未来发展控股(01259) - 2019 - 中期财报

Company Information This section provides an overview of the company's fundamental details, including its board, committees, registration, auditors, and primary business activities Company Basic Information This chapter outlines Future Development Holdings Limited's board members, committee structure, registration details, auditors, principal bankers, contact information, and its primary business as an investment holding company - Executive Directors include Mr. Choi Wah Lun (Chairman), Mr. Zhou Ling (Chief Executive Officer), and Mr. Lau Ka Ho (Chief Financial Officer, appointed on May 24, 2019)[5] - Mr. Lau Ka Ho was appointed Company Secretary on May 24, 2019, following the resignation of Mr. Leung Ho Ming[7] - The Group's principal business is investment holding, with subsidiaries engaged in manufacturing and selling personal care products, money lending, operating online platforms, trading commodities, securities investment, property holding and investment, and providing catering services[10][83] Management Discussion and Analysis This section provides a comprehensive review of the Group's business and financial performance, future outlook, and key corporate updates Business Review The Group's business segments showed mixed performance, with personal care products, online platform operations, and commodity trading experiencing revenue declines or expanded losses, while money lending saw revenue growth but reduced profit; securities investment recorded unrealized and realized losses, catering services achieved stable growth post-acquisition, and property holding experienced decreases in both revenue and profit - Personal care products business revenue was approximately RMB 164.6 million, an increase of approximately 7.0% year-on-year, but recorded a loss of approximately RMB 38.7 million, with losses expanding primarily due to China's economic slowdown and consumer shift to e-commerce[11] - Money lending business revenue was approximately RMB 18.0 million, an increase of approximately 8.2% year-on-year, but segment profit was approximately RMB 1.5 million, a decrease of approximately 66.6% year-on-year[12] - Online platform operations revenue was approximately RMB 5.2 million, a decrease of approximately 40.9% year-on-year, and recorded a profit of approximately RMB 2.2 million, a decrease of approximately 65.4% year-on-year[13] - Commodity trading business revenue was approximately RMB 71.3 million, a decrease of approximately 16.0% year-on-year, and recorded a loss of approximately RMB 24.6 million (June 30, 2018: loss of approximately RMB 0.3 million)[14][16] - Securities investment business recorded a net unrealized loss of approximately RMB 38.9 million and a net realized loss of approximately RMB 4.4 million[17] - Catering services business recorded total revenue of approximately RMB 25.0 million (June 30, 2018: nil) after the acquisitions of Lucky International Group Limited and Greater China Cold Chain Logistics Limited, but recorded a segment loss of approximately RMB 0.5 million[21][22][23] Financial Review The Group's turnover increased by 6.9% year-on-year, but gross profit and gross profit margin significantly decreased, leading to an expanded loss attributable to equity holders; two subsidiary acquisitions were completed to expand catering services, and funds were raised through share placements, maintaining healthy financial resources and liquidity despite increased impairment provisions for loans and trade receivables Turnover and Gross Profit Changes | Metric | 2019 (Unaudited) (RMB million) | 2018 (Unaudited) (RMB million) | Y-o-Y Change (%) | | :------------------ | :----------------------------- | :----------------------------- | :--------------- | | Turnover | 284.4 | 266.1 | 6.9% | | Gross Profit | 23.9 | 60.4 | (60.4%) | | Gross Profit Margin | 8.4% | 22.7% | (14.3%) | - Loss attributable to equity holders of the Company was approximately RMB 75.3 million, an increase of 47.7% from RMB 51.0 million in the prior period; basic loss per share was approximately RMB 5.3 cents (June 30, 2018: RMB 4.4 cents)[41] - During the reporting period, the Group acquired 80% equity interest in Lucky International Group Limited (consideration of HKD 42 million, partly paid by issuing shares) and 100% equity interest in Greater China Cold Chain Logistics Limited (consideration of HKD 800,000 cash) to expand its catering services business[36][37][39] - On June 30, 2018, 80% equity interest in Fujian Aijieli Daily Chemical Co., Ltd. was disposed of for a consideration of RMB 12.0 million, recognizing a disposal loss of RMB 9.0 million[40] - The Group's cash and cash equivalents were approximately RMB 194.3 million (December 31, 2018: RMB 218.9 million), with a current ratio of 1.4, maintaining healthy liquidity[43] - The Group raised approximately HKD 29.6 million and HKD 29.3 million in 2018 and 2019 respectively through share placements, primarily for money lending business and inventory procurement for catering services[44][45][46] - Impairment loss provision for loans and interest receivable was approximately RMB 5.0 million (June 30, 2018: RMB 0.5 million), and for trade receivables and bills receivable was approximately RMB 4.5 million (June 30, 2018: nil)[48][49] Future Outlook The Group plans to strengthen and diversify its business portfolio, cautiously developing each segment amidst China's economic slowdown, trade frictions, and stock market volatility; personal care will focus on supply chain and product development, money lending will explore finance lease opportunities, property holding remains optimistic about the Hong Kong market, and catering services are expected to continue growing - The Group will continue to strengthen, develop, and expand its diversified business portfolio, further building a sustainable investment portfolio, adopting a prudent approach to business development in the current economic environment[59] - The personal care business faces challenging prospects, and the Group will strive to improve supply chain responsiveness and enhance product development capabilities[59] - The money lending business will explore expansion through participation in China's finance lease business to manage risks[59] - The Group remains optimistic about the development of Hong Kong's property market and intends to demolish and redevelop a plot of land in Yuen Long, Hong Kong[60] - Catering services business recorded stable growth after acquisitions, and the Directors believe that the outlook for Hong Kong's catering services industry remains positive with lower reliance on the PRC market[62] Change of Company Name Effective May 2, 2019, the Company changed its English name from 'China Child Care Corporation Limited' to 'Future Development Holdings Limited' and adopted the Chinese name '未來發展控股有限公司' - The Company's English name changed from 'China Child Care Corporation Limited' to 'Future Development Holdings Limited'[63] - The Chinese name '未來發展控股有限公司' was adopted as the Company's dual foreign name, replacing its former Chinese name '中國兒童護理有限公司'[63] - The aforementioned changes became effective from May 2, 2019[63] Employees and Remuneration As of June 30, 2019, the Group's employee count increased to 982; the company offers competitive remuneration packages, including basic salaries, year-end bonuses, and social insurance, and has a share option scheme to reward employee contributions - As of June 30, 2019, the Group employed 982 employees (December 31, 2018: 921 employees)[64] - Remuneration packages include basic salaries, year-end bonuses, and participation in social insurance contribution schemes as required by the PRC government[64] - The Company adopted a share option scheme in June 2011 and updated its limits in June 2019 to reward employees who have contributed to the Group's success[64] Dividends The Board resolved not to declare any interim dividend for the six months ended June 30, 2019 - The Board resolved not to declare any interim dividend for the six months ended June 30, 2019 (six months ended June 30, 2018: nil)[65] Unaudited Condensed Consolidated Interim Financial Statements This section presents the Group's unaudited condensed consolidated interim financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2019, the Group's revenue increased by 6.9% year-on-year, but a significant rise in cost of sales led to a 60.4% decrease in gross profit; loss for the period expanded, with loss attributable to equity holders of the Company increasing to RMB 75.3 million and basic loss per share at RMB 5.3 cents Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2019 (Unaudited) (RMB thousand) | 2018 (Unaudited) (RMB thousand) | Y-o-Y Change (%) | | :------------------------------------- | :------------------------------ | :------------------------------ | :--------------- | | Revenue | 284,416 | 266,055 | 6.9% | | Cost of sales | (260,481) | (205,623) | 26.7% | | Gross profit | 23,935 | 60,432 | (60.4%) | | Loss before tax | (72,578) | (46,161) | 57.2% | | Loss for the period | (73,440) | (47,911) | 53.3% | | Loss for the period attributable to equity holders of the Company | (75,337) | (50,998) | 47.7% | | Basic loss per share (RMB cents) | (5.3) | (4.4) | 20.5% | Condensed Consolidated Statement of Financial Position As of June 30, 2019, the Group's total assets and total liabilities both decreased, with non-current assets and current assets declining by 12.2% and 10.4% respectively; equity attributable to equity holders of the Company decreased by 12.3%, and total equity decreased by 11.0% Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2019 (Unaudited) (RMB thousand) | December 31, 2018 (Audited) (RMB thousand) | Change (%) | | :------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------- | | Non-current assets | 614,245 | 698,990 | (12.2%) | | Current assets | 516,474 | 576,306 | (10.4%) | | Total Assets | 1,130,719 | 1,275,296 | (11.4%) | | Current liabilities | 361,420 | 412,652 | (12.4%) | | Non-current liabilities | (15,222) | (15,418) | (1.3%) | | Total Liabilities | 376,642 | 428,070 | (12.0%) | | Equity attributable to equity holders of the Company | 678,779 | 773,974 | (12.3%) | | Non-controlling interests | 75,298 | 73,252 | 2.8% | | Total Equity | 754,077 | 847,226 | (11.0%) | Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2019, the Group's total equity was RMB 754,077 thousand, a decrease from the beginning of the period; total comprehensive expense attributable to equity holders of the Company was RMB 125,861 thousand, while share capital increased through the issuance of new shares - As of June 30, 2019, equity attributable to equity holders of the Company was RMB 678,779 thousand, a decrease from RMB 773,574 thousand as of December 31, 2018[77] - Total comprehensive expense attributable to equity holders of the Company for the period was RMB 125,861 thousand[77] - Issuance of new shares during the period resulted in an increase in share capital of RMB 1,762 thousand[77] Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2019, the Group's net cash used in operating activities was RMB 127,715 thousand, net cash from investing activities was RMB 81,513 thousand, and net cash from financing activities was RMB 20,748 thousand, resulting in a net decrease in cash and cash equivalents of RMB 25,454 thousand Key Data from Condensed Consolidated Statement of Cash Flows | Metric | 2019 (Unaudited) (RMB thousand) | 2018 (Unaudited) (RMB thousand) | | :------------------------------------ | :------------------------------ | :------------------------------ | | Net cash used in operating activities | (127,715) | (76,918) | | Net cash from/(used in) investing activities | 81,513 | (6,009) | | Net cash from financing activities | 20,748 | 12,494 | | Net decrease in cash and cash equivalents | (25,454) | (70,433) | | Cash and cash equivalents at end of period | 194,264 | 153,034 | Notes to the Condensed Consolidated Interim Financial Statements These notes detail the basis of preparation, accounting policies (including the impact of initial adoption of IFRS 16 Leases), operating segment information, analysis of revenue and various expenses, as well as important financial information such as share capital, share option schemes, subsidiary acquisitions and disposals, related party transactions, and post-reporting period events 1. Company Information This section provides fundamental details about Future Development Holdings Limited, including its incorporation, listing, and diversified business activities through its subsidiaries - Future Development Holdings Limited (formerly 'China Child Care Corporation Limited') was incorporated in the Cayman Islands, with its shares listed on the Main Board of The Stock Exchange of Hong Kong Limited[83] - The Company's principal activity is investment holding, with diversified subsidiary businesses including manufacturing and selling personal care products, money lending, operating online platforms, trading commodities, securities investment, property holding, investment holding, and providing catering services[83] 2. Basis of Preparation and Accounting Policies This section outlines the basis for preparing the interim financial statements, including compliance with IAS 34 and the initial adoption of IFRS 16 Leases - The unaudited condensed consolidated interim financial statements are prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and the applicable disclosure requirements of Appendix 16 to the Listing Rules of the Stock Exchange[84] - IFRS 16 Leases was adopted for the first time in the current period, applied using the full retrospective method, with the date of initial application being January 1, 2019[84][87] Impact of IFRS 16 Adoption on Statement of Financial Position | Metric | Increase/(Decrease) (Unaudited) (RMB thousand) | | :--------------------------------- | :--------------------------------------------- | | Increase in right-of-use assets | 19,962 | | Decrease in prepaid land lease payments | (10,511) | | Increase in total assets | 9,183 | | Increase in lease liabilities (non-current) | 8,146 | | Increase in lease liabilities (current) | 1,037 | | Increase in total liabilities | 9,183 | 3. Operating Segment Information This section provides a breakdown of the Group's performance across its diverse operating segments, including revenue and profit/loss contributions - The Group's operating segments include personal care products, money lending, operating online platforms, trading commodities, securities investment, property holding, and providing catering services[98] Segment Revenue for the Six Months Ended June 30, 2019 | Segment | Revenue (RMB thousand) | | :----------------------- | :--------------------- | | Personal care products | 164,640 | | Money lending | 17,965 | | Operating online platforms | 5,219 | | Trading commodities | 71,324 | | Securities investment | – | | Property holding | 248 | | Catering services | 25,020 | | Total | 284,416 | Segment (Loss)/Profit for the Six Months Ended June 30, 2019 | Segment | (Loss)/Profit (RMB thousand) | | :----------------------- | :--------------------------- | | Personal care products | (38,734) | | Money lending | 1,470 | | Operating online platforms | 2,205 | | Trading commodities | (24,577) | | Securities investment | (59) | | Property holding | (284) | | Catering services | (517) | | Total | (60,496) | 4. Revenue This section provides a detailed breakdown of the Group's revenue by source for the reporting period Analysis of Revenue Sources | Revenue Source (RMB thousand) | 2019 (Unaudited) | 2018 (Unaudited) | | :---------------------------- | :--------------- | :--------------- | | Revenue from sales of goods | 235,964 | 238,769 | | Interest income from money lending business | 17,965 | 16,609 | | Income from operating online platforms | 5,219 | 8,838 | | Rental income from investment properties | 248 | 1,839 | | Income from catering services | 25,020 | – | | Total | 284,416 | 266,055 | 5. Other Income and Gains This section details the various other income and gains recognized by the Group during the reporting period Analysis of Other Income and Gains | Other Income and Gains (RMB thousand) | 2019 (Unaudited) | 2018 (Unaudited) | | :---------------------------------- | :--------------- | :--------------- | | Interest income | 419 | 1,905 | | Gains from financial assets at fair value through profit or loss | 342 | 399 | | Reversal of impairment loss on trade receivables | 1,911 | – | | Government grants | 2,186 | 619 | | Rental income | 278 | 285 | | Others | 760 | 832 | | Total | 5,987 | 4,040 | 6. Other Expenses This section provides an analysis of the Group's other expenses, including losses from asset disposals and impairment charges Analysis of Other Expenses | Other Expenses (RMB thousand) | 2019 (Unaudited) | 2018 (Unaudited) | | :---------------------------- | :--------------- | :--------------- | | Loss on disposal of property, plant and equipment | 437 | 2,580 | | Impairment loss on loans and interest receivable | 4,988 | 488 | | Impairment on trade receivables | 4,462 | – | | Impairment loss on goodwill | 2,523 | – | | Loss on disposal of a subsidiary | – | 9,004 | | Loss on fair value change of investment properties | 1,710 | 406 | | Total | 14,232 | 12,973 | 7. Finance Costs This section details the Group's finance costs, including interest expenses from bank and other borrowings, and lease liabilities Analysis of Finance Costs | Finance Costs (RMB thousand) | 2019 (Unaudited) | 2018 (Unaudited) | | :--------------------------- | :--------------- | :--------------- | | Interest on bank borrowings | 1,354 | 2,586 | | Interest on other borrowings | 1,460 | 2,174 | | Finance charges on lease liabilities | 317 | – | | Total | 3,131 | 4,896 | 8. Loss Before Tax This section itemizes the key expenses deducted in calculating the Group's loss before tax Items Deducted in Loss Before Tax | Item (RMB thousand) | 2019 (Unaudited) | 2018 (Unaudited) | | :------------------ | :--------------- | :--------------- | | Cost of inventories sold | 260,481 | 205,623 | | Depreciation of property, plant and equipment | 14,222 | 18,066 | | Depreciation of right-of-use assets | 2,343 | – | | Total staff costs | 35,015 | 31,073 | | Research and development costs | 9,905 | 5,586 | | Net exchange losses | 3,101 | 5,290 | 9. Income Tax Expense This section provides an analysis of the Group's income tax expense, including Hong Kong profits tax, PRC corporate income tax, and deferred tax Analysis of Income Tax Expense | Income Tax Expense (RMB thousand) | 2019 (Unaudited) | 2018 (Unaudited) | | :-------------------------------- | :--------------- | :--------------- | | Hong Kong profits tax | 1,998 | 1,951 | | PRC corporate income tax | 2 | 11 | | Deferred tax | (1,138) | (212) | | Total | 862 | 1,750 | - A subsidiary, Frog Prince (China) Daily Chemical Co., Ltd., enjoys a preferential tax rate of 15%[112] 10. Dividends This section confirms the Board's decision regarding interim dividend declaration for the reporting period - The Directors of the Company do not recommend the payment of any interim dividend for the six months ended June 30, 2019 (six months ended June 30, 2018: nil)[113] 11. Loss Per Share Attributable to Equity Holders of the Company This section presents the basic and diluted loss per share attributable to the Company's equity holders for the reporting period Loss Per Share | Metric (RMB cents) | 2019 (Unaudited) | 2018 (Unaudited) | | :----------------- | :--------------- | :--------------- | | Basic loss per share | (5.3) | (4.4) | | Diluted loss per share | Not applicable | Not applicable | - The basic loss per share amount is calculated based on the loss for the period attributable to equity holders of the Company of approximately RMB 75,337 thousand and the weighted average number of ordinary shares in issue of 1,425,482 thousand shares for the six months ended June 30, 2019[114] 12. Property, Plant and Equipment This section outlines the changes in the Group's property, plant, and equipment, including additions and depreciation Changes in Property, Plant and Equipment | Metric (RMB thousand) | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | | :------------------------------------------------ | :-------------------------- | :-------------------------- | | At beginning of period/year, net of accumulated depreciation and impairment | 171,823 | 402,050 | | Additions, at cost | 7,878 | 10,950 | | Depreciation provided during the period/year | (14,222) | (28,293) | | At end of period/year, net of accumulated depreciation and impairment | 164,986 | 171,823 | 13. Goodwill This section reports the carrying value of the Group's goodwill - As of June 30, 2019, the net carrying value of goodwill was RMB 22,800 thousand, consistent with December 31, 2018[118] 14. Financial Assets at Fair Value Through Other Comprehensive Income This section provides a breakdown of the Group's financial assets measured at fair value through other comprehensive income Financial Assets at Fair Value Through Other Comprehensive Income | Financial Asset Category (RMB thousand) | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | | :------------------------------------ | :------------------------ | :------------------------ | | - Equity securities listed in Hong Kong | 12,087 | 50,925 | | - Unlisted investment funds | 23,488 | 62,442 | | - Unlisted equity investments | 3,981 | 14,994 | | Total | 39,556 | 128,361 | 15. Loans and Interest Receivable This section provides an overview of the Group's loans and interest receivable, including impairment provisions and average interest rates Overview of Loans and Interest Receivable | Metric (RMB thousand) | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | | :-------------------- | :------------------------ | :------------------------ | | Gross loans and interest receivable | 186,710 | 180,951 | | Less: Impairment losses recognized | (9,930) | (4,860) | | Net carrying amount | 176,780 | 176,091 | - During the period, the Group provided loans of approximately RMB 19.5 million (year ended December 31, 2018: RMB 95.6 million), with an average annual interest rate of approximately 41.6%[47][122] - During the reporting period, an impairment loss provision of approximately RMB 5.0 million (June 30, 2018: RMB 0.5 million) was made for loans and interest receivable[48][122] 16. Trade and Bills Receivables This section provides an overview and aging analysis of the Group's trade and bills receivables, including credit terms and impairment provisions Overview of Trade and Bills Receivables | Metric (RMB thousand) | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | | :-------------------- | :------------------------ | :------------------------ | | Trade and bills receivables | 100,995 | 84,075 | | Less: Provision for doubtful debts | (4,462) | (1,911) | | Net carrying amount | 96,533 | 82,164 | - The Group generally grants credit terms of 30 to 180 days to its customers[123] - During the reporting period, an impairment loss provision of approximately RMB 4.5 million (June 30, 2018: nil) was made for trade and bills receivables[49][123] Aging Analysis of Trade and Bills Receivables | Aging (RMB thousand) | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | | :----------------- | :------------------------ | :------------------------ | | Within 30 days | 53,264 | 25,859 | | 31 to 60 days | 27,126 | 23,502 | | 61 to 90 days | 9,458 | 4,025 | | Over 90 days | 6,685 | 28,778 | | Total | 96,533 | 82,164 | 17. Trade and Bills Payables This section provides an aging analysis of the Group's trade and bills payables, including typical settlement terms Aging Analysis of Trade and Bills Payables | Aging (RMB thousand) | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | | :----------------- | :------------------------ | :------------------------ | | Within 30 days | 23,019 | 34,644 | | 31 to 90 days | 23,419 | 18,466 | | Over 90 days | 19,951 | 17,660 | | Total | 66,389 | 70,770 | - Trade payables are non-interest bearing and are normally settled within 30 to 180 days[126] 18. Share Capital This section details the Group's issued and fully paid share capital, including changes due to new share issuances Issued and Fully Paid Share Capital | Metric (RMB thousand) | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | | :-------------------- | :------------------------ | :------------------------ | | Issued and fully paid share capital | 13,411 | 11,649 | - On March 1, 2019, the Company issued 200,000,000 new shares as partial consideration for the acquisition of an 80% equity interest in Lucky International Group Limited[128] 19. Share Option Scheme This section describes the Company's share option scheme, its purpose, and the movements of outstanding share options - The Company established a share option scheme to provide incentives and rewards to eligible participants who contribute to the successful operations of the Group[130] - The maximum number of outstanding share options currently permitted to be granted under the scheme is 10% of the Company's issued shares at any time upon exercise[130] Movements in Share Options | Metric (thousand units) | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | | :---------------------- | :------------------------ | :------------------------ | | At January 1 | 93,655 | 94,827 | | Forfeited/lapsed during the period/year | (15,908) | (1,172) | | At June 30/December 31 | 77,747 | 93,655 | - For the six months ended June 30, 2019, the Group recognized share option expenses totaling RMB nil (2018: RMB 601 thousand)[137] 20. Acquisition of Subsidiaries This section details the Group's acquisitions of subsidiaries, including Lucky International Group Limited and Greater China Cold Chain Logistics Limited, and their strategic rationale (a) Acquisition of Lucky International Group Limited This subsection details the acquisition of Lucky International Group Limited, its consideration, and the resulting goodwill - The acquisition of 80% equity interest in Lucky International Group Limited was completed on May 29, 2019, for a total consideration of RMB 50,051 thousand (of which RMB 19,385 thousand was paid in cash and RMB 30,666 thousand by issuing shares)[139][140] - The acquisition of Lucky International Group Limited enables the Group to engage in catering services in Hong Kong, particularly in the trading of frozen agricultural products[139] - The acquisition generated goodwill of RMB 2,523 thousand, which has been reflected as an impairment loss in the profit or loss for the current period[140] (b) Acquisition of Greater China Cold Chain Logistics Limited This subsection details the acquisition of Greater China Cold Chain Logistics Limited and its contribution to the Group's catering services - The acquisition of 100% of the issued share capital of Greater China Cold Chain Logistics Limited was completed on June 4, 2019, for a total cash consideration of RMB 705 thousand[147][145] - The acquisition of Greater China Cold Chain Logistics Limited achieved synergy within the Company's catering services business, primarily engaged in providing frozen warehousing services[147] 21. Disposal of a Subsidiary This section details the disposal of Fujian Aijieli Daily Chemical Co., Ltd. and the resulting loss - On June 30, 2018, the Group disposed of 80% equity interest in Fujian Aijieli Daily Chemical Co., Ltd. for a total cash consideration of RMB 12,000 thousand[152] - Immediately following the completion of the disposal, Fujian Aijieli ceased to be a subsidiary of the Company, and a disposal loss of RMB 9,004 thousand was recognized[152][153] 22. Operating Lease Arrangements This section outlines the Group's operating lease arrangements, both as a lessor for investment properties and as a lessee for office and warehouse premises - As a lessor, the Group leases investment properties under operating lease arrangements for terms ranging from one to twenty years, with total future minimum lease payments receivable of RMB 7,212 thousand as of June 30, 2019[155][156] - As a lessee, the Group is a lessee for several leased properties used as offices and warehouses, having adopted IFRS 16 for the first time using the modified retrospective approach[157] 23. Commitments This section reports the Group's contractual commitments for property, plant, and equipment - As of June 30, 2019, the Group had nil contracted but unprovided commitments for the purchase of property, plant and equipment (December 31, 2018: RMB 288 thousand)[158] 24. Contingent Liabilities This section confirms the absence of any significant contingent liabilities for the Group - As of June 30, 2019 and December 31, 2018, the Group had no significant contingent liabilities[159] 25. Related Party Transactions This section details the Group's transactions with related parties and remuneration for key management personnel Related Party Transactions (Six Months Ended June 30, 2019) | Transaction Type | Related Party | Amount (RMB thousand) | | :--------------- | :------------ | :-------------------- | | Sales of products | Associates | 73,515 | | Purchases of products | Associates | 5,296 | | Miscellaneous income | Associates | 475 | Key Management Personnel Remuneration (Six Months Ended June 30, 2019) | Remuneration Category | Amount (RMB thousand) | | :-------------------- | :-------------------- | | Short-term employee benefits | 280 | | Post-employment benefits | 13 | | Total | 293 | 26. Events After the Reporting Period This section outlines significant events that occurred after the reporting period, including proposed disposals, name changes, and new lease agreements - On July 10, 2019, the Company entered into an agreement to dispose of the entire issued share capital of Long Sheng Xing Investment Holdings Limited for a total consideration of HKD 125 million, which is yet to be finalized[164] - On July 16, 2019, the Company announced a proposed change of its English name to 'Prosperous Future Holdings Limited', which is not yet effective[165] - On July 19, 2019, subsidiary Greater China Cold Chain Logistics Limited entered into a five-year lease agreement for a property at Kwai Chung Container Terminal, Hong Kong, to develop its frozen warehouse services business[166] - On August 23, 2019, the Company entered into an agreement to dispose of 51% of the issued shares of Marvel Paramount Holdings Limited for a total consideration of HKD 40 million, which is yet to be completed[167] 27. Approval of Condensed Consolidated Interim Financial Statements This section states the date on which the condensed consolidated interim financial statements were approved for issuance by the Board - The condensed consolidated interim financial statements were approved and authorized for issue by the Board of Directors on August 30, 2019[168] Supplementary Information to Interim Report This section provides additional details on the Company's share option scheme, directors' and major shareholders' interests, and corporate governance practices Share Option Scheme This section details the movements of share options under the Company's share option scheme for the six months ended June 30, 2019, including the number of options held by non-executive directors, executive directors, former directors, Group employees, and distributors, along with their exercise prices and periods - As of June 30, 2019, the total number of outstanding share options under the share option scheme was 77,746,500 units (January 1, 2019: 93,654,500 units)[204] - The number of share options forfeited/lapsed during the period was 15,908,000 units[204] - Share option exercise prices ranged from HKD 0.38 to HKD 2.94, with exercise periods covering 2012 to 2027[205][206] Directors' and Chief Executive's Interests and Short Positions in Shares and Underlying Shares This section discloses the interests of directors and the chief executive in the Company's shares and underlying shares as of June 30, 2019, with Mr. Li Zhouxin holding share options Directors' Long Positions in Underlying Shares (Share Options) | Name of Director | Nature of Interest | Number of Underlying Shares Interested | Percentage of the Company's Issued Share Capital + | | :--------------- | :----------------- | :----------------------------------- | :----------------------------------------- | | Mr. Li Zhouxin | Beneficial owner | 1,480,000 | 0.09% | - Save as disclosed above, as at June 30, 2019, none of the Directors or chief executive of the Company had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations that were required to be recorded[209] Major Shareholders' Interests in Shares and Underlying Shares This section lists major shareholders holding 5% or more of the Company's issued share capital as of June 30, 2019, including their long positions in ordinary shares and underlying shares (share options) Major Shareholders' Long Positions in the Company's Ordinary Shares | Name of Major Shareholder | Nature of Interest | Number of Ordinary Shares | Percentage of the Company's Issued Share Capital + | | :------------------------------------ | :------------------------- | :------------------------ | :----------------------------------------- | | Golden Sparkle Limited | Beneficial owner | 263,308,500 | 16.56% | | Mr. Lai Wai Lam | Interest in controlled corporation | 263,308,500 | 16.56% | | Pai Sheng Trading Limited | Beneficial owner | 200,000,000 | 12.58% | | Good Honour Investment Holdings Limited | Interest in controlled corporation | 200,000,000 | 12.58% | | Diamond Ace Holdings Limited | Interest in controlled corporation | 200,000,000 | 12.58% | | Emperor Supreme Limited | Interest in controlled corporation | 200,000,000 | 12.58% | | Ms. Cheng Wan Chi | Interest in controlled corporation | 200,000,000 | 12.58% | | Mr. Tai Chi Piu | Beneficial owner | 140,382,500 | 8.83% | | Yili Luo International Trading (Hong Kong) Limited | Beneficial owner | 80,000,000 | 5.03% | | Mr. Li Liang | Interest in controlled corporation | 80,000,000 | 5.03% | Major Shareholders' Long Positions in the Company's Underlying Shares (Share Options) | Name of Major Shareholder | Nature of Interest | Number of Underlying Shares Interested | Percentage of the Company's Issued Share Capital + | | :------------------------ | :----------------- | :----------------------------------- | :----------------------------------------- | | Mr. Li Liang | Beneficial owner | 30,000 | 0.002% | Compliance with the Model Code for Securities Transactions by Directors The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules, and all Directors confirmed full compliance during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules as its code of conduct for Directors' securities transactions[218] - Following specific enquiry by the Company, all Directors have confirmed their full compliance with the required standards set out in the Model Code during the reporting period[218] Compliance with the Company's Written Guidelines on Securities Transactions by Employees The Company has established written guidelines for employees who may possess inside information, which are no less exacting than the Model Code, and no breaches were identified - The Company has adopted written guidelines for employees who may possess inside information of the Company and/or its securities for securities transactions, on terms no less exacting than the Model Code[219] - The Company has not noted any non-compliance with the employee written guidelines by relevant employees[219] Corporate Governance The Board believes the Company has complied with the code provisions of the Corporate Governance Code in Appendix 14 of the Listing Rules for the period ended June 30, 2019 - The Board is of the view that the Company has complied with the code provisions set out in the Corporate Governance Code in Appendix 14 to the Listing Rules for the period ended June 30, 2019[222] Update on Directors' Information Pursuant to Rule 13.51B(1) of the Listing Rules, changes in the Company's Directors' information are listed as follows: Mr. Lau Ka Ho was appointed as an Executive Director of the Company on May 24, 2019 - Mr. Lau Ka Ho was appointed as an Executive Director of the Company on May 24, 2019[223] Purchase, Redemption or Sale of the Company's Listed Securities Neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities during the review period - Neither the Company nor any of its subsidiaries purchased, redeemed or sold any of the Company's listed securities during the review period[224] Audit Committee The Company's Audit Committee has reviewed the unaudited condensed consolidated results for the six months ended June 30, 2019, and discussed financial reporting matters - The Company's Audit Committee, comprising three independent non-executive Directors, has reviewed the unaudited condensed consolidated results for the six months ended June 30, 2019, including the accounting principles and practices adopted by the Group, and discussed financial reporting matters[225]