well positioned for highly promising growth from 2013 onwards.

Our expansion strategy remains unchanged as we continue to seek potential businesses to acquire; namely out-of-home media and interactive advertising businesses in the social media sector.

WE believe 2013 will be another promising year for RHM.

CHEONG CHIA CHIEH

Group Managing Director

28 June 2012

Notes to editors:

Exchange rate: £1 = RM4.94

Resource Holding Management Limited (AIM: RHM), is a Cayman Islands incorporated holding company. Its primary activity is that of a media broking group, including an innovative barter sales trading activity, in Malaysia and the major cities of the People's Republic of China ("PRC"), namely Shanghai, Beijing and Guangzhou.

A media broker conventionally purchases advertising space on behalf of its clients and earns commissions from the media providers based on the amount of advertising purchased. The AxChange business model adopts a pull marketing approach by aggregating demand from advertisers and consumers/merchants to generate additional sales for both the media owners and advertisers respectively.

RHM also acts, to a lesser extent, as a non-stockholding distributor for certain clients (for whom it also acts as a media broker) with the intention of generating higher margins for the Group than would be obtained in conventional media buying.

Using this distribution based business model (AxChange), which the Directors aim to grow, RHML enters into a contract to draw down various lines of inventory and then, as the inventory is sold through RHM's distribution network, the proceeds from the sales are used to purchase media space for the same client.

The AxChange business model has been designed to free up working capital; allowing RHML's customers to pay for advertising and assist new entrants into Malaysia & China (where capital controls are still in place) in selling their products using RHML's established distribution network. RHM also believes the model provides benefits to its distributors; providing them with lower unit prices and access to credit facilities to which they otherwise would not have access.

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2012

The results shown above relate entirely to continuing and acquired operations.

STATEMENTS OF FINANCIAL POSITION

AS AT 31 DECEMBER 2012

STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2012

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

The group's other reserves comprise the following:

COMPANY STATEMENT OF CHANGES IN EQUITY

Notes to the Results for the Financial Year Ended 31 Dec 2012

1.1 Basis of preparation financial statements

The Group's consolidated financial statements for the year ended 31 December 2012, from which this financial information has been extracted, and for the comparative year ended 31 December 2011 are prepared on a going concern basis and in accordance with IFRS as adopted by the EU ("IFRS").

The financial information set out in this preliminary announcement does not constitute "a complete set of financial statements" as defined in IAS1 Presentation of financial statements but it is derived from those accounts. The financial information for the year ended 31 December 2011 is derived from the financial statements for that year which were issued to shareholders on 18 June, 2012. The auditors reported on those accounts; their report was unqualified. The consolidated statement of financial position at 31 December 2012, the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated statement of cash flows and the related notes for the year then ended have been extracted from the Group's 2012 financial statements upon which the auditor's opinion is unqualified.

The announcement has been agreed with the company's auditor for release.

The financial statements are presented in Malaysian Ringgits and all values are rounded to the nearest thousand Ringgits (RM'000) except when otherwise indicated. The exchange rate of Malaysian Ringgit to Pounds Sterling at 31 December 2012 was £1: RM4.94 (RM1: £0.20) (2011: £1: RM4.80, RM1: £0.20)

1.2 Segmental reporting

The activities of the group are divided into operating segments in accordance with the requirements of IFRS 8 'Operating Segments'. Operating segments are identified on the same basis that is used internally to manage and report on performance and takes account of the organizational structure of the group based on the various services of the reportable segments. The activities of the group are broken down into three operating segments: advertising, financial services and other entities. The advertising segment is involved in the advertising brokerage business. The financial services segment focuses primarily on the provision of financial planning and insurance agency businesses. Holding companies are included in the other entities segment. Eliminations comprise the effects of eliminating business relationships between the operating segments.

Internal management and reporting segment information is prepared in conformity with the accounting policies adopted for preparing and presenting the group financial statements. There was no change in accounting policies compared to previous periods. Inter-segment receivables and payables, provisions, income, expenses and profits are eliminated in the column "Eliminations". Inter-segment sales take place at arm's length prices.

Operating segments are reported in a manner consistent with the internal reporting provided to the 'chief operating decision-maker' who is responsible for allocating resources and assessing performance of the operating segments and which has been identified as the Board of Directors that make strategic decisions. In order to assist the decision making process, various measures of segment result and of segment assets have been set for the different operating segments. The advertising, financial services and other entities segments are managed on the basis of the profit after taxation. Capital expenditure on non-current assets is the corresponding measure of segment assets used to determine how to allocate resources.

2 Segmental reporting

The segment results for 2012 were as follows:

The Company regards the customers who contributing more than 10% of the segmental revenue as major customers. During the financial year 2011, major customer/s of advertising and media segment contributed approximate to 23% (2010: 14%) of the segment's total revenue.

The segment results for 2011 were as follows:  

Geographical information

3 Goodwill

Group

2012 2011

RM'000 RM'000

Cost

At 1 January 33,241 13,890

Additions 5,084 18,556

Exchange adjustments 425 795 ________ ________

At 31 December 38,750 33,241

======= =======

No acquisitions took place in 2012. Additions to goodwill arose from the additional deferred contingent consideration on the acquisition of IMM Businesses. In view of the positive impact of IMM's brand name and reputation amongst advertisers and media partners for RHM's business in the PRC, IMM, Redhot Media (HK) Limited ("RHM (HK)") and Redhot Media International (Shanghai) Ltd ("RHM (Shanghai)") (together, "the Parties") have mutually agreed to renew the terms of the agreement with IMM for a period of one year, from 1 January 2012 to 31 December 2012. The Parties have agreed a variation on the payment consideration such that the vendor of IMM, being Mr Perry Tsang Wai Keung and/or his appointed nominees, following the publication of RHM (HK)'s and RHM (Shanghai)'s audited accounts for the year ended 31 December 2012, shall be entitled to receive:

(a) An amount equivalent to 100% of the total audited profit after tax of RHM (HK) and RHM (Shanghai) for the year to 31 December 2012; and

(b) Such number of the company ordinary shares of US$0.10 each ("Ordinary Shares") in value equivalent to 20% of the total audited profit after tax of RHM (HK) and RHM (Shanghai) for the year to 31 December 2012.

Further, the Parties have agreed to vary the terms of the purchase consideration for the 2010 and 2011 financial years such that a consideration equivalent to 100% of the audited profit after tax of RHM (HK) for each financial year will be payable in cash; whilst the balance of the consideration, equivalent to 20% of the audited profit after tax of RHM (HK) for each financial year 2010 and 2011, shall be payable in new Ordinary Shares. The original terms of the agreement required payment each year of 80% of the audited profit in cash and 40% of the audited profit in new Ordinary Shares.

The New Ordinary Shares represent 20% of RHM (HK)'s profits for 2010 and the Cash Consideration represents 20% of RHM (HK)'s profits for 2010. RMB8,941,527 has already been paid to the vendors of IMM in respect of the original 80% cash element of the payment consideration for 2010.

Goodwill acquired in business combinations is allocated, at acquisition, to the cash generating units ("CGUs") that are expected to benefit from the business combinations. The carrying amount of goodwill has been allocated as follows:

2012 2011

RM'000 RM'000

CMAD and CMIT businesses 9,377 9,370

IMM Business 23,351 17,849

Ausscar Group 2,990 2,990

RedHot Media Sdn Bhd 2,123 2,123

RH Media Group Sdn Bhd 909 909

______ ______

38,750 33,241

====== ======

The group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired.

The recoverable amounts of the CGU's are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the forecast period. Management estimated the discount rates of 15% that reflect current market assessments of the time value of money and the risks specific to the CGU's. The growth rates of 3% are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.

The directors have applied sensitivities to the goodwill impairment test and increasing the discount rate by 3% and removing the 3% growth rate does not result in any impairment of the goodwill for the CGUs.

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