Corporate Information
EXECUTIVE DIRECTORS | AUTHORISED REPRESENTATIVES |
Wong Kai Ling | Wong Kai Ling |
Yang Yi | Chiu Yuk Ching |
Meng Fanpeng | |
COMPANY SECRETARY | |
NON-EXECUTIVE DIRECTOR | Chiu Yuk Ching |
Qin Bo | |
AUDITORS | |
INDEPENDENT NON-EXECUTIVE | CCTH CPA Limited |
DIRECTORS | |
Choy So Yuk, BBS, JP | REGISTERED OFFICE |
Leung Yuen Wing | Clarendon House |
Wu Zhao | 2 Church Street |
Liu Wei | Hamilton HM 11 |
Zou Mingwu | Bermuda |
AUDIT COMMITTEE | HEAD OFFICE AND PRINCIPAL PLACE |
Leung Yuen Wing (Chairman) | OF BUSINESS IN HONG KONG |
Choy So Yuk, BBS, JP | Rooms 17-18, 36th Floor |
Wu Zhao | China Merchants Tower |
Shun Tak Centre | |
REMUNERATION COMMITTEE | 168-200 Connaught Road Central |
Choy So Yuk, BBS, JP | Hong Kong |
Leung Yuen Wing | Website: http://www.silkroadlogistics.com.hk |
Wu Zhao | E-mail: enquiry@srlhl.com |
NOMINATION COMMITTEE | BRANCH SHARE REGISTRAR AND |
Liu Wei (Chairman) | TRANSFER OFFICE |
Wong Kai Ling | Tricor Tengis Limited |
Choy So Yuk, BBS, JP | Level 54, Hopewell Centre |
Leung Yuen Wing | 183 Queen's Road East |
Wu Zhao | Wanchai |
Hong Kong | |
EXECUTIVE COMMITTEE | |
Wong Kai Ling | PRINCIPAL BANKERS |
Yang Yi | Citic Bank International Limited |
Meng Fanpeng | DBS Bank (Hong Kong) Limited |
The Bank of East Asia, Limited | |
Bank of Communications Co., Ltd. |
Interim Report 2020 | 1 |
Condensed Consolidated Statement of
Profit or Loss and Other Comprehensive Income
For the six months ended 30 June 2020
Six months ended 30 June | |||
2020 | 2019 | ||
Notes | HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | ||
REVENUE | 5 | 2,957 | 4,735,794 |
Cost of sales and services | 7 | (3,248) | (4,686,236) |
Gross (loss) profit | (291) | 49,558 | |
Other income and gains | 5 | 954 | 20,255 |
Selling and distribution expenses | - | (99) | |
Administrative expenses | (19,308) | (35,000) | |
Share of (loss) profit of associates | (4,536) | 1,604 | |
Finance costs | 6 | (23,051) | (15,334) |
(LOSS) PROFIT BEFORE TAX | 7 | (46,232) | 20,984 |
Income tax credit (expense) | 8 | 6,583 | (7,673) |
(LOSS) PROFIT FOR THE PERIOD | (39,649) | 13,311 | |
OTHER COMPREHENSIVE INCOME | |||
Items that may be reclassified subsequently | |||
to profit or loss: | |||
Exchange differences on translation | |||
of foreign operations | (10,652) | 3,711 | |
TOTAL COMPREHENSIVE INCOME FOR | |||
THE PERIOD | (50,301) | 17,022 | |
2 Silk Road Logistics Holdings Limited
Condensed Consolidated Statement of
Profit or Loss and Other Comprehensive Income
For the six months ended 30 June 2020
Six months ended 30 June | |||
2020 | 2019 | ||
Note | HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | ||
(Loss) profit for the period attributable to: | |||
Owners of the Company | (38,964) | 5,640 | |
Non-controlling interests | (685) | 7,671 | |
(39,649) | 13,311 | ||
Total comprehensive income for the period | |||
attributable to: | |||
Owners of the Company | (46,020) | 9,518 | |
Non-controlling interests | (4,281) | 7,504 | |
(50,301) | 17,022 | ||
(LOSS) EARNINGS PER SHARE | 10 | ||
- Basic | (0.68) cents | 0.10 cents | |
- Diluted | N/A | N/A | |
Interim Report 2020 | 3 |
Condensed Consolidated Statement of Financial Position
At 30 June 2020
30 June | 31 December | ||
2020 | 2019 | ||
Notes | HK$'000 | HK$'000 | |
(unaudited) | (audited) | ||
NON-CURRENT ASSETS | |||
Property, plant and equipment | 11 | 169,804 | 178,618 |
Right-of-use assets | 70,682 | 74,368 | |
Interests in associates | 487,542 | 492,055 | |
Goodwill | 88,738 | 88,738 | |
Oil properties | 67,171 | 67,017 | |
Total non-current assets | 883,937 | 900,796 | |
CURRENT ASSETS | |||
Inventories | 426 | 577 | |
Trade receivables | 12 | - | 574 |
Prepayments, deposits and other receivables | 219,252 | 230,211 | |
Income tax recoverable | 10,058 | 10,149 | |
Cash and cash equivalents | 1,581 | 4,369 | |
Total current assets | 231,317 | 245,880 | |
CURRENT LIABILITIES | |||
Trade payables | 13 | 78,356 | 80,281 |
Other payables and accruals | 168,949 | 150,196 | |
Bank and other borrowings | 450,742 | 394,379 | |
Promissory notes payable | 54,133 | 54,133 | |
Obligations under finance lease | 44 | 86 | |
Total current liabilities | 752,224 | 679,075 | |
NET CURRENT LIABILITIES | (520,907) | (433,195) | |
TOTAL ASSETS LESS CURRENT LIABILITIES | 363,030 | 467,601 | |
4 Silk Road Logistics Holdings Limited
Condensed Consolidated Statement of Financial Position
At 30 June 2020
30 June | 31 December | ||
2020 | 2019 | ||
Notes | HK$'000 | HK$'000 | |
(unaudited) | (audited) | ||
NON-CURRENT LIABILITIES | |||
Other payables and accruals | - | 18,778 | |
Bank and other borrowings | 295 | 35,230 | |
Obligations under finance leases | 33 | 110 | |
Lease liabilities | 12,796 | 13,083 | |
Assets retirement obligations | 5,755 | 5,651 | |
Deferred tax liabilities | 31,633 | 31,930 | |
Total non-current liabilities | 50,512 | 104,782 | |
Net assets | 312,518 | 362,819 | |
EQUITY | |||
Share capital | 14 | 57,036 | 57,036 |
Reserves | 175,272 | 221,292 | |
Equity attributable to owners of the Company | 232,308 | 278,328 | |
Non-controlling interests | 80,210 | 84,491 | |
Total equity | 312,518 | 362,819 | |
Interim Report 2020 | 5 |
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2020
Attributable to owners of the Company | ||||||||||
Share | Share | Exchange | Non- | |||||||
Share | premium | option | fluctuation | Capital | Contribution | Accumulated | controlling | |||
capital | account | reserve | reserve | reserve | surplus | losses | Total | interests | Total | |
HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | |
Balance at 31 December | ||||||||||
2019 (audited) | 57,036 | 1,492,097 | 3,632 | (20,664) | 178,368 | 773,090 | (2,205,231) | 278,328 | 84,491 | 362,819 |
Loss for the period | - | - | - | - | - | - | (38,964) | (38,964) | (685) | (39,649) |
Other comprehensive | ||||||||||
income for the period: | ||||||||||
Exchange differences on | ||||||||||
transaction of foreign | ||||||||||
operations | - | - | - | (7,056) | - | - | - | (7,056) | (3,596) | (10,652) |
Total comprehensive | ||||||||||
income for the period | - | - | - | (7,056) | - | - | (38,964) | (46,020) | (4,281) | (50,301) |
Balance at 30 June | ||||||||||
2020 (unaudited) | 57,036 | 1,492,097 | 3,632 | (27,720) | 178,368 | 773,090 | (2,244,195) | 232,308 | 80,210 | 312,518 |
Balance at 31 December | ||||||||||
2018 (audited) | 57,036 | 1,492,097 | 3,672 | (24,678) | 178,168 | 773,090 | (1,822,043) | 657,342 | 81,797 | 739,139 |
Loss for the period | - | - | - | - | - | - | 5,640 | 5,640 | 7,671 | 13,311 |
Other comprehensive | ||||||||||
income for the period: | ||||||||||
Exchange differences on | ||||||||||
transaction of foreign | ||||||||||
operations | - | - | - | 3,878 | - | - | - | 3,878 | (167) | 3,711 |
Total comprehensive | ||||||||||
income for the period | - | - | - | 3,878 | - | - | 5,640 | 9,518 | 7,504 | 17,022 |
Balance at 30 June | ||||||||||
2019 (unaudited) | 57,036 | 1,492,097 | 3,672 | (20,800) | 178,168 | 773,090 | (1,816,403) | 666,860 | 89,301 | 756,161 |
6 Silk Road Logistics Holdings Limited
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2020
Six months ended 30 June | ||
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Cash from operations | (1,824) | 290,075 |
Income tax paid | - | (3,469) |
Net cash (used in)/generated by | ||
operating activities | (1,824) | 286,606 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Interest received | 1 | 1 |
Additions to property, plant and equipment, | ||
and oil property | (689) | - |
Net proceeds received from disposal of assets | ||
classified as held for sale | - | 30,737 |
Other investing activities | - | (724) |
Net cash (used in)/generated by | ||
investing activities | (688) | 30,014 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
New loans raised | 328 | - |
Repayments of bank loans | - | (14,743) |
Repayment of finance leases | (110) | (44) |
Repayment of lease liabilities | (1,556) | - |
Other financing activities | (670) | (14,014) |
Net cash used in financing activities | (2,008) | (28,801) |
Net (decrease)/increase in cash and | ||
cash equivalents | (4,520) | 287,819 |
Cash and cash equivalents at | ||
beginning of the period | 4,369 | 43,579 |
Effect of foreign exchange rate changes | 1,732 | (5,062) |
Cash and cash equivalents at | ||
end of the period | 1,581 | 326,336 |
Analysis of cash and cash equivalents | ||
Cash and bank balances included in cash and | ||
cash equivalents as stated in the condensed | ||
consolidated statement of financial position | 1,581 | 326,336 |
Interim Report 2020 | 7 |
Notes to Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
-
BASIS OF PREPARATION
The condensed consolidated financial statements have been prepared in accordance with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and with Hong Kong Accounting Standard ("HKAS") 34, "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA").
Notwithstanding that the current liabilities of the Group at 30 June 2020 exceed the Group's current assets at that date by HK$520,907,000, which includes the bank and other borrowings and the promissory notes payable amounted to HK$450,742,000 and HK$54,133,000 respectively, and the Group incurred net loss of approximately HK$39,649,000 for the six months ended 30 June 2020, the directors considered it appropriate for the preparation of the condensed consolidated financial statements on a going concern basis after taking into account of the following circumstances and measures which are in place or to be implemented:
Management of the Group will closely monitor the financial position of the Group and the directors of the Company will make every effort (a) to secure funds as necessary to finance the business operations of the Group for the foreseeable future; and (b) to negotiate with the lender of the bank and other borrowings and the holder of the promissory note payable for the extension of repayments of the borrowings and the promissory note to a date when the Group has adequate working capital to serve the repayments.
Should the Group be unable to continue to operate as a going concern, adjustments would have to be made to restate the values of assets to their estimated recoverable amounts, to provide further liabilities that might arise and to reclassify non-current assets and non- current liabilities as current assets and current liabilities respectively. The effects of these potential adjustments have not been reflected in the condensed consolidated financial statements. - SIGNIFICANT ACCOUNTING POLICIES
The condensed consolidated financial statements have been prepared on the historical cost basis.
Except as described below, the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 30 June 2020 are the same as those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2019.
8 Silk Road Logistics Holdings Limited
Notes to Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
2. SIGNIFICANT ACCOUNTING POLICIES (continued) Changes in accounting policies and disclosures
The Group has adopted the following new and revised amendments to the Hong Kong Financial Reporting Standards ("HKFRSs") issued by the HKICPA for the first time for the current period's financial information.
Amendments to HKFRS 3 | Definition of Business |
Amendments to HKFRS 9, | Interest Rate Benchmark Reform |
HKAS 39 and HKFRS 7 | |
Amendments to HKAS 1 and HKAS 8 | Definition of Material |
The adoption of the above amended standards effective in respect of the current period had not resulted in significant impact on the Group's condensed consolidated interim financial information. The Group has also not applied any new or amended standards that are not yet effective in respect of the current period.
-
ESTIMATES
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31st December 2019. - OPERATING SEGMENT INFORMATION
The Directors determine its operating segments based on the regular internal financial information reported to the Group's executive directors for their decisions about resources allocation to the Group's business components and review of these components' performance.
The Group is organised into business units based on their products and services and has four reportable operating segments as follows: - The commodities trading segment is engaged in the trading of commodities purchased from external parties;
- The oil segment is engaged in exploration and production of oil as well as the provision of well drilling services; and
- The logistics segment is engaged in the provision of transportation and warehousing services.
Interim Report 2020 | 9 |
Notes to Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
4. OPERATING SEGMENT INFORMATION (continued) Six months ended 30 June 2020
Commodities | |||||
trading | Oil | Logistics | |||
segment | segment | segment | Total | ||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | ||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||
Segment revenue | |||||
Sales to external customers | - | 970 | 1,987 | 2,957 | |
Segment loss | - | (5,955) | (9,559) | (15,514) | |
Reconciliation: | |||||
Unallocated income and | |||||
expense, net | (30,718) | ||||
Loss before tax | |||||
(46,232) | |||||
Other segment | |||||
information | |||||
Capital expenditure | - | 687 | - | 687 | |
Depreciation and | |||||
amortisation | - | 796 | 6,339 | 7,135 | |
Unallocated depreciation | |||||
and amortisation | 1,333 | ||||
Six months ended 30 June 2019 | |||||
Commodities | |||||
trading | Oil | Logistics | |||
segment | segment | segment | Total | ||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | ||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||
Segment revenue | |||||
Sales to external customers | 4,731,506 | 476 | 3,812 | 4,735,794 | |
Segment profit/(loss) | 34,091 | (3,158) | 1,627 | 32,560 | |
Reconciliation: | |||||
Unallocated income and | |||||
expense, net | (11,576) | ||||
Profit before tax | 20,984 | ||||
Other segment | |||||
information | |||||
Capital expenditure | - | - | - | - | |
Depreciation and | |||||
amortisation | - | 1,686 | 5,927 | 7,613 | |
Unallocated depreciation | |||||
and amortisation | 1,333 | ||||
10 Silk Road Logistics Holdings Limited
Notes to Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
4. OPERATING SEGMENT INFORMATION (continued) At 30 June 2020
Commodities | |||||
trading | Oil | Logistics | |||
segment | segment | segment | Total | ||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | ||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||
Segment assets | 207,042 | 162,001 | 687,244 | 1,056,287 | |
Reconciliation: | |||||
Unallocated assets | 58,967 | ||||
Total assets | |||||
1,115,254 | |||||
Segment liabilities | 101,169 | 9,519 | 45,654 | 156,342 | |
Reconciliation: | |||||
Unallocated liabilities | 646,394 | ||||
Total liabilities | |||||
802,736 | |||||
At 31 December 2019 | |||||
Commodities | |||||
trading | Oil | Logistics | |||
segment | segment | segment | Total | ||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | ||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||
Segment assets | 307,638 | 187,699 | 622,253 | 1,117,590 | |
Reconciliation: | |||||
Unallocated assets | 29,086 | ||||
Total assets | 1,146,676 | ||||
Segment liabilities | 171,725 | 48,260 | 48,200 | 268,185 | |
Reconciliation: | |||||
Unallocated liabilities | 515,672 | ||||
Total liabilities | 783,857 | ||||
Interim Report 2020 | 11 |
Notes to Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
4. OPERATING SEGMENT INFORMATION (continued) Geographical information
- Revenue from external customers
Six months ended | ||
30 June | 30 June | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
PRC | 1,987 | 4,735,318 |
Other countries | 970 | 476 |
2,957 | 4,735,794 | |
The revenue information above is based on the location of the customers.
- Non-currentassets
Six months | Year | |
ended | ended | |
30 June | 31 December | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (audited) | |
PRC | 505,672 | 520,195 |
USA | 77,037 | 75,987 |
Other countries | 212,490 | 215,876 |
795,199 | 812,058 | |
The above non-current asset information above is based on the location of the assets and exclude goodwill of approximately HK$88,738,000 (31 December 2019: HK$88,738,000).
12 Silk Road Logistics Holdings Limited
Notes to Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
5. REVENUE, OTHER INCOME AND GAINS
Revenue represents the aggregate of net invoiced value of goods sold, after allowances for returns and trade discounts, and sales of oil, net of royalties, obligations to governments and other mineral interest owners, and income from logistic services rendered, analysed as follows:
Six months ended 30 June | ||
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
Revenue from: | ||
Sales of goods | 970 | 4,731,982 |
Rendering of services | 1,987 | 3,812 |
2,957 | 4,735,794 | |
Revenue recognised | ||
- point in time | 970 | 4,731,982 |
- over time | 1,987 | 3,812 |
2,957 | 4,735,794 | |
An analysis of other income and gains is as follows: | ||
Six months ended 30 June | ||
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
Other income and gains | ||
Bank interest income | 1 | 1 |
Gain on disposal of asset held for sale | - | 18,049 |
Government grants | 704 | 1,373 |
Sundry income | 249 | 832 |
954 | 20,255 | |
Interim Report 2020 | 13 |
Notes to Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
6. | FINANCE COSTS | |||
Six months ended 30 June | ||||
2020 | 2019 | |||
HK$'000 | HK$'000 | |||
(unaudited) | (unaudited) | |||
Interest expenses, net of reimbursement on | ||||
borrowings: | ||||
Bank loans, overdrafts and other loans | 877 | 3,428 | ||
Finance lease | - | 1 | ||
Lease liabilities | 501 | 595 | ||
Other borrowings | 21,673 | 11,310 | ||
23,051 | 15,334 | |||
7. (LOSS) PROFIT BEFORE TAX
The Group's (loss) profit before tax is arrived at after charging the following:
Six months ended 30 June | ||
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
Cost of inventories sold | 1,698 | 4,683,757 |
Cost of services | 1,550 | 2,479 |
Staff costs (including directors' remuneration) | 5,217 | 8,772 |
Depreciation of property, plant and equipment | 5,718 | 5,153 |
Depreciation of right-of-use assets | 2,547 | 2,414 |
Amortisation of oil properties | 203 | 1,379 |
Lease payments under short term leases | 69 | 181 |
14 Silk Road Logistics Holdings Limited
Notes to Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
8. | INCOME TAX CREDIT (EXPENSE) | |||
Six months ended 30 June | ||||
2020 | 2019 | |||
HK$'000 | HK$'000 | |||
(unaudited) | (unaudited) | |||
Provision for the period | ||||
Hong Kong profits tax | - | - | ||
PRC corporate income tax | (6) | (8,522) | ||
USA income tax | - | - | ||
(6) | (8,522) | |||
Over provision in prior periods | 6,589 | 849 | ||
Current tax | 6,583 | (7,673) | ||
Deferred tax | - | - | ||
Total tax credit (expense) for the period | 6,583 | (7,673) | ||
No provision for Hong Kong profits tax has been made as the entities in the Group have no assessable profits arising in Hong Kong for both of the periods presented. Under the Corporate Income Tax Law of the People's Republic of China (the "PRC"), the PRC corporate income tax is calculated at the rate of 25% (six months ended 30 June 2019: 25%) on the Group's estimated assessable profits arising in the PRC for the six months ended 30 June 2020. Tax on the assessable profits arising in the United States of America ("USA") is calculated at the rate of 21% (six months ended 30 June 2019: 21%), however, no such income tax has been provided for the current period as the Group did not generate any assessable profits arising in the USA.
Interim Report 2020 | 15 |
Notes to Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
-
DIVIDENDS
No dividends have been paid or declared by the Company during the six months ended 30 June 2020 (six months ended 30 June 2019: Nil). - (LOSS) EARNINGS PER SHARE Basic (loss) earnings per share
The calculation of basic (loss) earnings per share is based on the loss for the period attributable to owners of the Company of approximately HK$38,964,000 (six months ended 30 June 2019: profit attributable to owners of the Company of approximately HK$5,640,000) and approximately 5,703,616,000 (six months ended 30 June 2019: 5,703,616,000) ordinary shares in issue for the period.
Diluted (loss) earnings per share
No diluted (loss) earnings per share is presented for the six months ended 30 June 2020 and 30 June 2019, as there were no potential ordinary shares in issue during those periods. - PROPERTY, PLANT AND EQUIPMENT
During the period, the Group had not acquired or disposed of any significant items of property, plant and equipment (six months ended 30 June 2019: Nil). Depreciation for items of property, plant and equipment for the period amounted approximately HK$5,718,000 (six months ended 30 June 2019: approximately HK$5,153,000).
16 Silk Road Logistics Holdings Limited
Notes to Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
12. TRADE RECEIVABLES
30 June | 31 December | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (audited) | |
Trade receivables | 98,998 | 101,051 |
Less : Impairment of trade receivables | (98,998) | (100,477) |
- | 574 | |
The Group's trading terms with its customers are mainly on credit, except for new customers, where payment in advance is normally required. The credit period granted by the Group to its customers generally ranged from one to three months. Overdue balances are reviewed regularly by senior management.
An aged analysis of the trade receivables as at the end of the reporting period, based on the date of invoice, is as follows:
30 June | 31 December | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (audited) | |
Not more than 30 days | - | 574 |
31-60 days | - | 13 |
61-90 days | - | 40 |
91-365 days | 53 | 59 |
Over one year | 98,945 | 100,365 |
98,998 | 101,051 | |
Interim Report 2020 | 17 |
Notes to Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
12. TRADE RECEIVABLES (continued)
The movements in the provision for impairment of trade receivables are as follows:
Six months | Year | |
ended | ended | |
30 June | 31 December | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (audited) | |
At beginning of the period/year | 100,477 | 101,590 |
Impairment losses recognised | - | - |
Write off during the period/year | - | - |
Exchange realignment | (1,479) | (1,113) |
At end of the period/year | 98,998 | 100,477 |
The Group seeks to maintain strict control over its outstanding receivables to minimize credit risk. Overdue balances are reviewed regularly by senior management. In view of the management, impairment loss on trade receivables that have been past due has been adequately made in the consolidated financial statements.
The Group does not hold any collateral or other credit enhancements over these balances.
13. TRADE PAYABLES
An aged analysis of the trade payables as at the end of the reporting period, based on the date of invoice, is as follows:
30 June | 31 December | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (audited) | |
Not more than 30 days | - | 79,767 |
31-60 days | - | 61 |
61-90 days | - | 1 |
91-365 days | 78,235 | 340 |
Over one year | 121 | 112 |
78,356 | 80,281 | |
The trade payables are non-interest-bearing and are normally settled on 90-day terms.
18 Silk Road Logistics Holdings Limited
Notes to Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
14. SHARE CAPITAL
Number of | ||
ordinary shares | ||
of HK$0.01 each | HK$'000 | |
Authorised | ||
At 31 December 2019 and 30 June 2020 | 200,000,000,000 | 2,000,000 |
Issued and fully paid | ||
At 31 December 2019 and 30 June 2020 | 5,703,615,592 | 57,036 |
15. RELATED PARTY TRANSACTIONS
Compensation of key management personnel of the Group
The remuneration of directors and other members of key management for the period was as follows:
Six months ended 30 June | ||
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
Short term employee benefits | 4,063 | 2,735 |
Post-employment benefits | 70 | 20 |
Total compensation paid to key management | ||
personnel | 4,133 | 2,755 |
The remuneration of directors and key executives is recommended by the remuneration committee of the Company and determined by the Board having regard to the performance of individuals and market trends.
Interim Report 2020 | 19 |
Notes to Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
-
FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table illustrates the fair value measurement hierarchy of the Group's financial instruments: - Fair value of financial assets and financial liabilities that are not measured at fair value
The directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the condensed consolidated financial statements approximate their fair values. The fair values are determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant input being the discount rate that reflects the credit risk of counterparties. - Reconciliation of Level 3 fair value measurement
Reconciliation of Level 3 fair value measurement is not presented as the Group had no financial assets or financial liabilities that are measured at fair value at end of the reporting period.
- Fair value of financial assets and financial liabilities that are not measured at fair value
- LITIGATION
First Civil Complaint
Pursuant to the civil complaint dated 22 November 2019 (the "First Civil Complaint"), filed by 天津浩泰恒遠國際貿易有限公司 (transliterated in English as Tianjin Haotai Hengyuan International Trading Company Limited) (the "First Plaintiff") as plaintiff with Tianjin No. 1 Intermediate People's Court, the First Plaintiff claimed against Qian'an Logistics for (i) repaying the aggregate amount of RMB68,370,454.42, being the purchase price for goods supplied by the First Plaintiff to Qian'an Logistics; and (ii) all the costs in relation to the First Civil Complaint. The amount of RMB68,370,454.42 claimed by the First Plaintiff is included in accounts payables and other payables as at 30 June 2020.
The Directors were informed that Qian'an Logistics has filed an application with the Tianjin No. 1 Intermediate People's Court and an appeal with the Tianjin High People's Court to object the Tianjin No. 1 Intermediate People's Court's jurisdiction over the First Civil Compliant, the application was dismissed by the Tianjin No. 1 Intermediate People's Court and the appeal was dismissed by the Tianjin High People's Court respectively.
The court hearing in respect of the First Civil Complaint has been re-scheduled to 15 October 2020. Qian'an Logistics intends to negotiate with the First Plaintiff for the settlement of the claim and withdrawal of the First Civil Complaint.
20 Silk Road Logistics Holdings Limited
Notes to Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
-
LITIGATION (continued) Second Civil Complaint
Pursuant to the civil complaint dated 29 November 2019 (the "Second Civil Complaint") filed by Haitong UniTrust International Leasing Co., Ltd. ( 海通恒信國際租賃股份有限 公司) (the "Second Plaintiff") as plaintiff with the Shanghai Financial Court, the Second Plaintiff claimed against Qian'an Logistics for (i) repayment of an aggre gate amount of RMB197,754,190.70; and (ii) all the costs in relation to the Second Civil Complaint. The Second Civil Complaint had been accepted by the Shanghai Financial Court.
The Second Civil Complaint was arisen from the dispute under a domestic factoring agreement dated 26 September 2018 (the "Factoring Agreement") entered into among the Second Plaintiff, 天津物產進出口貿易有限公司 (transliterated in English as Tewoo Import and Export Trade Company Limited) ("Tewoo") and Qian'an Logistics. Pursuant to the Factoring Agreement, the Second Plaintiff agreed to provide financing to Tewoo which, in return, agreed to assign all its rights under the account receivables in the aggregate amount of RMB223,463,688.00 (the "Account Receivables") payable by Qian'an Logistics to the Second Plaintiff in connection with five copper cathode contracts supplied by Tewoo to Qian'an. According to the Factoring Agreement, the Second Plaintiff appointed Tewoo to be its collection and receiving agent for the receipt of the Account Receivables payable by Qian'an Logistics.
The Directors were informed that Qian'an Logistics has filed an application with the Shanghai Financial Court and an appeal with the Shanghai High People's Court in relation to, among others, objection of Shanghai Financial Court's jurisdiction over the Second Civil Compliant, the application was dismissed by the Shanghai Financial Court and the appeal was dismissed by the Shanghai High People's Court respectively.
The management of Qian'an Logistics represented that Qian'an Logistics has fully settled the Account Receivables with Tewoo in connection with the five copper cathode contracts. In the premises, Qian'an Logistics has instructed its PRC legal adviser to contest the claim and to handle all other legal issues in connection with the Second Civil Complaint. As the trial has not yet commenced, the effects of the Second Civil Complaint on the Company cannot be assessed at this moment. - COMPARATIVE FIGURES
Certain comparative figures have been restated to conform with current period's presentation.
Interim Report 2020 | 21 |
General Information
MANAGEMENT DISCUSSION AND ANALYSIS
For the six months ended 30 June 2020, the Group recorded revenue of approximately HK$2,957,000, compared with that of HK$4,735,794,000 for the corresponding period in 2019, while the loss attributable to the owners of the Company is approximately HK$38,964,000 for the period, compared with the profit attributable to the owners of the Company of approximately HK$5,640,000 for the corresponding period in 2019. The substantial decrease in turnover and resulted in loss was due to the Group having nil commodities trading business in this period.
BUSINESS REVIEW
The first half year of 2020 was the most challenging period for the Group in recent times, as the COVID-19 pandemic wrought havoc across the globe with enormous human and economic costs. Without exception, major economies fell into economic contraction in the first quarter of the year. China suffered the deepest GDP decline of 6.8% y-o-y given its decisive public health actions which included a full-blown lockdown on Hubei province for two months. After the spread of the virus was contained effectively within the country, the Chinese economy achieved a V-shaped rebound with a 3.2% growth in the second quarter, thanks to both significant fiscal stimulus and monetary easing. On the contrary, the impact of COVID-19 was still unfolding in other major economies, leaving their GDP growth in the negative territory in the second quarter.
Against this background, all the business segments of the Group were severely affected in the first half of 2020. During this period, our trading segment recorded close to nil activities. This is because, although the second quarter saw a gradual resumption of factory production in the wider economy, the demand of raw material only started to recover toward the end of the second quarter. Revenue from trading segment was nil for the six months ended 30 June 2020, compared with HK$4,731,982,000 for the six months ended 30 June 2019.
Our management team has worked endlessly with our customers and business partners to hasten the resumption of our trading activities. Our core subsidiary Silk Road Logistics (Qian'an) Company Limited ("Qian'an Logistics"), which has been the primary source of revenue of the Group's operation in recent years, is expected to have gradual improvement in its trading volume over the course of the second half of the year.
Chaos struck the oil market when the pandemic crippled oil demand amid an ongoing price war between OPEC and Russia. The oil price dipped to historically low levels with near-term oil contracts turning negative in April, before it stabilized to a level around US$40. As a result, the oil segment of the Group decided to suspend oil production between April and May to avoid financial losses. RockEast Energy Corporation ("RockEast") of which the Group owns about 28.19% equity interest recorded a loss of approximately HK$3,386,000. However, due to the relatively higher operational cost, the Group's US oil operation reported a loss of HK$2,570,000 in the first half of 2020. The Group will keep closely monitoring the profitability of these oil assets and manage the production scale accordingly.
The debtor's turnover day of the Group for the six months ended 30 June 2020 was nil, as all debtors were settled before period ended, compared with 25 days for the six months ended 30 June 2018. It is in line with the credit period of the Group assign to the customers. In future, the Group will maintain its strict credit policy to customers with more emphasis on repayment quality. If there are any irregularities in repayment, credit terms granted to debtors will be adjusted accordingly. For the adoption of new HKFRS 9, the Group has measured the expected credit losses, receivables relating to customers with known financial difficulties or significant doubt on collection of receivables are assessed individually for provision for impairment allowance. The management will continue to closely monitor the credit qualities and the collectability of the trade receivables.
22 Silk Road Logistics Holdings Limited
General Information
OUTLOOK
The COVID-19 pandemic has had a more negative impact on the world economy in the first half of 2020 than anticipated. Therefore, global recovery is expected to be gradual because of persistent social distancing and workplace hygiene practices into the second half of this year. The recent IMF forecast predicted recession for most countries in 2020, with the weakness of advanced economies spilling over to the outlook for emerging markets. In contrast, the situation is more optimistic for China after its successful containment of COVID-19. China has become one of the first countries to restart economic activity with stimulative measures, which have paved the path for a balanced economic recovery with improvement in industrial output, investment and retail sales.
In the coming months, the Group will concentrate our efforts on business resumption and growth in our existing business segments. We will also upgrade our preparedness of our business for the scenario of intermittent hindrance caused by COVID-19 and its prevention measures for a prolonged period. More importantly, our business units will take this opportunity to forge stronger connection and cooperation with our customers and business partners for mutual benefits in the volatile business environment.
Aside from causing disruptions, the pandemic has deepened two crucial trends in the economic landscape - more digital and less global. "More digital" covers all areas ranging from government and corporate expenditure to individual consumption. The economy has become further digitalised with flourishing new business models such as working from home, online education and intelligent construction. "Less global" means the move towards deglobalization in the post- pandemic world, in which countries loosen their ties with trading partners and become more self-reliant. In particular, China has promoted the concept of "internal circulation" to highlight the importance of domestic consumption and domestic supply chains in economic development. This is in part a response to the shifts in the global supply networks and a possible escalation of Sino-US trade and geopolitical tensions.
In light of the above trends, the Group will continue our quest of operational excellence with technology adoption. We aim to provide our clients a higher visibility of their supply chains for forecasting, planning, manufacturing and distribution operations. The Group will take advantage of the many innovations being pioneered in China in the areas of Internet of Things (IoT) and big data, which allow the logistics industry to improve efficiency and costs in a significant way.
For business development, the Group will utilize the strength of our logistics network covering Hebei and Inner Mongolia as well as our expertise in commodity trading. A more domestically focused Chinese economy will present new opportunities in raw material trade for the Group to diversify our revenue stream and business portfolio. As always, the Group will act in the best interests of the shareholders by exercising diligence in project appraisal for potential investments.
Interim Report 2020 | 23 |
General Information
CAPITAL STRUCTURE, LIQUIDITY, FINANCIAL RESOURCES AND DEBT MATURITY PROFILE
As at 30 June 2020, the Group had total interest bearing bank and other borrowings and promissory notes payable in the amount of approximately HK$450,742,000 and HK$54,133,000 (31 December 2019: HK$429,609,000 and HK$54,133,000 respectively), representing an increase of HK$21,133,000 and HK$nil respectively. Both are repayable within one year.
The Group's total interest bearing bank and other borrowings of approximately HK$27,425,000 are denominated in Renminbi ("RMB") is charged at floating interest rates, and HK$423,317,000 denominated in HK$ is charge at fixed rate. The Group's cash and bank balances of approximately HK$1,581,000 were 70% denominated in RMB, 19% in USD and 11% in HK$. The promissory notes payable is denominated in HK$.
As at 30 June 2020 and 31 December 2019, the convertible bonds with the aggregate principal amount of HK$300,000,000 was matured and become an other borrowing as it is not redeemed at maturity date. Combining the unsettled interests, the total amount of other borrowings was HK$388,086,000 (31 December 2019: HK$366,413,000). It is denominated in HK$ and bear interest at fixed interest rate of 6% per annum, with an overdue penalty rate of 5% per annum.
TREASURY POLICY
The Group adopts a conservative approach towards its treasury policy. The Group strives to reduce exposure to credit risk by performing ongoing credit evaluation of the financial condition of its customers. To manage liquidity risk, the Board closely monitors the Group's liquidity position to ensure that the liquidity structure of the Group's assets, liabilities and commitments can meet its funding requirements.
MATERIAL ACQUISITION OR DISPOSAL OF SUBSIDIARIES AND AFFILIATED COMPANIES
During the period under review, there was no material acquisition or disposal of subsidiaries and affiliated companies.
EMPLOYEES
As at 30 June 2020, the total number of employees of the Group was approximately 35 (31 December 2019: 40). Apart from the basic remuneration, discretionary bonus may be granted to eligible employees by reference to the Group's performance as well as the individual's performance. For the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group's operation, the Group adopted the existing share option scheme in June 2017 (the "Share Option Scheme"). As at 30 June 2020 and 31 December 2019, there were no outstanding share options granted under the Share Option Scheme.
24 Silk Road Logistics Holdings Limited
General Information
CHARGE OF GROUP ASSETS
As at 30 June 2020 and 31 December 2019, there were no charge of assets for the Group.
GEARING RATIO
As at 30 June 2020, the gearing ratio of the Group (being the ratio of net debt divided by total capital plus net debt) was approximately 68.6% (31 December 2019: approximately 63.3%). Net debt represents the aggregate amount of the Group's interest-bearing bank and other borrowings, the liability component of convertible bonds, the non-current portion of the amount loans due to related parties and promissory note less cash and cash equivalents of the Group. Total capital represents total equity attributable to the owners of the Company.
EXPOSURE TO FLUCTUATIONS IN EXCHANGE RATES AND ANY RELATED HEDGES
The Group's reporting currency is denominated in HK$. The Group's monetary assets, loans and transactions were principally denominated in RMB, USD and HK$. The Group had a net exchange exposure to RMB as the Group's assets were principally located in the PRC and the revenues were in RMB. The Group does not have any derivative financial instruments or hedging instruments. The Group will constantly review the economic situation and its foreign currency risk profile, and will consider appropriate hedging measures in future as may be necessary.
CONTINGENT LIABILITIES
The Group had no material contingent liabilities as at 30 June 2020 (2019: Nil).
LITIGATION
The board (the "Board") of directors (the "Directors") of the Company has recently been aware that two civil complaints (collectively, the "Civil Complaints") had been filed in the courts in the People's Republic of China against 絲路物流(遷安)有限公司 (transliterated in English as Silk Road Logistics (Qian'an) Company Limited, "Qian'an Logistics"), an indirect non wholly-owned subsidiary of the Company, as defendant.
First Civil Complaint
Pursuant to the civil complaint dated 22 November 2019 (the "First Civil Complaint"), filed by 天 津浩泰恒遠國際貿易有限公司 (transliterated in English as Tianjin Haotai Hengyuan International Trading Company Limited) (the "First Plaintiff") as plaintiff with Tianjin No. 1 Intermediate People's Court, the First Plaintiff claimed against Qian'an Logistics for (i) repaying the aggregate amount of RMB68,370,454.42, being the purchase price for goods supplied by the First Plaintiff to Qian'an Logistics; and (ii) all the costs in relation to the First Civil Complaint. The amount of RMB68,370,454.42 claimed by the First Plaintiff is included in accounts payables and other payables as at 30 June 2020.
Interim Report 2020 | 25 |
General Information
The Directors were informed that Qian'an Logistics has filed an application with the Tianjin No. 1 Intermediate People's Court and an appeal with the Tianjin High People's Court to object the Tianjin No. 1 Intermediate People's Court's jurisdiction over the First Civil Compliant, the application was dismissed by the Tianjin No. 1 Intermediate People's Court and the appeal was dismissed by the Tianjin High People's Court respectively.
The court hearing in respect of the First Civil Complaint has been re-scheduled to 15 October 2020. Qian'an Logistics intends to negotiate with the First Plaintiff for the settlement of the claim and withdrawal of the First Civil Complaint.
Second Civil Complaint
Pursuant to the civil complaint dated 29 November 2019 (the "Second Civil Complaint") filed by Haitong UniTrust International Leasing Co., Ltd. (海通恒信國際租賃股份有限公司) (the "Second Plaintiff") as plaintiff with the Shanghai Financial Court, the Second Plaintiff claimed against Qian'an Logistics for (i) repayment of an aggregate amount of RMB197,754,190.70; and (ii) all the costs in relation to the Second Civil Complaint. The Second Civil Complaint had been accepted by the Shanghai Financial Court.
The Second Civil Complaint was arisen from the dispute under a domestic factoring agreement dated 26 September 2018 (the "Factoring Agreement") entered into among the Second Plaintiff, 天津物產進出口貿易有限公司 (transliterated in English as Tewoo Import and Export Trade Co., Limited) ("Tewoo") and Qian'an Logistics. Pursuant to the Factoring Agreement, the Second Plaintiff agreed to provide financing to Tewoo which, in return, agreed to assign all its rights under the account receivables in the aggregate amount of RMB223,463,688.00 (the "Account Receivables") payable by Qian'an Logistics to the Second Plaintiff in connection with five copper cathode contracts supplied by Tewoo to Qian'an. According to the Factoring Agreement, the Second Plaintiff appointed Tewoo to be its collection and receiving agent for the receipt of the Account Receivables payable by Qian'an Logistics.
The Directors were informed that Qian'an Logistics has filed an application with the Shanghai Financial Court and an appeal with the Shanghai High People's Court in relation to, among others, objection of Shanghai Financial Court's jurisdiction over the Second Civil Compliant, the application was dismissed by the Shanghai Financial Court and the appeal was dismissed by the Shanghai High People's Court respectively.
The management of Qian'an Logistics represented that Qian'an Logistics has fully settled the Account Receivables with Tewoo in connection with the five copper cathode contracts. In the premises, Qian'an Logistics has instructed its PRC legal adviser to contest the claim and to handle all other legal issues in connection with the Second Civil Complaint. As the trial has not yet commenced, the effects of the Second Civil Complaint on the Company cannot be assessed at this moment.
26 Silk Road Logistics Holdings Limited
General Information
DIVIDENDS
The Board does not recommend the payment of an interim dividend for the six months ended 30 June 2020 (six months ended 30 June 2019: Nil).
PURCHASE, SALE OR REDEMPTION OF SHARES
During the six months ended 30 June 2020, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities.
INTERESTS OF DIRECTORS AND CHIEF EXECUTIVE
As at 30 June 2020, the following Directors and chief executive of the Company were interested, or were deemed to be interested in the following long and short positions in the shares, underlying shares and debentures of the Company or any associated corporation (within the meaning of the Securities and Futures Ordinance (the "SFO")) which (a) were required to be notified to the Company and The Stock Exchange of Hong Kong Limited (the "Stock Exchange") pursuant to Divisions 7 and 8 of Part XV of the SFO; or (b) were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein (the "Register"); or (c) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix 10 of the Listing Rules, to be notified to the Company and the Stock Exchange:
Long and short positions in the shares and underlying shares of the Company
Approximate | ||||
percentage | ||||
Number of | of the issued | |||
Name of Director | ordinary shares | Nature of Interest | Total | share capital |
Mr. Meng Fanpeng | 480,000(L) | Personal interests | 480,000(L) | 0.01% |
Ms. Choy So Yuk | 271,908(L) | Personal interests | 271,908(L) | 0.01% |
Mr. Leung Yuen Wing | 224,213(L) | Personal interests | 224,213(L) | 0.01% |
L - Long position
S - Short position
Save as disclosed above, as at 30 June 2020, none of the Directors and chief executive of the Company was interested, or was deemed to be interested in the long and short positions in the shares, underlying shares and debentures of the Company or any associated corporation which were required to be notified to the Company and the Stock Exchange or recorded in the Register as aforesaid.
DIRECTORS' RIGHTS TO ACQUIRE SHARES OR DEBENTURES
Save as disclosed in the sections headed "Interests of Directors and chief executive" and "Share Options Scheme" in this report, at no time during the period under review, was the Company or any of its subsidiaries a party to any arrangement to enable a director of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.
Interim Report 2020 | 27 |
General Information
SHARE OPTIONS SCHEME
The Company adopted the Share Option Scheme for the purpose of providing incentives to Participants (as defined in the Share Option Scheme) to contribute to the Group and/or to enable the Group to recruit high-calibre employees and attract resources that are valuable to the Group and the shareholders of the Company as a whole.
As at 1 January 2020 and 30 June 2020, there was no outstanding share option. During the period, no share options were granted, cancelled, lapsed or exercised.
SUBSTANTIAL SHAREHOLDERS' AND OTHER PERSONS' INTERESTS
Save as disclosed under the section headed "Interests of Directors and chief executive" above, as at 30 June 2020, the following persons had an interest in the shares and underlying shares of the Company as recorded in the register required to be kept under Section 336 of the SFO.
Long and short positions in the shares/underlying shares of the Company
Approximate | ||||
percentage of | ||||
No. of shares/ | the issued | |||
Name | Capacity | Nature of Interest | underlying shares | share capital |
Huarong Overseas Chinese | Interest of controlled | Corporate interests | 1,703,728,222(L and S) | 29.87% |
Asset Management Co., Ltd. | corporation | (Notes 1 and 2) | ||
("Huarong Overseas Chinese") | ||||
華融華僑資產管理股份有限公司 | ||||
China Huarong Asset | Interest of controlled | Corporate interests | 1,703,728,222(L and S) | 29.87% |
Management Co., Ltd. | corporation | (Notes 1 and 2) | ||
("Huarong Asset Management") | ||||
中國華融資產管理股份有限公司 | ||||
Cai Jianjun ("Mr. Cai") | Interest of controlled | Corporate interests | 1,703,728,222(L) | 29.87% |
corporation | (Note 2) | |||
Family Interest | Personal interests | 10,000,000(L) | 0.18% | |
(Note 3) | ||||
Total: 1,713,728,222(L) | 30.05% | |||
Yuan Jing | Beneficial owner | Personal interests | 10,000,000(L) | 0.18% |
Family Interest | Corporate interests | 1,703,728,222(L) | 29.87% | |
(Note 4) | ||||
Total: 1,713,728,222(L) | 30.05% |
28 Silk Road Logistics Holdings Limited
General Information
Long and short positions in the shares/underlying shares of the Company | ||||
Approximate | ||||
percentage of | ||||
No. of shares/ | the issued | |||
Name | Capacity | Nature of Interest | underlying shares | share capital |
China Yangtze River | Beneficial owner | Corporate interests | 1,703,728,222(L) | 29.87% |
Petrochemical Group Limited | (Note 2) | |||
"( Yangtze River") | ||||
Xinya Global Limited | Beneficial owner | Corporate interests | 438,224,120(L) | 7.68% |
新亞環球有限公司 | (Note 5) | |||
Tewoo Import & Export (HK) | Interest of controlled | Corporate interests | 438,224,120(L) | 7.68% |
Limited | corporation | (Note 5) | ||
Tianjin Tian Yuen Investment | Interest of controlled | Corporate interests | 438,224,120(L) | 7.68% |
Limited* | corporation | (Note 5) | ||
天津天源投資有限公司 | ||||
Tewoo Import and Export | Interest of controlled | Corporate interests | 438,224,120(L) | 7.68% |
Trade Co., Limited* | corporation | (Note 5) | ||
天津物產進出口貿易有限公司 | ||||
Tewoo Group (Hong Kong) | Interest of controlled | Corporate interests | 438,224,120(L) | 7.68% |
Limited | corporation | (Note 5) | ||
Tewoo Group Co., Ltd.* | Interest of controlled | Corporate interests | 438,224,120(L) | 7.68% |
天津物產集團有限公司 | corporation | (Note 5) | ||
Tianjin Guo Xiang Asset | Interest of controlled | Corporate interests | 438,224,120(L) | 7.68% |
Management Limited* | corporation | (Note 5) | ||
天津國翔資產管理有限公司 | ||||
Tianjin Guo Xing Asset | Interest of controlled | Corporate interests | 438,224,120(L) | 7.68% |
Operation Limited* | corporation | (Note 5) | ||
天津國興資本運營有限公司 | ||||
Tianjin Yi Qing Asset | Interest of controlled | Corporate interests | 438,224,120(L) | 7.68% |
Management Limited* | corporation | (Note 5) |
天津一輕資產經營管理 有限公司
Interim Report 2020 | 29 |
General Information
Long and short positions in the shares/underlying shares of the Company | ||||
Approximate | ||||
percentage of | ||||
No. of shares/ | the issued | |||
Name | Capacity | Nature of Interest | underlying shares | share capital |
Tianjin Yi Qing Group | Interest of controlled | Corporate interests | 438,224,120(L) | 7.68% |
Holdings Limited* | corporation | (Note 5) |
天津市一輕集團(控股) 有限公司
L - Long position
S - Short position
Notes:
- China Huarong Investment Management Limited ("Huarong Investment Management") is interested in these 1,703,728,222 shares. Pure Virtue Enterprises Limited owns 100% of Huarong Investment Management and is wholly-owned by China Huarong Overseas Investment Holdings Co., Limited. China Huarong Overseas Investment Holdings Co., Limited is owned 100% by Huarong Overseas Chinese which is owned 91% by Huarong Zhiyuan Investment & Management Co., Ltd. Huarong Asset Management owns 100% of Huarong Zhiyuan Investment & Management Co., Ltd.
- Pursuant to a put option deed entered into between Yangtze River, a company wholly-owned by Mr. Cai, and Huarong Investment Management, Huarong Investment Management may put any or all of these 1,703,728,222 shares to Yangtze River. Huarong Investment Management has exercised the put option on 24 June 2020 and Yangtze River is under an obligation to purchase these 1,703,728,222 shares.
- Ms. Yuan Jing holds these 10,000,000 shares; Mr. Cai is the spouse of Ms. Yuan Jing, accordingly, Mr. Cai is deemed to have interest in these 10,000,000 shares.
- Ms. Yuan Jing is the spouse of Mr. Cai, accordingly, she is deemed to have interest in the shares held by Yangtze River referred to Note 2 above.
- These shares is beneficially owned by Xinya Global Limited. Xinya Global Limited is wholly owned by Tewoo Import & Export (HK) Limited. Tweoo Import & Export (HK) Limited is owned as to 49% by Tewoo Import And Export Trade Co., Limited and 51% by Tewoo Group (Hong Kong) Limited. Tewoo Import and Export Trade Co., Limited is owned as to 17.47% by Tianjin Tian Yuen Investment Limited and 53.43% by Tewoo Group Co., Limited. Tianjin Tian Yuen Investment Limited is wholly owned by Tiajin Guo Xiang Asset Management Limited. Each of Tianjin Yi Qing Asset Management Limited and Tianjin Guo Xing Asset Operation Limited owns 50% of Tianjin Guo Xiang Asset Management Limited. Tianjin Yi Qing Asset Management Limited is wholly owned by Tianjin Yi Qing Group (Holdings) Limited. Tewoo Group (Hong Kong) Limited is wholly owned by Tewoo Group Co., Limited.
* The Chinese name of these companies are translated into English for reference purposes only.
Save as disclosed above, the Directors are not aware of any other persons who, at 30 June 2020, had interests or short positions in the shares or underlying shares of the Company which are recorded in the register and required to be kept under Section 336 of the SFO.
COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
The Board is committed to raising the standard of corporate governance within the Group in order to enhance the transparency in disclosure of material information. In the opinion of the Directors, the Company has complied with the code provisions of the Corporate Governance Code (the "CG Code") contained in Appendix 14 to the Listing Rules throughout the six months ended 30 June 2020, except the following deviations:
30 Silk Road Logistics Holdings Limited
General Information
Code provision A.1.3
Under code provision A.1.3, notice of at least 14 days should be given of a regular board meeting to give all directors an opportunity to attend. During the period, a regular Board meeting was convened with less than 14 days' notice due to the practical reasons. Although the Company had not notified the Directors of the meeting date 14 days in advance, most of the Directors attended the meeting. The Company will use its best endeavor to give 14 days' advanced notifications of regular Board meeting to the extent practicable.
Code provisions A2
Code provision A2 stipulates that the roles of chairman and chief executive should be separate and should not be performed by the same individual, and the roles of the chairman of the Board. The chairman and the chief executive of the Company was performed by two separate individuals, with Mr. Cai Jianjun ("Mr. Cai") acted as the chairman and Mr. Fang Gang (Mr. Fang") acted as the chief executive until Mr. Cai resigned as executive Director and chairman of the Board on 5 June 2020. Following the resignation of Mr. Cai, the Company does not have the chairman of the Board and hence does not comply with code provision A2. Mr. Fang resigned as the chief executive on 15 July 2020. The Company will identify appropriate persons to fill in the vacancies.
Code Provision A.4.1
Under code provision A.4.1, non-executive directors should be appointed for a specific term and be subject to re-election. Two independent non-executive Directors namely, Ms. Choy So Yuk and Mr. Leung Yuen Wing were not appointed for a specific term. However, all Directors are subject to the retirement provisions in the Bye-laws of the Company which provides that one-third of the Directors for the time being shall retire from office by rotation and every Director shall be subject to retirement at least once every three years.
Code Provision A.6.7 and E.1.2
Under code provision A.6.7, independent non-executive directors and other non-executive directors should attend general meetings and develop a balanced understanding of the views of the shareholders. In addition, code provision E.1.2 provides that the chairman of the board should attend the annual general meeting. The independent non-executive directors, Mr. Leung Yuen Wing, Mr. Wu Zhao, Mr. Zhu Dengkai, Mr. Liu Wei and Mr. Zou Mingwu had not attended the annual general meeting held on 10 July 2020 ("2020 AGM") as they were not in Hong Kong or due to other commitments which must be attended to by them. As no chairman was appointed after the resignation of Mr. Cai on 5 June 2020, the 2020 AGM did not have chairman to attend, however, the executive Directors, Ms. Yang Yi and Mr. Meng Fanpeng, the non-executive Director, Mr. Qin Bo and the independent non-executive Director and also a member of each of the Audit Committee, the Remuneration Committee and the Nomination Committee, Mr. Choy So Yuk attended the 2020 AGM.
Code Provision A.7.1
Under code provision A.7.1, for regular board meetings, and as far as practicable in all other cases, an agenda and accompanying board papers should be sent, in full, to all directors at least 3 days before the intended date of a board meeting or board committee meeting (or other agreed period). As additional time was required to prepare the board papers, the board papers were not sent to all Directors 3 days before the regular board meeting. The Company will arrange the board papers at the earliest possible time in future.
Interim Report 2020 | 31 |
General Information
MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS
The Company has adopted a code of conduct regarding directors' securities transactions set out in the Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix 10 of the Listing Rules (the "Model Code"). Following specific enquiry by the Company, all Directors have confirmed that they have complied with the required standards set out in the Model Code throughout the six months ended 30 June 2020.
CHANGE OF INFORMATION OF DIRECTORS
On 13 May 2020, Mr. Wang Xiusong resigned as executive Director and Ms. Wong Kai Ling was appointed as an executive Director.
On 2 June 2020, Mr. Zhou Hao resigned as non-executive Director and Mr. Qin Bo was appointed as non-executive Director.
On 5 June 2020, Mr. Cai Jianjun resigned as executive Director and chairman of the Company.
On 22 June 2020, Ms. Zhang Rui resigned as executive Director, and Ms. Yang Yi and Mr. Meng Fanpeng were appointed as executive Directors.
On 10 July 2020, Mr. Zhu Dengkai retired as independent non-executive Director at the 2020 AGM.
REVIEW BY THE AUDIT COMMITTEE
The Audit Committee currently comprises three independent non-executive Directors, namely, Mr. Leung Yuen Wing (chairman), Ms. Choy So Yuk and Mr. Wu Zhao. The interim results of the Group for the six months ended 30 June 2020 has not been audited or reviewed by the Company's auditors but has been reviewed by the Audit Committee.
On behalf of the Board
Meng Fanpeng
Executive Director
Hong Kong, 28 August 2020
32 Silk Road Logistics Holdings Limited
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Loudong General Nice Resources (China) Holdings Ltd. published this content on 21 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 September 2020 08:44:05 UTC