Share Capital and Options - As of September 30, 2023, the total number of shares held by Onger Investments Limited is 2,007,700,062, and Goal Success Investments Limited holds 5,312,395,685 shares, representing approximately 27.4% and 72.6% of the total issued shares respectively [2][10]. - The total number of shares available for issue under the 2012 Scheme is 176,000,000, which represents approximately 1.77% of the existing issued share capital of the Company [17]. - The Company has granted share options totaling 50,000,000 to the Director Leung Sui Wah, with an exercise price of HK$0.118 per share [16]. - The Company’s share option scheme allows for options to be granted up to 1% of the shares in issue in any 12-month period without prior shareholder approval [14]. - The Company’s total outstanding share options as of April 1, 2023, were 211,000,000, which decreased to 176,000,000 by September 30, 2023, after the lapse of 35,000,000 options [16][17]. - The Company’s share option plan was adopted on May 3, 2012, and has since been terminated for new grants, with existing options remaining valid [12]. - The exercise price for share options is determined by the Board and must not be less than the closing price of the shares on the date of grant [13]. - The Company’s corporate governance includes provisions for refreshing the share option limit to 10% of the total number of shares in issue, subject to shareholder approval [15]. Financial Performance - Total revenue for the six months ended September 30, 2023, was HK$324,693,000, a slight increase from HK$321,507,000 in the same period of 2022, representing a growth of 0.68% [33]. - Revenue from property sales increased to HK$116,677,000, up from HK$108,185,000, reflecting a growth of 4.6% year-over-year [33]. - Commission income from the agricultural produce exchange market decreased to HK$45,136,000, down 12.5% from HK$51,505,000 in the previous year [33]. - For the six months ended September 30, 2023, the profit for the period attributable to ordinary equity holders was 7,764 million HKD, compared to 12,697 million HKD for the same period in 2022, reflecting a decrease of approximately 38.3% [47]. - The total comprehensive income for the period was a loss of 318,904 million HKD, compared to a loss of 353,631 million HKD in the previous year, indicating an improvement of about 9.8% [47]. - The basic earnings per share for the six months ended September 30, 2023, remained unchanged at 0.78 HKD, with no dilution effect from share options [47]. - The Group reported a profit for the period of HK$15,840,000, compared to HK$20,461,000 for the same period in 2022, reflecting a decline in profitability [64]. Cash Flow and Liabilities - Net cash flows from operating activities for the period were HK$116,089,000, compared to a net cash outflow of HK$45,934,000 in the same period last year [27]. - The company reported a net increase in cash and cash equivalents of HK$1,551,000, contrasting with a decrease of HK$129,366,000 in the prior year [27]. - Total non-current liabilities decreased to HK$1,483,318,000 from HK$1,717,098,000, indicating a reduction of approximately 13.6% [23]. - The equity attributable to owners of the parent was HK$1,586,896,000, down from HK$1,738,026,000, a decline of about 8.7% [23]. - The company incurred net cash used in investing activities of HK$17,342,000, compared to HK$2,740,000 in the previous year, indicating increased investment outflows [27]. - The total cash and cash equivalents at the end of the period stood at HK$278,509,000, compared to HK$270,863,000 at the end of the previous year [27]. - The group reported an increase in depreciation on owned assets to HK$7,543,000 from HK$6,666,000, which is an increase of about 13.1% [109]. - The group had capital commitments totaling HK$178,986,000 as of the reporting period [138]. Shareholder and Corporate Governance - The Company’s substantial shareholders include entities controlled by Mr. Tang, who is deemed to be interested in 7,320,095,747 shares, representing approximately 100% of the total issued shares [9][10]. - The board of directors does not recommend the payment of any interim dividend for the six months ended September 30, 2023, consistent with the previous year [94]. - The Group operates under two reportable segments: agricultural produce exchange market operation and property sales [70]. - The Group's segment performance is assessed based on the profit from each segment, including certain other income and expenses, and central administrative costs [81]. Legal Proceedings - The Group has been involved in civil proceedings related to the Baisazhou Acquisition since 2011, with key proceedings resolved in the current period [173]. - The Hong Kong Court ruled that Ms. Wang and Tian Jiu must pay the Company damages totaling RMB510,000,000 for losses incurred due to the undervaluation of Baisazhou Agricultural's shares [173]. - On April 26, 2023, the court ruled that Ms. Wang and Tian Jiu shall pay the Company damages totaling HK$567,037,325.74, along with interest from January 18, 2021 [175]. - The Company continues to be the legal and beneficial owner of Baisazhou Agricultural following the dismissal of the counterclaim by Ms. Wang and Tian Jiu [175]. Financial Instruments and Fair Value - The fair values of cash and cash equivalents, trade receivables, and other financial instruments approximate their carrying amounts due to short-term maturities [177]. - The fair values of the non-current portion of loans and interest receivables and interest-bearing bank borrowings were calculated by discounting expected future cash flows using current rates for similar instruments [181]. - The fair value measurement of financial instruments is reviewed and approved by the directors and discussed with the audit committee twice a year [190].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不負責，對其準確 性或完整性亦不發表任何聲明，並明確表示，概不對因本公佈全部或任何部分內容而產生或 因依賴該等內容而引致之任何損失承擔任何責任。 CHINA AGRI-PRODUCTS EXCHANGE LIMITED 中 國 農 產 品 交 易 有 限 公 司 （於百慕達註冊成立之有限公司） （股份代號：0149） 截至二零二三年九月三十日止六個月之 中期業績公佈 中期業績 中國農產品交易有限公司（「本公司」，連同其附屬公司統稱「本集團」）之董事 會（「董事會」或「董事」）欣然宣佈本集團截至二零二三年九月三十日止六個月 （「本期間」）的未經審核簡明綜合中期業績，連同截至二零二二年九月三十日 止六個月（「二零二二年對應期間」）的比較數字。本中期簡明綜合財務資料未 經審核，但已由本公司審核委員會（「審核委員會」）審閱。 ...

Financial Performance - The Group recorded a turnover of approximately HK$596 million for the year ended March 31, 2023, a decrease of approximately HK$273 million compared to the previous year[15]. - The Group recorded a turnover of approximately HK$596 million for the year ended 31 March 2023, representing a decrease of approximately 31% compared to HK$869 million for the previous financial year[37]. - Gross profit for the year was approximately HK$331 million, a decrease of approximately 27% from HK$456 million in the previous year[37]. - The segment result was approximately HK$200 million, reflecting a decrease of approximately 34% compared to HK$304 million in the last financial year[37]. - The decrease in turnover, gross profit, and segment result was primarily due to a reduction in property sales recognition during the year[37]. - Other revenue and net income decreased to approximately HK$25 million from approximately HK$27 million, mainly due to a decline in bank and other interest income[42]. - General and administrative expenses increased to approximately HK$164 million from approximately HK$149 million, primarily due to new business preparation costs[44]. - Selling expenses decreased to approximately HK$47 million from approximately HK$61 million, attributed to reduced sales recognition and related promotional activities[44]. - Profit attributable to owners of the Company was approximately HK$7 million, compared to approximately HK$6 million in the last financial year, despite a decrease in operational profit[55]. - Income tax decreased significantly to approximately HK$9 million from approximately HK$69 million, mainly due to lower assessable profits and over-provision recognized during the Year[54]. Market Operations - The Group managed a total of eleven agricultural produce exchange markets in mainland China, covering regions such as Wuhan, Huangshi, and Suizhou[18]. - The business operations span across multiple provinces, including Hubei, Henan, Guangxi, Jiangsu, and Liaoning[18]. - The Group's logistics network connects southern and northern regions, enhancing the efficiency of agricultural produce distribution[18]. - The Group's market expansion strategy includes establishing a nationwide chain of wholesale markets and modern agricultural logistics centers[18]. - The Group plans to expand new business sales channels by leveraging its eleven agricultural produce exchange markets across the country, targeting food supply to restaurants and supermarkets in Hong Kong[24]. - The turnover of Suizhou Market increased by approximately 11% compared to the last financial year[71]. - The turnover of Puyang Market increased by approximately 33% due to improved agricultural products transaction commission[73]. - The turnover of Luoyang Market decreased by approximately 52% due to reduced property sale recognition[72]. - The turnover of Yulin Market decreased by approximately 46% due to decreased property sale recognition[80]. - The turnover of Xuzhou Market decreased by approximately 3% compared to the last financial year[82]. - The turnover of Panjin Market decreased by approximately 4% compared to the last financial year[84]. Strategic Objectives - The year 2023 marks the beginning of the PRC's comprehensive implementation of the 20th National Congress's spirit, focusing on agricultural development and food security[19]. - The Group aims to ensure stable and secure supply of food and key agricultural products, aligning with national policies for rural revitalization and agricultural modernization[19]. - The company is committed to promoting high-quality development in agriculture and rural areas as part of its strategic objectives[19]. - The Group aims to enhance cold chain logistics, as the comprehensive cold chain circulation rate of fresh agricultural products in China is only 19%, significantly lower than the over 90% in developed countries[23]. - The Group is committed to implementing a comprehensive agricultural produce exchange market information system to drive business development and achieve sustained profit growth[28]. - The Group aims to build a nationwide agricultural produce exchange network, leveraging its industry position and advanced management systems[166]. - The Group is expanding operations in China through an "asset light" strategy and exploring electronic platform development to leverage advancements in the data economy promoted by the PRC government[169]. - The Group aims to build a national agricultural produce trading market network, leveraging its leading industry position and replicable business model[170]. Corporate Governance - The Company has maintained a high standard of corporate governance, emphasizing transparency, accountability, integrity, and independence to enhance competitiveness and operating efficiency[195]. - The Board comprises three executive Directors and three independent non-executive Directors as of the date of the annual report[199]. - The Company has complied with the Corporate Governance Code throughout the financial year ended March 31, 2023[196]. - The Company adopted the Model Code for Securities Transactions by Directors, ensuring compliance by all Directors throughout the financial year[197]. - The Company has a written code of conduct regarding securities transactions for relevant employees likely to possess inside information[198]. Legal and Compliance - The company has complied with all relevant laws and regulations impacting its business operations during the year[133]. - The Group has engaged independent environmental consultants to conduct environmental impact assessments for all construction projects, ensuring compliance with PRC environmental laws[129]. - The company has adhered to the "Three Simultaneities" principle in all construction projects, ensuring compliance with environmental standards[132]. - The Group regularly reviews its liquidity levels to ensure adequate financing for its capital-intensive agri-products exchange markets[124]. - The Group faces risks including fluctuations in the RMB exchange rate against Hong Kong dollars, which could impact financial reporting[124]. - The Group does not have a foreign currency hedging policy and is exposed to foreign currency risks primarily from operations in mainland China[111]. Human Resources - As of March 31, 2023, the Group employed 1,116 employees, a slight increase from 1,115 employees on March 31, 2022, with approximately 98% located in the PRC[160]. - The remuneration policy for employees is reviewed periodically, focusing on market conditions, company performance, and individual qualifications[160]. - The Company adopted a new share option scheme on August 26, 2022, to reward eligible participants and enhance company value[160]. Environmental and Social Responsibility - The Group donated approximately HK$6.29 million worth of supplies to charitable organizations in China and the local community during the year[29]. - The Group has been actively promoting the informatization of agricultural produce exchange markets to transform traditional markets into modern digital wholesale cities[22]. - The Group's leadership team has extensive experience in business operations, corporate governance, and mergers and acquisitions, enhancing its strategic capabilities[177][178]. Risk Management - The Group's treasury policy includes diversifying funding sources, primarily relying on internally generated cash flow and interest-bearing loans from banks and non-financial institutions[116]. - The Group's interest-bearing debts totaled approximately HK$1,402 million as of March 31, 2023, down from HK$1,492 million as of March 31, 2022[108]. - The effective interest rate for Listed Notes was 12% for both years, while financial institution borrowings had an effective interest rate of 5% as of March 31, 2023[115]. Legal Proceedings - The Company continues to seek legal advice for the recovery of damages against Ms. Wang and Tian Jiu[158]. - The Company was awarded damages totaling HK$567,037,325.74 from Ms. Wang and Tian Jiu, along with interest from January 18, 2021, until payment[157]. - The Supreme Court dismissed the application for retrial regarding the previous judgments, confirming the rulings in favor of the Company[151]. - The company has faced ongoing legal proceedings related to the acquisition of a 90% interest in Baisazhou Agricultural, with claims of forged agreements[138]. - The Ministry of Commerce of the PRC was ordered to handle an application regarding the revocation of approval related to the contested agreements within 30 days[142].

Financial Performance - The Group recorded a turnover of approximately HK$322 million for the six months ended 30 September 2022, representing a decrease of approximately HK$90 million or 22% from HK$412 million for the corresponding period in 2021[14]. - The decline in turnover was attributed to lower property sales recognition and market operation turnover compared to the 2021 corresponding period[14]. - The Group recorded a gross profit of approximately HK$175 million, a decrease of approximately 23% compared to HK$228 million in the corresponding period of 2021[17]. - The segment result was approximately HK$116 million, representing a decrease of approximately 27% from HK$158 million in the same period last year[17]. - The profit for the period attributable to owners of the Company was approximately HK$8 million, down from approximately HK$18 million in the corresponding period of 2021[27]. - The Group's profit from operations before fair value change of investment properties was approximately HK$91 million, down from approximately HK$138 million in the previous year[27]. Expenses and Costs - General and administrative expenses increased to approximately HK$82 million, up from approximately HK$75 million in the previous year, mainly due to pandemic-related expenses[19]. - Selling expenses decreased to approximately HK$16 million from HK$23 million, attributed to reduced property sales recognition[19]. Dividends - The Board resolved not to declare any interim dividend for the six months ended 30 September 2022, consistent with the previous year where no dividend was declared[10][12]. Market Operations - Huangshi Market occupies approximately 23,000 square metres and has resumed full operation during the Period[38]. - Suizhou Market, covering around 240,000 square metres, showed satisfactory operating performance despite moderate impacts from the COVID-19 pandemic[40]. - Luoyang Market, the flagship project in Henan Province, has a site area of approximately 255,000 square metres and contributed positive cash flow to the Group as operations returned to normal[43]. - Yulin Market is one of the largest agricultural produce exchange markets in Guangxi Region, with a site area of approximately 415,000 square metres, and its performance was satisfactory during the Period[49]. - Xuzhou Market occupies approximately 200,000 square metres and serves as a major marketplace for fruit supply in northern Jiangsu Province, showing steady operating performance[51]. - Huai'an Market, covering about 100,000 square metres, has been operational since October 2015 and is expected to require more time for market growth[58]. - Panjin Market, with a construction area of around 50,000 square metres, focuses on river crab trading and is expected to maintain steady performance[59]. Investment Properties - The Group recorded a net gain in fair value of investment properties of approximately HK$25 million, compared to HK$4 million in the previous year[20]. - The stock of properties value impaired during the period was approximately HK$5 million, whereas there was no impairment in the same period last year[20]. - The fair value of the Group's investment properties was determined based on independent professional valuations, adhering to HKIS Valuation Standards 2020[92]. Financial Position - As of September 30, 2022, the Group had total cash and cash equivalents amounting to approximately HK$271 million, down from approximately HK$440 million as of March 31, 2022[75]. - Total assets were approximately HK$4,699 million as of September 30, 2022, compared to approximately HK$5,491 million as of March 31, 2022[75]. - The Group's gearing ratio increased to approximately 0.6 as of September 30, 2022, from approximately 0.4 as of March 31, 2022[75]. - The ratio of total interest-bearing debts to total assets was approximately 29% as of September 30, 2022, compared to approximately 27% as of March 31, 2022[75]. - Outstanding capital commitments amounted to approximately HK$213 million as of September 30, 2022, down from approximately HK$272 million as of March 31, 2022[78]. - The Group's total interest-bearing debts were approximately HK$1,375 million as of September 30, 2022, down from approximately HK$1,492 million as of March 31, 2022[87]. Legal Proceedings - The company faced legal proceedings initiated by Ms. Wang and Tian Jiu regarding the acquisition of 90% equity in Baisazhou Agricultural Products, claiming the transfer agreement was forged[106]. - The Hubei Court dismissed the claims from Ms. Wang and Tian Jiu, ordering them to bear the legal costs, but the decision was later overturned by the Supreme Court, which declared the agreement invalid[107]. - The Supreme Court recognized a sales agreement worth HKD 1,156,000,000 that must be executed by the company, Ms. Wang, and Tian Jiu[107]. - The Company continues to monitor ongoing legal proceedings related to the interests in Baisazhou Agricultural[120]. Employee and Remuneration - As of September 30, 2022, the Group employed 1,105 individuals, a slight decrease from 1,115 as of March 31, 2022, with approximately 98% located in the PRC[128]. - The Group's remuneration policy is reviewed periodically, with employee compensation adjusted annually based on market conditions, qualifications, experience, responsibilities, and performance[128]. - The Group has adopted a new share option scheme on August 26, 2022, aimed at rewarding eligible participants and enhancing the Company's value for shareholders[128]. Strategic Initiatives - The Company is actively studying various business opportunities to diversify income streams and deliver long-term benefits to shareholders[29]. - The Group is exploring opportunities to establish a new electronic trading platform to enhance the efficiency of the agricultural products market[60]. - The Group is pursuing an "asset light" strategy and exploring electronic platform development to capitalize on technology advancements in the PRC[134]. - The Group plans to build a nationwide agricultural produce exchange network leveraging its industry position and advanced management systems[131]. Risk Management - The Group has implemented policies to monitor and assess potential cyber risks, ensuring the security of its operations[61]. - Environmental risks due to severe climate change may adversely impact agricultural production and the Group's turnover in market operations and property sales[71]. - The Group faces risks including fluctuations in the Renminbi exchange rate, difficulty in obtaining financing, and challenges in maintaining competitive positioning in the agri-products exchange market[100]. Shareholder Information - As of September 30, 2022, Mr. Tang held 7,320,095,747 shares, representing approximately 73.54% of the Company's total issued shares[156]. - The Company confirmed compliance with the required standards set out in the Model Code for the entire reporting period[148]. - The 2022 Scheme will remain in force for 10 years, until August 25, 2032[190].

Financial Performance - The Group recorded a turnover of approximately HK$869 million for the year ended March 31, 2022, an increase of approximately HK$218 million compared to the previous year[10]. - The Group recorded a turnover of approximately HK$869 million for the year ended 31 March 2022, representing an increase of approximately 33% compared to HK$651 million in the previous financial year[49][51]. - Gross profit for the year was approximately HK$456 million, an increase of approximately 30% from HK$352 million in the previous year[49][51]. - Segment result increased to approximately HK$304 million, up approximately 32% from HK$230 million in the previous financial year[49][51]. - The gross profit margin to turnover was 52% for the year, compared to 54% in the previous year[50]. - Other revenue and net income decreased to approximately HK$27 million from approximately HK$41 million in the previous year, primarily due to a reduction in government grants and subsidies[52]. - The Group recorded a gain on litigation judgment of approximately HK$49 million for the year, significantly lower than the HK$661 million recorded in the previous financial year[54]. - The profit attributable to owners of the Company was approximately HK$6 million, a sharp decline from HK$490 million in the last financial year, mainly due to reduced gains from litigation judgments[60]. Market Operations - The Group managed a total of 11 agricultural produce exchange markets in mainland China, covering various provinces including Hubei, Henan, Guangxi, Jiangsu, and Liaoning[14]. - The agricultural wholesale markets are crucial for ensuring the supply of essential food items, closely linked to the livelihoods of many households[25]. - The operation turnover of Huangshi Market increased by approximately 16% due to improved market operations, creating synergy with Wuhan Baisazhou Market[85]. - Huangshi Market's turnover increased by approximately 16% due to improved marketing efforts[86]. - Suizhou Market's turnover increased by approximately 65% compared to the last financial year[87]. - Luoyang Market's turnover increased by approximately 375% due to increased property sale recognition[89]. - Puyang Market's turnover decreased by approximately 44% due to decreased property sale recognition[91]. - Kaifeng Market's turnover increased by approximately 117% due to increased property sale recognition[93]. - Yulin Market's turnover decreased by approximately 22% due to decreased property sale recognition[107]. - Qinzhou Market's turnover decreased by approximately 9% due to decreased property sale recognition[109]. - Xuzhou Market's turnover increased by approximately 9% compared to the last financial year[111]. - Panjin Market's turnover increased by approximately 6% compared to the last financial year[114]. Strategic Initiatives - The Group's strategy includes optimizing the digital operation model to enhance efficiency and reduce costs in the agricultural wholesale industry[30]. - The Group has fully introduced a new electronic transaction settlement model across all agricultural produce exchange markets, aiming to reduce communication, approval, and operating costs[22]. - The Group plans to continue upgrading its electronic systems and market management models to diversify profit sources and revenue streams[31]. - The Group is exploring opportunities to establish new electronic trading platforms to enhance market efficiency[124]. - The Group is actively studying and evaluating various business opportunities to diversify income streams and deliver long-term benefits to shareholders[62]. - The Group aims to diversify its revenue streams and enhance its electronic systems and market management models in the future[33]. Regulatory and Economic Environment - The proposal to formulate a law on agricultural wholesale markets aims to strengthen planning, establish entry and exit mechanisms, and enhance supervision of the agricultural product market[18]. - The establishment of a legal framework for agricultural wholesale markets is expected to standardize operations and enhance healthy competition in the industry[18]. - The Central Government's No.1 Central Document for 2022 emphasizes the importance of stabilizing agricultural fundamentals and promoting rural revitalization amidst ongoing pandemic challenges[26]. - The PRC central government prioritizes agricultural development, promising investments in agricultural produce markets and infrastructure improvements[191]. - The Ministry of Commerce issued an opinion to strengthen county-level commercial systems and promote rural consumption[194]. - The State Council published a plan to promote agricultural digitalization as part of the 14th Five Year Development Plan[196]. Community and Social Responsibility - The Group is committed to food safety and aims to achieve high-quality and stable business performance through smart agricultural wholesale practices[31]. - The Group continues to prioritize food safety management and regularly conducts training to improve overall food safety awareness[40]. - The Group is committed to community support, donating RMB1 million for flood relief efforts and contributing essential goods for poverty alleviation[39][40]. Financial Position and Risks - As of March 31, 2022, the Group had total cash and cash equivalents of approximately HK$440 million, an increase from approximately HK$425 million as of March 31, 2021[132]. - Total assets were approximately HK$5,491 million, down from approximately HK$5,584 million in the previous year, while net assets increased to approximately HK$2,352 million from HK$2,206 million[132]. - The Group's gearing ratio remained stable at approximately 0.4 as of March 31, 2022, with total bank and other borrowings amounting to approximately HK$1,492 million[132]. - The ratio of total interest-bearing debts to total assets was approximately 27% as of March 31, 2022, compared to approximately 25% in the previous year[132]. - Outstanding capital commitments as of March 31, 2022, amounted to approximately HK$272 million, up from approximately HK$241 million in the previous year[134]. - The Group's operations are exposed to foreign currency risks primarily due to operations in mainland China and certain bank deposits denominated in RMB[134]. - The Group does not currently have a foreign currency hedging policy but is considering risk hedging tools to mitigate RMB exchange risks[134]. - The Group's treasury policy emphasizes diversifying funding sources, relying on internally generated cash flow and interest-bearing loans for operational financing[145]. - The Group regularly reviews its funding positions to ensure adequate financial resources for meeting financial obligations and considers various financing alternatives[145]. Legal Matters - The Company faced legal proceedings initiated by Ms. Wang and Tian Jiu regarding the alleged forgery of share transfer agreements related to a 90% interest acquisition in Baisazhou Agricultural[172]. - The Hubei Court dismissed the claims of Ms. Wang and Tian Jiu in June 2014, ordering them to bear the legal costs[174]. - The Supreme Court revoked the Hubei Court Judgment and declared the Contended Agreements void, affirming a sale and purchase agreement valued at HK$1,156 million[174]. - The Company continues to be the legal and beneficial owner of Baisazhou Agricultural under PRC Laws, as confirmed by multiple court judgments[180]. - The counterclaim made by Ms. Wang and Tian Jiu for the return of the Company's 90% interest in Baisazhou Agricultural was dismissed by the Hubei Court on 23 December 2019[181]. - The Supreme Court dismissed the appeal of Ms. Wang and Tian Jiu against the 23 December Judgment, upholding the ruling on 29 March 2021[181]. - The company was awarded damages totaling RMB 510,000,001 as per the HK Judgment[183]. Employment and Workforce - As of 31 March 2022, the group employed 1,115 employees, a decrease from 1,151 employees as of 31 March 2021[188]. - During the year, 226,000,000 share options were granted at an exercise price of HK$0.118 per share, with no options vested, exercised, cancelled, or lapsed[188].

Financial Performance - The Group recorded a turnover of approximately HK$412 million for the six months ended 30 September 2021, representing an increase of approximately HK$120 million or 41% from HK$292 million for the same period in 2020[13]. - Gross profit for the Period was approximately HK$228 million, an increase of approximately 51% compared to HK$151 million for the six months ended 30 September 2020[17]. - The segment result was approximately HK$158 million, reflecting a 70% increase from approximately HK$93 million in the previous year[17]. - The gross profit margin to turnover improved to 55% for the Period, compared to 52% for the same period in 2020[14]. - The profit attributable to owners of the Company for the Period was approximately HK$18 million, compared to a loss of approximately HK$23 million in the corresponding period of 2020[27]. - The Group recorded a profit from operations before fair value change of investment properties and impairment of approximately HK$138 million, up from approximately HK$67 million in the same period last year, representing a 106% increase[27]. - Profit for the period was HK$33,954,000, a significant recovery from a loss of HK$18,592,000 in the same period last year[178]. - Total comprehensive income for the period attributable to owners of the company was HK$75,998,000, down from HK$93,687,000 in the previous year[181]. - Earnings per share (basic and diluted) for the period was HK$0.18, compared to a loss per share of HK$0.23 in the same period last year[181]. Expenses and Costs - General and administrative expenses decreased to approximately HK$75 million from HK$79 million in the previous year, due to cost-saving measures[18]. - Selling expenses increased to approximately HK$23 million from HK$15 million, attributed to higher property sales recognition[18]. - Finance costs decreased to approximately HK$66 million from HK$82 million, primarily due to the repayment of interest-bearing debts[18]. - General and administrative expenses were approximately HK$75 million, down from approximately HK$79 million in the previous period, due to cost control measures[22]. - Sales expenses increased to approximately HK$23 million from approximately HK$15 million, attributed to increased confirmed property sales[22]. Market Operations - The reduction of COVID-19 transmission contributed to the restoration of sales and market operations to normal levels during the Period[17]. - The operating performance of Luoyang Market returned to normal as the COVID-19 pandemic was gradually brought under control, contributing positive cash flow to the Group[37]. - The performance of Huangshi Market resumed to full operation during the Period, enhancing trading synergy with Wuhan Baisazhou Market[31]. - Yulin Market, one of the largest agricultural produce exchange markets in Guangxi Region, performed satisfactorily during the Period, with property sales as the major income source[40]. - Suizhou Market's operating performance was satisfactory despite moderate impacts from the COVID-19 pandemic[36]. - Puyang Market, a joint venture project in Henan Province, has shown satisfactory operational performance during the period[43]. - Kaifeng Market, with a total building area of approximately 120,000 square meters, is gradually improving its performance as part of the agricultural market network in Henan Province[44]. - Yulin Market in Guangxi, covering approximately 415,000 square meters with a total building area of about 196,000 square meters, has performed well, generating significant revenue from property sales[45]. - Qinzhou Market, with a gross floor area of approximately 180,000 square meters, has shown satisfactory performance as the second operational point in Guangxi[48]. - Xuzhou Market occupies approximately 200,000 square meters and serves as a major marketplace for fruit supply in northern Jiangsu Province, maintaining steady operational performance[49]. - Huai'an Market, covering about 100,000 square meters, is expected to improve gradually as it matures, despite ongoing legal disputes with a joint venture partner[52]. - Panjin Market, the Group's first investment in Liaoning Province, has a construction area of around 50,000 square meters and is expected to maintain steady performance focusing on river crab trading[53]. Financial Position - As of 30 September 2021, the Group's total cash and cash equivalents amounted to approximately HK$442 million, an increase from approximately HK$425 million as of 31 March 2021[65]. - Total assets were approximately HK$5,652 million, up from approximately HK$5,584 million as of 31 March 2021, while net assets increased to approximately HK$2,295 million from approximately HK$2,206 million[65]. - The Group's gearing ratio as of 30 September 2021 was approximately 0.5, compared to 0.4 as of 31 March 2021, with total borrowings of approximately HK$1,548 million[65]. - The ratio of total interest-bearing debts to total assets was approximately 27% as of 30 September 2021, up from approximately 25% as of 31 March 2021[65]. - As of 30 September 2021, outstanding capital commitments amounted to approximately HK$267 million, an increase from approximately HK$241 million as of 31 March 2021[72]. - The Group had no contingent liabilities related to guarantees provided by wholly-owned subsidiaries as of 30 September 2021, compared to approximately HK$27,000 as of 31 March 2021[72]. - The Group's total interest-bearing debts as of 30 September 2021 were approximately HK$1,548 million, an increase from approximately HK$1,371 million as of 31 March 2021[78]. - The overall financial position shows a strengthening of equity and a significant reduction in liabilities, indicating improved financial health for the Company[186]. Legal Matters - The Company was involved in legal proceedings initiated by Ms. Wang and Tian Jiu regarding the alleged forgery of share transfer agreements related to the acquisition of a 90% interest in Baisazhou Agricultural[95]. - The Hubei Court dismissed the claims of Ms. Wang and Tian Jiu in June 2014, ordering them to bear the legal costs of the proceedings[96]. - The Supreme Court of the PRC revoked the Hubei Court Judgment on January 13, 2015, declaring the Contended Agreements void and recognizing a sale and purchase agreement valued at HK$1,156 million as the actual agreement[96]. - In May 2015, Ms. Wang and Tian Jiu filed legal proceedings against the Ministry of Commerce (MOFCOM) for failing to handle their application to revoke the approval related to the Contended Agreements[101]. - The Beijing Court ordered MOFCOM to reconsider the Application within 30 days on January 8, 2016[101]. - MOFCOM confirmed on May 19, 2016, that its approval from November 2007 regarding the Contended Agreements would not be revoked, citing potential serious damage to public interest[102]. - The Beijing Court dismissed the application by Ms. Wang and Tian Jiu to revoke MOFCOM's Decision on April 18, 2017, stating it lacked legal and factual basis[104]. - Ms. Wang and Tian Jiu filed an appeal against the Beijing Court's judgment on May 10, 2017, seeking to set aside the judgment and revoke MOFCOM's approval[105]. - The Company was awarded damages totaling RMB 510,000,001 from Ms. Wang and Tian Jiu due to their breach of the SPA regarding the acquisition of Baisazhou Agricultural[115]. - The Supreme Court dismissed the appeal of Ms. Wang and Tian Jiu, upholding the 23 December Judgment, which confirms the Company's ownership of Baisazhou Agricultural[112]. - The Company continues to be the legal owner of Baisazhou Agricultural according to the judgments issued by the Supreme Court[113]. Employee Information - The Company has 1,125 employees as of 30 September 2021, a decrease from 1,151 employees on 31 March 2021[119]. - Approximately 98% of the Group's employees are located in the PRC[119]. Corporate Governance - The Company has maintained high standards of corporate governance, ensuring transparency and accountability throughout the reporting period[130]. - The Group's management system and information technology infrastructure are well-advanced, supporting its nationwide agricultural produce exchange network[123]. - The Group has limited resources allocated to e-commerce development, focusing on cost control while exploring partnerships in this area[54]. - The Group has implemented policies to mitigate cyber risks and data fraud, ensuring that access to data is restricted to authorized personnel only[61]. Shareholding Structure - Mr. Tang holds 7,450,095,747 shares, representing approximately 74.85% of the total issued shares of the company[142]. - Easy One has an interest in 2,137,700,062 shares, accounting for 21.47% of the total issued shares[156]. - Goal Success is a beneficial owner of 5,312,395,685 shares, which is 53.37% of the total issued shares[156]. - Biomore Investments, Total Smart, and WYT each have an interest in 5,312,395,685 shares, representing 53.37% of the total issued shares[156]. - The company disclosed that 810,322,940 shares of WYT were held by Rich Time, and 11,400,000,000 shares of WOP were held by Earnest Spot Limited[151]. - The total number of shares involved in Mr. Tang's interests in associated corporations is 7,780,645,772 shares, which is approximately 46.71%[148]. - The company has a significant concentration of ownership, with major shareholders controlling over 50% of the total shares[156]. Future Outlook - The Group is expanding operations in China through an "asset light" strategy, confident that this approach will yield long-term benefits for the Company and its shareholders[126]. - The "Belt and Road Initiative" is expected to drive overall growth in the PRC economy, providing sustainable development opportunities[125]. - The PRC central government's agricultural development remains a top priority, with the 2021 "No. 1 Central Document" promoting investments in agricultural produce markets and logistics infrastructure[125].

[Corporate Information](index=3&type=section&id=Corporate%20Information) This section provides key company details, including board composition, essential operational information, and listing specifics [Board Composition and Committees](index=3&type=section&id=1.1%20Board%20Composition%20and%20Committees) The company's board comprises executive, non-executive, and independent non-executive directors, supported by audit, remuneration, nomination, and executive committees to ensure sound and effective corporate governance - Board members include Executive Directors Mr. Leung Shui Wah (Chief Executive Officer) and Mr. Yau Yuk Shing, Non-executive Director Mr. Tang Ching Ho (Chairman), and Independent Non-executive Directors Mr. Ng Yat Cheung, Mr. Lau King Lung, and Mr. Wong Ping Yuen[4](index=4&type=chunk)[5](index=5&type=chunk)[10](index=10&type=chunk) - The company has an Audit Committee, Remuneration Committee, Nomination Committee, and Executive Committee, each with clear membership and responsibilities[4](index=4&type=chunk)[5](index=5&type=chunk)[6](index=6&type=chunk) [Key Company Information](index=4&type=section&id=1.2%20Key%20Company%20Information) This section lists the company's principal bankers, legal advisors, auditors, registered office, head office, and principal place of business in Hong Kong - Principal bankers include Bank of Communications Co., Ltd. Hong Kong Branch and The Hongkong and Shanghai Banking Corporation Limited[8](index=8&type=chunk)[10](index=10&type=chunk) - Legal advisors are Linklaters for Hong Kong law and King & Wood Mallesons for PRC law[10](index=10&type=chunk) - The auditor is BDO Limited[13](index=13&type=chunk) [Listing Information](index=6&type=section&id=1.3%20Listing%20Information) The company's shares and notes are listed on The Stock Exchange of Hong Kong Limited, with stock codes 0149 and 5755 respectively - The company's shares are listed on The Stock Exchange of Hong Kong Limited, stock code 0149[15](index=15&type=chunk) - The company's 1% notes due 2024 are also listed on The Stock Exchange of Hong Kong Limited, stock code 5755[15](index=15&type=chunk) - The company's website is http://www.cnagri-products.com[16](index=16&type=chunk) [Chairman's Statement](index=7&type=section&id=Chairman's%20Statement) This statement provides an overview of the group's financial performance, business environment, strategic developments, and social responsibilities [Financial Performance Overview](index=7&type=section&id=2.1%20Financial%20Performance%20Overview) For the year ended March 31, 2021, the group's turnover was approximately **HKD 651 million**, a decrease of approximately **HKD 440 million** compared to the previous fiscal year (15 months), primarily due to accounting period adjustments and reduced property sales Turnover Comparison | Metric | For the 12 months ended March 31, 2021 (HKD) | For the 15 months ended March 31, 2020 (HKD) | | :--- | :--- | :--- | | Turnover | 651,000,000 | 1,091,000,000 | | Change | Decrease of approximately 440,000,000 | - | - The decrease in turnover was mainly due to reduced recognized property sales and the previous fiscal year including an additional three months of reporting data[17](index=17&type=chunk)[18](index=18&type=chunk) [Business Environment and Market Layout](index=8&type=section&id=2.2%20Business%20Environment%20and%20Market%20Layout) The group maintained stable business development amidst the pandemic, benefiting from its livelihood project nature and cost control measures, while the Chinese government's continuous support for agricultural product wholesale markets and logistics provided a favorable policy environment - The group's business development remained stable amidst the COVID-19 outbreak due to its nature as a livelihood project and effective cost control measures[21](index=21&type=chunk)[22](index=22&type=chunk) - The group has successfully established a nationwide chain of wholesale market systems and a modern agricultural and sideline product logistics center network, managing **11** agricultural product trading markets across Hubei, Henan, Guangxi, Jiangsu, and Liaoning provinces[19](index=19&type=chunk)[20](index=20&type=chunk) - The Chinese government continues to focus on "agriculture, rural areas, and farmers" development through its No. 1 Central Document, strongly supporting agricultural product wholesale markets and the agricultural product logistics industry, while also issuing policies to regulate the industry and raise entry barriers[23](index=23&type=chunk)[24](index=24&type=chunk)[26](index=26&type=chunk)[28](index=28&type=chunk) [Business Development and Digital Transformation](index=10&type=section&id=2.3%20Business%20Development%20and%20Digital%20Transformation) The group actively promotes the digitalization of its agricultural wholesale business, fully implementing electronic transaction settlement and modern leasing management systems to meet post-pandemic digital demands and strengthen market risk prevention and cost control - The group has fully introduced electronic transaction settlement and modern leasing management systems across all agricultural product trading markets, advancing the digitalization of its agricultural wholesale business[34](index=34&type=chunk)[35](index=35&type=chunk) - Electronic payment usage has increased, all paper-based lease contracts have been converted to electronic contracts, allowing operators to pay fees and sign online, effectively reducing costs and monitoring operational status[34](index=34&type=chunk)[35](index=35&type=chunk) - During the pandemic, the group implemented strict hygiene and epidemic prevention measures, strengthened monitoring of imported cold chain food, and integrated resources to enhance cost control for improved operational efficiency[36](index=36&type=chunk)[37](index=37&type=chunk) [Corporate Strategy and Future Outlook](index=11&type=section&id=2.4%20Corporate%20Strategy%20and%20Future%20Outlook) The group will integrate online and offline agricultural product trading platforms, apply modern technology to manage "five flows" (vehicle, human, logistics, information, capital), upgrade to a new generation of agricultural product supply chain logistics centers, and plans to shift its profit model from fixed rent to transaction commissions for sustainable growth - The group will integrate offline physical agricultural product trading markets and build an online agricultural product trading big data cloud platform, applying modern technology to manage the "five flows": vehicle flow, human flow, logistics flow, information flow, and capital flow[39](index=39&type=chunk)[42](index=42&type=chunk) - In the long term, the profit model will shift from traditional fixed site rental to primarily collecting transaction commissions, aiming for more flexible and effective market scaling and sustained profit growth[40](index=40&type=chunk)[42](index=42&type=chunk) - The future strategy will uphold the philosophy of "strengthening agriculture with integrity, benefiting farmers with trust," using digitalization as a core means to ensure food safety, guided by smart agricultural wholesale upgrades, to deliver reasonable returns to shareholders[41](index=41&type=chunk)[43](index=43&type=chunk) [Social Responsibility](index=12&type=section&id=2.5%20Social%20Responsibility) The group is committed to sustainable business development, actively participates in Hong Kong charity events, donates essential goods to anti-epidemic frontlines and affected areas in mainland China, and strictly adheres to environmental laws and regulations while promoting environmental awareness - The group participated in Hong Kong Community Chest's "Charity Dental Day" and "Green Day" to raise funds for vulnerable groups and promote environmental awareness[49](index=49&type=chunk)[50](index=50&type=chunk) - In mainland China, the group repeatedly donated essential goods such as vegetables, cooking oil, and rice to government units, hospital anti-epidemic personnel, schools, and residents, supporting epidemic prevention and poverty alleviation[49](index=49&type=chunk)[50](index=50&type=chunk) - The group strictly complies with Chinese environmental laws and regulations in the construction and operation of agricultural product trading markets, and actively promotes environmental awareness among employees and suppliers[49](index=49&type=chunk)[50](index=50&type=chunk) [Management Discussion and Analysis](index=13&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed analysis of the group's financial performance, operational review, business development, risk management, liquidity, and legal matters [Summary of Financial Results](index=15&type=section&id=3.1%20Summary%20of%20Financial%20Results) For the year ended March 31, 2021, the group recorded a turnover of approximately **HKD 651 million**, a decrease of about **40%** from the previous fiscal year (15 months), with gross profit and segment results also declining; however, a positive legal ruling for the Wuhan market resulted in a **HKD 661 million** gain on litigation judgment, significantly increasing profit attributable to owners to approximately **HKD 490 million** [Turnover, Gross Profit and Segment Result](index=15&type=section&id=3.1.1%20Turnover,%20Gross%20Profit%20and%20Segment%20Result) For the year ended March 31, 2021, the group's turnover was **HKD 651 million**, a **40%** year-on-year decrease, with gross profit and segment results also falling by **35%** and **32%** respectively, primarily due to reduced property sales and reporting period adjustments Key Financial Metrics Comparison (as of March 31) | Metric | 2021 (12 months) (million HKD) | 2020 (15 months) (million HKD) | Change Rate | | :--- | :--- | :--- | :--- | | Turnover | 651 | 1,091 | -40% | | Gross Profit | 352 | 539 | -35% | | Segment Result | 230 | 337 | -32% | - The decrease in turnover, gross profit, and segment results was mainly due to reduced recognized property sales and the previous fiscal year including an additional three months of reporting data[60](index=60&type=chunk)[58](index=58&type=chunk) [Other Revenue and Other Net Income](index=15

[Corporate Information](index=2&type=section&id=Corporate%20Information) [Corporate Information Details](index=2&type=section&id=Corporate%20Information%20Details) This section details China Agri-Products Exchange Limited's corporate information as of September 30, 2020, covering governance, key personnel, and listing particulars - The Board of Directors comprises **three executive directors** (including Chairman and CEO Mr. Chan Chun Hong) and **three independent non-executive directors**[7](index=7&type=chunk) - Details on the composition and chairpersons of the Audit Committee, Remuneration Committee, and Nomination Committee[7](index=7&type=chunk) - The company's shares and 1% notes due 2024 are listed on The Stock Exchange of Hong Kong Limited, with stock code **0149** and note code **5755**[9](index=9&type=chunk) [Interim Dividend](index=5&type=section&id=Interim%20Dividend) [Interim Dividend Declaration](index=5&type=section&id=Interim%20Dividend%20Declaration) The Board resolved not to declare an interim dividend for the six months ended September 30, 2020, consistent with the prior year - The Board resolved not to declare an interim dividend for the six months ended September 30, 2020[10](index=10&type=chunk)[12](index=12&type=chunk) - No interim dividend was declared for the same period in 2019[10](index=10&type=chunk)[12](index=12&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) [Summary of Financial Results](index=5&type=section&id=SUMMARY%20OF%20FINANCIAL%20RESULTS) The Group experienced significant declines in turnover and gross profit for the six months ended September 30, 2020, resulting in a loss attributable to owners, mainly due to reduced property sales Key Financial Performance (For the six months ended September 30) | Indicator | 2020 (HK$ Million) | 2019 (HK$ Million) | Change (%) | | :--- | :--- | :--- | :--- | | Turnover | 292 | 462 | -37% | | Gross Profit | 151 | 219 | -31% | | Segment Results | 93 | 134 | -31% | | General and Administrative Expenses | 79 | 92 | -14% | | Selling Expenses | 15 | 39 | -61.5% | | Finance Costs | 82 | 94 | -12.7% | | Net Fair Value Gain on Investment Properties | 39 | 60 | -35% | | Net Fair Value Loss on Derivative Financial Instruments | 0.308 | -0.069 (Net Gain) | N/A | | (Loss)/Profit Attributable to Owners of the Company | (23) | 8 | N/A | - Turnover decreased by **37% to HK$292 million**, primarily due to reduced property sales recognition[11](index=11&type=chunk)[13](index=13&type=chunk) - Gross profit and segment results both decreased by approximately **31%**, mainly due to slower property sales activities impacted by the COVID-19 pandemic[16](index=16&type=chunk)[19](index=19&type=chunk) - General and administrative expenses decreased to **HK$79 million**, primarily benefiting from cost control policies[17](index=17&type=chunk)[20](index=20&type=chunk) - Loss attributable to owners of the Company was approximately **HK$23 million**, compared to a profit of **HK$8 million** in the prior period, mainly due to reduced property sales recognition and lower net fair value gain on investment properties[23](index=23&type=chunk)[25](index=25&type=chunk) [Review of Operations](index=7&type=section&id=REVIEW%20OF%20OPERATIONS) The Group's core business of managing and selling properties in China's agricultural product markets saw most operations recover satisfactorily despite initial COVID-19 impacts, alongside developing procurement and limited e-commerce - The Group's principal business involves property management and sales for agricultural product trading markets in China[26](index=26&type=chunk)[27](index=27&type=chunk) - The COVID-19 pandemic impacted property sales and the operational performance of agricultural by-product trading markets[26](index=26&type=chunk)[27](index=27&type=chunk) - Wuhan Baishazhou Market's operations were initially restricted by the pandemic but fully recovered, achieving satisfactory results with primary income from property rentals[30](index=30&type=chunk)[31](index=31&type=chunk)[33](index=33&type=chunk)[36](index=36&type=chunk) - Huangshi, Suizhou, Luoyang, Puyang, Kaifeng, Yulin, Qinzhou, and Xuzhou markets all resumed normal operations after the pandemic's impact, showing satisfactory or steady performance[34](index=34&type=chunk)[35](index=35&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) - Huai'an Market is involved in a legal dispute with a joint venture partner, with details disclosed in Note 19 to the financial statements[52](index=52&type=chunk)[53](index=53&type=chunk) - Panjin Market primarily focuses on river crab trading, with stable performance expected[55](index=55&type=chunk)[56](index=56&type=chunk) - The food and agricultural by-product procurement business added community delivery services during the pandemic, subsequently achieving stable performance[57](index=57&type=chunk)[61](index=61&type=chunk) - The Group has made limited investments in e-commerce development, carefully controlling costs and exploring cooperation opportunities with other partners[58](index=58&type=chunk)[62](index=62&type=chunk) [Risk Management](index=11&type=section&id=RISK%20MANAGEMENT) The Group manages cybersecurity and climate risks, while COVID-19's temporary impact on market trading has largely recovered due to effective containment and business resilience - The Group has appointed professionals to monitor and assess potential cyber risks, establishing policies and procedures for internet usage, physical system power maintenance, and regular updates of network security systems and firewalls[59](index=59&type=chunk)[63](index=63&type=chunk) - The Group faces moderate environmental risks, as severe and permanent climate change in China could adversely affect agricultural production and the Group's turnover[60](index=60&type=chunk) - The COVID-19 pandemic led to slower market trading activities and reduced commission income, but due to the nature of the business and rapid containment, the impact was temporary, with market trading volumes and revenues gradually returning to normal levels[65](index=65&type=chunk)[67](index=67&type=chunk) [Liquidity and Financial Resources](index=12&type=section&id=LIQUIDITY%20AND%20FINANCIAL%20RESOURCES) As of September 30, 2020, the Group improved its liquidity and financial position with increased cash, total assets, and net assets, alongside reduced capital commitments and contingent liabilities Overview of Liquidity and Financial Resources | Indicator | 2020-09-30 (HK$ Million) | 2020-03-31 (HK$ Million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Cash and Cash Equivalents | 449 | 340 | +32.1% | | Total Assets | 5,508 | 5,139 | +7.2% | | Net Assets | 1,562 | 1,485 | +5.2% | | Gearing Ratio | 0.9 | 1.0 | -10% | | Total Interest-Bearing Debt | 1,829 | 1,811 | +1.0% | | Interest-Bearing Debt to Total Assets Ratio | 33% | 35% | -2% | | Capital Commitments (Unprovided) | 377 | 398 | -5.3% | | Contingent Liabilities | 0.2 | 0.6 | -66.7% | - The Group holds no outstanding foreign exchange contracts, interest rate or currency swaps, or other financial derivative instruments[77](index=77&type=chunk)[78](index=78&type=chunk) - The Group's revenue, operating costs, and bank deposits are primarily denominated in RMB and HKD, exposing it to foreign exchange risk from RMB to HKD fluctuations, with no current hedging policy[77](index=77&type=chunk)[78](index=78&type=chunk) [Debt Profiles and Financial Planning](index=14&type=section&id=DEBT%20PROFILES%20AND%20FINANCIAL%20PLANNING) As of September 30, 2020, the Group's total interest-bearing debt was HK$1.829 billion, with a financial policy focused on diversified funding and strategic financing options Analysis of Interest-Bearing Debt (As of September 30) | Debt Type | 2020 (HK$ Million) | 2020 Approx. Effective Interest Rate (per annum) | 2019 (HK$ Million) | 2019 Approx. Effective Interest Rate (per annum) | | :--- | :--- | :--- | :--- | :--- | | Bond Issues | 186 | 12% | 177 | 12% | | Convertible Notes | 252 | 12% | 247 | 12% | | Borrowings from Financial Institutions | 415 | 6% | 411 | 6% | | Borrowings from Non-Financial Institutions | 600 | 10% | 600 | 10% | | Acceptance Bills | 376 | 5% | 376 | 5% | | **Total** | **1,829** | | **1,811** | | - Outstanding principal of convertible notes is **HK$264.8 million**, due in October 2021, with no conversions into shares during the period[70](index=70&type=chunk)[71](index=71&type=chunk) - Outstanding principal of listed notes due 2024 is **HK$290 million**[72](index=72&type=chunk)[75](index=75&type=chunk) - The Group's financial policy includes diversifying funding sources, regularly reviewing its financial position, and considering various financing options such as share placements, rights issues, borrowings, and bond issuances[84](index=84&type=chunk)[85](index=85&type=chunk) [Material Valuation Method of Investment Properties and Review of Audit Committee](index=16&type=section&id=Material%20Valuation%20Method%20of%20Investment%20Properties%20and%20Review%20of%20Audit%20Committee) Investment properties are fair valued by independent valuers using income capitalization and market comparables, with property inventories using direct comparison, all reviewed by the Audit Committee and Board - Investment properties are stated at fair value, valued by independent professional valuers based on net rental income capitalization and market comparable transaction prices[86](index=86&type=chunk)[87](index=87&type=chunk) - Property inventories are valued using the direct comparison method, referencing actual sales prices and asking prices of comparable properties[86](index=86&type=chunk)[87](index=87&type=chunk) - The Audit Committee and the Board have reviewed the material valuation methods for investment properties[88](index=88&type=chunk) [Significant Investments Held, Material Acquisitions and Disposals of Subsidiaries, and Future Plans for Material Investments or Capital Assets](index=16&type=section&id=Significant%20Investments%20Held%2C%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20and%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of September 30, 2020, the Group held no significant investments or conducted material acquisitions/disposals of subsidiaries, nor does it have specific future plans for such activities - During the period, the Group held no significant investments apart from subsidiaries, nor were there any material acquisitions or disposals of subsidiaries[89](index=89&type=chunk)[90](index=90&type=chunk) - As of September 30, 2020, the Group had no specific plans for significant investments, capital assets, or acquisitions or disposals of subsidiaries[89](index=89&type=chunk)[90](index=90&type=chunk) [Risk Factors Relating to Our Industry and Business Operations](index=17&type=section&id=RISK%20FACTORS%20RELATING%20TO%20OUR%20INDUSTRY%20AND%20BUSINESS%20OPERATIONS) The Group faces various operational risks in its China agricultural markets, including currency fluctuations, financing, competition, and regulatory changes, with ongoing monitoring and mitigation strategies - The Group faces RMB to HKD exchange rate fluctuation risk, regularly monitoring and preparing hedging mechanisms[92](index=92&type=chunk)[93](index=93&type=chunk) - Capital-intensive agricultural product trading markets face financing difficulties, with the Group regularly reviewing liquidity levels and preparing for future funding needs[92](index=92&type=chunk)[93](index=93&type=chunk) - The Group needs to maintain or enhance its competitive position and market occupancy rates through monitoring competitor activities and launching marketing campaigns[92](index=92&type=chunk)[93](index=93&type=chunk) - Obtaining necessary licenses and permits for developing, constructing, operating, and acquiring agricultural product trading markets, the Group employs local professionals to ensure compliance[92](index=92&type=chunk)[93](index=93&type=chunk) - Risk of regulatory changes related to agricultural product trading markets, the Group maintains a flat organizational structure for rapid response[92](index=92&type=chunk)[93](index=93&type=chunk) - A resurgence of the COVID-19 pandemic would adversely affect market operations, with markets continuously implementing contingency health and hygiene measures[92](index=92&type=chunk)[93](index=93&type=chunk) [Litigation](index=18&type=section&id=LITIGATION) The Group is engaged in ongoing litigation regarding the validity of the Baishazhou Agricultural equity acquisition, where despite a court ruling, MOFCOM confirmed the Company's legal ownership - Civil litigation initiated by Ms. Wang Xiu Qun and Wuhan Tian Jiu Industrial and Commercial Development Co., Ltd. (plaintiffs) against the Company (defendant) and Wuhan Baishazhou Agricultural By-product Grand Market Co., Ltd. (third party)[94](index=94&type=chunk)[97](index=97&type=chunk) - The Supreme People's Court ruled the disputed agreement invalid on January 13, 2015, but did not rule on the acquisition itself or MOFCOM's approval[96](index=96&type=chunk)[98](index=98&type=chunk) - MOFCOM decided on May 19, 2016, that its November 2007 approval for the disputed agreement would not be revoked and remained valid[101](index=101&type=chunk)[102](index=102&type=chunk) - The Supreme People's Court rejected Ms. Wang and Tian Jiu's retrial application on December 31, 2019, confirming MOFCOM's approval would not be revoked, and the Company remains the legal and beneficial owner of Baishazhou Agricultural[109](index=109&type=chunk)[110](index=110&type=chunk) - Ms. Wang and Tian Jiu previously applied to freeze the Company's **70% interest** in Baishazhou Agricultural and filed a counterclaim, which was dismissed by the Hubei court[112](index=112&type=chunk)[113](index=113&type=chunk)[115](index=115&type=chunk) - The Company's PRC legal counsel believes the Beijing judgment will not directly lead to an immediate change in Baishazhou Agricultural's ownership, and the Company remains the legal owner[116](index=116&type=chunk)[119](index=119&type=chunk) - Further details regarding the litigation cases are provided in Note 19 to the condensed consolidated financial statements in this interim report[117](index=117&type=chunk)[120](index=120&type=chunk) [Employees and Remuneration Policies](index=21&type=section&id=EMPLOYEES%20AND%20REMUNERATION%20POLICIES) As of September 30, 2020, the Group employed 1,193 staff, primarily in China, with remuneration policies and a share option scheme designed to attract and retain talent based on performance and market terms - As of September 30, 2020, the Group had a total of **1,193 employees**, with approximately **98%** located in China[118](index=118&type=chunk)[121](index=121&type=chunk) - Remuneration policies are regularly reviewed by the Remuneration Committee and determined with reference to market terms, company performance, and individual qualifications and performance[118](index=118&type=chunk)[121](index=121&type=chunk) - The Company has adopted a share option scheme aimed at incentivizing eligible individuals who contribute to the Group[118](index=118&type=chunk)[121](index=121&type=chunk) [Prospects](index=22&type=section&id=PROSPECTS) The Group plans to expand its national agricultural market network in China using an asset-light strategy, leveraging its industry position and government support for agricultural development despite global economic slowdowns - The US-China trade disputes had a temporary impact on the Group's business operations, which are primarily focused on the domestic market[122](index=122&type=chunk)[123](index=123&type=chunk) - The Group will continue to leverage its industry-leading position, replicable business model, robust management systems, and information technology infrastructure to build a national network of agricultural product trading markets[122](index=122&type=chunk)[123](index=123&type=chunk) - The COVID-19 pandemic caused short-term adverse effects on market operations, but is expected to return to normal levels after the pandemic subsides[124](index=124&type=chunk)[127](index=127&type=chunk) - The Chinese central government prioritizes agricultural development, issuing "Central Document No. 1 of 2020" to promote investment and infrastructure construction in agricultural product markets[125](index=125&type=chunk)[127](index=127&type=chunk) - The Group will adopt an "asset-light" strategy, collaborating with various partners to expand its operations in China, seizing new business opportunities and delivering long-term benefits to shareholders[126](index=126&type=chunk)[127](index=127&type=chunk) [Corporate Governance and Other Information](index=23&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Corporate Governance Practices](index=23&type=section&id=CORPORATE%20GOVERNANCE%20PRACTICES) The Company largely complied with the Corporate Governance Code, with the combined Chairman and CEO roles justified by Mr. Chan's experience and the Board's balanced composition - The Company complied with most provisions of the Corporate Governance Code, but deviated from Code Provision A.2.1 (roles of Chairman and Chief Executive Officer should be separate)[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk) - Mr. Chan Chun Hong holds both the Chairman and Chief Executive Officer roles, with the Board believing his extensive experience and the Board's balanced composition ensure a balance of power[129](index=129&type=chunk)[130](index=130&type=chunk) [Changes in Information of Directors](index=23&type=section&id=CHANGES%20IN%20INFORMATION%20OF%20DIRECTORS) Director information changes during the period primarily involve the delisting of Easy One Financial Group Limited on October 21, 2020, where Mr. Chan Chun Hong served as an executive director - Easy One Financial Group Limited, where Mr. Chan Chun Hong served as an executive director, was delisted on **October 21, 2020**, as its privatization became effective on **October 16, 2020**[132](index=132&type=chunk)[134](index=134&type=chunk) [Purchase, Sale or Redemption of Listed Securities of the Company](index=23&type=section&id=PURCHASE%2C%20SALE%20OR%20REDEMPTION%20OF%20LISTED%20SECURITIES%20OF%20THE%20COMPANY) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[133](index=133&type=chunk)[135](index=135&type=chunk) [Model Code for Securities Transactions by Directors](index=24&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted the Model Code for Securities Transactions by Directors, with all directors confirming compliance during the period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers[136](index=136&type=chunk)[139](index=139&type=chunk) - All Directors confirmed compliance with the Model Code during the period[136](index=136&type=chunk)[139](index=139&type=chunk) [Audit Committee](index=24&type=section&id=AUDIT%20COMMITTEE) The Audit Committee, composed of independent non-executive directors and chaired by Mr. Wong Bing Yuen, reviewed the unaudited interim results, accounting principles, and financial matters with management and auditors - The Audit Committee comprises three independent non-executive directors: Mr. Wong Bing Yuen (Chairman), Mr. Ng Yat Cheung, and Mr. Lau King Lung[137](index=137&type=chunk)[140](index=140&type=chunk) - The Committee has reviewed and discussed the unaudited condensed consolidated interim results, accounting principles and practices, and financial-related matters for the period with management and external auditors[137](index=137&type=chunk)[140](index=140&type=chunk) [Disclosure of Interests](index=24&type=section&id=DISCLOSURE%20OF%20INTERESTS) As of September 30, 2020, no directors held interests in Company securities, while major shareholders, including Easy One Financial Group and Wang On Group, held significant long positions - As of September 30, 2020, no directors or chief executives held any interests and/or short positions in the shares, underlying shares, or debentures of the Company or any of its associated corporations[138](index=138&type=chunk)[141](index=141&type=chunk) Major Shareholders' Long Positions in the Company's Shares and Underlying Shares (As of September 30, 2020) | Shareholder Name | Capacity | Total Number of Shares and Underlying Shares | Approx. Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Easy One Financial Group Limited | Interest of controlled corporation | 2,265,200,062 | 22.75% | | Goal Success Investments Limited | Beneficial owner | 5,312,395,685 | 53.37% | | Biomore Investments Limited | Interest of controlled corporation | 5,312,395,685 | 53.37% | | Total Smart Investments Limited | Interest of controlled corporation | 5,312,395,685 | 53.37% | | Wai Yuen Tong Medicine Holdings Limited | Interest of controlled corporation | 5,312,395,685 | 53.37% | | Wang On Group Limited | Interest of controlled corporation | 5,312,395,685 | 53.37% | | Mr. Tang Ching Ho | Interest of controlled corporation | 5,312,395,685 | 53.37% | | Ms. Yau Yuk Yin | Family interest | 5,312,395,685 | 53.37% | - Mr. Tang Ching Ho and his associates indirectly hold **53.37%** of the Company's shares and underlying shares through their control of Wang On Group Limited[148](index=148&type=chunk)[149](index=149&type=chunk) [Share Option Scheme](index=28&type=section&id=SHARE%20OPTION%20SCHEME) The Company adopted a share option scheme on May 3, 2012, to incentivize eligible individuals, with no options granted as of September 30, 2020 - The Company adopted a share option scheme on **May 3, 2012**, aimed at incentivizing eligible individuals who contribute to the Group[150](index=150&type=chunk)[151](index=151&type=chunk) - No share options have been granted under the scheme since its adoption up to September 30, 2020[150](index=150&type=chunk)[151](index=151&type=chunk) [Appreciation](index=28&type=section&id=APPRECIATION) Chairman and CEO Mr. Chan Chun Hong expressed gratitude to all stakeholders for their continuous support and contributions to the Group - Mr. Chan Chun Hong, Chairman and Chief Executive Officer, expressed gratitude to clients, business partners, shareholders, Board members, and all staff for their support and contributions[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) [Independent Review Report](index=29&type=section&id=Independent%20Review%20Report) [Introduction](index=29&type=section&id=INTRODUCTION) Independent auditors reviewed the interim financial information for the six months ended September 30, 2020, prepared under Listing Rules and HKAS 34, to provide a conclusion - The auditors have reviewed the interim financial information for the six months ended September 30, 2020[156](index=156&type=chunk)[157](index=157&type=chunk) - The interim financial information was prepared in accordance with the Main Board Listing Rules and Hong Kong Accounting Standard 34 "Interim Financial Reporting"[156](index=156&type=chunk)[157](index=157&type=chunk) - Directors are responsible for the preparation and presentation of the interim financial information, and the auditors' responsibility is to conclude based on their review[156](index=156&type=chunk)[157](index=157&type=chunk) [Scope of Review](index=30&type=section&id=SCOPE%20OF%20REVIEW) The review, conducted under HK Standard on Review Engagements 2410, involved inquiries and analytical procedures, but its scope is less than an audit, so no audit opinion is expressed - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity"[158](index=158&type=chunk)[159](index=159&type=chunk) - The scope of a review is substantially less than an audit conducted in accordance with Hong Kong Standards on Auditing, and therefore no audit opinion is expressed[158](index=158&type=chunk)[159](index=159&type=chunk) [Conclusion](index=30&type=section&id=CONCLUSION) Based on the review, auditors found no material issues indicating the interim financial information was not prepared in accordance with HKAS 34 - Nothing has come to the auditors' attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[161](index=161&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=31&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) [Profit or Loss and Other Comprehensive Income Summary](index=31&type=section&id=Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income%20Summary) For the six months ended September 30, 2020, the Group reported a **37% decrease** in turnover and a **HK$22.6 million loss** attributable to owners, despite significant foreign exchange gains in other comprehensive income Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended September 30) | Indicator | 2020 (HK$ Thousand) | 2019 (HK$ Thousand) | | :--- | :--- | :--- | | Turnover | 292,413 | 462,473 | | Gross Profit | 150,633 | 219,259 | | Operating Profit before Fair Value Changes and Impairment | 67,191 | 97,983 | | Net Fair Value Gain on Investment Properties | 39,473 | 60,242 | | Fair Value Changes of Derivative Financial Instruments | (308) | 69 | | Write-down of Property Inventories | (1,689) | – | | Operating Profit | 104,667 | 158,294 | | Finance Costs | (82,487) | (93,800) | | Profit Before Taxation | 22,180 | 64,494 | | Income Tax | (40,772) | (49,673) | | **(Loss)/Profit for the Period** | **(18,592)** | **14,821** | | Exchange Differences Arising from Translation of Foreign Operations | 130,655 | (4,214) | | **Total Comprehensive Income for the Period** | **112,063** | **10,607** | | (Loss)/Profit Attributable to Owners of the Company | (22,567) | 8,194 | | (Loss)/Profit Attributable to Non-Controlling Interests | 3,975 | 6,627 | | Basic (Loss)/Earnings Per Share (HK Cents) | (0.23) | 0.08 | | Diluted (Loss)/Earnings Per Share (HK Cents) | (0.23) | 0.08 | - Profit/(loss) for the period changed from a **profit of HK$14,821 thousand** in 2019 to a **loss of HK$18,592 thousand** in 2020[165](index=165&type=chunk) - Profit/(loss) attributable to owners of the Company changed from a **profit of HK$8,194 thousand** in 2019 to a **loss of HK$22,567 thousand** in 2020[167](index=167&type=chunk) - Exchange differences arising from translation of foreign operations changed from a **loss of HK$4,214 thousand** in 2019 to a **gain of HK$130,655 thousand** in 2020, significantly boosting total comprehensive income[167](index=167&type=chunk) [Condensed Consolidated Statement of Financial Position](index=32&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) [Financial Position Summary](index=32&type=section&id=Financial%20Position%20Summary) As of September 30, 2020, the Group's total assets grew to HK$5.508 billion, driven by investment properties and property inventories, with an increase in net assets despite a decrease in net current assets Condensed Consolidated Statement of Financial Position (As of September 30) | Indicator | 2020-09-30 (HK$ Thousand) | 2020-03-31 (HK$ Thousand) | | :--- | :--- | :--- | | **Non-Current Assets** | | | | Property, Plant and Equipment | 52,776 | 45,759 | | Right-of-Use Assets | 21,306 | 18,802 | | Investment Properties | 3,000,246 | 2,839,091 | | **Current Assets** | | | | Property Inventories | 1,650,538 | 1,611,442 | | Trade and Other Receivables | 291,422 | 233,817 | | Bank and Cash Balances | 448,796 | 339,599 | | **Current Liabilities** | | | | Deposits and Other Payables | 772,592 | 683,044 | | Contract Liabilities | 560,232 | 464,983 | | Bank and Other Borrowings (within one year) | 270,809 | 231,820 | | Acceptance Bills | 376,000 | 376,000 | | **Non-Current Liabilities** | | | | Bonds | 186,080 | 176,998 | | Bank and Other Borrowings (after one year) | 744,193 | 779,669 | | Convertible Bonds | 252,315 | 246,894 | | Deferred Tax Liabilities | 519,752 | 483,521 | | **Net Assets** | **1,562,325** | **1,485,365** | | Total Equity Attributable to Owners of the Company | 1,185,327 | 1,091,640 | | Non-Controlling Interests | 376,998 | 393,725 | - Investment properties increased from **HK$2,839,091 thousand** as of March 31, 2020, to **HK$3,000,246 thousand** as of September 30, 2020[168](index=168&type=chunk) - Bank and cash balances increased from **HK$339,599 thousand** as of March 31, 2020, to **HK$448,796 thousand** as of September 30, 2020[168](index=168&type=chunk) - Total current liabilities increased from **HK$1,945,573 thousand** as of March 31, 2020, to **HK$2,221,054 thousand** as of September 30, 2020[168](index=168&type=chunk) - Net assets increased from **HK$1,485,365 thousand** as of March 31, 2020, to **HK$1,562,325 thousand** as of September 30, 2020[170](index=170&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=34&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) [Changes in Equity Summary](index=34&type=section&id=Changes%20in%20Equity%20Summary) Total equity attributable to owners increased to HK$1,185,327 thousand, primarily due to a significant foreign exchange gain, despite a period loss Condensed Consolidated Statement of Changes in Equity (For the six months ended September 30) | Indicator | 2020-09-30 (HK$ Thousand) | 2020-04-01 (HK$ Thousand) | | :--- | :--- | :--- | | Share Capital | 99,531 | 99,531 | | Share Premium | 3,923,147 | 3,923,147 | | Capital Redemption Reserve | 945 | 945 | | Contributed Surplus | 2,215,409 | 2,215,409 | | Shareholders' Contribution | 664 | 664 | | Other Reserves | (15,021) | (15,021) | | Exchange Reserve | (206,780) | (323,034) | | Convertible Bond Reserve | 79,547 | 79,547 | | Statutory Reserve | 15,580 | 15,094 | | Accumulated Losses | (4,927,695) | (4,904,642) | | **Total Equity Attributable to Owners of the Company** | **1,185,327** | **1,091,640** | | Non-Controlling Interests | 376,998 | 393,725 | | **Total Equity** | **1,562,325** | **1,485,365** | - Total equity attributable to owners of the Company increased from **HK$1,091,640 thousand** as of April 1, 2020, to **HK$1,185,327 thousand** as of September 30, 2020[172](index=172&type=chunk)[173](index=173&type=chunk) - Exchange differences (arising from translation of foreign operations) generated a **gain of HK$116,254 thousand** during the period, significantly impacting the change in equity[173](index=173&type=chunk) - Loss attributable to owners of the Company for the period was **HK$22,567 thousand**[173](index=173&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=36&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) [Cash Flows Summary](index=36&type=section&id=Cash%20Flows%20Summary) For the six months ended September 30, 2020, the Group generated **HK$202.7 million** net cash from operations, leading to an increase in cash and cash equivalents to **HK$448.8 million** at period-end Condensed Consolidated Statement of Cash Flows (For the six months ended September 30) | Indicator | 2020 (HK$ Thousand) | 2019 (HK$ Thousand) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 202,737 | 137,116 | | Net Cash Used in Investing Activities | (13,290) | (2,309) | | Net Cash Used in Financing Activities | (105,582) | (228,889) | | **Net Increase/(Decrease) in Cash and Cash Equivalents** | **83,865** | **(94,082)** | | Cash and Cash Equivalents at Beginning of Period | 339,599 | 488,415 | | Effect of Foreign Currency Exchange Rate Changes | 25,332 | 3,107 | | **Cash and Cash Equivalents at End of Period** | **448,796** | **397,440** | - Net cash generated from operating activities increased from **HK$137,116 thousand** in 2019 to **HK$202,737 thousand** in 2020[177](index=177&type=chunk) - Net cash used in financing activities significantly decreased from **HK$228,889 thousand** in 2019 to **HK$105,582 thousand** in 2020, mainly due to reduced repayment of bank borrowings and no bond redemptions[177](index=177&type=chunk) - Net increase in cash and cash equivalents was **HK$83,865 thousand**, compared to a net decrease of **HK$94,082 thousand** in the prior period[178](index=178&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=37&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [1. Basis of Preparation](index=38&type=section&id=1.%20Basis%20of%20Preparation) Interim financial statements are prepared under Listing Rules and HKAS 34, using consistent accounting policies, with the financial year-end changed from December 31 to March 31 - The interim financial statements are prepared in accordance with Appendix 16 of the Listing Rules and Hong Kong Accounting Standard 34 "Interim Financial Reporting"[181](index=181&type=chunk)[183](index=183&type=chunk) - The financial year-end has been changed from **December 31** to **March 31**, with the current period covering **April 1 to September 30, 2020**[184](index=184&type=chunk) [2. Application of Amendments to HKFRSs](index=39&type=section&id=2.%20Application%20of%20Amendments%20to%20HKFRSs) The Group first applied various HKFRS amendments, including those on materiality and business definitions, which had no material impact on financial position or performance - The Group has for the first time applied several amended Hong Kong Financial Reporting Standards, including revisions concerning the definition of materiality, definition of a business, and interest rate benchmark reform[187](index=187&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk) - These amendments had no material impact on the Group's financial position and performance for the current and prior periods[189](index=189&type=chunk)[190](index=190&type=chunk) [3. Turnover](index=40&type=section&id=3.%20Turnover) The Group's turnover, primarily from property rentals, services, and sales, decreased by **37% to HK$292 million** due to significantly reduced property sales revenue Turnover Analysis (For the six months ended September 30) | Revenue Category | 2020 (HK$ Thousand) | 2019 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue from Property Support Services | 48,919 | 49,004 | | Commission Income from Operating Agricultural Product Trading Markets | 39,286 | 36,879 | | Revenue from Property Sales | 109,008 | 266,222 | | Food and Agricultural By-product Procurement | 10,637 | 14,602 | | Property Rental Income | 84,563 | 95,766 | | **Total Turnover** | **292,413** | **462,473** | - Revenue from property sales significantly decreased from **HK$266 million** in 2019 to **HK$109 million** in 2020[194](index=194&type=chunk) - Commission income from agricultural product trading markets slightly increased, while property rental income and food and agricultural by-product procurement income decreased[194](index=194&type=chunk) [4. Other Revenue and Other Net Income](index=41&type=section&id=4.%20Other%20Revenue%20and%20Other%20Net%20Income) For the six months ended September 30, 2020, total other revenue and net income slightly increased to HK$10.6 million, primarily driven by a significant rise in government subsidies Other Revenue and Other Net Income (For the six months ended September 30) | Revenue Category | 2020 (HK$ Thousand) | 2019 (HK$ Thousand) | | :--- | :--- | :--- | | Bank and Other Interest Income | 3,777 | 3,648 | | Government Subsidies | 5,701 | 350 | | Others | 1,114 | 5,985 | | **Total** | **10,592** | **9,983** | - Government subsidies significantly increased, primarily to compensate the Group for expenses incurred from investments in agricultural product trading markets in China[197](index=197&type=chunk)[198](index=198&type=chunk) [5. Segment Reporting](index=42&type=section&id=5.%20Segment%20Reporting) The Group's two segments, agricultural product markets and property sales, both saw reduced external sales and segment results, with property sales declining significantly, while the market segment's assets and liabilities grew Segment Revenue and Results (For the six months ended September 30) | Indicator | Operating Agricultural Product Trading Markets (2020 HK$ Thousand) | Property Sales (2020 HK$ Thousand) | Total (2020 HK$ Thousand) | Operating Agricultural Product Trading Markets (2019 HK$ Thousand) | Property Sales (2019 HK$ Thousand) | Total (2019 HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | External Sales | 183,405 | 109,008 | 292,413 | 196,251 | 266,222 | 462,473 | | Segment Results | 72,132 | 20,455 | 92,587 | 90,733 | 43,716 | 134,449 | Segment Assets and Liabilities (As of September 30) | Indicator | Operating Agricultural Product Trading Markets (2020 HK$ Thousand) | Property Sales (2020 HK$ Thousand) | Consolidated (2020 HK$ Thousand) | Operating Agricultural Product Trading Markets (2020-03-31 HK$ Thousand) | Property Sales (2020-03-31 HK$ Thousand) | Consolidated (2020-03-31 HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Segment Assets | 3,511,834 | 1,650,538 | 5,162,372 | 3,334,415 | 1,611,442 | 4,945,857 | | Segment Liabilities | 1,631,180 | 560,137 | 2,191,317 | 1,448,318 | 475,800 | 1,924,118 | - External sales for the property sales segment significantly decreased from **HK$266 million** in 2019 to **HK$109 million** in 2020[203](index=203&type=chunk) - Both segment assets and liabilities for the operating agricultural product trading markets segment increased[207](index=207&type=chunk) [6. Finance Costs](index=44&type=section&id=6.%20Finance%20Costs) For the six months ended September 30, 2020, total finance costs decreased to HK$82.5 million, mainly due to lower bond interest, despite a significant increase in interest on short-term bank and other borrowings Finance Costs Analysis (For the six months ended September 30) | Finance Cost Category | 2020 (HK$ Thousand) | 2019 (HK$ Thousand) | | :--- | :--- | :--- | | Interest on Bank and Other Borrowings Repayable within Five Years | 41,128 | 13,984 | | Interest on Bank and Other Borrowings Repayable after Five Years | 2,523 | 30 | | Interest on Acceptance Bills | 11,750 | 11,750 | | Interest on Convertible Bonds | 15,373 | 14,443 | | Interest on Bonds | 10,525 | 53,070 | | Interest on Lease Liabilities | 1,188 | 523 | | **Total** | **82,487** | **93,800** | - Interest on bonds significantly decreased from **HK$53,070 thousand** in 2019 to **HK$10,525 thousand** in 2020[210](index=210&type=chunk) - Interest on bank and other borrowings repayable within five years increased from **HK$13,984 thousand** in 2019 to **HK$41,128 thousand** in 2020[210](index=210&type=chunk) [7. Profit Before Taxation](index=45&type=section&id=7.%20Profit%20Before%20Taxation) Profit before taxation significantly decreased to HK$22.18 million, primarily due to increased depreciation of right-of-use assets and a fair value loss on derivative financial instruments Profit Before Taxation Items (For the six months ended September 30) | Item | 2020 (HK$ Thousand) | 2019 (HK$ Thousand) | | :--- | :--- | :--- | | Depreciation and Amortization | 5,889 | 9,732 | | Depreciation of Right-of-Use Assets | 2,001 | 989 | | Fair Value Changes of Derivative Financial Instruments | 308 | (69) | | Short-Term Lease Expenses | 146 | 436 | | Expected Credit Loss (Reversal)/Provision for Trade and Other Receivables and Loans Receivable | (269) | 13 | | Loss on Disposal of Property, Plant and Equipment | 147 | 163 | - Depreciation and amortization decreased from **HK$9,732 thousand** in 2019 to **HK$5,889 thousand** in 2020[211](index=211&type=chunk) - Depreciation of right-of-use assets increased from **HK$989 thousand** in 2019 to **HK$2,001 thousand** in 2020[211](index=211&type=chunk) - Fair value changes of derivative financial instruments shifted from a **gain of HK$69 thousand** in 2019 to a **loss of HK$308 thousand** in 2020[211](index=211&type=chunk) [8. Income Tax](index=46&type=section&id=8.%20Income%20Tax) Income tax decreased to HK$40.77 million, mainly comprising PRC enterprise income tax and deferred tax, with no Hong Kong profits tax provision due to no assessable profits Income Tax Analysis (For the six months ended September 30) | Tax Category | 2020 (HK$ Thousand) | 2019 (HK$ Thousand) | | :--- | :--- | :--- | | PRC Enterprise Income Tax | 25,033 | 49,346 | | Deferred Tax | 15,739 | 327 | | **Total** | **40,772** | **49,673** | - PRC enterprise income tax decreased from **HK$49,346 thousand** in 2019 to **HK$25,033 thousand** in 2020[213](index=213&type=chunk) - Deferred tax significantly increased from **HK$327 thousand** in 2019 to **HK$15,739 thousand** in 2020[213](index=213&type=chunk) - No provision was made for Hong Kong profits tax as the Company and its subsidiaries had no assessable profits in both periods[214](index=214&type=chunk)[215](index=215&type=chunk) [9. Dividends](index=46&type=section&id=9.%20Dividends) The Directors do not recommend any interim dividend for the review period ended September 30, 2020, consistent with the prior year - The Directors do not recommend the payment of any interim dividend for the review period[216](index=216&type=chunk)[217](index=217&type=chunk) - No interim dividend was paid for the six months ended June 30, 2019, either[216](index=216&type=chunk)[217](index=217&type=chunk) [10. (Loss)/Earnings Per Share](index=47&type=section&id=10.%20%28Loss%29%2FEarnings%20Per%20Share) Basic and diluted loss per share were HK **0.23 cents**, a shift from prior year's earnings, primarily due to a **HK$22.6 million loss** attributable to owners, with no dilution effect from convertible bonds (Loss)/Earnings Per Share (For the six months ended September 30) | Indicator | 2020 (HK Cents) | 2019 (HK Cents) | | :--- | :--- | :--- | | Basic (Loss)/Earnings Per Share | (0.23) | 0.08 | | Diluted (Loss)/Earnings Per Share | (0.23) | 0.08 | - Basic (loss)/earnings per share changed from **earnings of HK 0.08 cents** in 2019 to a **loss of HK 0.23 cents** in 2020[167](index=167&type=chunk)[218](index=218&type=chunk) - Diluted (loss)/earnings per share was the same as basic (loss)/earnings per share due to the anti-dilutive effect of unconverted convertible bonds[218](index=218&type=chunk) [11. Movement in Property, Plant and Equipment](index=47&type=section&id=11.%20Movement%20in%20Property%2C%20Plant%20and%20Equipment) During the review period, the Group acquired property, plant, and equipment at a cost of approximately **HK$11.1 million**, an increase from the prior year - During the review period, the Group acquired property, plant, and equipment at a cost of approximately **HK$11,126,000**[219](index=219&type=chunk) - The cost of property, plant, and equipment acquired in the prior period was approximately **HK$4,778,000**[219](index=219&type=chunk) [12. Investment Properties](index=47&type=section&id=12.%20Investment%20Properties) Investment properties saw additions and exchange adjustments totaling HK$126 million, with HK$1.367 billion pledged as collateral, and were fair valued by valuers with no transfers to property inventories - During the review period, the cost additions and exchange adjustments for the Group's investment properties were approximately **HK$6,068,000** and **HK$120,092,000**, respectively[220](index=220&type=chunk) - As of September 30, 2020, investment properties were fair valued by valuers[220](index=220&type=chunk) - Approximately **HK$1,367,186,000** of investment properties were pledged to banks as collateral for the Group's borrowings[220](index=220&type=chunk) - No investment properties were transferred to property inventories during the period, compared to approximately **HK$373,580,000** transferred in the prior period[220](index=220&type=chunk) - Investment properties are classified as Level 3 under the fair value hierarchy[220](index=220&type=chunk) [13. Trade and Other Receivables](index=48&type=section&id=13.%20Trade%20and%20Other%20Receivables) Net trade and other receivables increased to HK$291.4 million, driven by growth in trade receivables, land acquisition deposits, and prepayments Trade and Other Receivables Analysis (As of September 30) | Item | 2020-09-30 (HK$ Thousand) | 2020-03-31 (HK$ Thousand) | | :--- | :--- | :--- | | Total Trade Receivables | 10,419 | 3,587 | | Land Acquisition Deposits | 55,240 | 53,019 | | Other Deposits | 7,325 | 9,866 | | Prepayments | 147,108 | 101,399 | | Other Receivables | 72,419 | 67,074 | | Less: Provision for Expected Credit Losses | (1,089) | (1,128) | | **Trade and Other Receivables, Net** | **291,422** | **233,817** | - Total trade receivables increased from **HK$3,587 thousand** as of March 31, 2020, to **HK$10,419 thousand** as of September 30, 2020[222](index=222&type=chunk) - Prepayments increased from **HK$101,399 thousand** as of March 31, 2020, to **HK$147,108 thousand** as of September 30, 2020[222](index=222&type=chunk) [14. Deposits and Other Payables](index=49&type=section&id=14.%20Deposits%20and%20Other%20Payables) Total deposits and other payables increased to HK$772.6 million, driven by increases in accrued expenses, construction payables, interest payables, and other payables Deposits and Other Payables Analysis (As of September 30) | Item | 2020-09-30 (HK$ Thousand) | 2020-03-31 (HK$ Thousand) | | :--- | :--- | :--- | | Accrued Expenses | 27,239 | 21,726 | | Construction Payables | 52,671 | 48,038 | | Deposits Received | 96,558 | 99,902 | | Interest Payables | 311,315 | 298,598 | | Other Tax Payables | 27,432 | 18,463 | | Other Payables | 257,377 | 196,317 | | **Total** | **772,592** | **683,044** | - Interest payables increased from **HK$298,598 thousand** as of March 31, 2020, to **HK$311,315 thousand** as of September 30, 2020[224](index=224&type=chunk) - Other payables increased from **HK$196,317 thousand** as of March 31, 2020, to **HK$257,377 thousand** as of September 30, 2020[224](index=224&type=chunk) [15. Bank and Other Borrowings](index=49&type=section&id=15.%20Bank%20and%20Other%20Borrowings) Total bank and other borrowings reached HK$1.015 billion, with secured bank borrowings and unsecured other borrowings at interest rates ranging from 3.0% to 10.0%, collateralized by investment properties and other assets Bank and Other Borrowings Analysis (As of September 30) | Borrowing Category | 2020-09-30 (HK$ Thousand) | 2020-03-31 (HK$ Thousand) | | :--- | :--- | :--- | | Secured Bank Borrowings | 396,798 | 394,017 | | Unsecured Bank Borrowings | 18,204 | 17,472 | | Unsecured Other Borrowings | 600,000 | 600,000 | | **Total** | **1,015,002** | **1,011,489** | Bank and Other Borrowings Repayment Period Analysis (As of September 30) | Repayment Period | 2020-09-30 (HK$ Thousand) | 2020-03-31 (HK$ Thousand) | | :--- | :--- | :--- | | Within One Year | 270,809 | 231,820 | | More Than One Year but Not Exceeding Two Years | 42,933 | 61,733 | | More Than Two Years but Not Exceeding Five Years | 646,648 | 658,968 | | More Than Five Years | 54,612 | 58,968 | - Secured bank borrowings include floating-rate and fixed-rate borrowings, with floating rates ranging from **3.0% to 7.1%** and fixed rates from **3.3% to 7.4%**[230](index=230&type=chunk) - Unsecured other borrowings primarily from Profit Gain Investments Limited and Kai Yu Investments Limited, with a fixed annual interest rate of **10%**[231](index=231&type=chunk)[232](index=232&type=chunk) - Secured bank borrowings are collateralized by investment properties, pledged bank deposits, and property inventories with a carrying value of approximately **HK$1,713,619,000**[235](index=235&type=chunk)[236](index=236&type=chunk) [16. Share Capital](index=51&type=section&id=16.%20Share%20Capital) As of September 30, 2020, the Company's authorized share capital was HK$300 million, with issued and fully paid share capital of HK$99,531 thousand, remaining unchanged from March 31, 2020 Share Capital Analysis (As of September 30) | Share Capital Category | 2020-09-30 Number of Shares | 2020-09-30 Par Value (HK$ Thousand) | 2020-03-31 Number of Shares | 2020-03-31 Par Value (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Authorized Ordinary Shares (HK$0.01 each) | 30,000,000,000 | 300,000 | 30,000,000,000 | 300,000 | | Issued and Fully Paid Ordinary Shares | 9,953,067,822 | 99,531 | 9,953,067,822 | 99,531 | - Both authorized and issued and fully paid share capital remained unchanged across both reporting periods[238](index=238&type=chunk) [17. Fair Value Measurement](index=52&type=section&id=17.%20Fair%20Value%20Measurement) Financial assets and liabilities at amortized cost approximate fair value, with investment properties and derivative financial instruments classified as Level 3, valued using unobservable inputs like a **12.84% discount rate** - Fair values of financial assets and financial liabilities are determined by reference to market quotations or discounted cash flow analysis[241](index=241&type=chunk) - Fair value measurements are categorized into three levels: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[241](index=241&type=chunk)[242](index=242&type=chunk) Fair Value Measurement of Financial Assets (As of September 30) | Item | 2020-09-30 (HK$ Thousand) | 2020-03-31 (HK$ Thousand) | | :--- | :--- | :--- | | Equity Securities Listed in Hong Kong (Level 1) | 65 | 72 | | Derivative Financial Instruments (Level 3) | 14 | 322 | - Investment properties and derivative financial instruments are classified as Level 3 fair value measurements[220](index=220&type=chunk)[243](index=243&type=chunk) - As of September 30, 2020, the discount rate used to calculate the fair value of derivative financial instruments was **12.84%**, with a higher discount rate resulting in a lower fair value[248](index=248&type=chunk)[249](index=249&type=chunk) [18. Commitments](index=54&type=section&id=18.%20Commitments) Unfulfilled capital commitments, primarily for construction costs, decreased to approximately HK$376.8 million as of September 30, 2020 Capital Commitments (As of September 30) | Item | 2020-09-30 (HK$ Thousand) | 2020-03-31 (HK$ Thousand) | | :--- | :--- | :--- | | Capital Expenditure Authorized and Contracted for Construction Costs | 376,844 | 397,717 | - Capital commitments are primarily related to construction costs and have decreased[252](index=252&type=chunk) [19. Litigation](index=55&type=section&id=19.%20Litigation) This note details the Group's ongoing legal disputes, primarily concerning the Baishazhou Agricultural equity acquisition, where MOFCOM affirmed the Company's ownership despite a court ruling, alongside other related lawsuits - Ms. Wang Xiu Qun and Wuhan Tian Jiu Industrial and Commercial Development Co., Ltd. issued a writ against the Company in China, alleging the share transfer agreement was forged and seeking a court order to declare the disputed agreement invalid[253](index=253&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk) - The Supreme People's Court ruled the disputed agreement invalid on January 13, 2015, but did not rule on the acquisition itself or MOFCOM's approval[260](index=260&type=chunk) - MOFCOM decided on May 19, 2016, that its November 2007 approval for the disputed agreement would not be revoked and remained valid[272](index=272&type=chunk) - The Supreme People's Court rejected Ms. Wang and Tian Jiu's retrial application on December 31, 2019, confirming MOFCOM's approval would not be revoked, and the Company remains the legal and beneficial owner of Baishazhou Agricultural[276](index=276&type=chunk)[277](index=277&type=chunk)[281](index=281&type=chunk) - The Company issued a writ against Ms. Wang and Tian Jiu in Hong Kong, seeking damages, with the trial conducted in February, March, and June 2019, and judgment currently awaited[269](index=269&type=chunk) - Ms. Wang and Tian Jiu previously applied for a freezing order on the Company's **70% interest** in Baishazhou Agricultural and filed a counterclaim, which was dismissed by the Hubei court[287](index=287&type=chunk) - Jiangsu Shenglong Zhengtai Trade and Commercial Development Co., Ltd. issued a writ against Huai'an Mingyuan Agricultural Development Company Ltd and Mr. Wang Yong Gang, seeking to terminate a cooperation agreement and claim compensation, with the case remaining ongoing[289](index=289&type=chunk) [(A) Writ issued in the PRC by Ms. Wang Xiu Qun and Wuhan Tian Jiu Industrial and Commercial Development Co., Ltd. against the Company ("PRC Action No.1")](index=55&type=section&id=%28A%29%20Writ%20issued%20in%20the%20PRC%20by%20Ms.%20Wang%20Xiu%20Qun%20and%20Wuhan%20Tian%20Jiu%20Industrial%20and%20Commercial%20Development%20Co.%2C%20Ltd.%20against%20the%20Company%20%28%22PRC%20Action%20No.1%22%29) - Ms. Wang and Tian Jiu alleged that the share transfer agreement ("Disputed Agreement") for the Company's acquisition of **90% equity** in Baishazhou Agricultural was forged, seeking a court order to declare the Disputed Agreement void ab initio and terminated[253](index=253&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk) - The Hubei court initially dismissed Ms. Wang and Tian Jiu's claims, but the Supreme People's Court overturned the Hubei court's judgment on January 13, 2015, declaring the Disputed Agreement invalid[259](index=259&type=chunk)[260](index=260&type=chunk) - The Company's PRC legal counsel believes the Beijing judgment will not directly lead to an immediate change in Baishazhou Agricultural's ownership, and the Company remains the legal owner until MOFCOM's approval and the Hubei Administration for Industry and Commerce's equity transfer registration are revoked[260](index=260&type=chunk) - If Baishazhou Agricultural ceases to be a subsidiary, it could result in a reduction of Group revenue by approximately **HK$80 million**, profit attributable to owners by approximately **HK$43 million**, assets by approximately **HK$1.901 billion**, liabilities by approximately **HK$813 million**, and total equity attributable to owners by approximately **HK$1.088 billion**[264](index=264&type=chunk) [(B) Writ issued in the PRC by the Company and Baisazhou Agricultural against Ms. Wang, Tian Jiu and others](index=60&type=section&id=%28B%29%20Writ%20issued%20in%20the%20PRC%20by%20the%20Company%20and%20Baisazhou%20Agricultural%20against%20Ms.%20Wang%2C%20Tian%20Jiu%20and%20others) - The Company and Baishazhou Agricultural filed a lawsuit with the Hubei court on January 28, 2011, demanding Ms. Wang and Tian Jiu return illegally occupied assets and operating profits of Baishazhou Agricultural[267](index=267&type=chunk) - The Company withdrew its claims in October 2014, with Baishazhou Agricultural remaining the plaintiff[267](index=267&type=chunk) - The lawsuit was previously suspended due to the outcome of Ms. Wang and Tian Jiu's litigation against MOFCOM, then resumed in July 2020; Baishazhou Agricultural withdrew its claims in July 2020, and the case is now closed[267](index=267&type=chunk)[268](index=268&type=chunk) [(C) Writ issued by the Company against Ms. Wang and Tian Jiu in Hong Kong](index=61&type=section&id=%28C%29%20Writ%20issued%20by%20the%20Company%20against%20Ms.%20Wang%20and%20Tian%20Jiu%20in%20Hong%20Kong) - The Company issued a writ of summons against Ms. Wang and Tian Jiu in the Hong Kong Court of First Instance in October 2011, seeking damages for their breach of several provisions of the sale and purchase agreement[269](index=269&type=chunk) - Ms. Wang and Tian Jiu have undertaken not to endorse, assign, transfer, or negotiate two instruments (allegedly promissory notes under the sale and purchase agreement), nor to enforce payment until a final court judgment[269](index=269&type=chunk) - The trial was conducted over **23 days** in February, March, and June 2019, with both parties awaiting the court's judgment[269](index=269&type=chunk) [(D) Legal proceedings against MOFCOM by Ms. Wang and Tian Jiu](index=62&type=section&id=%28D%29%20Legal%20proceedings%20against%20MOFCOM%20by%20Ms.%20Wang%20and%20Tian%20Jiu) - Ms. Wang and Tian Jiu initiated two separate legal proceedings against the Ministry of Commerce of the PRC ("MOFCOM") in May 2015, alleging MOFCOM failed to perform its duties in processing their applications to revoke the approval certificate and reply for the Disputed Agreement[272](index=272&type=chunk) - The Beijing court ruled on January 8, 2016, requiring MOFCOM to re-process the application within **30 days**[272](index=272&type=chunk) - MOFCOM decided on May 19, 2016, to confirm that its November 2007 approval for the Disputed Agreement would not be revoked and remained valid[272](index=272&type=chunk) - Ms. Wang and Tian Jiu subsequently requested the Beijing court to revoke MOFCOM's decision, but the Beijing court dismissed their application on March 31, 2017[273](index=273&type=chunk) - The Beijing Higher People's Court dismissed Ms. Wang and Tian Jiu's appeal on December 20, 2018, upholding the original judgment of the Beijing court[273](index=273&type=chunk) - The Supreme People's Court rejected Ms. Wang and Tian Jiu's retrial application on December 31, 2019, confirming that MOFCOM's November 2007 approval for the Disputed Agreement would not be revoked and remained valid, which is a final judgment[276](index=276&type=chunk)[277](index=277&type=chunk)[281](index=281&type=chunk) [(E) Writ issued by the Company against Ms. Wang and Tian Jiu in Hubei](index=64&type=section&id=%28E%29%20Writ%20issued%20by%20the%20Company%20against%20Ms.%20Wang%20and%20Tian%20Jiu%20in%20Hubei) - The Company issued a writ to the Hubei court in May 2015, seeking an order for Ms. Wang and Tian Jiu to assist Baishazhou Agricultural in fulfilling its contractual obligation under the sale and purchase agreement to report and file with MOFCOM for approval[278](index=278&type=chunk)[282](index=282&type=chunk) - Ms. Wang and Tian Jiu raised a jurisdictional objection to the Hubei court, which was dismissed, and their subsequent appeal to the Supreme People's Court was also rejected[283](index=283&type=chunk)[284](index=284&type=chunk)[285](index=285&type=chunk) - Ms. Wang and Tian Jiu again applied in May 2017 to freeze the Company's **70% interest** in Baishazhou Agricultural, and the Hubei court granted the freezing order[287](index=287&type=chunk) - Ms. Wang and Tian Jiu applied in May 2017 to add a counterclaim, seeking to recover the Company's **90% interest** in Baishazhou Agricultural[287](index=287&type=chunk) - The Company withdrew its claims in April 2019, and the Hubei court dismissed Ms. Wang and Tian Jiu's counterclaim on December 23, 2019[287](index=287&type=chunk) - Ms. Wang and Tian Jiu appealed the December 23 judgment in January 2020, requesting the Supreme People's Court to revoke the judgment, declare the sale and purchase agreement invalid, and return the Company's **90% interest** in Baishazhou Agricultural; the case remains ongoing as of the reporting date[287](index=287&type=chunk)[288](index=288&type=chunk) [(F) Writ issued in the PRC by Jiangsu Shenglong Zhengtai Trade and Commercial Development Co., Ltd against Huai'an Mingyuan Agricultural Development Company Ltd and Mr. Wang Yong Gang](index=67&type=section&id=%28F%29%20Writ%20issued%20in%20the%20PRC%20by%20Jiangsu%20Shenglong%20Zhengtai%20Trade%20and%20Commercial%20Development%20Co.%2C%20Ltd%20against%20Huai%27an%20Mingyuan%20Agricultural%20Development%20Company%20Ltd%20and%20Mr.%20Wang%20Yong%20Gang) - Jiangsu Shenglong Zhengtai Trade and Commercial Development Co., Ltd. issued a writ in November 2018 against Huai'an Mingyuan Agricultural Development Company Ltd and Mr. Wang Yong Gang, seeking to terminate the business cooperation agreement and supplementary business cooperation agreement, and demanding total compensation of approximately **RMB37.82 million**[289](index=289&type=chunk) - Huai'an Mingyuan filed a counterclaim in December 2018, seeking a court order to declare Jiangsu Shenglong's notice of termination of cooperative operation invalid and demanding Jiangsu Shenglong bear legal fees[289](index=289&type=chunk) - As of the reporting date, the case remains ongoing[289](index=289&type=chunk) [20. Material Related Party Transactions](index=68&type=section&id=20.%20Material%20Related%20Party%20Transactions) The Group conducted material related party transactions, including reduced key management remuneration and various interest and purchase transactions with Easy One Financial Group, Wai Yuen Tong, and Wang On Group Key Management Personnel Remuneration (For the six months ended September 30) | Remuneration Category | 2020 (HK$ Thousand) | 2019 (HK$ Thousand) | | :--- | :--- | :--- | | Short-Term Employee Benefits | 4,162 | 6,652 | | Post-Employment Benefits | 71 | 53 | | **Total** | **4,233** | **6,705** | Material Related Party Transactions (For the six months ended September 30) | Related Party and Transaction Category | 2020 (HK$ Thousand) | 2019 (HK$ Thousand) | | :--- | :--- | :--- | | Easy One Financial Group Limited and its Subsidiaries – Interest on Convertible Bonds | 5,980 | 5,618 | | Wai Yuen Tong Medicine Holdings Limited and its Subsidiaries – Interest on Other Borrowings | 26,322 | – | | Wai Yuen Tong Medicine Holdings Limited and its Subsidiaries – Interest on Bonds | – | 37,455 | | Wai Yuen Tong Medicine Holdings Limited and its Subsidiaries – Purchase of Goods | 803 | 2,948 | | Wang On Group Limited and its Subsidiaries – Management Fees | 480 | 480 | | Wang On Group Limited and its Subsidiaries – Interest on Other Borrowings | 3,760 | – | | Wang On Group Limited and its Subsidiaries – Interest on Bonds | – | 5,365 | - Key management personnel remuneration decreased from **HK$6,705 thousand** in 2019 to **HK$4,233 thousand** in 2020[293](index=293&type=chunk) - Wai Yuen Tong Medicine Holdings Limited and its subsidiaries incurred **HK$26,322 thousand** in other borrowing interest in 2020, compared to **HK$37,455 thousand** in bond interest in 2019[295](index=295&type=chunk) [21. Approval of Interim Financial Statements](index=69&type=section&id=21.%20Approval%20of%20Interim%20Financial%20Statements) The Board of Directors approved and authorized the interim financial statements for issue on November 24, 2020 - The interim financial statements were approved and authorized for issue by the Board of Directors on **November 24, 2020**[296](index=296&type=chunk)

Financial Performance - The Group recorded a turnover of approximately HK$1,091 million for the fifteen months ended March 31, 2020, compared to approximately HK$779 million for the twelve months ended December 31, 2018, representing a significant increase[17]. - The Group achieved a profit attributable to owners of the Company of approximately HK$6 million during the same period, a turnaround from a loss of approximately HK$213 million in the previous year[17]. - Gross profit for the Period was approximately HK$539 million, an increase of approximately 38% from HK$391 million in the previous year[67]. - Segment result increased by approximately 67% to approximately HK$332 million compared to HK$199 million in the last financial year[67]. - Other revenue and other net income decreased to approximately HK$20 million from HK$21 million in the previous year, mainly due to a decrease in management fee income[69]. - General and administrative expenses were approximately HK$207 million, remaining similar to the previous year despite the extra three months of reporting data[72]. - The profit attributable to owners of the Company was approximately HK$6 million, a significant recovery from a loss of approximately HK$213 million in the last financial year[75]. - Net gain in fair value of investment properties was approximately HK$149 million, a substantial increase from HK$5 million in the previous year[73]. Market Operations - The Group's agricultural produce exchange markets maintained stable operations during the COVID-19 pandemic, with the Wuhan Baisazhou Market recognized for its contributions to supply guarantee in Wuhan[25]. - The Group operates a total of 11 agricultural produce exchange markets across various provinces in Mainland China, including Hubei, Henan, and Jiangsu[24]. - The operation performance of Luoyang Market improved, with an operation turnover increase of approximately 34% compared to the last financial year of 2018[97]. - Puyang Market recorded an increase of approximately 113% in turnover compared to the last financial year of 2018[101]. - Yulin Market achieved a revenue growth of approximately 7% for the period compared to the last financial year of 2018[107]. - Qinzhou Market saw an increase of approximately 45% in operation turnover compared to the last financial year of 2018[110]. - The COVID-19 outbreak significantly affected the market performance of Wuhan Baisazhou Market in early 2020, but the market fully resumed normal operation by late April 2020[86]. - The trading volume and income of the markets have gradually returned to normal levels as the epidemic began to be under control[137]. Strategic Developments - Wai Yuen Tong Medicine Holdings Limited became a controlling shareholder with a 53.37% interest in the Company following a partial share offer that closed in February 2020[19]. - The completion of the partial share offer allows the Group to generate synergies with the controlling shareholder in terms of assets and businesses, enhancing its market position[19]. - The Group aligned its financial year-end date with the holding company to reduce expenses related to the preparation of separate financial statements[19]. - The Group is actively enhancing environmental safety standards and has implemented a strong electricity monitoring alert system in its markets[33]. - The Group is developing an omnichannel operation model, integrating online and offline business activities, with e-commerce initiatives piloted at the Wuhan Baisazhou Market[34]. - The Group plans to establish fresh food retail specialty stores in agricultural produce exchange markets and has opened franchise stores on e-commerce platforms to integrate physical and virtual retail businesses[36]. - The Group aims to explore business opportunities in the ASEAN region in response to the PRC government's Belt and Road Initiative[46]. - The Group's focus on integrating e-commerce with traditional wholesale markets is expected to drive growth in the agricultural produce sector[36]. Operational Efficiency - The asset-light operation model has begun to yield positive results, with the Suizhou Market serving as a benchmark project for this strategy[31]. - The Group continues to strengthen cost control and enhance operational efficiency while diversifying its business to increase income sources[32]. - The Group's markets are strategically located in key regions, linking southern and northern China, which supports its logistics and supply chain operations[24]. - The Group's operational strategy includes optimizing asset allocation and seeking diversified development in related business segments to enhance efficiency[39]. - The Group is diversifying its revenue sources by transitioning from a wholly-owned operation model to a partnership model, enhancing its management services[83]. Financial Position - As of March 31, 2020, the Group had total cash and cash equivalents of approximately HK$340 million, down from approximately HK$488 million as of December 31, 2018[151]. - Total assets were approximately HK$5,139 million, a decrease from approximately HK$5,604 million as of December 31, 2018, while net assets were approximately HK$1,485 million, down from approximately HK$1,595 million[151]. - The Group's gearing ratio as of March 31, 2020, was approximately 1.0, consistent with the ratio as of December 31, 2018[151]. - Total interest-bearing debts amounted to approximately HK$1,811 million, a decrease from approximately HK$2,085 million as of December 31, 2018, representing about 35% of total assets[151]. - The Group issued Convertible Notes with an outstanding principal amount of HK$264.8 million as of March 31, 2020, with no conversions into shares during the period[151]. - The Group's Listed Notes in the principal amount of HK$290 million remained outstanding as of March 31, 2020, under a medium-term note program established in May 2014[151]. Legal and Compliance - The Group has engaged independent environmental consultants for environmental impact assessments, ensuring compliance with PRC environmental laws[174]. - The Group complied with relevant laws and regulations during the period, including the Listing Rules and the Securities and Futures Ordinance[175]. - The Group continues to monitor new laws and regulations affecting its operations and provides relevant training to employees[177]. - The company has complied with all relevant environmental laws and regulations in China, with no significant adverse environmental liabilities reported to date[176]. Employee and Management - As of March 31, 2020, the Group had 1,171 employees, a decrease from 1,229 employees as of December 31, 2018, with approximately 98% located in the PRC[195]. - The Group's remuneration policy is periodically reviewed, and no share options were granted during the reporting period[195]. - The Company continues to focus on recruiting and retaining competent individuals committed to its long-term success and growth[195]. Impact of COVID-19 - The outbreak of COVID-19 has caused adverse impacts on the performance of agricultural produce exchange markets, especially during early 2020[200]. - Various contingency health and hygiene measures have been implemented to ensure the health and safety of employees, tenants, and visitors[200]. - Most agricultural produce exchange markets have continued to operate despite the challenges posed by the pandemic[200].

Financial Performance - The company reported a revenue of approximately HKD 779 million for the year ended December 31, 2018, a decrease from HKD 790 million in 2017, attributed to effective cost control measures[7]. - The operating profit before fair value changes and impairments improved from approximately HKD 74 million in 2017 to about HKD 127 million in 2018, reflecting a significant operational efficiency[7]. - The company recorded a loss attributable to owners of the company of approximately HKD 213 million, compared to a loss of HKD 341 million in 2017, indicating a 37.5% improvement in losses year-over-year[7]. - The company recorded a revenue of approximately HKD 779 million, a decrease of about 1% compared to the previous fiscal year of approximately HKD 790 million, primarily due to a reduction in confirmed property sales[21]. - Gross profit and segment results were approximately HKD 391 million and HKD 199 million, respectively, representing increases of about 15% and 11% compared to the previous fiscal year[23]. - Other income and net income amounted to approximately HKD 21 million, an increase from HKD 15 million in the previous year, mainly due to rising interest income[24]. - General and administrative expenses were approximately HKD 235 million, a decrease from HKD 239 million in the previous year, attributed to cost-saving measures[25]. - The company reported a net loss attributable to owners of approximately HKD 213 million, an improvement from a loss of HKD 341 million in the previous fiscal year[29]. - The fair value net gain from investment properties was approximately HKD 5 million, a decrease from HKD 52 million in the previous year, primarily due to declines in fair value at specific markets[27]. Market Operations - The company is managing a total of 11 agricultural product trading markets across various cities in China, including Wuhan and Xuzhou, enhancing its market presence[10]. - A pilot delivery service was launched in collaboration with an e-commerce company at the Wuhan Baishazhou Agricultural Products Trading Market, aiming to enhance revenue streams[13]. - The company has established a joint venture for the Suizhou Baishazhou Agricultural Products Trading Market, which is expected to contribute revenue in the future[12]. - Wuhan Baishazhou Market's revenue significantly increased due to rent adjustments, establishing a strong reputation among customers and tenants[33]. - Huangshi Market generated approximately HKD 16,000,000 in revenue, maintaining stability compared to the previous fiscal year[35]. - Yulin Market's revenue grew by about 27%, with property sales rising from approximately HKD 298,000,000 to about HKD 394,000,000[42]. - Qinzhou Market's operating revenue increased by approximately 18% compared to the previous fiscal year[45]. - Xuzhou Market's revenue was approximately HKD 46,000,000, remaining stable compared to the previous fiscal year[46]. - Luoyang Market turned a profit in 2018, contributing positively to the group's overall performance[38]. - Puyang Market's revenue increased by approximately 22% compared to the previous fiscal year[39]. - Suizhou Market is in the early development stage, focusing on fruit and vegetable trading[36]. Strategic Initiatives - The company has initiated a light-asset operation model, reducing capital pressure during business expansion and improving operational efficiency[12]. - The company is actively enhancing environmental safety standards by upgrading the electric monitoring and early warning systems across its trading markets[14]. - The "Belt and Road" initiative has strengthened business exchanges between mainland China and countries along the route, promoting agricultural product trade[9]. - The company is responding to national policies by integrating e-commerce channels to increase revenue sources, aligning with the government's agricultural e-commerce strategy[13]. - The company is actively seeking opportunities to expand its wholesale market connections with ASEAN regions to enhance domestic and international sales of agricultural products[15]. - The company is diversifying its revenue sources by adopting a light asset model and providing management services[31]. - The company aims to expand its market presence through partnerships and new market developments in various regions[31]. - The group has strategically entered the food and agricultural procurement business, launching its first pilot in Wuhan, with strong market demand observed[53]. Financial Position and Debt Management - As of December 31, 2018, the group's cash and cash equivalents totaled approximately HKD 488 million, down from HKD 514 million in 2017[55]. - Total assets and net asset value as of December 31, 2018, were approximately HKD 5.604 billion and HKD 1.595 billion, respectively, compared to HKD 6.111 billion and HKD 1.958 billion in 2017[55]. - The group's debt-to-asset ratio was approximately 37% as of December 31, 2018, down from 42% in 2017[56]. - The total interest-bearing debt amounted to approximately HKD 2.085 billion as of December 31, 2018, a decrease from HKD 2.553 billion in 2017[61]. - The group has outstanding convertible bonds with a principal amount of HKD 264.8 million as of December 31, 2018[57]. - The group has unfulfilled capital commitments of approximately HKD 214 million as of December 31, 2018, down from HKD 260 million in 2017[58]. - The company is negotiating with multiple banks to secure necessary financing to meet its operational and financial needs[65]. - The company is actively seeking opportunities to enhance its financial position through refinancing, extending borrowings, and/or fundraising[196]. Legal and Compliance Matters - The company continues to hold a 70% interest in the Bai Sha Zhou Agricultural Products, as confirmed by the Beijing High Court ruling on December 20, 2018, which dismissed appeals from Ms. Wang and Tian Jiu[77]. - The approval granted by the Ministry of Commerce in 2007 regarding the disputed agreement remains valid and cannot be revoked, as per the decision made on May 19, 2016[77]. - The company is actively pursuing all necessary legal actions in response to the Beijing ruling, as advised by its legal counsel[77]. - The company has faced multiple legal challenges regarding the ownership of Bai Sha Zhou Agricultural Products, with the latest ruling affirming its legal and beneficial ownership[77]. - The company has incurred legal costs related to the ongoing litigation, which may impact future financial performance[74]. - The company plans to continue its operations and maintain its interests in the agricultural sector despite the ongoing legal disputes[77]. - The company is committed to addressing the implications of the court rulings on its business strategy and operations moving forward[77]. - The company has been involved in various legal proceedings since 2015, indicating a prolonged dispute over ownership and operational control of Bai Sha Zhou Agricultural Products[74]. Environmental and Social Responsibility - The company is committed to integrating environmental, social, and governance (ESG) matters into its business strategy for sustainable development[104]. - The company has developed a strong e-commerce network to connect online and offline agricultural trading market customers[104]. - The company has implemented internal policies to monitor environmental performance and manage climate change risks[104]. - The company emphasizes data security and has policies in place to protect against data fraud risks[104]. - The company values stakeholder engagement to identify and manage ESG-related risks and opportunities[104]. - The total greenhouse gas emissions amounted to 23,675 tons of CO2 equivalent, with direct emissions (Scope 1) at 2,874 tons and indirect emissions (Scope 2) at 20,801 tons[110]. - The emission intensity was reported at 0.03 tons of CO2 equivalent per thousand HKD in revenue[110]. - The company generated 4.22 kg of sulfur oxides, 124.09 kg of nitrogen oxides, and 10.85 kg of particulate matter during the reporting period[110]. - The total amount of non-hazardous waste produced by the company was 60,260 tons in 2018[114]. - The company has complied with Chinese environmental laws, including the Environmental Protection Law and the Air Pollution Prevention Law, with no significant fines reported for non-compliance[113]. - The company has implemented measures to reduce air pollutants and waste generation, including signing a carbon reduction charter[111]. - The company’s operations have not resulted in any hazardous waste generation during the reporting period[114]. - The company ensures that wastewater meets the "Comprehensive Wastewater Discharge Standards" before being discharged into treatment facilities[115]. - The company has established a waste management system, including designated waste collection points and regular cleaning contracts[114]. - The company has committed to environmental impact assessments prior to construction and production activities[111]. - Total water consumption in 2018 was 2,201,091 tons, with a water intensity of 3.0 tons per thousand HKD revenue, an increase from 2.83 tons in 2017[119]. - Total energy consumption in 2018 was 184.55 MJ per thousand HKD revenue, up from 180.02 MJ in 2017[119]. - The group implemented water-saving measures, achieving a monthly water saving of 500 tons by adjusting toilet flushing frequency[121]. - The group plans to install solar street lights in 2019 to further reduce electricity consumption[122]. - The group replaced halogen bulbs with LED lighting in public areas to save energy[122]. Employee and Governance Practices - The company employed 1,229 employees as of December 31, 2018, a decrease from 1,355 employees in 2017, with approximately 98% located in China[78]. - Employee turnover rate in 2018 was approximately 32%, with a new hire rate of about 24%[133]. - The gender distribution of employees was approximately 58% male and 42% female[126]. - The company provided a total of 11,196 training sessions for employees during the year, with a breakdown of 10,206 hours for male employees and 6,587 hours for female employees[151][152]. - The company has implemented a safety training program, providing a total of 2,817 hours of safety training to employees in the year[157]. - There were no reported incidents of work-related deaths or occupational diseases during the reporting period[155]. - The company is committed to providing a diverse and equitable work environment, prohibiting discrimination based on race, gender, age, or religion[146]. - The company has implemented policies to ensure employees have a work-life balance, including sufficient rest time and vacation days[148]. - The company has established an accident reporting procedure to manage and improve responses to occupational health and safety incidents[154]. - The company donated approximately HK$377,056 to community organizations in Hong Kong and China in 2018, representing a 28% increase from the previous year[166]. Corporate Governance - The board consists of three executive directors and three independent non-executive directors, ensuring a balanced skill set and experience necessary for the company's business needs[174]. - The company has adopted a code of conduct for securities transactions by directors, which complies with the standards set out in the Listing Rules[174]. - The board held a minimum of four meetings in the year and has established a list of matters reserved for its review and approval[176]. - All independent non-executive directors are appointed for a term of three years, ensuring their independence and objectivity in decision-making[176]. - The company actively encourages employee participation in community service activities, enhancing its corporate social responsibility initiatives[166]. - The board is committed to maintaining high levels of corporate governance, ensuring accountability and transparency among stakeholders[169]. - The company regularly reviews its corporate governance practices to ensure compliance with the Corporate Governance Code[176]. - The board has delegated general powers to management for the daily administration and operations of the group[176]. - The company has implemented a diversity policy to ensure a balanced representation of skills and experience on the board[176]. - The company achieved a 99.99% approval rate for all resolutions presented at the 2018 Annual General Meeting[178]. - The board of directors held four regular meetings during the review year, with attendance rates documented[182]. - The remuneration committee convened three times during the review year, with all members present at each meeting[183]. - The company emphasizes continuous professional development for all directors, ensuring they are updated on corporate governance and regulatory changes[181]. - The chairman and CEO, Mr. Chen, oversees overall corporate planning and strategy, enhancing operational efficiency in a dynamic business environment[180]. - The company plans to review its governance practices to ensure alignment with best interests and compliance with corporate governance codes[180]. - The remuneration committee is responsible for establishing transparent remuneration policies for directors and senior management[183]. - The company has committed to diversity in its board composition, considering various factors such as gender and professional experience[183]. - The company will disclose the results of its governance reviews annually in its corporate governance report[184]. Risk Management - The company has established and maintained an effective risk management and internal control system, reviewed annually[197]. - The risk management framework includes risk identification, assessment, monitoring, and control activities involving all levels of staff[198][200]. - The audit committee reviewed the accounting principles and practices adopted by the company and was satisfied with the effectiveness of the internal audit function[195][196]. - The company aims to provide reasonable assurance against material misstatements or losses, rather than absolute assurance[197]. - The board and audit committee will review any changes in significant risks faced by the group[200]. - The company is committed to maintaining a robust risk management culture and environment[198].