BOARD OF DIRECTORS
Executive Director
Mr. Du Lin Dong (Chairman and
Chief Executive Officer)
Non-executive Directors
Mr. Ding Xiaobin
Mr. Zhang Huayu (Vice Chairman)
Ms. Li Jie
Ms. Chen Xi
Independent Non-executive Directors
Mr. Zhang Jing
Mr. Zeng Xianggao
Mr. Wong Lok Man
EXECUTIVE COMMITTEE
Mr. Du Lin Dong (Chairman)
AUDIT COMMITTEE
Mr. Zhang Jing (Chairman)
Mr. Zeng Xianggao
Mr. Wong Lok Man
REMUNERATION COMMITTEE
Mr. Zhang Jing (Chairman)
Mr. Du Lin Dong
Mr. Wong Lok Man
NOMINATION COMMITTEE
Mr. Zhang Jing (Chairman)
Mr. Zeng Xianggao
Mr. Wong Lok Man
RISK MANAGEMENT COMMITTEE
Mr. Du Lin Dong (Chairman)
Mr. Zhang Jing
AUTHORISED REPRESENTATIVES
Mr. Du Lin Dong
Mr. Wong Tsz Lun
COMPANY SECRETARY
Mr. Wong Tsz Lun
AUDITORS
Moore Stephens CPA Limited
Certified Public Accountants
Corporate Information
INVESTMENT MANAGER
China Financial International Investments & Managements Limited
CUSTODIAN
Bank of Communications Trustee Limited
LEGAL ADVISER
As to Bermuda law
Conyers Dill & Pearman
REGISTERED OFFICE
Clarendon House
2 Church Street
Hamilton
HM 11
Bermuda
PRINCIPAL PLACE OF BUSINESS IN HONG KONG
Suite 2001, 20/F, Tower 1
The Gateway
Harbour City, Hong Kong
SHARE REGISTRAR AND TRANSFER OFFICE IN BERMUDA
MUFG Fund Services (Bermuda) Limited 4th Floor Cedar House
41 Cedar Avenue
Hamilton, HM 12 Bermuda
SHARE REGISTRAR AND TRANSFER OFFICE IN HONG KONG
Tricor Tengis Limited
Level 54, Hopewell Centre
183 Queen's Road East Hong Kong
PRINCIPAL BANKER
The Hongkong and Shanghai Banking
Corporation Limited
TRADING CODE ON THE STOCK EXCHANGE OF HONG KONG LIMITED
0721
COMPANY WEBSITE
http://www.irasia.com/listco/hk/cfii
Interim Report 2020 | 1 |
Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the six months ended 31 December 2020
Unaudited | |||||||||
Six months ended | 31 December | ||||||||
2019 | |||||||||
2020 | |||||||||
Notes | HK$'000 | HK$'000 | |||||||
Revenue | 4 | 187 | 19,199 | ||||||
Other income | 4 | 22,946 | 5,960 | ||||||
Fair value loss on financial assets at | |||||||||
fair value through profit or loss ("FVTPL") | (37,528) | (88,255) | |||||||
Impairment loss on debt instruments at | |||||||||
fair value through other comprehensive income ("FVTOCI") | - | (17,015) | |||||||
Administrative expenses | (12,251) | (14,478) | |||||||
Share of (loss) profit from an associate | (81) | 8 | |||||||
Finance costs | 5 | (1,147) | (1,676) | ||||||
Loss before tax | (27,874) | (96,257) | |||||||
Income tax expense | 6 | - | - | ||||||
Loss for the period | 7 | (27,874) | (96,257) | ||||||
Other Comprehensive Income | |||||||||
Item that will not be reclassified to profit or loss: | |||||||||
- Fair value loss of equity instruments at FVTOCI | (8,884) | (34,755) | |||||||
Items that may be reclassified subsequently to profit or loss: | |||||||||
Debt instruments at FVTOCI | |||||||||
- Change in fair value of debt instrument at fair value through | |||||||||
other comprehensive income | - | (17,015) | |||||||
- Adjustment for expected credit loss | |||||||||
included in profit or loss | - | 17,015 | |||||||
- | - | ||||||||
- Exchange difference arising on translation of | |||||||||
foreign operations | 16,442 | (1,054) | |||||||
OTHER COMPREHENSIVE INCOME (EXPENSE) | |||||||||
FOR THE PERIOD | 7,558 | (35,809) | |||||||
TOTAL COMPREHENSIVE INCOME (EXPENSE) | |||||||||
FOR THE PERIOD | (20,316) | (132,066) | |||||||
LOSS PER SHARE ATTRIBUTABLE TO | |||||||||
OWNERS OF THE COMPANY | 9 | ||||||||
- Basic | (HK$0.25) | (HK$0.88) | |||||||
- Diluted | (HK$0.25) | (HK$0.88) | |||||||
2 China Financial International Investments Limited
Interim Condensed Consolidated Statement of Financial Position
31 December 2020
Unaudited | Audited | |||||
31 December | 30 June | |||||
2020 | 2020 | |||||
Notes | HK$'000 | HK$'000 | ||||
NON-CURRENT ASSETS | ||||||
Property, plant and equipment | 10 | 75 | 89 | |||
Right-of-use assets | 2,291 | 3,390 | ||||
Interest in an associate | 11 | 1,031 | 1,112 | |||
Financial assets at FVTPL | 12 | 682,085 | 635,796 | |||
Equity Instruments at FVTOCI | 13 | 53,159 | 62,043 | |||
Deposits | 14 | 15,318 | 306 | |||
Total non-current assets | 753,959 | 702,736 | ||||
CURRENT ASSETS | ||||||
Prepayments, deposits and other receivables | 14 | 39,699 | 27,287 | |||
Financial assets at FVTPL | 12 | 48,479 | 107,372 | |||
Bank balances and cash | 7,554 | 64,911 | ||||
Total current assets | 95,732 | 199,570 | ||||
CURRENT LIABILITIES | ||||||
Other payables and accruals | 17,465 | 9,516 | ||||
Amount due to an associate | 273 | 58 | ||||
Tax payable | 4,200 | 4,200 | ||||
Borrowings | 15 | 29,986 | 52,978 | |||
Lease liabilities | 1,605 | 2,361 | ||||
Financial guarantee contracts | 16 | - | 6,382 | |||
Total current liabilities | 53,529 | 75,495 | ||||
NET CURRENT ASSETS | 42,203 | 124,075 | ||||
TOTAL ASSETS LESS CURRENT LIABILITIES | 796,162 | 826,811 | ||||
NON-CURRENT LIABILITIES | ||||||
Lease liabilities | 761 | 1,097 | ||||
Borrowings | 15 | - | 9,997 | |||
Total non-current liabilities | 761 | 11,094 | ||||
NET ASSETS | 795,401 | 815,717 | ||||
EQUITY | ||||||
Share capital | 17 | 109,717 | 109,717 | |||
Reserves | 685,684 | 706,000 | ||||
TOTAL EQUITY | 795,401 | 815,717 | ||||
Net asset value per share | 7.25 | 7.43 | ||||
Interim Report 2020 | 3 |
Condensed Consolidated Statement of Changes in Equity
For the six months ended 31 December 2020
Attributable to owners of the Company | |||||||||||||||||||||||||||||||
Financial | |||||||||||||||||||||||||||||||
assets | |||||||||||||||||||||||||||||||
Share | Share | Contributed | Capital | at FVTOCI | Exchange | Accumulated | |||||||||||||||||||||||||
capital | premium | surplus | reserve | reserve | reserve | losses | Total | ||||||||||||||||||||||||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | ||||||||||||||||||||||||
At 1 July 2020 (audited) | 109,717 | 2,067,672 | 278,979 | 2,766 | (44,201) | (24,010) | (1,575,206) | 815,717 | |||||||||||||||||||||||
Loss for the period | |||||||||||||||||||||||||||||||
- | - | - | - | - | - | (27,874) | (27,874) | ||||||||||||||||||||||||
Other comprehensive loss for the period: | |||||||||||||||||||||||||||||||
Change in fair value of financial assets at | |||||||||||||||||||||||||||||||
fair value through other comprehensive income | - | - | - | - | (8,884) | - | - | (8,884) | |||||||||||||||||||||||
Exchange differences on translation of | |||||||||||||||||||||||||||||||
foreign operations | - | - | - | - | - | 16,442 | - | 16,442 | |||||||||||||||||||||||
Total comprehensive expense for the period | |||||||||||||||||||||||||||||||
- | - | - | - | (8,884) | 16,442 | (27,874) | (20,316) | ||||||||||||||||||||||||
At 31 December 2020 (unaudited) | 109,717 | 2,067,672 | 278,979 | 2,766 | (53,085) | (7,568) | (1,603,080) | 795,401 | |||||||||||||||||||||||
At 1 July 2019 (audited) | 109,717 | 2,067,672 | 278,979 | 2,766 | (4,296) | (13,426) | (1,356,706) | 1,084,706 | |||||||||||||||||||||||
Loss for the period | - | - | - | - | - | - | (96,257) | (96,257) | |||||||||||||||||||||||
Other comprehensive loss for the period: | |||||||||||||||||||||||||||||||
Change in fair value of financial assets at | |||||||||||||||||||||||||||||||
fair value through other comprehensive income | - | - | - | - | (34,755) | - | - | (34,755) | |||||||||||||||||||||||
Exchange differences on translation of | |||||||||||||||||||||||||||||||
foreign operations | - | - | - | - | - | (1,054) | - | (1,054) | |||||||||||||||||||||||
Total comprehensive expense for the period | - | - | - | - | (34,755) | (1,054) | (96,257) | (132,066) | |||||||||||||||||||||||
At 31 December 2019 (unaudited) | 109,717 | 2,067,672 | 278,979 | 2,766 | (39,051) | (14,480) | (1,452,963) | 962,640 | |||||||||||||||||||||||
4 China Financial International Investments Limited
Condensed Consolidated Statement of Cash Flows
For the six months ended 31 December 2020
Unaudited | ||||||||
Six months ended 31 December | ||||||||
2019 | ||||||||
2020 | ||||||||
HK$'000 | HK$'000 | |||||||
Cash flows from operating activities | ||||||||
Loss before tax | (27,874) | (96,257) | ||||||
Adjustments for: | ||||||||
Share of (loss) profit from an associate | 81 | (8) | ||||||
Interest income | (293) | (18,508) | ||||||
Dividend income | (187) | (946) | ||||||
Finance costs | 1,147 | 1,676 | ||||||
Depreciation | 1,223 | 988 | ||||||
Loss on disposal of a subsidiary | 255 | - | ||||||
Impairment of/(Reversal of impairment loss) on financial assets at FVTOCI | - | 17,015 | ||||||
Net gain on disposal of financial assets at fair value through profit or loss | - | |||||||
Fair value change of financial assets at fair value through profit or loss | 37,528 | 88,255 | ||||||
(Reversal of) impairment loss on deposits and other receivables | - | (1,313) | ||||||
Reversal of provision for financial guarantee liabilities | (6,382) | (4,392) | ||||||
Operating profit (loss) before working capital changes | 5,498 | (13,490) | ||||||
(Increase) decrease in prepayments, deposits and other receivables | 2,397 | 134,846 | ||||||
Increase in other payables and accruals | 8,012 | 6,542 | ||||||
Increase in an amount due to a related company | - | |||||||
Increase (decrease) in an amount due to an associate | 215 | (114) | ||||||
Purchase of financial assets at fair value through profit or Loss | (71,259) | (118,006) | ||||||
Sales of financial assets at fair value through profit or loss | 43,429 | - | ||||||
Cash (used in)/generated from operations | (11,708) | 9,778 | ||||||
Interest received | 293 | 255 | ||||||
Dividend received | 1,450 | 946 | ||||||
Net cash (used in) generated from operating activities | (9,965) | 10,979 | ||||||
Cash flows from investing activities | ||||||||
Net cash outflow of disposal of a subsidiary | (16) | - | ||||||
Interim Report 2020 | 5 |
Condensed Consolidated Statement of Cash Flows (Continued)
For the six months ended 31 December 2020
Unaudited | ||||||||
Six months ended 31 December | ||||||||
2019 | ||||||||
2020 | ||||||||
HK$'000 | HK$'000 | |||||||
Net cash used in investing activities | (16) | - | ||||||
Cash flows from financing activities | ||||||||
Repayment of borrowings | (32,989) | - | ||||||
Interest paid | (1,147) | (1,676) | ||||||
Repayment of lease liabilities | (978) | (811) | ||||||
Net cash used in financing activities | (35,114) | (2,487) | ||||||
Net (decrease) increase in cash and cash equivalents | (45,095) | 8,492 | ||||||
Cash and cash equivalents at beginning of the period | 64,911 | 36,124 | ||||||
Effect of foreign exchange rate changes | (12,262) | 824 | ||||||
Cash and cash equivalents at the end of period | 7,554 | 45,440 | ||||||
Analysis of the balances of cash and cash equivalents | ||||||||
Cash and bank balances | 7,554 | 45,440 | ||||||
6 China Financial International Investments Limited
Notes to the Condensed Consolidated Financial Statements
For the six months ended 31 December 2020
1. Corporation information and basis of preparation
China Financial International Investments Limited (the "Company") was incorporated in the Cayman Islands under the Cayman Islands Companies Law as an exempted company with its shares listed on the Main Board of The Stock Exchange of Hong Kong Limited (the "Stock Exchange"). With effect from 9 May 2006, the Company was de-registered from the Cayman Islands under the Cayman Islands Companies Law and re-domiciled in Bermuda under the Companies Act 1981 of Bermuda as an exempted company. The Company's registered office address is Clarendon House, 2 Church Street, Hamilton, HM 11, Bermuda and the Company's principal place of business is Suite 2001, 20th Floor, Tower 1, The Gateway, Harbour City, Kowloon, Hong Kong.
The Company and its subsidiaries (the "Group") are principally engaged in investing in listed and unlisted companies established and/or doing business in Hong Kong and the People's Republic of China (the "PRC").
The unaudited condensed consolidated financial statements for the six months ended 31 December 2020 have been prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting ("HKAS 34") issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA") and with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on the Stock Exchange (the "Listing Rules").
In the preparation of the condensed consolidated financial statements, the directors of the Company have given due and careful consideration to the future liquidity of the Group by continuously monitoring forecast and actual cash flows. For the six months ended 31 December 2020, the Group reported loss for the year of HK$27,874,000. At 31 December 2020, the Group had bank balances and cash of HK$7,554,000 and net current assets of HK$42,203,000. Future cash flows from operating activities are dependent on realisation of the listed and unlisted investments. In order to continue funding future capital programmes, the Company may need to obtain additional equity or debt financing, or assess other options. The ability to access the required capital to maintain current financial position and cash flows is dependent on a variety of external factors.
The condensed consolidated financial statements have been prepared on a going concern basis as, in the opinion of the directors of the Company, the Group has the ability to obtain debt or equity financing, or other sources of funding for future capital programmes should the need arise.
They have been prepared on the historical cost convention, except for financial assets at FVTPL and financial assets at FVTOCI which have been measured at fair value. These unaudited condensed consolidated financial statements are presented in Hong Kong dollars ("HK$") and all values are rounded to the nearest thousand except when otherwise indicated.
The unaudited condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements for the year ended 30 June 2020, which have been prepared in accordance with Hong Kong Financial Reporting Standards ("HKFRSs").
Interim Report 2020 | 7 |
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The preparation of unaudited condensed consolidated financial statements in compliance with HKAS 34 requires the use of certain judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expenses on a year to date basis. Actual results may differ from these estimates. The significant judgements made by the management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Group's annual consolidated financial statements for the year ended 30 June 2020. The accounting policies adopted in the unaudited interim condensed consolidated financial statements are consistent with those followed in the Group's annual financial statements for the year ended 30 June 2020, except for the adoption of the following amendments to HKFRSs issued by the HKICPA as disclosed below.
Other than changes in accounting policies resulting from application of new and amendments to HKFRSs, the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 31 December 2020 are the same as those presented in the Group's annual consolidated financial statements for the year ended 30 June 2020.
Application of new and amendments to HKFRSs
In the current interim period, the Group has applied, for the first time, the following amendments to HKFRSs issued by the HKICPA which are mandatorily effective for the annual period beginning on or after 1 January 2020 for the preparation of the Group's condensed consolidated financial statements:
Amendments to HKAS 1 and HKAS 8 | Definition of Material | |
Amendments to HKFRS | 3 | Definition of a Business |
Amendments to HKFRS | 9, HKAS 39 and HKFRS 7 | Interest Rate Benchmark Reform |
The application of the Amendments to References to the Conceptual Framework in HKFRS Standards and the amendments to HKFRSs in the current period has had no material impact on the Group's financial position and performance for the current and prior periods and/or on the disclosures set out in these condensed consolidated financial statements.
Except as described below, the application of the Amendments to References to the Conceptual Framework in HKFRSs and the amendments to HKFRSs in the current period has had no material impact on the Group's financial positions and performance for the current and prior periods and/or on the disclosures set out in these condensed consolidated financial statements.
Impacts of application on Amendments to HKAS 1 and HKAS 8 "Definition of Material"
The amendments provide a new definition of material that states "information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity." The amendments also clarify that materiality depends on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements taken as a whole.
The application of the amendments in the current period has had no impact on the condensed consolidated financial statements. Changes in presentation and disclosures on the application of the amendments, if any, will be reflected on the consolidated financial statements for the year ending 30 June 2021.
2A. Significant events and transactions in the current interim period
The pandemic impact of COVID-19 and the subsequent quarantine measures as well as the travel restrictions imposed by many countries have had negative impacts to the global economy and business environment, and directly and indirectly affecting the operations of the Group. The financial position and performance of the Group have been affected in different aspects, including reduction in revenue and reduction in the returns in the investments.
8 China Financial International Investments Limited
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
3. OPERATING SEGMENT INFORMATION
Information reported to the executive directors of the Company, being the chief operating decision maker, for the purpose of resource allocation and assessment of segment performance focuses on the type and underlying business of the Group's investments.
In the current period, the Group reorganised its internal reporting structure which resulted in the changes to the composition of its reportable segment, as the business extension of clean energy business. Prior period segment disclosure has been represented to conform with the current period's presentation.
Specifically, the Group's reportable segments under HKFRS 8 "Operating Segments" are as follows:
- Micro-loanservice - equity investments in investees engaged in micro-loan services
- Real estate and natural gas - equity investments in investees engaged in real estate and natural gas business
- Investment in fixed income financial assets - debt investments
- Clean energy - equity investment in investees engaged in clean energy industry
- Other - equity investments in investees engaged in guarantee service, warehouse operation and management consultation service and other businesses
Interim Report 2020 | 9 |
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
3. OPERATING SEGMENT INFORMATION (Continued)
No operating segments have been aggregated in arriving at the reportable segments of the Group.
Investment in | ||||||||||||||
Real estate | fixed Income | |||||||||||||
Micro-loan | and | Financial | Clean | |||||||||||
service | natural gas | Assets | energy | Others | Total | |||||||||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | |||||||||
Six months ended 31 December 2020 | ||||||||||||||
Segment results | (7,327) | (14,439) | - | (11,801) | (3,774) | (37,341) | ||||||||
Share of profit of an associate | (81) | |||||||||||||
Unallocated other income | 22,946 | |||||||||||||
Finance costs | (1,147) | |||||||||||||
Central administrative expenses | (12,251) | |||||||||||||
Loss before tax | ||||||||||||||
(27,874) | ||||||||||||||
Six months ended 31 December 2019 | ||||||||||||||
Segment results | (10,014) | (54,651) | 1,236 | (20,928) | (1,714) | (86,071) | ||||||||
Share of profit of an associate | 8 | |||||||||||||
Unallocated other income | 5,960 | |||||||||||||
Finance costs | (1,676) | |||||||||||||
Central administrative expenses | (14,478) | |||||||||||||
Loss before tax | (96,257) | |||||||||||||
Segment (loss) profit represent the (loss from)/profit earned by each segment without allocation of share of (loss) profit of an associate, other income, impairment loss on other receivables, finance costs and central administrative expenses.
10 China Financial International Investments Limited
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
3. OPERATING SEGMENT INFORMATION (Continued) Segment assets
The following is an analysis of the Group's assets by reportable segment:
Unaudited | Audited | ||||
31 December | 30 June | ||||
2020 | 2020 | ||||
HK$'000 | HK$'000 | ||||
Micro-loan service | 15,921 | 53,628 | |||
Real estate and natural gas | 67,791 | 113,382 | |||
Investment in fixed income financial assets | - | - | |||
Clean energy | 569,794 | 489,663 | |||
Others | 130,217 | 148,538 | |||
Total segment assets | 783,723 | 805,211 | |||
Unallocated assets | 65,968 | 97,095 | |||
Consolidated assets | 849,691 | 902,306 | |||
For the purposes of monitoring segment performance and allocating resources between segments:
- all assets are allocated to reportable segments other than property, plant and equipment, right-of-use assets, interest in an associate, prepayments, deposits and other receivables and bank balances and cash; and
- no liabilities are allocated to reportable segments
4. REVENUE AND OTHER INCOME
An analysis of revenue and other income is as follows:
Unaudited | |||||||
Six months ended 31 December | |||||||
2019 | |||||||
2020 | |||||||
HK$'000 | HK$'000 | ||||||
Revenue | |||||||
Dividend income from listed investments | 187 | 946 | |||||
Interest income from unlisted investments | - | 18,253 | |||||
187 | 19,199 | ||||||
Other income | |||||||
Bank interest income | 293 | 255 | |||||
Exchange gain | 15,599 | - | |||||
Reversal of impairment loss on other receivable | - | 1,313 | |||||
Reversal of provision for financial guarantee liabilities | 6,382 | 4,392 | |||||
Sundry income | 672 | - | |||||
22,946 | 5,960 | ||||||
Interim Report 2020 | 11 |
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
5. | FINANCE COSTS | ||||||
Unaudited | |||||||
Six months ended 31 December | |||||||
2019 | |||||||
2020 | |||||||
HK$'000 | HK$'000 | ||||||
Interest on borrowings | 1,060 | 1,588 | |||||
Interest on lease liabilities | 87 | 88 | |||||
1,147 | 1,676 | ||||||
6. | INCOME TAX EXPENSE | ||||||
Unaudited | |||||||
Six months ended 31 December | |||||||
2019 | |||||||
2020 | |||||||
HK$'000 | HK$'000 | ||||||
Current - PRC | |||||||
- Provision for the period | - | - | |||||
- Overprovision in respect of prior year | - | - | |||||
- | - | ||||||
Deferred tax - PRC | |||||||
- Provision for the period | - | - | |||||
- | - | ||||||
Hong Kong Profit Tax is calculated at 8.25% on the first HK$2,000,000 of the estimated assessable profits and at 16.5% on the estimated assessable profits above HK$2,000,000 for both periods.
No provision for Hong Kong Profits Tax has been made in the financial statements as the Group has no assessable profits for the year (31 December 2019: assessable profit of the Group is wholly absorbed by tax losses brought forward for the period).
Under the Law of the People's Republic of China on Enterprise Income Tax (the "EIT Law") and Implementation Regulation of the EIT Law, the tax rate of the PRC subsidiaries is 25% for both periods.
12 China Financial International Investments Limited
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
7. LOSS FOR THE PERIOD
The Group's profit before income tax is arrived at after charging/(crediting):
Unaudited | |||||||
Six months ended 31 December | |||||||
2019 | |||||||
2020 | |||||||
HK$'000 | HK$'000 | ||||||
Custodian fee | 85 | 81 | |||||
Depreciation of property, plant and equipment | 14 | 141 | |||||
Depreciation of right-of-use assets | 1,209 | 847 | |||||
Investment management fees | 215 | 560 | |||||
(Reversal of) loss allowance for deposits and other receivable | - | (1,313) | |||||
Loss on disposal of subsidiary | 255 | - | |||||
Reversal of provision for financial guarantee liabilities | (6,382) | (4,392) | |||||
Staff costs, including directors' remuneration: | |||||||
- Salaries and wages | 2,740 | 5,374 | |||||
- Pension scheme contributions | 51 | 74 | |||||
- DIVIDEND
The directors did not recommend the payment of an interim dividend for the six months ended 31 December 2020 (31 December 2019: Nil). - LOSS PER SHARE
The calculation of the basic loss per share attributable to owners of the Company is based on the following data:
Unaudited | |||||||
Six months ended 31 December | |||||||
2019 | |||||||
2020 | |||||||
HK$'000 | HK$'000 | ||||||
Loss for the period/year attributable to owners | |||||||
of the Company for the purpose of basic loss per share | (27,874) | (96,257) | |||||
Number of shares | |||||||
2019 | |||||||
2020 | |||||||
'000 | '000 | ||||||
Weight average number of ordinary shares for the purpose of | |||||||
basic loss per share | 10,971,634 | 10,971,634 | |||||
No diluted loss per share for both periods were presented as there were no potential ordinary shares in issue for both periods.
Interim Report 2020 | 13 |
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
10. PROPERTY, PLANT AND EQUIPMENT | ||||||
Audited | ||||||
Unaudited | ||||||
31 December | 30 June | |||||
2020 | 2020 | |||||
HK$'000 | HK$'000 | |||||
Opening net book value | 89 | 491 | ||||
Additions | - | 95 | ||||
Disposal | - | (315) | ||||
Depreciation provided during the period/year | (14) | (182) | ||||
Closing net book value | 75 | 89 | ||||
11. INTEREST IN AN ASSOCIATE | ||||||
Audited | ||||||
Unaudited | ||||||
31 December | 30 June | |||||
2020 | 2020 | |||||
HK$'000 | HK$'000 | |||||
Cost of investment in an associate | 290 | 290 | ||||
Share of post-acquisition losses and other comprehensive income | 741 | 822 | ||||
Closing net book value | 1,031 | 1,112 | ||||
Principal | Paid up | Proportion of ownership | ||||
Place of | place of | issued | interest and voting rights | |||
Name of associate | incorporation | business | capital | held by the Group | Principal activity | |
31 December | 30 June | |||||
2020 | 2020 | |||||
China Financial International | Hong Kong | Hong Kong | HK$1,000,000 | 29% | 29% | Provision of asset |
Investments & Managements | management services | |||||
Limited ("CFIIM") |
14 China Financial International Investments Limited
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
12. FINANCIAL ASSETS AT FVTPL | ||||||
Audited | ||||||
Unaudited | ||||||
31 December | 30 June | |||||
2020 | 2020 | |||||
Notes | HK$'000 | HK$'000 | ||||
Financial assets mandatorily measured at FVTPL: | ||||||
Listed securities held for trading | ||||||
- Equity securities listed in Hong Kong | (i) | 48,479 | 107,372 | |||
Financial assets classified/designated at FVTPL: | ||||||
- Unlisted equity investments | (ii) | 682,085 | 635,796 | |||
Total | 730,564 | 743,168 | ||||
Analysed for reporting purposes as: | ||||||
Current assets | 48,479 | 107,372 | ||||
Non-current assets | 682,085 | 635,796 | ||||
730,564 | 743,168 | |||||
Notes:
-
The fair values of listed securities are determined based on the quoted market bid prices available on the relevant exchange at the end of the period.
Particular of the major components of the investment portfolio as at 31 December 2020, in terms of the carrying value of the respective individual investment, are as follows:
China City Infrastructure Group Limited ("China City Infrastructure")
As at 31 December 2020 and 30 June 2020, the Group held 436,079,429 shares in China City Infrastructure, representing approximately 13.94% of the issued share capital of China City Infrastructure. As at 31 December 2020, the market value of the investment in the shares of China City Infrastructure was HK$41,864,000 (30 June 2020: HK$55,818,000).
Sino-Ocean Group Holding Limited ("Sino-Ocean Group")
As at 31 December 2020 and 30 June 2020, the Group held 500,000 and 4,212,500 shares in Sino-Ocean Group, representing approximately 0.01% and 0.06% of the issued share capital of Sino-Ocean Group respectively. Sino-Ocean Group is principally engaged in investment holding, property development and property investment in the PRC. As at 31 December 2020, the market value of the investment in the shares of Sino-Ocean Group was HK$775,000 (30 June 2020: HK$7,793,000).
Hidili Industry International Development Limited ("Hidili Industry")
As at 31 December 2020 and 30 June 2020, the Group held 12,369,000 shares in Hidili Industry, representing approximately 0.6% of the issued share capital of Hidili Industry. Hidili Industry is principally engaged in coal mining and manufacture and sale of clean coal. As at 31 December 2020, the market value of the investment in the shares of Hidili Industry was HK$2,560,000 (30 June 2020: HK$2,053,000).
China Communications Construction Co Ltd ("China Communications")
As at 31 December 2020 and 30 June 2020, the Group held 979,000 and 9,588,000 shares in China Communications, representing approximately 0.02% and 0.22% of the issued share capital of China Communications. China Communications is principally engaged in infrastructure construction, infrastructure design and dredging businesses. As at 31 December 2020, the market value of the investment in the shares of China Communications was HK$3,280,000 (30 June 2020: HK$41,708,000).
Interim Report 2020 | 15 |
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
12. FINANCIAL ASSETS AT FVTPL (Continued)
Notes: (Continued)
- At the end of the reporting period, the Group had the following unlisted equity investments
Place of | Group's effective interest | Unaudited | Unaudited | Audited | Audited | ||||
incorporation/ | Unaudited | Audited | 31 December | 31 December | 30 June | 30 June | |||
registration and | 31 December | 30 June | 2020 | 2020 | 2020 | 2020 | |||
Name | Notes | business | 2020 | 2020 | Principal activities | Fair value | Cost | Fair value | Cost |
HK$'000 | HK$'000 | HK$'000 | HK$'000 | ||||||
Micro-loan service: | |||||||||
Tianjin Rongshun Microfinance | (a) | The People | 30% | 30% | Provision of small loan and | 1,261 | 36,606 | 1,055 | 36,606 |
Limited ("Tianjin Rongshun") | Republic of | financial consultation services | |||||||
China (The | |||||||||
"PRC") | |||||||||
TIIC RongShun Micro-Loan Company | (b) | The PRC | 10% | 10% | Provision of small loan and | 4,165 | 12,189 | 4,378 | 12,189 |
Limited ("TIIC Rongshun") | financial consultation services | ||||||||
Harbin Zhongjinguoxin | (c) | The PRC | 30% | 30% | Provision of small loan and | - | 36,693 | - | 36,693 |
Microfinance Co. Limited | financial consultation services | ||||||||
("Harbin Zhongjinguoxin") | |||||||||
Tianjin Binlian Microfinance Limited | (d) | The PRC | 3.3% | 3.3% | Provision of small loan and | 1,118 | 12,271 | 1,131 | 12,271 |
("Tianjin Binlian") | financial consultation services | ||||||||
Ezhou Zhongjinguotou Microfinance | (e) | The PRC | - | 50% | Provision of small loan and | - | - | 19,421 | 185,000 |
Limited ("Ezhou Zhongjinguotou") | financial consultation services | ||||||||
Ziyang Yanjiang CFI GuoSen | (f) | The PRC | 30% | 30% | Provision of small loan and | 126 | 73,730 | 129 | 73,730 |
Microfinance Co., Ltd | financial consultation services | ||||||||
("Ziyang Yanjiang") | |||||||||
Nanjing Jiangning | (g) | The PRC | 30% | 30% | Provision of small loan and | 9,251 | 36,673 | 10,173 | 36,673 |
MingYangRongTong Agricultural | financial consultation service | ||||||||
Microfinance Co., Ltd | |||||||||
("Nanjing Jiangning") |
Tianjin Rongyang Micro-Loan Limited | (h) | The PRC | 30% | 30% | Provision of small loan and |
("Tianjin Rongyang") | financial consultation services | ||||
Zhenjiang CFI Guosen Technology | (i) | The PRC | - | 30% | Provision of small loan and |
Microfinance Corporation Limited | financial consultation service | ||||
("Zhenjiang CFI") |
- | 36,741 | 6,382 | 36,741 |
- | - | 10,959 | 56,874 |
16 China Financial International Investments Limited
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
12. FINANCIAL ASSETS AT FVTPL (Continued)
Notes: (Continued)
- At the end of the reporting period, the Group had the following unlisted equity investments (Continued)
Place of | Group's effective interest | Unaudited | Unaudited | Audited | Audited | ||||
incorporation/ | Unaudited | Audited | 31 December | 31 December | 30 June | 30 June | |||
registration and | 31 December | 30 June | 2020 | 2020 | 2020 | 2020 | |||
Name | Notes | business | 2020 | 2020 | Principal activities | Fair value | Cost | Fair value | Cost |
HK$'000 | HK$'000 | HK$'000 | HK$'000 | ||||||
Clean energy: | |||||||||
Henan Tianguan Energy and | (j) | The PRC | 30% | 30% | Production and sales of denatured | 122,719 | 230,763 | 180,439 | 230,763 |
Biotechnology Company Limited | fuel ethanol, sales of acetone, | ||||||||
("Henan Tianguan") | butanol, polyols, production | ||||||||
and sales of biodegradable | |||||||||
plastics and biodiesel, sales of | |||||||||
chemical products, wheat bran | |||||||||
flour, feed sales, acetic acid | |||||||||
and acetaldehyde production | |||||||||
Hunan South China New Energy | (k) | The PRC | 30% | 30% | New energy technology | 54,529 | 51,200 | 50,366 | 51,200 |
Limited ("Hunan South China") | development transfer and | ||||||||
consultation, research and | |||||||||
development, manufacturing | |||||||||
and sales of chemical | |||||||||
products, chemical reagents | |||||||||
and auxiliaries (excluding | |||||||||
hazardous chemicals and | |||||||||
precursor chemicals) | |||||||||
Henan Keyi Huirui Energy and | (l) | The PRC | 30% | 30% | Biotechnology energy technology | 136,113 | 117,450 | 93,995 | 117,450 |
Biotechnology Company Limited | development, transfer and | ||||||||
("Keyi Huirui") | consultation, research and | ||||||||
development, manufacturing | |||||||||
and sales of biotechnology | |||||||||
energy and chemical | |||||||||
equipment | |||||||||
Mengzhou Houyuan Biotechnology | (m) | The PRC | 30% | 30% | Biotechnology and ethanol bio- | 146,581 | 150,065 | 131,637 | 150,065 |
Limited ("Mengzhou Houyuan") | chemical product development | ||||||||
and production | |||||||||
Tianguan New Energy Limited | (n) | The PRC | 5% | 5% | Ethanol products transportation, | 4,316 | 557 | 317 | 557 |
("Tianguan New Energy") | development, trading and | ||||||||
consultation service | |||||||||
Henan Zhongxin Biotechnology | (o) | The PRC | 30% | 30% | Production and sales of fuel | 53,452 | 52,084 | 16,455 | 16,455 |
Limited ("Zhongxin Biotechnology") | ethanol and related products | ||||||||
Henan Zhongxin Petrochemical | (p) | The PRC | 30% | 30% | Operating refined petroleum | 52,084 | 52,084 | 16,455 | 16,455 |
Oil Trading Limited | products | ||||||||
("Zhongxin Petrochemical Oil") |
Interim Report 2020 | 17 |
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
12. FINANCIAL ASSETS AT FVTPL (Continued)
Notes: (Continued)
- At the end of the reporting period, the Group had the following unlisted equity investments (Continued)
Place of | Group's effective interest | Unaudited | Unaudited | Audited | Audited | ||||||
incorporation/ | Unaudited | Audited | 31 December | 31 December | 30 June | 30 June | |||||
registration and | 31 December | 30 June | 2020 | 2020 | 2020 | 2020 | |||||
Name | Notes | business | 2020 | 2020 | Principal activities | Fair value | Cost | Fair value | Cost | ||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | ||||||||
Others | |||||||||||
Xi'an Kairong Financial Service | (q) | The PRC | 30% | 30% | Provision of financial management | 5,350 | 18,724 | 5,458 | 18,724 | ||
Limited ("Xi'an Kairong") | services | ||||||||||
Hubei Zhongjin Tech Financial | (r) | The PRC | 30% | 30% | Provision of financial management | 3,610 | 19,030 | 3,677 | 19,030 | ||
Services Co., Ltd. | services | ||||||||||
("Hubei Zhongjin") | |||||||||||
Liaoyuan Hancheng Trading Limited | (s) | The PRC | 30% | 30% | Food and agriculture products | 71,259 | 65,400 | 67,134 | 65,400 | ||
("Liaoyuan Hancheng") | trading and warehouse | ||||||||||
management | |||||||||||
Nanyang Xinglong Property | (t) | The PRC | 30% | 30% | Property development | 16,151 | 15,354 | 16,235 | 15,364 | ||
Development Limited | |||||||||||
("Nanyang Xinglong") | |||||||||||
682,086 | 635,796 | ||||||||||
- At the end of the reporting period, the Group had the following unlisted equity investments (Continued)
- On 24 August 2011, the Group invested in a 30% equity interest of Tianjin Rongshun, a joint venture established in the PRC. Tianjin Rongshun is principally engaged in the provision of small loan and financial consultation services in Tianjin, the PRC.
- On 2 September 2011, the Group invested in a 10% equity interest of TIIC Rongshun, a joint venture established in the PRC. TIIC Rongshun is principally engaged in the provision of small loan and financial consultation services in Tianjin, the PRC.
-
On 29 August 2011, the Group invested in a 30% equity interest of Harbin Zhongjinguoxin, a joint venture established in the PRC. Harbin Zhongjinguoxin is principally engaged in the provision of small loan and financial consultation services in Harbin, Heilongjiang Province, the PRC.
On 22 December 2016, the Company entered into a disposal agreement to dispose of all of its equity interest in Harbin Zhongjinguoxin to an independent third party for a cash consideration of Renminbi ("RMB") 25,000,000. A deposit of HK$2,500,000 was received and still included as receipt in advance in "other payables and accruals" as at 30 June 2019 and 2020. As at 31 December 2020, in the opinion of the Directors of the Company, the disposal transaction has yet been completed after 12 months from the date of the disposal agreement but the transaction still be considered as valid. - On 13 January 2012, the Group invested in a 10% equity interest of Tianjin Binlian, a joint venture established in the PRC. The Group's equity interest in Tianjin Binlian was reduced to 3.3% on 22 January 2014, as the registered capital of Tianjin Binlian was enlarged by the new registered capital subscribed by its other shareholders on that date. Tianjin Binlian is principally engaged in the provision of small loan and financial consultation services in Tianjin, especially Dongli District, the PRC.
18 China Financial International Investments Limited
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
12. FINANCIAL ASSETS AT FVTPL (Continued)
Notes: (Continued)
-
On 2 March 2012, the Group invested in a 30% equity interest of Ezhou Zhongjinguotou, a joint venture established in the PRC. Ezhou Zhongjinguotou is principally engaged in the provision of small loan and financial consultation services in Ezhou, Hubei Province, the PRC.
On 18 December 2016, the shareholders' resolution of Ezhou Zhongjinguotou approved some existing shareholders of Ezhou Zhongjinguotou to withdraw their capital commitment in the sum of RMB200,000,000 in Ezhou Zhongjinguotou so that the registered capital of Ezhou Zhongjinguotou was reduced from RMB500,000,000 to RMB300,000,000. Due to the reduction in registered capital, the shareholding of the Company in Ezhou Zhongjinguotou inevitably increased from 30% to 50%. In order to comply with Rule 21.04(3)(a) of the Listing Rules, the Company shall voluntarily relinquish the voting rights beyond 30%.
During the period ended 31 December 2020, the Group disposed a subsidiary, holding the investment of Ezhou Zhongjinguotou, to an independent party. The detail of the disposal is disclosed in Note 18,. - On 6 August 2012, the Group invested in a 30% equity interest of Ziyang Yanjiang, a joint venture established in the PRC. Ziyang Yanjiang is principally engaged in the provision of small loan and financial consultation services in Ziyang, Sichuan Province, the PRC.
- On 31 August 2012, the Group invested in a 30% equity interest of Nanjing Jiangning, a joint venture established in the PRC. Nanjing Jiangning is principally engaged in the provision of small loan and financial consultation services in Jiangning District, Nanjing, Jiangsu Province, the PRC.
- On 13 September 2012, the Group invested in a 30% equity interest of Tianjin Rongyang, a joint venture established in the PRC. Tianjin Rongyang is principally engaged in the provision of small loan and financial consultation services in Tianjin, the PRC.
-
On 22 November 2013, the Group invested in a 30% equity interest of Zhenjiang CFI, a joint venture established in the PRC. Zhenjiang CFI is principally engaged in the provision of small loan and financial consultation services in Zhenjiang, Jiangsu Province, the PRC.
During the period ended 31 December 2020, the Group disposed a subsidiary, holding the investment of Zhenjiang CFI, to an independent party. The detail of the disposal is disclosed in Note 18. - On 11 May 2018, the Group invested in a 30% equity interest of Henan Tianguan, a joint venture established in the PRC. Henan Tianguan is principally engaged in Production and sales of denatured fuel ethanol, sales of acetone, butanol, polyols, production and sales of biodegradable plastic and biodiesel, sales of chemical products, wheat bran flour, feed sales, acetic acid and acetaldehyde production.
- On 23 January 2019, Keyi (Shanghai) Investments Limited ("Keyi (Shanghai)"), a wholly-owned subsidiary of the Company, entered into an agreement with Hunan South China to inject capital contribution of RMB45,000,000 into Hunan South China for acquiring 30% of Hunan South China's equity interest. Hunan South China is engaged in new energy technologies development, transfer and consultation, research and development, manufacturing and sales of chemical products, chemical reagents and auxiliaries (excluding hazardous chemicals and precursor chemicals).
- In August 2019, Keyi (Shanghai) entered into an agreement with three partners in relation to the formation of Keyi Huirui. The registered capital of Keyi Huirui is RMB350,000,000. Keyi (Shanghai) injected RMB105,000,000 for acquiring 30% of Keyi Huirui's equity interest. Keti Huirui is engaged in biotechnology energy technology development transfer and consultation research and development, manufacturing and sales of biotechnology energy and chemical equipment. On 5 September 2019, Keyi Huirui was officially set up.
Interim Report 2020 | 19 |
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
12. FINANCIAL ASSETS AT FVTPL (Continued)
Notes: (Continued)
- At the end of the reporting period, the Group had the following unlisted equity investments (Continued)
-
On 17 October 2019, the Group entered into an agreement with Hollys (China) Limited ("Hollys") to obtain repayment of outstanding principal and interests accrued of the bonds issued by Hollys in return of the 30% equity interest investment in Mengzhou Houyuan.
Mengzhou Houyuan is principally engaged in development and production of biotechnology and ethanol bio-chemical products in Henan Province, the PRC. - In October 2019, the Group invested in a 5% equity interest of Tianguan New Energy, a joint venture established in the PRC. Tianguan New Energy is principally engaged in ethanol products transportation, development and relevant consultation services in Huizhou, Guangdong Province, the PRC.
- On 16 March 2020, the Group invested in a 30% equity interest of Zhongxin Biotechnology, a joint venture established in the PRC. Zhongxin Biotechnology is principally enegaegd engaged in production and sales of fuel ethanol and related products, the production and supply of electricity and heat, and the research, development and technical services of fuel ethanol and denatured fuel ethanol.
- On 16 March 2020, the Group invested in a 30% equity interest of Zhongxin Petrochemical Oil, a joint venture established in the PRC. Zhongxin Petrochemical Oil is principally operating refined petroleum products (such as vehicle ethanol gasoline, kerosene, diesel, natural gas) without storage facilities, selling food and chemical products, retail medicine and road cargo transport.
- On 18 December 2012, the Group invested in a 30% equity interest of Xi'an Kairong, a joint venture established in the PRC. Xi'an Kairong is principally engaged in the provision of financial management services to SMEs in Xi'an Economic Development Zone, Shaanxi Province, the PRC.
- On 22 September 2014, the Group invested in a 30% equity interest of Hubei Zhongjin, a joint venture established in the PRC. Hubei Zhongjin is principally engaged in the provision of financial management services to SMEs in Wuhan, Hubei Province, the PRC.
- On 11 June 2020, the Group invested in a 30% equity interest of Liaoyuan Hancheng, which is principally engaged in food and agriculture products trading and warehouse management in Jilin Province, PRC.
- On 2 April 2020, the Group entered into an agreement with Xing Yue Investment Limited ("Xing Yue") and the sole shareholder of Xing Yue, Ms. Dong Lili to obtain the repayment of outstanding principal and interests accrued of the bonds issued by Xing Yue in return of the 30% equity interest investment in Nanyang Xinglong.
-
On 17 October 2019, the Group entered into an agreement with Hollys (China) Limited ("Hollys") to obtain repayment of outstanding principal and interests accrued of the bonds issued by Hollys in return of the 30% equity interest investment in Mengzhou Houyuan.
Nanyang Xinglong is principally engaged in property development in Henan Province, PRC.
The fair values of all the above investments were determined by the directors of the Company with reference to the professional valuation carried out by Asset Appraisal Limited, an independent valuer.
At the end of the period, the Group held more than 20% of the effective shareholding interest in the above investee companies. The investments in these companies are not accounted for as associates as the Group had no significant influence over these companies. In accordance with the relevant agreement signed between the Group and these investee companies as well as the other shareholders of the investee companies, the Group does not have the right to participate in its policy-making processes, to appoint directors nor management and to interchange of managerial personnel. Hence, all of these investments are not regarded as associates of the Group and are accounted for as financial assets at FVTPL for the period/year ended 31 December 2020 and 30 June 2020.
20 China Financial International Investments Limited
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
13. EQUITY INSTRUMENTS AT FVTOCI | |||||
Audited | |||||
Unaudited | |||||
31 December | 30 June | ||||
2020 | 2020 | ||||
HK$'000 | HK$'000 | ||||
Listed investments: | |||||
- Equity securities listed in Hong Kong (Note i) | 25,152 | 33,536 | |||
Unlisted investments: | |||||
- Equity securities (Note ii) | 28,007 | 28,507 | |||
Total | 53,159 | 62,043 | |||
Notes:
-
Listed equity securities
The fair values of listed equity securities are determined based on the quoted market bid prices available on the relevant exchange at the end of the reporting period.
Particulars of the investment as at 31 December 2020, in terms of the carrying value of the listed investment, are as follows: China City Infrastructure Group Limited ("China City Infrastructure")
On 21 June 2016, the Company and China City Infrastructure, a company listed on the Stock Exchange, entered into the share subscription agreement to subscribe for 262,000,000 new shares of China City Infrastructure with a one-yearlock-up period for a total subscription price of HK$131,000,000 at HK$0.50 per share. The transaction was completed on 28 June 2016. At 31 December 2020 and 30 June 2020, the 262,000,000 shares representing approximately 8.4% of the entire issued share capital in China City Infrastructure. China City Infrastructure is principally engaged in infrastructure businesses, property investment, property development, hotel business, property management and natural gas in the PRC. As at 31 December 2020, the fair value of the Group's interest in China City Infrastructure was HK$25,152,000 (30 June 2020: HK$33,536,000).
Interim Report 2020 | 21 |
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
13. EQUITY INSTRUMENTS AT FVTOCI (Continued)
Notes: (Continued)
-
Unlisted equity investments
As at 31 December 2020, the Group held the following unlisted equity investments:
Place of | Group's effective interest | Unaudited | Unaudited | Audited | Audited | |||||||
incorporation/ | Unaudited | Audited | 31 December | 31 December | 30 June | 30 June | ||||||
registration and | 31 December | 30 June | 2020 | 2020 | 2020 | 2020 | ||||||
Name | Notes | business | 2020 | 2020 | Principal activities | Fair value | Cost | Fair value | Cost | |||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | |||||||||
Micro-loan services: | ||||||||||||
Jingdezhen CFI Guosen | (a) | The PRC | - | 40% | Provision of small loan and | - | - | - | 188,690 | |||
Microfinance Co., Ltd. | financial consultation services | |||||||||||
("Jingdezhen CFI Guosen") | ||||||||||||
Others: | ||||||||||||
Jiangxi Huazhang Hanchen | (b) | The PRC | 2.98% | 2.98% | Provision of financing guarantees | 28,007 | 43,150 | 28,507 | 43,150 | |||
Guarantee Group Limited | to small and medium | |||||||||||
("Jiangxi Huazhang") | enterprises ("SMEs") | |||||||||||
Shenzhen Zhongtoujinxin Asset | (c) | The PRC | 30% | 30% | Provision of consultation services | - | 18,350 | - | 18,350 | |||
Management Company Limited | on project investments | |||||||||||
("Zhongtoujinxin") | ||||||||||||
28,007 | 28,507 | |||||||||||
- On 26 May 2011 and 28 November 2012, the Group invested in 23.33% and 6.67% equity interests of Jingdezhen CFI Guosen, respectively, a joint venture established in the PRC. Jingdezhen CFI Guosen is principally engaged in the provision of small loan and financial consultation services in Jingdezhen, the PRC.
On 1 June 2016, the Group's equity interests in Jingdezhen CFI Guosen changed from 30% to 40% due to previous shareholders of Jingdezhen CFI Guosen withdrew their capital commitment in the sum of RMB125,000,000 in Jingdezhen CFI Guosen and the registered capital of Jingdezhen CFI Guosen was reduced from RMB500,000,000 to RMB375,000,000. Due to the reduction in registered capital, the shareholding of the Company in Jingdezhen CFI Guosen inevitably and automatically increased from 30% to 40%. In order to comply with Rule 21.04(3)(a) of the Listing Rules, the Company voluntarily relinquished the voting rights beyond 30%.
During the period ended 31 December 2020, the Group disposed a subsidiary, holding the investment of Zhenjiang CFI Guosen, to an independent party. The detail of the disposal is disclosed in Note 18,. - On 13 April 2011, the Group acquired a 30% equity interest of Jiangxi Huazhang, a joint venture established in the PRC. The Group's equity interest in Jiangxi Huazhang became 7.2% on 15 July 2013 and dropped to 2.98% on 19 August 2016, as the registered capital of Jiangxi Huazhang was enlarged by the new registered capital subscribed by its other shareholders on those dates. Jiangxi Huazhang is principally engaged in the provision of financing guarantees to SMEs in the Jiangxi Province, the PRC.
- On 29 April 2011, the Group invested in a 30% equity interest of Zhongtoujinxin, a joint venture established in the PRC. The first contribution of RMB6,000,000 (equivalent to HK$7,200,000) was made by the Company in 2011 and the second contribution of RMB9,000,000 (equivalent to HK$11,150,000) was made on 10 May 2012. Zhongtoujinxin is principally engaged in the provision of consultation services for project investments in the PRC.
22 China Financial International Investments Limited
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
13. EQUITY INSTRUMENTS AT FVTOCI (Continued)
Notes: (Continued)
-
Unlisted equity investments (Continued)
The fair values of all of the above investments were determined by the directors of the Company with reference to the professional valuation carried out by Asset Appraisal Limited, an independent valuer.
As the end of the reporting period, the Group held more than 20% of the effective shareholding interest in these above investee companies. The investments in these companies are not accounted for as associates as the Group had no significant influence over these companies. IN accordance with the relevant agreement signed between the Group and these investee companies as well as the other shareholders of the investee companies, the Group does not have the right to participate in its policy-making processes, to appoint directors nor management and to interchange of managerial personnel. Hence, all of theses investments are not regarded as associates of the Group and are accounted for as equity instruments at FVTOCI for the period/year ended 31 December 2020 and 30 June 2020.
14. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES
Unaudited | Audited | |||||||
31 December | 30 June | |||||||
2020 | 2020 | |||||||
Notes | HK$'000 | HK$'000 | ||||||
Deposits paid for potential investments | (i) | 30,000 | 30,000 | |||||
Rental and utilities deposits | 451 | 510 | ||||||
Dividends receivable | (ii) | 1,144 | 2,407 | |||||
Consideration receivable for disposal of an investment | (iii) | 30,000 | - | |||||
Other receivables | 559 | 1,808 | ||||||
62,154 | 34,725 | |||||||
Less: loss allowance | (7,500) | (7,500) | ||||||
54,654 | 27,225 | |||||||
Prepayments | 363 | 368 | ||||||
55,017 | 27,593 | |||||||
Analysed for reporting purposes as: | ||||||||
Current assets | 39,699 | 27,287 | ||||||
Non-current assets | 15,318 | 306 | ||||||
55,017 | 27,593 | |||||||
Interim Report 2020 | 23 |
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
14. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES (Continued)
Notes:
- Deposits paid for potential investments
Unaudited | Audited | |||||
31 December | 30 June | |||||
2020 | 2020 | |||||
HK$'000 | HK$'000 | |||||
Mr. Peng Kexi ("Mr. Peng") (Note (a)) | 20,000 | 20,000 | ||||
Mr. Zhang Gui Qing | 10,000 | 10,000 | ||||
30,000 | 30,000 | |||||
Less: loss allowance | (7,500) | (7,500) | ||||
22,500 | 22,500 | |||||
- The Company entered into an agreement with an independent third party, Mr. Peng. Pursuant to agreement, Mr. Peng is responsible for assisting to seek and recommend potential investments in the PRC to the Company. On August 2020, a new agreement was signed to extend the arrangement to 31 July 2022, and the Company agreed to provide the deposit to Mr. Peng amounted to HK$20,000,000 during the period as agreed, the deposit will be refunded after the period expired and is interest free. As at 31 December 2020 and 30 June 2020, the deposit remained unutilised.
At 31 December 2020 and 30 June 2020, the provisional for ECL in respect of the deposit paid to Mr. Peng was HK$5,000,000.
- The Company entered into an agreement with an independent third party, Mr. Peng. Pursuant to agreement, Mr. Peng is responsible for assisting to seek and recommend potential investments in the PRC to the Company. On August 2020, a new agreement was signed to extend the arrangement to 31 July 2022, and the Company agreed to provide the deposit to Mr. Peng amounted to HK$20,000,000 during the period as agreed, the deposit will be refunded after the period expired and is interest free. As at 31 December 2020 and 30 June 2020, the deposit remained unutilised.
- Dividends receivable represents dividends declared from the financial assets at FVTPL which are scheduled for payment after the end of the reporting period. As at the date of approval of these consolidated financial statements, all such dividends have been received by the Group.
-
During the period ended 31 December 2020, the Group disposed its subsidiary, China Financial International Investments (Jiangxi) Limited (as disclosed in Note 18) to an independent party with the consideration of HK$30,000,000.
The subsidiary is mainly engaged in investing unlisted equities in micro-loan business in PRC.
24 China Financial International Investments Limited
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
15. BORROWINGS | |||||
Audited | |||||
Unaudited | |||||
31 December | 30 June | ||||
2020 | 2020 | ||||
HK$'000 | HK$'000 | ||||
The carrying amount of the above borrowings are repayable | |||||
(based on scheduled repayment dates set out in the loan agreements): | |||||
Within one year | 29,986 | 52,978 | |||
Within a period of more than one year but not exceeding two years | - | 9,997 | |||
29,986 | 62,975 | ||||
Analysed for reporting purposes as: | |||||
Current liabilities | 29,986 | 52,978 | |||
Non-current liabilities | - | 9,997 | |||
29,986 | 62,975 | ||||
As at 30 June 2020, bonds with a total nominal amount of HK$63,000,000 were issued to independent third parties at 5% interest rate per annum with maturity dates ranging from years 2020 to 2021, being seven years' maturity from the date of issue.
During the period ended 31 December 2020, the Company repaid the with total nominal amount of HK$33,000,000 and the accrued interests.
16. FINANCIAL GUARANTEE CONTRACTS
The movement of provision for financial guarantee contracts during the current and prior periods are as follows:
Unaudited | Audited | |||||
31 December | 30 June | |||||
2020 | 2020 | |||||
HK$'000 | HK$'000 | |||||
At beginning of the year | 6,382 | 10,679 | ||||
Decrease in fair value of financial guarantee contract | (6,382) | (4,297) | ||||
At end of the period/year end | - | 6,382 | ||||
In 2012, the Company provided irrevocable guarantee to Tianjin Rongyang to secure the loans granted to certain
customers (the "Customers") of Tianjin Rongyang referred by Nanjing Xinning Guangdian Zidonghua Limited(南 京新寧光電自動化有限公司)("Xinning Guangdian"), an independent third party, using the Company's entire equity interests in Tianjin Rongyang.
The maximum exposure of the Group associated to such financial guarantees is limited to the fair value of the collaterals offered by the Group, i.e. the Group's entire equity in Tianjin Rongyang.
The Group holds 30% equity interest in Tianjin Rongyang as of 31 December 2020.
For the period ended 31 December 2020, a reversal of provision for financial guarantees of HK$6,382,000 was recognised due to decrease in fair value of the Group's investment in Tianjin Rongyang to nil.
Interim Report 2020 | 25 |
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
17. SHARE CAPITAL OF THE COMPANY | |||||||||||
Audited | |||||||||||
Unaudited | |||||||||||
31 December 2020 | 30 June 2020 | ||||||||||
Number of | Number of | ||||||||||
shares | shares | ||||||||||
'000 | HK$'000 | '000 | HK$'000 | ||||||||
Authorised: | |||||||||||
Ordinary shares of HK$0.01 each | 30,000,000 | 300,000 | 30,000,000 | 300,000 | |||||||
Issued and fully paid: | |||||||||||
Ordinary shares of HK$0.01 each | 10,971,634 | 109,717 | 10,971,634 | 109,717 | |||||||
18. DISPOSAL OF A SUBSIDIARY
During the period ended 31 December 2020, the Group disposed a subsidiary, China Financial International Investments (Jiangxi) Limited, which is mainly engaged in investing unlisted equities in micro-loan business in PRC. The net assets of the subsidiary at the date of disposal were as follows:
Consideration received/receivable
Deferred cash consideration
Analysis of assets and liabilities over which control was lost: Bank
Financial assets at FVTPL
Amount due to the Company
Net assets disposed of
Loss on disposal of a subsidiary
Consideration received or receivable
Net assets disposed of
Net cash outflow arising on disposal
Cash consideration
Less: bank balances and cash disposed of
HK$'000
30,000
16
30,380
(141)
30,255
30,000
(30,255)
(255)
-
(16)
(16)
26 China Financial International Investments Limited
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
19. SHARE-BASED PAYMENT TRANSACTIONS
Under the share option scheme adopted by the Company on 15 January 2008 (the "Scheme"), options were granted to certain directors and consultants entitling them to subscribe for shares of the Company under the Scheme. The Scheme was approved and adopted by shareholders of the Company on 15 January 2008 (the "Date of Adoption"), whereby the directors of the Company are authorised, at their discretion, to invite full time employees of the Group, (including executive and non-executive directors of the Company or any of its subsidiaries) and any suppliers, consultants, agents or advisers of the Group, to take up options to subscribe for shares of the Company. The maximum number of shares in respect of which options may be granted under the Scheme, when aggregated with any shares subject to any other schemes, shall not exceed 10% of the issued share capital of the Company on the Date of Adoption.
On 15 December 2017, the Scheme was terminated and the new share option scheme (the "New Scheme") was approved by the Shareholders of the Company at the annual general meeting to replace the Scheme. The New Scheme shall be valid and effective for a period of 10 years ending on 14 December 2027. The exercise price of the options under the New Scheme is determinable by the board of directors, but will be at least the highest of:
- The closing price of the shares on the Stock Exchange (as stated in the Stock Exchange's daily quotation sheets) on the offer date, which must be a business day;
- The average of the closing prices of the shares on the Stock Exchange (as stated in the Stock Exchange's daily quotation sheets) for the 5 business days immediately preceding the offer date; and
- The nominal value of the Company's shares on the offer date.
The maximum number of shares issuable under share options to each eligible participant in the Scheme within any 12-month period is limited to 1% of the shares of the Company in issue at any time. Any further grant of share options in excess of this limit is subject to shareholders' approval in a general meeting.
Share options granted to a director, chief executive or substantial shareholder of the Company, or to any of their associates, are subject to approval in advance by the independent non-executive directors. In addition, any share options granted to a substantial shareholder or an independent non-executive director of the Company, or to any of their associates, in excess of 0.1% of the shares of the Company in issue at any time or with an aggregate value (based on the price of the Company's shares at the date of grant) in excess of HK$5,000,000, within any 12-month period, are subject to shareholders' approval in advance in a general meeting.
The offer of a grant of share options under the New Scheme may be accepted within 21 days from the date of offer, upon payment of a nominal consideration of HK$1 in total by the grantee. The exercise period of the share options granted is determinable by the directors.
Share options do not confer rights on the holders to dividends or to vote at shareholders' meetings.
The maximum number of the shares available for issue upon exercise of all share options which may be further granted under the New Scheme is 1,097,163,403 shares, representing 10% of the total number of issued shares of the Company on 15 December 2017.
No share options were granted under the New Scheme for both period/year.
Interim Report 2020 | 27 |
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
20. RELATED PARTY TRANSACTIONS
During the period, the Group entered into the following transactions with related parties:
Unaudited | ||||||
Six months ended 31 December | ||||||
2019 | ||||||
2020 | ||||||
HK$'000 | HK$'000 | |||||
Investment management fee paid/payable to CFIIM (Note i) | 215 | 560 | ||||
Legal advisory fees paid/payable to Michael Li & Co (Note ii) | 22 | 30 | ||||
Notes:
-
An investment management agreement (the "Investment Management Agreement") was entered into between the Company and CFIIM on 25 April 2014 to renew the appointment of CFIIM as the investment manager of the Company for a further period of three years effective from 29 April 2014 to 28 April 2017. Pursuant to the Investment Management Agreement, CFIIM is entitled to a management fee which is receivable monthly in arrears at the rate of 0.75% per annum of the aggregate market value of the portfolio managed by CFIIM on the last business day of each calendar month.
The Investment Management Agreement expired on 28 April 2017 and a new investment management agreement (the "2nd Investment Management Agreement") was entered into accordingly on 26 April 2017 to renew the appointment of CFIIM as the investment manager of the Company for a further period of three years effective from 29 April 2017 to 28 April 2020. Pursuant to the 2nd Investment Management Agreement, CFIIM is entitled to a management fee which is receivable monthly in arrears at the rate of 0.75% per annum of the aggregate market value of the portfolio managed by CFIIM on the last business day of each calendar month.
The Investment Management Agreement expired on 28 April 2020 and a new investment management agreement (the "3rd Investment Management Agreement") was entered into accordingly on 27 April 2020 to renew the appointment of CFIIM as the investment manager of the Company for a further period of three years effective from 29 April 2020 to 28 April 2023. Pursuant to the 3rd Investment Management Agreement, CFIIM is entitled to a management fee which is receivable monthly in arrears at the rate of 0.75% per annum of the aggregate market value of the portfolio managed by CFIIM on the last business day of each calendar month.
Investment management fees also constitute continuing connected transactions as defined in Chapter 14A of the Listing Rules. The disclosures required by Chapter 14A of the Listing Rules are disclosed in the report of directors in the annual report. - Michael Li & Co is a company controlled by the company secretary of the Company, Mr. Li Chi Chung, and provided various legal advisory services to the Group.
28 China Financial International Investments Limited
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
20. RELATED PARTY TRANSACTIONS (Continued) Compensation of key management personnel
Unaudited | ||||||
Six months ended 31 December | ||||||
2019 | ||||||
2020 | ||||||
HK$'000 | HK$'000 | |||||
Salaries, allowances and benefits in kind | 2,740 | 3,762 | ||||
Pension scheme contribution | 51 | 74 | ||||
21. FINANCIAL INSTRUMENTS
Fair value measurements of financial instruments
A number of assets and liabilities included in these unaudited interim condensed consolidated financial statements require measurement at, and/or disclosure of, fair value. The fair value measurement of the Group's financial and non-financial assets and liabilities utilised market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique utilised are (the "Fair Value Hierarchy"):
- Level 1: Quoted prices in active markets for identical items (unadjusted);
- Level 2: Observable direct or indirect inputs other than Level 1 inputs;
- Level 3: Unobservable inputs (i.e. not derived from market data).
The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur.
The following tables illustrate the fair value measurement hierarchy of the Group's financial instruments:
Fair value hierarchy at 31 December 2020 (unaudited)
Level 1 | Level 2 | Level 3 | Total | |||||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | |||||
Equity instruments at FVTOCI: | ||||||||
- Listed equity securities | 25,152 | - | - | 25,152 | ||||
- Unlisted investments | - | - | 28,007 | 28,007 | ||||
Financial assets at FVTPL | ||||||||
- Listed equity securities | 48,479 | - | - | 48,479 | ||||
- Unlisted equity investments | - | - | 682,085 | 682,085 | ||||
73,631 | - | 710,092 | 783,723 | |||||
Interim Report 2020 | 29 |
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
21. FINANCIAL INSTRUMENTS (Continued)
Fair value measurements of financial instruments (Continued)
Fair value hierarchy at 30 June 2020 (audited)
Level 1 | Level 2 | Level 3 | Total | ||||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | ||||
Equity Instruments at FVTOCI: | |||||||
- Listed equity securities | 33,536 | - | - | 33,536 | |||
- Unlisted investments | - | - | 28,507 | 28,507 | |||
Financial assets at FVTPL | |||||||
- Listed equity securities | 107,372 | - | - | 107,372 | |||
- Unlisted equity investments | - | - | 635,796 | 635,796 | |||
140,908 | - | 664,303 | 805,211 | ||||
Below is a summary of significant unobservable inputs to the valuation of financial instruments together with a quantitative sensitivity analysis as at 31 December 2020 and 30 June 2020:
Significant | ||||
Valuation technique | unobservable inputs | Range/value | Sensitivity of fair value to the input | |
Unlisted security classified | ||||
as equity instrument as | ||||
FVTOCI | ||||
Micro-loan service | Market comparable | Price to book ratio | 31 December 2020: | The fair value is positively correlated to |
companies | ("PB ratio") | 0.1844 to 1.0356 | the PB ratio. Had the highest PB ratio | |
among the comparables been used as | ||||
30 June 2020: | at 31 December 2020, the Group's OCI | |||
0.1846 to 1.0084 | would have no impact (30 June 2020: | |||
no impact). Had the lowest PB ratio | ||||
among the comparables been used as | ||||
at 31 December 2020, the Group's OCI | ||||
would have no impact (30 June 2019: no | ||||
impact). | ||||
Lack of marketability | 31 December 2020: | The fair value is negatively correlated to the | ||
discount ("LOMD") | 34% | LOMD. Had the LOMD decreased by 5% | ||
as at 31 December 2020, the Group's OCI | ||||
30 June 2020: | would have no impact (30 June 2020: no | |||
28% | impact). Had the LOMD increased by 5% | |||
as at 31 December 2020, the Group's OCI | ||||
would have no impact(30 June 2019: no | ||||
impact). |
30 China Financial International Investments Limited
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
21. FINANCIAL INSTRUMENTS (Continued)
Fair value measurements of financial instruments (Continued)
Significant | ||||
Valuation technique | unobservable inputs | Range/value | Sensitivity of fair value to the input | |
Unlisted security classified | ||||
as equity instrument as | ||||
FVTOCI | ||||
Others | Market comparable | PB ratio | 31 December 2020: | The fair value measurement is positively |
companies | 0.1844 to 1.0356 | correlated to the PB ratios. Had the | ||
highest PB ratio among the comparables | ||||
30 June 2020: | been used as at 31 December 2020, | |||
0.1846 to 1.0084 | the Group's OCI would have increased | |||
by HK$24,280,000 (30 June 2020: | ||||
HK$23,297,000). Had the lowest PB ratio | ||||
among the comparables been used as | ||||
at 31 December 2020, the Group's OCI | ||||
would have decreased by HK$18,141,000 | ||||
(30 June 2020: HK$19,024,000). |
LOMD
Unlisted equity investments classified as financial assets at FVTPL
31 December 2020: The fair value is negatively correlated to
34% LOMD. Had the LOMD decreased by 5% as at 31 December 2020, the Group's OCI
30 June 2020: would have increased by HK$2,117,000
28% (30 June 2020: HK$1,980,000). Had the LOMD increased by 5% as at 31 December 2020, the Group's OCI would have decreased by HK$2,117,000 (30 June 2020: HK$1,980,000).
Micro-loan service | Market comparable | PB ratio | 31 December 2020: | The fair value is positively correlated to the |
companies | 0.1844 to 1.0356 | PB ratios. Had the highest PB ratio among | ||
the comparables been used as at 31 | ||||
30 June 2020: | December 2020, the Group's profit or loss | |||
0.1846 to 1.0084 | would have increased by HK$12,424,000 | |||
(30 June 2020: HK$43,825,000). Had the | ||||
lowest PB ratio among the comparables | ||||
been used as at 31 December 2020, | ||||
the Group's profit or loss would have | ||||
decreased by HK$9,281,000 (30 June | ||||
2020: HK$35,789,000). | ||||
LOMD | 31 December 2020: | The fair value is negatively correlated to | ||
34% | the LOMD. Had the LOMD decreased | |||
by 5% as at 31 December 2020, the | ||||
30 June 2020: | Group's profit or loss would have | |||
28% | increased by HK$1,322,000 (30 June | |||
2020: HK$3,724,000). Had the LOMD | ||||
increased by 5% as at 31 December | ||||
2020, the Group's profit or loss would | ||||
have decreased by HK$1,322,000 (30 | ||||
June 2020: HK$3,724,000). |
Interim Report 2020 | 31 |
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
21. FINANCIAL INSTRUMENTS (Continued)
Fair value measurements of financial instruments (Continued)
Significant | ||||
Valuation technique | unobservable inputs | Range/value | Sensitivity of fair value to the input | |
Unlisted equity investments | ||||
classified as financial assets | ||||
at FVTPL | ||||
Clean energy/others | Market comparable | PB ratio | 31 December 2020: | The fair value is positively correlated to the |
companies | 0.1844 to 1.0356 | PB ratios. Had the highest PB ratio among | ||
the comparables been used as at 31 | ||||
30 June 2020: | December 2020, the Group's profit or loss | |||
0.1846 to 1.0034 | would have increased by HK$23,473,000 | |||
(30 June 2020: HK$34,679,000). Had the | ||||
lowest PB ratio among the comparables | ||||
been used as at 31 December 2020, | ||||
the Group's profit or loss would have | ||||
decreased by HK$9,825,000 (30 June | ||||
2020: HK$13,796,000). |
LOMD
Unlisted equity investments classified as financial assets at FVTPL
31 December 2020: The fair value measurement is negatively
34% correlated to the LOMD. Had the LOMD decreased by 5% as at 31 December
30 June 2020: 2020, the Group's profit or loss would
28% have increased by HK$1,265,000 (30 June 2020: $1,453,000). Had the LOMD increased by 5% as at 31 December 2020, the Group's profit or loss would have decreased by HK$1,265,000 (30 June 2020: $1,453,000).
Clean energy/others | Market comparable | Ratio of enterprise | 31 December 2020: | The fair value is positively correlated to the |
companies | value over earnings | 0.76 to 21.91 | EV/EBITDA ratios. Had the highest EV/ | |
before interest, tax | EBITDA ratio amount the comparables | |||
depreciation and | 30 June 2020: | been used as at 31 December 2020, | ||
amortization ("EV/ | 0.92 to 19.21 | the Group's profit or loss would have | ||
EBITD ratio") | increased by HK$126,327,000 (30 June | |||
2020: 183,055,000). Had the lowest EV/ | ||||
EBITDA ratio among the comparables | ||||
been used as at 30 December 2020, | ||||
the Group's profit or loss would have | ||||
decreased by HK$62,168,000 (30 June | ||||
2020: 79,527,000) | ||||
LOMD | 31 December 2020: | The fair value measurement is negatively | ||
22.67% to 34% | correlated to the LOMD. Had the LOMD | |||
decreased by 5% as at 31 December | ||||
30 June 2020: | 2020, the Group's profit or loss would | |||
24.4% to 28.6% | have increased by HK$18,489,000 (30 | |||
June 2020: $28,084,000). Had the LOMD | ||||
increased by 5% as at 31 December | ||||
2020, the Group's profit or loss would | ||||
have decreased by HK$18,489,000 (30 | ||||
June 2020: $28,084,000). |
There were no transfers between Level 1 and 2 during both period/year.
32 China Financial International Investments Limited
Notes to the Condensed Consolidated Financial Statements (Continued)
For the six months ended 31 December 2020
21. FINANCIAL INSTRUMENTS (Continued)
Fair value measurements of financial instruments (Continued) Reconciliation of Level 3 fair value measurements
31 December 2020 (Unaudited)
Financial | Equity | Debt | ||||||
assets | instruments | Instruments | ||||||
at FVTPL | at FVTOCI | at FVTOCI | Total | |||||
(unlisted) | ||||||||
securities) | ||||||||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | |||||
Opening balance | 635,796 | 28,507 | - | 664,303 | ||||
Total losses: | ||||||||
- in profit or loss | (22,065) | - | - | (22,065) | ||||
- in OCI | - | (500) | - | (500) | ||||
- exchange realignment | 27,475 | - | - | 27,475 | ||||
Purchases | 71,259 | - | - | 71,259 | ||||
Disposals | (30,380) | - | - | (30,380) | ||||
Closing balance | ||||||||
682,085 | 28,007 | - | 710,092 | |||||
30 June 2020 (Audited) | ||||||||
Financial | Equity | Debt | ||||||
assets | instruments | instruments | ||||||
at FVTPL | at FVTOCI | at FVTOCI | Total | |||||
(unlisted) | ||||||||
securities) | ||||||||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | |||||
Opening balance | 313,408 | 25,718 | 302,234 | 641,360 | ||||
Total losses: | ||||||||
- in profit or loss | (48,962) | - | (55,471) | (104,433) | ||||
- in OCI | - | 2,789 | (55,471) | (52,682) | ||||
- reclassified from OCI to profit or loss | - | - | 55,471 | 55,471 | ||||
- exchange realignment | (10,396) | - | - | (10,396) | ||||
Purchases | 381,746 | - | - | 381,746 | ||||
Disposals | - | - | (246,763) | (246,763) | ||||
Closing balance | 635,796 | 28,507 | - | 664,303 | ||||
22. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS
The unaudited interim condensed consolidated financial statements were approved and authorised for issue by the board of directors on 26 February 2021.
Interim Report 2020 | 33 |
Management Discussion and Analysis
BUSINESS REVIEW
The Group is principally engaged in the investments in the listed and unlisted companies established and/or doing business in Hong Kong and the People's Republic of China (the "PRC" or, "China").
The Group recorded a loss of HK$27,874,000 for the six months ended 31 December 2020 (the "Period"), as compared to a loss of HK$96,257,000 for the same period last year. The loss was mainly attributable to the fair value loss of approximately HK$37,528,000 on financial assets at fair value through profit or loss.
LISTED INVESTMENT REVIEW
During the Period, the Group recorded the total loss of HK$15,464,000 on listed securities business. Dividend income of HK$187,000 from listed investments was recorded for the Period (31 December 2019: HK$946,000).
As at 31 December 2020, the market value of the listed securities amounted to HK$73,631,000 (30 June 2020: HK$140,908,000). All the listed securities were listed on The Stock Exchange of Hong Kong Limited (the "Stock Exchange").
Listed Securities Portfolio
Dividend | % to the | |||||||||||
Market | received/ | Group's net | ||||||||||
Group's | value at | receivable | assets as at | |||||||||
Number of | effective | 31 December | during | 31 December | Investment | Disposal | Realized | |||||
Name of listed securities | Nature of business | shares held | interest | 2020 | the Period | 2020 | cost | consideration | gain/(loss) | |||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | ||||||||
Hidili Industry International | Coal mining and manufacture and | 12,369,000 | 0.6% | 2,560 | - | 0.32% | - | - | - | |||
Development Limited | sale of clean coal | |||||||||||
China City Infrastructure | Infrastructure businesses, property investment, | 698,079,429 | 22.32% | 67,016 | - | 8.43% | - | - | - | |||
Group Limited | property development, hotel business, | |||||||||||
("China City Infrastructure") | property management and natural gas | |||||||||||
in the PRC | ||||||||||||
Sino-Ocean Group | Investment holding, property development | 500,000 | 0.01% | 775 | 187 | 0.10% | 14,229 | 6,347 | 7,882 | |||
Holding Limited | and property investment in the PRC | |||||||||||
China Communications | Infrastructure construction, infrastructure | 979,000 | 0.02% | 3,280 | - | 0.41% | 74,988 | 37,083 | 37,905 | |||
Construction Co. Ltd. | design, dredging and other businesses | |||||||||||
73,631 | 187 | |||||||||||
34 China Financial International Investments Limited
Management Discussion and Analysis (Continued)
UNLISTED INVESTMENT REVIEW
For the Period, the total loss on the Group's unlisted investment portfolio recorded as HK$22,064,000 (31 December 2019: HK$47,487,000). The loss was mainly attributable to the decrease in fair value of small loan companies and investments in fixed income financial assets. No dividend income was recorded for the six months ended 31 December 2020 and 2019, no interest income from the unlisted investments was recorded (31 December 2019: HK$18,253,000).
The fair value of the Group's unlisted investments increased by 6.89% to HK$710,092,000 (30 June 2020: HK$664,303,000).
Unlisted Equity Investments
The Company's unlisted equity investments are mainly concentrated on clean energy industry and small loan companies in the PRC.
Since 2018, the Group focusing on clean energy industry and made several investments. Bioenergy is a carbon neutral and renewable energy source that reducing greenhouse gas emissions. Biofuels such as ethanol and biodiesel, are less toxic and are biodegradable. Using biomass can help build resilience in agricultural, timber and food-processing industries. Bioenergy provides a use for their waste streams, can help them reduce their energy costs.
Meanwhile, small loan industry in the PRC is still facing worries of the decreasing interest rate of private lending and the increase of operation risks, resulting in certain small loan companies continue to generate overdue loans and incur losses. In view of the slipping performance of the small loan industry, the Company has plan to exit the investments in small loan industry.
In the foreseeable future, the Company will continuously focus its investment on the bioenergy sector and gradually exit the past investment in the small loan industry which aim to maximize value of the shareholders of the Company.
Interim Report 2020 | 35 |
Management Discussion and Analysis (Continued)
UNLISTED INVESTMENT REVIEW (Continued)
Unlisted Equity Investments (Continued)
Unlisted equity investment portfolio
Group's | % to the Group's | |||||||||
Fair value at | net assets as at | |||||||||
effective | 31 December | 31 December | ||||||||
Name of company | Notes | Location | interest | Business nature | Cost | 2020 | 2020 | |||
HK$'000 | HK$'000 | |||||||||
Micro-loan service | ||||||||||
1 | Tianjin Rongshun Microfinance Limited | Tianjin | 30% | Provision of small loan and financial | 36,606 | 1,261 | 0.16% | |||
consultation services | ||||||||||
2 | TIIC RongShun Micro-Loan Company Limited | Tianjin | 10% | Provision of small loan and financial | 12,189 | 4,165 | 0.52% | |||
consultation services | ||||||||||
3 | Harbin Zhongjinguoxin Microfinance Co., Ltd. | (1) | Harbin, Heilongjiang Province | 30% | Provision of small loan and financial | 36,693 | - | - | ||
("Harbin Zhongjinguoxin") | consultation services | |||||||||
4 | Tianjin Binlian Microfinance Limited | Tianjin | 3.3% | Provision of small loan and financial | 12,271 | 1,118 | 0.14% | |||
consultation services | ||||||||||
5 | Ziyang Yanjiang CFI GuoSen Microfinance Co., Ltd. | Ziyang, Sichuan Province | 30% | Provision of small loan and financial | 73,730 | 126 | 0.02% | |||
consultation services | ||||||||||
6 | Nanjing Jiangning MingYangRongTong | Nanjing, Jiangsu Province | 30% | Provision of small loan and financial | 36,673 | 9,251 | 1.16% | |||
Agricultural Microfinance Co., Ltd. | consultation service | |||||||||
7 | Tianjin Rongyang Micro-Loan Limited | Tianjin | 30% | Provision of small loan and financial | 36,741 | - | - | |||
consultation services | ||||||||||
Sub-total: | 244,903 | 15,921 | ||||||||
Guarantee Service | ||||||||||
8 | Jiangxi Huazhang Hanchen Guarantee Group Limited | (2) | Nanchang, Jiangxi Province | 2.98% | Provision of financing guarantees to small | 43,150 | 28,007 | 3.52% | ||
and medium enterprises | ||||||||||
Investment and management consultation service | ||||||||||
9 | Shenzhen Zhongtoujinxin Asset | Shenzhen, Guangdong | 30% | Provision of consultation services on | 18,350 | - | - | |||
Management Company Limited | Province | project investments | ||||||||
10 | Xi'an Kairong Financial Service Limited | Xi'an, Shaanxi Province | 30% | Provision of financial management | 18,724 | 5,350 | 0.67% | |||
services | ||||||||||
11 | Hubei Zhongjin Tech Financial Services Co., Ltd. | Wuhan, Hubei Province | 30% | Provision of financial management | 19,030 | 3,610 | 0.45% | |||
services | ||||||||||
Sub-total: | 56,104 | 8,960 | ||||||||
36 China Financial International Investments Limited
Management Discussion and Analysis (Continued)
UNLISTED INVESTMENT REVIEW (Continued)
Unlisted Equity Investments (Continued)
Unlisted equity investment portfolio (Continued)
Group's | % to the Group's | |||||||||
Fair value at | net assets as at | |||||||||
effective | 31 December | 31 December | ||||||||
Name of company | Notes | Location | interest | Business nature | Cost | 2020 | 2020 | |||
HK$'000 | HK$'000 | |||||||||
Clean energy | ||||||||||
12 | Henan Tianguan Energy and Biotechnology | (3) | Henan Province | 30% | Production and sales of denatured fuel | 230,763 | 122,719 | 15.43% | ||
Company Limited ("Henan Tianguan") | ethanol, sales of acetone, butanol, | |||||||||
polyols, production and sales of | ||||||||||
biodegradable plastics and biodiesel, | ||||||||||
sales of chemical products, wheat | ||||||||||
bran flour, feed sales, acetic acid and | ||||||||||
acetaldehyde production | ||||||||||
13 | Hunan South China New Energy Limited ("South China | (4) | Hunan Province | 30% | New energy technologies development, | 51,200 | 54,529 | 6.86% | ||
New Energy") | transfer and consultation, research | |||||||||
and development, manufacturing and | ||||||||||
sales of chemical products, chemical | ||||||||||
reagents and auxiliaries (excluding | ||||||||||
hazardous chemicals and precursor | ||||||||||
chemicals) | ||||||||||
14 | Mengzhou Houyuan Biotechnology Company Limited | (5) | Henan Province | 30% | Biotechnology and ethanol bio-chemical | 150,065 | 146,581 | 18.43% | ||
product development and production of | ||||||||||
ethanol chemical products | ||||||||||
15 | Henan Keyi Huirui Bioenergy Technology Company | (6) | Henan Province | 30% | Biotechnology energy technology | 117,450 | 136,113 | 17.11% | ||
Limited ("Keyi Huirui") | development, transfer and consultation, | |||||||||
research and development, | ||||||||||
manufacturing and sales of | ||||||||||
biotechnology energy and chemical | ||||||||||
equipment | ||||||||||
16 | Tianguan New Energy Limited ("Tianguan New | (7) | Guangdong Province | 5% | Ethanol products transportation, | 557 | 4,316 | 0.54% | ||
Energy") | development, trading and consultation | |||||||||
service | ||||||||||
17 | Henan Zhongxin Petrochemical Oil Sales Co., Ltd | (8) | Henan Province | 30% | Engage in petrol station operation | 52,084 | 52,084 | 6.55% | ||
("Zhongxin Petrochemical") | ||||||||||
18 | Henan Zhongxin Bioenergy Co., Ltd | (9) | Henan Province | 30% | Denatured ethanol, ethanol, acetone, | 52,084 | 53,452 | 6.72% | ||
("Zhongxin Bioenergy") | n-butanone, biogas, polyols, fully | |||||||||
degradable plastics, chemical | ||||||||||
products, gluten, feed, instrumentation, | ||||||||||
mechanical and electrical equipment, | ||||||||||
special chemical equipment, | ||||||||||
environmental protection equipment, | ||||||||||
electrical equipment, bioenergy and | ||||||||||
biochemical complete set equipment | ||||||||||
sales; technical development and | ||||||||||
consultation, import and export of | ||||||||||
goods or technologies in the field of | ||||||||||
bioenergy and biochemical science and | ||||||||||
technology | ||||||||||
654,203 | 569,794 | |||||||||
Total: | 1,322,809 | 574,778 | ||||||||
Interim Report 2020 | 37 |
Management Discussion and Analysis (Continued)
UNLISTED INVESTMENT REVIEW (Continued)
Unlisted Equity Investments (Continued)
Unlisted equity investment portfolio (Continued)
Group's | % to the Group's | |||||||||
Fair value at | net assets as at | |||||||||
effective | 31 December | 31 December | ||||||||
Name of company | Notes | Location | interest | Business nature | Cost | 2020 | 2020 | |||
HK$'000 | HK$'000 | |||||||||
Others | ||||||||||
19 | Jilin Jusheng Light Alloy Co., Ltd (formerly known as | (10) | Jilin Province | 30% | Corn distribution, grain purchase, | 65,400 | 71,259 | 8.96% | ||
Liaoyuan Hancheng Economic and Trade Co., Ltd) | storages (excluding hazardous | |||||||||
chemicals); sales of building materials, | ||||||||||
mechanical and electrical products, | ||||||||||
communication equipment, chemical | ||||||||||
products (excluding hazardous | ||||||||||
chemical), aluminum alloy strip, foil | ||||||||||
production and product processing | ||||||||||
20 | Nanyang Xinglong Real Estate Co., Ltd | (11) | Henan Province | 30% | Real Estate Development (with valid | 15,354 | 16,151 | 2.03% | ||
license); flowers, seedlings planting | ||||||||||
(excluding breeding seedlings), | ||||||||||
hardware and building materials sales | ||||||||||
80,754 | 87,410 | |||||||||
Total: | 1,079,114 | 710,092 | ||||||||
Notes:
- On 22 December 2016, the Company entered into a disposal agreement to dispose of all of its equity interest in Harbin Zhongjinguoxin to an independent third party for a cash consideration of RMB25,000,000. A deposit of HK$2,500,000 has been received which was included in receipt in advance in "other payables and accruals" as at 30 June 2020 and 2019. As at 31 December 2020, in the opinion of the Directors of the Company, the disposal transaction has yet been completed after 12 months from the date of the disposal agreement but the transaction still be considered as valid.
- On 13 April 2011, the Group acquired a 30% equity interest of Jiangxi Huazhang, a joint venture establish in the PRC. The Group's equity interest in Jiangxi Huazhang became 7.2% on 15 July 2013 and reduce to 2.98% on 19 August 2016, as Jiangxi Huazhang was enlarged by the new registered capital subscribed by its other shareholders on these dates.
- On 11 May 2018, the Company entered into the joint venture agreement with the joint venture partners in relation to the formation of the Henan Tianguan in Henan province, the PRC. Pursuant to the joint venture agreement, the Company owned 30% of the registered capital of the Henan Tianguan. On 31 July 2018, Henan Tianguan increased the registered capital from RMB300,000,000 to RMB660,000,000 hence Keyi (Shanghai) Investments Limited ("Keyi") and Joy State Holdings Limited, wholly-owned subsidiaries of the Company, further injected RMB30,000,000 and RMB78,000,000 respectively.
- In January 2019, Keyi entered into an agreement with South China New Energy to inject capital contribution of RMB45,000,000 into South China New Energy for acquiring 30% of South China New Energy's equity interest. On 23 January 2019, the legal title of 30% equity interest in South China New Energy has been successfully transferred to Keyi.
-
On 17 October 2019, the Group entered into an agreement with Hollys (China) Limited ("Hollys") to obtain repayment of outstanding principal and interests accrued of the bonds issued by Hollys in return of the 30% equity interest investment in Mengzhou Houyuan.
Mengzhou Houyuan is principally engaged in development and production of biotechnology and ethanol bio-chemical products in Henan Province, the PRC.
38 China Financial International Investments Limited
Management Discussion and Analysis (Continued)
UNLISTED INVESTMENT REVIEW (Continued)
Unlisted Equity Investments (Continued)
Unlisted equity investment portfolio (Continued)
- In August 2019, Keyi (Shanghai) entered into an agreement with three partners in relation to the formation of Keyi Huirui. The registered capital of Keyi Huirui is RMB350,000,000. Keyi (Shanghai) injected RMB105,000,000 for acquiring 30% of Keyi Huirui's equity interest. Keti Huirui is engaged in biotechnology energy technology development, transfer and consultation, research and development, manufacturing and sales of biotechnology energy and chemical equipment. On 5 September 2019, Keyi Huirui was officially set up.
- In October 2019, the Group invested in a 5% equity interest of Tianguan New Energy, a joint venture established in the PRC. Tianguan New Energy is principally engaged in ethanol products transportation, development and relevant consultation services in Huizhou, Guangdong Province, the PRC.
- On 16 March 2020, the Group invested in a 30% equity interest of Zhongxin Petrochemical Oil, a joint venture established in the PRC. Zhongxin Petrochemical Oil is principally operating refined petroleum products (such as vehicle ethanol gasoline, kerosene, diesel, natural gas) without storage facilities, selling food and chemical products, retail medicine and road cargo transport.
- On 16 March 2020, the Group invested in a 30% equity interest of Zhongxin Biotechnology, a joint venture established in the PRC. Zhongxin Biotechnology is principally enegaegd engaged in production and sales of fuel ethanol and related products, the production and supply of electricity and heat, and the research, development and technical services of fuel ethanol and denatured fuel ethanol.
- On 11 June 2020, the Group invested in a 30% equity interest of Jilin Jusheng Light Alloy Co., Ltd, which is principally engaged in food and agriculture products trading and warehouse management in Jilin Province, PRC.
-
On 2 April 2020, the Group entered into an agreement with Xing Yue Investment Limited ("Xing Yue") and the sole shareholder of Xing Yue, Ms. Dong Lili to obtain the repayment of outstanding principal and interests accrued of the bonds issued by Xing Yue in return of the 30% equity interest investment in Nanyang Xinglong.
Nanyang Xinglong is principally engaged in property development in Henan Province, PRC.
PROSPECT
The Company is expected to continue to focus on China's bioethanol sector with the aim to maximize value for the Shareholders.
In this year, the Company has continuously Invested in the bioethanol sector in mainland China. The Company executed a cooperation agreement with the People's Government of Nanyang of the PRC, Sinopec Marketing Company Limited and South South Asia Pacific Bioenergy Limited In relation to formation of two joint venture companies, Zhongxin Petrochemical Oil Sales Co., Ltd and Zhongxin Bioenergy Co., Ltd.
As the Group's business is moving forward towards its strategic goals, the Board will carefully assess and minimize potential risks and strive to generate more returns to all shareholders.
Interim Report 2020 | 39 |
Management Discussion and Analysis (Continued)
MAJOR ACQUISITIONS AND DISPOSALS
During the period ended 31 December 2020, the Group disposed a directly wholly-owned subsidiary, China Financial International Investments (Jiangxi) Limited, to independent third parties at considerations of HK$30,000,000.
LIQUIDITY, FINANCIAL RESOURCES AND GEARING
As at 31 December 2020, the Group had cash and cash equivalents of HK$7,554,000 (30 June 2020: HK$64,911,000). Majority of the cash and bank balances denominated in Hong Kong dollars, United States dollars and Renminbi are placed with banks in Hong Kong and the PRC. The current ratio (calculated as the current assets to the current liabilities) of the Group as at 31 December 2020 was approximately 1.79 times (30 June 2020: 2.64 times), gearing ratio (total liabilities to total assets) of the Group as at 31 December 2020 was approximately 6.39% (30 June 2020: 9.60%).
The Group did not have any bank borrowing as at 31 December 2020 (30 June 2019: Nil). The Group did not
have any capital commitments as at 31 December 2020 (30 June 2020: Nil).
INTERIM DIVIDEND
The Board of the Directors does not recommend any payment of interim dividend for the Period (2019: Nil).
CHARGES ON THE GROUP'S ASSETS
As at 31 December 2020, there were no charges on the Group's assets.
CONTINGENT LIABILITIES
The Group did not have any material contingent liabilities as at 31 December 2020.
CAPITAL STRUCTURE
As at 31 December 2020, the Group's shareholders' equity and total number of shares in issue for the Company stood at HK$795,401,000 (30 June 2020: HK$815,717,000) and approximately 10,971,634,030 (30 June 2020: 10,971,634,030), respectively.
EXPOSURE TO FLUCTUATIONS IN EXCHANGE RATES
Hong Kong dollars and Renminbi are the main currencies of the Group to carry out its business transactions. During the Period, transactions in Renminbi were not significant, the Board considers that the Group's exposure to fluctuation in exchange rates was insignificant.
EMPLOYEES AND REMUNERATION POLICY
As at 31 December 2020, the Group had 13 employees (including Directors). The total staff cost (including Directors' remuneration) of the Group for the Period was HK$2,791,000 (2019: HK$5,448,000). The remuneration package of the employees is determined by various factors including the employees' experience and performance, the market condition, industry practice and applicable employment law.
40 China Financial International Investments Limited
Other Information
DIRECTOR'S AND CHIEF EXECUTIVE'S INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES
As at 31 December 2020, the interests and short positions of the Directors and the chief executive of the Company and their respective associates in the ordinary shares, share options, underlying shares or debentures of the Company or its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong (the "SFO")) which (i) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); (ii) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") contained in Listing Rules, were as follows:
Long positions in ordinary shares of the Company
Number of issued ordinary shares held | ||||||
Approximate | ||||||
percentage of | ||||||
Personal | Corporate | Total | shareholding | |||
Name of director | Capacity | interests | interests | interests | in the Company | |
Du Lin Dong | Benficial owner and | 185,914,830 | 500,000,000 | 685,914,830 | 6.25% | |
interests of controlled | ||||||
corporation | ||||||
Ding Xiaobin | 1,300,000 | - | 1,300,000 | 0.01% | ||
Zeng Zianggao | 1,000,000 | - | 1,000,000 | 0.01% |
Note: Mr. Du Lin Dong is personally holding 185,914,830 ordinary shares. The 500,000,000 ordinary shares were held by Rightfirst, a company wholly owned by Mr. Du Lin Dong. Under SFO, Mr. Du Lin Dong is deemed to be interested in the ordinary shares in which Rightfirst is interested.
Save as disclosed above, as at 31 December 2020, none of the Directors nor the chief executive of the Company and their respective associates had or was deemed to have any interests and short positions in the ordinary shares, share options, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which (i) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); (ii) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) were required to be notified to the Company and the Stock Exchange pursuant to the Model Code.
Interim Report 2020 | 41 |
Other Information (Continued)
SUBSTANTIAL SHAREHOLDERS' AND OTHER PERSONS' INTERESTS IN SHARES AND UNDERLYING SHARES
The register of substantial Shareholders maintained under Section 336 of the SFO shows that as at 31 December 2020, the Company had been notified of the following substantial Shareholders' interests or short positions, being 5% or more of the Company's ordinary shares and underlying shares:
Number of issued ordinary shares held | |||||||
Approximate | |||||||
percentage of | |||||||
Name of | Personal | Corporate | Total | shareholding | |||
Shareholder | Capacity | Notes | interests | interests | interests | in the Company | |
Zhang Zuhao | Beneficial owner | 1,000,000,000 | - | 1,000,000,000 | 9.11% | ||
Jumbo View Holdings | Beneficial owner | (1) | 1,016,860,000 | - | 1,016,860,000 | 9.27% | |
Limited | |||||||
Zhang Gui | Interests of controlled | (1) | - | 1,016,860,000 | 1,016,860,000 | 9.27% | |
corporation | |||||||
Century Golden | Beneficial owner | (2) | 1,000,000,000 | - | 1,000,000,000 | 9.11% | |
Resources | |||||||
Investments Co., Ltd | |||||||
Huang Shiying | Interests of controlled | (2) | - | 1,000,000,000 | 1,000,000,000 | 9.11% | |
corporation | |||||||
Huang Tao | Interests of controlled | (2) | - | 1,000,000,000 | 1,000,000,000 | 9.11% | |
corporation | |||||||
Gen Xiaoqing | Beneficial owner | 770,110,000 | - | 770,110,000 | 7.02% |
Notes:
- 70% of the issued share capital of Jumbo View Holdings Limited is owned by Mr. Zhang Gui, and Mr. Zhang Gui is therefore deemed to be interested in the ordinary shares held by Jumbo View Holdings Limited.
- 40% and 50% of the issued share capital of Century Golden Resources Investment Co., Limited is owned by Mr. Huang Shiying and Mr. Huang Tao, respectively, and Mr. Huang Shiying and Mr. Huang Tao are therefore deemed to be interested in the ordinary shares held by Century Golden Resources Investment Co., Limited.
Save as disclosed above, as at 31 December 2020, the Company has not been notified by any other persons, not being a Director or chief executive of the Company, who has interests or short positions in the ordinary shares and underlying shares of the Company representing 5% or more of the Company's issued share capital.
42 China Financial International Investments Limited
Other Information (Continued)
SHARE OPTION SCHEME
In light of the requirements of Chapter 17 of the Listing Rules, the Company adopted a share option scheme (the "Scheme") on 15 December 2017. Under the Scheme, the Directors may grant options to those participants who, in the opinion of the Board, have contributed or may contribute to the development and growth of the Group and any entity in which the Group holds any equity interest. As at 31 December 2020, no any share options were granted, exercised, lapsed, forfeited or outstanding.
DIRECTORS' RIGHTS TO ACQUIRE SHARES OR DEBENTURES
At no time during the Period was the Company or any of its subsidiaries or fellow subsidiaries, a party to any arrangement to enable the Directors to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate
PURCHASES, REDEMPTION OR SALE OF LISTED SECURITIES OF THE COMPANY
Neither the Company, nor any of its subsidiaries purchased, redeemed or sold any of the Company's listed securities during the Period.
CORPORATE GOVERNANCE
The Board is responsible for ensuring high standards of corporate governance are maintained and for accounting to Shareholders. During the Period, the Company complied with the Corporate Governance Code (the "CG Code") as contained in Appendix 14 of the Listing Rules except for the following deviations:
- The code provision A.2.1 of the CG Code stipulates that the roles of chairman and chief executive officer should be separated and should not be performed by the same individual. The positions of both chairman and chief executive officer have been held by Mr. Du Lin Dong. Given the Group's current stage of development, the Board considers that this structure will not impair the balance of power and authority between the Board and the management of the Company. Mr. Du Lin Dong possesses the essential leadership skills to manage the Board and extensive knowledge in the business of the Group. The Board considers the present structure is more suitable for the Company because it can promote the efficient formulation and implementation of the Company's strategies.
The Board will continue to monitor and review the Company's corporate governance practices to ensure compliance with the CG Code.
MODEL CODE FOR SECURITIES TRANSACTIONS
The Company has adopted the Model Code as set out in Appendix 10 to the Listing Rules as its own code of conduct regarding directors' securities transactions. Having made specific enquiry by the Company, all Directors have confirmed that they have fully complied with the Model Code throughout the Period.
Interim Report 2020 | 43 |
Other Information (Continued)
AUDIT COMMITTEE
The Company established the audit committee (the "Audit Committee") which comprises three independent non-executive Directors namely, Mr. Zhang Jing (chairman of the audit committee), Mr. Zeng Xianggao and Mr. Wong Lok Man. The Audit Committee had reviewed with the management the accounting principles and practices adopted by the Group and discussed auditing, risk management system, internal control systems and financial reporting matters including the review of the unaudited interim consolidated financial statements for the Period before recommending them to the Board for approval. The Audit Committee is established with specific terms of references which deal clearly with the committee's authority and duties and is available on the website of the Stock Exchange and the Company.
PUBLICATION OF INTERIM RESULTS ON THE WEBSITES
The Group's interim results will be included in the Company's interim report for the Period which will be published on the website of the Stock Exchange (http://www.hkex.com.hk) as well as the website of the Company (http://www.irasia.com/listco/hk/cfii) as soon as possible.
China Financial International Investments Limited
Du Lin Dong
Chairman and Chief Executive Officer
Hong Kong, 26 February 2021
44 China Financial International Investments Limited
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China Financial International Investments Limited published this content on 30 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 March 2021 13:14:10 UTC.