騰 邦 控 股 有 限 公 司

Tempus Holdings Limited

(Incorporated in the Cayman Islands with limited liability)

Stock Code: 06880

INTERIM REPORT

2020

C O N T E N T S

Page

  1. CORPORATE INFORMATION
  1. FINANCIAL HIGHLIGHTS
  1. MANAGEMENT DISCUSSION AND ANALYSIS

18 OTHER INFORMATION

27 REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

29 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

  1. CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
  1. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
  2. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

36 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CORPORATE INFORMATION

BOARD OF DIRECTORS

Executive Directors

Mr. Zhong Yiming (Chief Executive Officer)

Mr. Yip Chee Lai, Charlie

Mr. Wang Xingyi

Mr. Sun Yifei

Non-executive Director

Mr. Zhong Baisheng (Chairman)

Independent non-executive Directors

Mr. Han Biao

Mr. Li Qi

Mr. Wong Kai Hing

COMPANY SECRETARY

Ms. Cheung Man Yin

(appointed on 7 July 2020)

Mr. Kam Chi Sing

(appointed on 8 January 2020 and resigned on 7 July 2020)

EXECUTIVE COMMITTEE

Mr. Zhong Yiming (Chairman)

Mr. Yip Chee Lai, Charlie

Mr. Wang Xingyi

Mr. Sun Yifei

AUDIT COMMITTEE

Mr. Wong Kai Hing (Chairman)

Mr. Li Qi

Mr. Han Biao

REMUNERATION COMMITTEE

Mr. Han Biao (Chairman)

Mr. Li Qi

Mr. Wong Kai Hing

Mr. Zhong Yiming

Mr. Sun Yifei

NOMINATION COMMITTEE

Mr. Han Biao (Chairman)

Mr. Li Qi

Mr. Wong Kai Hing

AUTHORISED REPRESENTATIVES

Mr. Zhong Yiming

Mr. Sun Yifei

COMPANY WEBSITE

www.tempushold.com

REGISTERED OFFICE

Cricket Square

Hutchins Drive

P.O. Box 2681

Grand Cayman, KY1-1111

Cayman Islands

HEADQUARTERS AND PRINCIPAL PLACE OF BUSINESS IN HONG KONG

28th Floor

No. 9 Des Voeux Road West

Hong Kong

PRINCIPAL SHARE REGISTRAR AND

TRANSFER OFFICE IN CAYMAN ISLANDS

Codan Trust Company (Cayman) Limited

Cricket Square

Hutchins Drive

P.O. Box 2681

Grand Cayman, KY1-1111

Cayman Islands

2

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

CORPORATE INFORMATION

HONG KONG BRANCH SHARE

REGISTRAR AND TRANSFER OFFICE

Boardroom Share Registrars (HK) Limited 2103B, 21/F.

148 Electric Road

North Point, Hong Kong

AUDITOR

Moore Stephens CPA Limited

Certified Public Accountants and

Registered Public Interest Entity Auditor

801-806 Silvercord, Tower 1

30 Canton Road, Tsimshatsui

Kowloon, Hong Kong

HONG KONG LEGAL ADVISER

Jia Yuan Law Office

17/F, No. 238 Des Voeux Road Central

Sheung Wan

Hong Kong

PRINCIPAL BANKS

Hang Seng Bank Limited

The Hongkong and Shanghai Banking

Corporation Limited

Bank of China (Hong Kong) Limited

Standard Chartered Bank (Hong Kong) Limited

INVESTOR RELATIONS

Ms. Li Huifang

STOCK CODE

06880

BOARD LOT

2,000 shares

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

3

FINANCIAL HIGHLIGHTS

The board (the "Board" ) of directors (the "Directors" ) of Tempus Holdings Limited (the "Company" ) hereby announces the unaudited condensed consolidated interim results of the Company and its subsidiaries (collectively, the "Group" ) for the six months ended 30 June 2020 (the "Period" ) together with the unaudited comparative figures for the six months ended 30 June 2019. The interim results for the Period are unaudited, but have been reviewed by the audit committee (the "Audit Committee" ) of the Company.

Six months

Six months

ended

ended

30 June

30 June

2020

2019

Changes

(Unaudited)

(Unaudited)

(Restated)

Profitability data (HK$' 000)

Revenue - from continuing operations

171,849

227,396

(24.4%)

Gross profit - from continuing operations

88,694

127,232

(30.3%)

Loss before tax - from continuing operations

(42,099)

(65,923)

(36.1%)

Loss after tax for the Period

- from continuing operations

(42,373)

(66,645)

(36.4%)

- from discontinued operations

-

(878)

100%

Loss per share - from continuing operations

- basic and diluted (HK cents)

(12.03)

(19.04)

(36.8%)

Gross profit margin - from continuing operations

51.6%

56.0%

(4.4 ppt)

Loss before tax margin - from continuing operations

(24.5%)

(29.0%)

4.5 ppt

As at

30 June

31 December

2020

2019

Changes

(Unaudited)

(Audited)

Assets and liabilities data (HK$' 000)

Bank balances and cash

84,750

73,340

15.6%

Bank and other borrowings

201,196

205,356

(2.0%)

Net current liabilities

(270,599)

(247,519)

9.3%

Total assets less current liabilities

138,629

187,904

(26.2%)

Assets and working capital ratios/data

Current ratio (times)

0.4

0.5

(0.1)

Gearing ratio (%)

60.8

53.4

7.4

Inventories turnover days (days)

69.7

60.9

8.8

Trade receivables turnover days (days)

71.7

99.5

(27.8)

Trade payables turnover days (days)

90.9

95.0

(4.1)

4

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

FINANCIAL HIGHLIGHTS

Notes for key ratio:

Gross profit

Revenue from continuing operations - Cost of sales from

continuing operations

Loss per share

Loss attributable to shareholders from continuing operations/

Weighted average number of ordinary shares

Current ratio

Current assets/Current liabilities

Gearing ratio

Total borrowings/Total assets x 100%

Inventories turnover days

Average of beginning and ending inventories balances/Cost of

sales x number of days in the Period

Trade receivables

Average of beginning and ending trade receivables balances/

turnover days

Revenue x number of days in the Period

Trade payables

Average of beginning and ending trade payables balances/Cost of

turnover days

sales x number of days in the Period

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

5

MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS REVIEW

For the year ended 31 December 2019, upon completion of the disposal of Shenzhen Qianhai Tempus Value Chain Co. Ltd.* (深圳前海騰邦價值鏈有限公司) ( "Qianhai Value Chain" ) and the partial disposal of shareholding in Tempus Sky Enterprises Limited ( "Tempus Sky" , together with Qianhai Value Chain, the "Disposed OpCo" ), the Group ceased to carry on the original logistics business. Accordingly, the operations of the Disposed OpCo were classified as discontinued operations in accordance with HKFRS 5 Non-currentAssets Held for Sale and Discontinued Operations . Without changing the Company' s principal business and looking forward, the Company will continue to stay tuned to the market trends and explore new business opportunities.

During the Period, the Group' s revenue generated from the continuing operations was HK$171.8 million, decreased by 24.4% as compared with that of HK$227.4 million for the six months ended 30 June 2019. The Group recorded a loss for the Period from continuing operations of HK$42.4 million, as compared with that of HK$66.6 million for the six months ended 30 June 2019. The decrease in revenue generated from the continuing operations was mainly due to the impacts of external macroeconomic environment including the outbreak of COVID-19 ( "COVID-19outbreak" ) around the world since early 2020, the slowdown in global economy and the intensification in the Sino-US trade conflicts, which has led to the slowdown in the business of the Group. The loss for the Period from continuing operations was mainly attributable to the onslaught of the novel coronavirus, which caused the decrease in revenue generated from sales of health and wellness products segment. The decrease in the revenue was however partially compensated by the reversal of impairment losses on financial assets which was recognised during the Period, by the decrease in finance costs, as well as the decrease in selling and distribution expenses and administrative expenses incurred by the sales of health and wellness products segment which was in line with the decrease of revenue generated from that segment.

SALES OF HEALTH AND WELLNESS PRODUCTS BUSINESS

During the Period, sales of massage chairs and other massage/fitness/diagnostics products were HK$110.7 million and HK$59.0 million, respectively, representing 65.2% and 34.8% of the Group' s segment revenue from the sales of health and wellness products business, respectively. The Group launched a total of 9 new products, generating revenue of HK$11.4 million, representing 6.7% of the Group' s segment revenue from the sales of health and wellness products business.

Sales Channels

The Group keeps strengthening its sales channels and expanding its geographical market coverage. The diversified sales channels of the Group comprise of (i) traditional sales channels including retail outlets at shopping malls and department stores; and (ii) proactive sales channels including roadshow counters, corporate sales, international sales and internet sales.

6

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

MANAGEMENT DISCUSSION AND ANALYSIS

The table below shows the revenue breakdown of each sales channel.

Six months ended

Six months ended

30 June 2020

30 June 2019

Changes

% of

% of

HK$' 000

revenue

HK$' 000

revenue

HK$' 000

%

Retail outlets

91,316

53.8

132,243

58.3

(40,927)

(30.9)

Roadshow counters

10,458

6.2

23,260

10.3

(12,802)

(55.0)

Corporate sales

44,207

26.0

54,672

24.1

(10,465)

(19.1)

International sales

6,137

3.6

6,167

2.7

(30)

(0.5)

Internet sales

17,601

10.4

10,523

4.6

7,078

67.3

Total

169,719

100.0

226,865

100.0

(57,146)

(25.2)

  1. Traditional sales channels
    During the Period, the Group' s revenue generated from traditional sales channels was HK$91.3 million, representing 53.8% of the Group' s segment revenue from the sales of health and wellness products business, and a decrease of 30.9% as compared to HK$132.2 million for the six months ended 30 June 2019. The decrease was due to COVID-19 outbreak since early 2020, the restrictions imposed by the respective authorities in Mainland China, Macau, Malaysia, Singapore as well as Hong Kong (the "Respective Regions" ) in view of public health concerns. The lockdown which resulted in little appetite for purchase, difficulty in goods delivery owing to traffic controls in many parts of China, and temporary closure of retail outlets in the Respective Regions. These had adversely affected the Group' s sales activities during the Period. As at 30 June 2020, the Group operated the following retail outlets which consist of retail stores and consignment counters:

No. of outlets as at

30 June

31 December

30 June

2020

2019

2019

Mainland China

116

113

117

Hong Kong and Macau

23

24

24

Singapore and Malaysia

15

15

16

Total

154

152

157

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

7

MANAGEMENT DISCUSSION AND ANALYSIS

Retail business in the Mainland China

As at 30 June 2020, the Group operated 116 retail outlets in the Mainland China, mainly located in the Yangtze River Delta, the Pearl River Delta, Beijing-Tianjin-Hebei regions and Chengdu. During the Period, the revenue contributed by retail business in the Mainland China was HK$38.3 million, representing a decrease of 33.7% as compared to HK$57.8 million for the six months ended 30 June 2019. The decrease was due to the impact of the COVID-19 outbreak mentioned above in the region during the Period.

Retail business in Hong Kong and Macau

As at 30 June 2020, the Group maintained 23 retail outlets in Hong Kong and Macau. During the Period, the revenue contributed by the retail business in the region was HK$45.6 million, representing a decrease of 23.5% as compared to HK$59.6 million for the six months ended 30 June 2019. The decrease was due to the impact of COVID-19 outbreak mentioned above in the region during the Period.

Retail business in Singapore and Malaysia

As at 30 June 2020, the Group operated 15 retail outlets in Singapore and Malaysia. During the Period, the revenue contributed by retail business in the region was HK$7.4 million, representing a decrease of 50.0% as compared to HK$14.8 million for the six months ended 30 June 2019. The decrease was due to the impact of COVID-19 outbreak mentioned above in both regions during the Period.

  1. Proactive sales channels
    The proactive sales channels are important marketing and revenue generating channels for the Group. These channels not only facilitate the penetration into new market segments with minimum fixed operating expenses, but also mitigate the impact of the escalating operating costs such as retail stores rental, staff costs and advertising expenses.
    Roadshow counters of the Group are promotional and non-permanent counters which the Group operated in different department stores and shopping malls from time to time. The decrease of 55.0% in revenue from roadshow counters was mainly due to the impact of COVID-19 outbreak mentioned above during the Period.
    The Group' s corporate sales represent the sale of selected health and wellness products to corporate customers such as financial institutions, retail chain stores and professional bodies. The decrease of 19.1% in revenue from corporate sales was mainly due to less sizable corporate projects during the Period.
    International sales of the Group are generated by the export of the Group' s health and wellness products to its international distributors or wholesalers for their distributions in overseas markets such as Eastern Europe and the Middle East. The revenue generated from international sales remained stable during the Period.
    The Group' s internet sales represent the sales through an online group-buying platform and the sales through its online stores at major business-to-customer shopping platforms such as the Tmall (天貓). The increase of 67.3% in revenue from internet sales was mainly attributable to the rapid development of general e-commerce environment in the Mainland China.

8

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

MANAGEMENT DISCUSSION AND ANALYSIS

TRADING BUSINESS

The Group' s trading business represents trading of goods such as personal consumables. During the Period, the revenue generated from the trading business was HK$2.1 million, representing 1.2% of the revenue generated from continuing operations of the Group. The increase of 301.1% in the revenue generated from trading as compared to HK$0.5 million for the six months ended 30 June 2019 was mainly due to the revenue generated from trading circuit board during the Period.

RESULTS OF OPERATION

Revenue

The Group' s operating results from continuing operation for the Period were primarily contributed by business engaging in the sales of health and wellness products as well as trading. In light of adopting HKFRS 5, the results of the logistics business in 2019 were included under the discontinued operations. The condensed consolidated statement of comprehensive income for the six months ended 30 June 2019 has also been restated for comparison purpose.

Revenue from the continuing operations represents the income from sales of health and wellness products and trading of consumer products. During the Period, the Group' s revenue from the continuing operations decreased by 24.4% to HK$171.8 million from HK$227.4 million for the six months ended 30 June 2019. The decrease was mainly attributable to the decrease in revenue of 25.2% generated from sales of health and wellness products business.

Continuing operations

Six months ended

Six months ended

30 June 2020

30 June 2019

Changes

% of

% of

HK$' 000

revenue

HK$' 000

revenue

HK$' 000

%

Sales of health and wellness products

169,719

98.8

226,865

99.8

(57,146)

(25.2)

Trading

2,130

1.2

531

0.2

1,599

301.1

Total

171,849

100.0

227,396

100.0

(55,547)

(24.4)

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

9

MANAGEMENT DISCUSSION AND ANALYSIS

Cost of sales

Cost of sales for the continuing operations represents product cost and direct expenses in relation to purchases of products. The Group' s cost of sales for the continuing operations for the Period was HK$83.2 million, representing a decrease of 17.0% from HK$100.2 million for the six months ended 30 June 2019. The decrease in cost of sales was mainly due to the decrease in cost of sales of health and wellness products in line with the deterioration of the business of the same segment.

Gross profit

The gross profits for the continuing operations for the Period and for the six months ended 30 June 2019 were HK$88.7 million and HK$127.2 million, respectively. The gross profit margins for the Period and for the six months ended 30 June 2019 were 51.6% and 56.0%, respectively, representing a decrease of 4.4 ppt. The table below sets out the gross profit margins by business segment. The gross profit margins remained stable during the Period.

Gross profit margin by segment

Continuing operations

Six months

Six months

ended

ended

30 June

30 June

2020

2019

Change

Sales of health and wellness products

51.9%

56.2%

(4.3 ppt)

Trading

26.6%

(35.8%)

62.4 ppt

Overall

51.6%

56.0%

(4.4 ppt)

Other income

Other income for the continuing operations for the Period was HK$6.0 million, mainly comprising government grants of HK$4.0 million and repair income of HK$0.8 million. Other income for the continuing operations for the six months ended 30 June 2019 was HK$7.6 million, mainly comprising rental income of HK$2.0 million, government grants of HK$1.7 million and interest income of HK$1.6 million.

Other gains and losses, net

The Group' s continuing operations recorded other losses of HK$6.8 million, mainly comprising a loss on fair value change on financial assets at fair value through profit or loss of HK$8.1 million which were partially offset by a gain on net exchange gain of HK$1.2 million. The Group' s continuing operations recorded other losses of HK$7.5 million for the six months ended 30 June 2019, mainly comprising a loss on disposal group classified as held for sale of HK$13.4 million and a loss on fair value change of investment properties of HK$5.0 million which were partially offset by a gain on fair value change of derivatives embedded in convertible bonds of HK$6.9 million.

10

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

MANAGEMENT DISCUSSION AND ANALYSIS

Impairment losses on financial assets

A sum of HK$13.9 million of impairment losses on financial assets has been reversed and been recognised for the Period, mainly represented by HK$0.4 million received from trade debtors and HK$13.5 million received from other debtors, as compared with the impairment losses on the financial assets of approximately HK$5.9 million recognised for the six months ended 30 June 2019.

Share of results of associates

Share of results of associates for continuing operations for the Period was a loss of HK$3.3 million (for the six months ended 30 June 2019: a loss of HK$0.4 million), mainly representing the Group' s share of loss from associates, Yantai Leteng Equity Investment Management Centre (Limited Partnership)* (煙台樂 騰股權投資管理中心(有限合夥)) and Guangdong Shucheng Technology Co., Ltd (廣東數程科技有限公司).

Selling and distribution expenses

Selling and distribution expenses for the continuing operations, mainly comprising advertising and marketing expenses as well as staff costs, decreased from HK$107.7 million for the six months ended 30 June 2019 to HK$81.6 million for the Period. The decrease was mainly attributed to the decrease in advertising and marketing expenses of HK$4.7 million, distribution expense of HK$1.8 million, rental expense of HK$9.3 million and staff costs of HK$9.1 million.

Administrative expenses

Administrative expenses for the continuing operations, mainly comprising staff costs and professional fees, decreased from HK$53.5 million for the six months ended 30 June 2019 to HK$40.0 million for the Period. The decrease was primarily due to the decrease in business trip and travelling expense of HK$0.9 million and staff costs of HK$12.1 million.

Finance costs

Finance costs for the continuing operations decreased to HK$19.1 million for the Period from HK$25.8 million for the six months ended 30 June 2019. The drop was due to the decrease in bank and other borrowings during the Period, and the full settlement of senior note during the period ended 30 June 2019.

Loss before tax

As a result of the factors described above, the Group' s loss before tax for the continuing operations was HK$42.1 million for the Period, as compared to the loss before tax of HK$65.9 million for the six months ended 30 June 2019.

Income tax expense

Income tax expense for the continuing operations was HK$0.3 million for the Period and HK$0.7 million for the six months ended 30 June 2019. The decrease was mainly attributed to the drop in profit subject to income tax for the Period.

Loss for the Period

As a result of the factors described above, the Group' s loss for the continuing operations was HK$42.4 million for the Period, as compared to a loss of HK$66.6 million for the six months ended 30 June 2019.

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

11

MANAGEMENT DISCUSSION AND ANALYSIS

Discontinued operations

Upon completion of the disposal of Qianhai Value Chain and the partial disposal of shareholding in Tempus Sky during the year ended 31 December 2019, the Group ceased to carry out the original logistics business. Accordingly, the operations of the Disposed OpCo were classified as discontinued operations in accordance with HKFRS 5 Non-currentAssets Held for Sale and Discontinued Operations . The comparative figures in the condensed consolidated statement of profit or loss and other comprehensive income have been restated to re-present the result of the Disposed OpCo for the six months ended 30 June 2019.

The revenue generated from the discontinued operations for the six months ended 30 June 2019 was approximately HK$154.9 million and the gross profit for the discontinued operations for the six months ended 30 June 2019 was HK$15.6 million. The loss for the six months ended 30 June 2019 from discontinued operations of HK$0.9 million was attributed from selling and distribution expenses of HK$10.4 million, administrative expenses of HK$3.1 million, finance costs of HK$0.8 million and income tax expense of HK$1.6 million for the discontinued operations.

FINANCIAL POSITION

As at 30 June 2020, total equity of the Group was HK$115.3 million (as at 31 December 2019: HK$160.4 million). The decrease was mainly due to the loss for the Period.

As at 30 June 2020, the Group' s net current liabilities was HK$270.6 million (as at 31 December 2019: HK$247.5 million). The current ratio was 0.4 times as at 30 June 2020 (as at 31 December 2019: 0.5 time).

As at 30 June 2020, total non-current assets of the Group was HK$409.2 million (as at 31 December 2019: HK$435.4 million), while the total current assets of the Group was HK$217.4 million (as at 31 December 2019: HK$268.8 million). The decrease in non-current assets and current assets were mainly due to the decrease in rights-of-use assets, the decrease in financial assets at fair value through profit or loss and the decrease in trade, bills and other receivables during the Period, respectively.

LIQUIDITY AND FINANCIAL RESOURCES

As at 30 June 2020, the Group had bank balances and cash of HK$84.8 million (as at 31 December 2019: HK$73.3 million). The Group' s bank balances and cash primarily consisted of cash on hand and bank balances which were mainly held at the banks in Hong Kong and the Mainland China. The Group' s approach in managing liquidity is to ensure, as far as possible, that the Group always maintains sufficient liquidity to meet its liabilities when due, without incurring unacceptable losses or risking damage to the Group' s reputation.

Operating activities

Net cash generated from operating activities was HK$50.1 million for the Period (for the six months ended 30 June 2019: HK$31.3 million), primarily reflecting the operating cash inflows before movements in working capital of HK$3.9 million, as adjusted by a decrease of HK$3.2 million in inventories, a decrease of HK$63.0 million in trade, bills and other receivables and a decrease of HK$20.7 million in trade and other payables.

12

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

MANAGEMENT DISCUSSION AND ANALYSIS

Investing activities

Net cash used in investing activities was HK$2.4 million for the Period (for the six months ended 30 June 2019: HK$2.2 million), primarily consisted of payment for acquisition of property, plant and equipment of HK$2.5 million and receipt of interest of HK$0.1 million.

Financing activities

Net cash used in financing activities was HK$33.9 million for the Period (for the six months ended 30 June 2019: HK$89.1 million), which was primarily due to repayments of convertible bonds of HK$5.0 million and repayment of lease liabilities of HK$22.5 million during the Period.

BORROWINGS AND GEARING RATIO

Total borrowings of the Group as at 30 June 2020 was HK$381.2 million with effective interest rates ranging from 1.75% to 23.1% per annum. The Group' s gearing ratio increased by 7.4 ppt from 53.4% as at 31 December 2019 to 60.8% as at 30 June 2020, which was primarily due to the significant decrease in trade, bills and other receivables of approximately HK$59.8 million at the Period end.

WORKING CAPITAL

As at 30 June 2020, the net negative working capital of the Group was HK$270.6 million, which represented an increase of HK$23.1 million or 9.3% as compared to the net negative working capital HK$247.5 million as at 31 December 2019. The increase in net negative working capital was primarily due to increase in payable of convertible bonds of HK$9.5 million, decrease in trade and other payable of HK$20.7 million, decrease in short term lease liabilities of HK$13.9 million, decrease in trade, bills and other receivables of HK$59.8 million and increase in bank balances and cash of HK$11.4 million.

As at 30 June 2020, the Group' s inventories decreased by HK$3.2 million to HK$30.2 million from HK$33.4 million as at 31 December 2019. The inventories turnover days was 69.7 days as at 30 June 2020 as compared with 60.9 days as at 31 December 2019. The increase was primarily due to slow down of the Group' s sales activities as a result of the impact of COVID-19 outbreak.

As at 30 June 2020, the Group' s trade receivables decreased by HK$39.8 million, to HK$47.8 million from HK$87.6 million as at 31 December 2019. The trade receivables turnover days decreased to 71.7 days from 99.5 days as at 31 December 2019. The decrease was due to better control of collection of trade receivables during the Period.

As at 30 June 2020, the Group' s trade payables decreased by HK$19.8 million to HK$31.6 million from HK$51.4 million as at 31 December 2019. The trade payables turnover days decreased by 4.1 days to

90.9 days from 95.0 days as at 31 December 2019. The decrease in trade payables turnover days was mainly due to shorter settlement period to the suppliers during the Period.

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

13

MANAGEMENT DISCUSSION AND ANALYSIS

CAPITAL EXPENDITURE

During the Period, the Group' s total capital expenditure amounted to HK$2.5 million, which was used in the acquisition of property, plant and equipment.

CHARGE ON ASSETS

As at 30 June 2020, the Group had pledged certain assets, including leasehold land and buildings, under property, plant and equipment with a total carrying value of HK$295.4 million for the purpose of securing certain banking and other facilities.

SIGNIFICANT INVESTMENT, MATERIAL ACQUISITIONS AND DISPOSALS OF ASSETS

On 22 January 2020, Zhuhai Tempus Jinyue Investment Limited* (珠海騰邦金躍投資有限公司) ( "Vendor" ), a wholly owned subsidiary of the Company, Mr. Wang Xiaowei (王嘯巍), Mr. Peng Biao (彭彪) and Tianjin Yuncheng Corporate Management LLP* (天津市雲橙企業管理合夥企業（有限合夥）) (collectively, the "Purchasers" ) and Ms. Zheng Meiling (鄭美玲) (the "Transferee" ) entered into receivables transfer agreement in respect of the assignment of the outstanding consideration amounted to RMB19,810,000 from Vendor to the Transferee for a total consideration of RMB15,850,000. Up to the date of this report, the Group has received all of the consideration.

For details, please refer to the Company' s announcements dated 28 December 2018, 2 January 2019, 28 March 2019, 22 January 2020 and 30 January 2020.

IMPORTANT EVENTS AFTER THE END OF THE PERIOD

On 7 August 2020, Zhuhai Tempus Jinyue Investment Limited, a wholly owned subsidiary of the Company (the "Vendor" ), entered into a sale and purchase agreement ( "S&P I" ) with two independent third parties ( "Purchaser A" and "Purchaser B" , collectively, the "Purchasers" ), pursuant to which the Vendor has agreed to sell and the Purchasers have agreed to acquire collectively the equity interest of approximately 1.75% held by the Vendor in 重慶格洛博電子商務有限公司 ( "格洛博" ), for a total consideration of approximately RMB2,213,000 (equivalent to approximately HK$2,464,000). Up to the date of this report, the Group received all of the consideration.

On 20 August 2020, the Vendor entered into a sale and purchase agreement ( "S&P II" ) with an independent third party ( "Purchaser C" ), pursuant to which the Vendor has agreed to sell and Purchaser C has agreed to acquire the equity interest of approximately 1.10% held by the Vendor in 格 洛博, for a consideration of approximately RMB1,390,000 (equivalent to approximately HK$1,548,000). Up to the date of this report, the Group received all of the consideration.

The Group recorded a gain of disposals of RMB326,000 (equivalent to approximately HK$363,000). Upon completion of S&P I and S&P II, the Vendor will continue to hold approximately 3.80% of the entire issued share capital of 格洛博.

Saved as disclosed in this report, there are no important events affecting the Group after the end of the Period.

14

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

MANAGEMENT DISCUSSION AND ANALYSIS

INTERIM DIVIDEND

The Board has resolved not to declare an interim dividend for the Period (for the six months ended 30 June 2019: Nil).

CONTINGENT LIABILITIES

Saved as disclosed in this report, the Group did not have any material contingent liabilities as at 30 June 2020.

FOREIGN EXCHANGE RISK MANAGEMENT

As at 30 June 2020, the Group was exposed to certain foreign exchange risk as the Group had bank balances in Renminbi of approximately RMB27,149,000 (equivalent to approximately HK$29,713,000), and in United States dollar of approximately US$395,490 (equivalent to approximately HK$3,069,000). The Group does not use any derivative financial instruments to hedge the foreign exchange risk. Instead, the Group manages the foreign exchange risk by closely monitoring the movement of the foreign currency rates and may, depending on the circumstances and trend of foreign currency, consider adopting significant foreign currency hedging policy in the future.

FUTURE PLANS FOR MATERIAL INVESTMENTS OR ACQUISITION OF CAPITAL ASSETS

The Group does not have any solid plans for material investments or acquisition of capital assets as at the date of this report. The Group continues to seek appropriate investment opportunities which are in line with the Group' s strategy.

EMPLOYEES AND REMUNERATION POLICY

As at 30 June 2020, the Group had a total number of 681 (as at 31 December 2019: 780) full-time employees. The key components of the Group' s remuneration package include basic salary, and where appropriate, other allowances, incentive bonus, mandatory provident funds, state-managed retirement benefits scheme and share options under the share option scheme of the Company. The Group determined the remuneration packages of all employees based on factors including individual qualifications, contributions to the Group, performance and years of experience of the respective staff. The remuneration committee will review and determine the remuneration and compensation packages of the Directors and senior management of the Company with reference to salaries paid by comparable companies, time commitment and responsibilities of the Directors and performance of the Group.

The Group operates a mandatory provident fund scheme for all qualifying employees in Hong Kong. The assets of the schemes are held separately from those of the Group, in funds under the control of trustees.

The employees employed in Macau are members of the defined contribution retirement benefit plan. The subsidiary established in Macau is required to contribute Macanese Pataca 60 per month for each employee to the retirement benefit plan to fund the benefits.

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

15

MANAGEMENT DISCUSSION AND ANALYSIS

The employees employed in Mainland China are members of the state-managed retirement benefit scheme operated by Mainland China government. The subsidiaries established in Mainland China are required to contribute a certain percentage of the salaries of its employees to the scheme. The only obligation of the Group with respect to the retirement benefit schemes is to make the required contributions under the schemes.

The Company adopted a share option scheme on 25 November 2011 (the "Share Option Scheme" ) for the purpose of enabling the Company to grant options to selected participants as incentives or rewards for their contribution to the Group. On 26 January 2017 and 16 April 2018, the Group granted 23,420,000 share options (Lot 1) and 34,986,000 share options (Lot 2) under the Share Option Scheme at the exercise prices of HK$1.84 per share and HK$2.13 per share to certain Directors, senior management and selected employees of the Group. During the Period, no share options have been granted under the Share Option Scheme. Movements of the outstanding share options granted under the Share Option Scheme during the Period are as follows:

Balance

Balance

as at

Share

Share

Share

as at

1 January

options

options

options

30 June

2020

granted

exercised

lapsed

2020

Lot 1

12,400,000

-

-

(3,500,000)

8,900,000

Lot 2

16,998,600

-

-

(4,298,600)

12,700,000

Total

29,398,600

-

-

(7,798,600)

21,600,000

STRATEGIES AND PROSPECTS

The COVID-19 outbreak in the first half of year 2020 has undermined the overall business environment, the prolonged Sino-US trade war and the slowing down of economy in Mainland China and Hong Kong have also brought negative impacts on domestic demands in Mainland China as well as Hong Kong. Looking ahead, the second half of 2020 remains challenging. Despite COVID-19 outbreak is being under control in China, the spread of novel coronavirus continues to expand globally. Thus, the Group has implemented cost-control and operational efficiency measures to deal with this outbreak. Moreover, the Company has been striving to resolve its liquidity issue arising from the redemption of certain convertible bonds by timeously adopting a series of measures to tide over these difficulties, including (i) disposing non-core assets such as equity investments, and stripping loss-making business;

  1. studying possibilities of strengthening fundraising activities; (iii) expediting collection of receivables; and (iv) optimising operation efficiency. The Group is cautious yet optimistic towards its business and development.

16

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

MANAGEMENT DISCUSSION AND ANALYSIS

REVIEW OF INTERIM RESULTS BY THE AUDIT COMMITTEE

The Audit Committee has reviewed together with the Board and Moore Stephens CPA Limited, the Company' s auditor, the unaudited condensed consolidated financial statements of the Group for the Period. The Audit Committee is satisfied that the unaudited condensed consolidated financial statements of the Group for the Period were prepared in accordance with the applicable accounting standards and fairly present the Group' s financial position and results for the Period.

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

17

OTHER INFORMATION

COMPLIANCE WITH CORPORATE GOVERNANCE PRACTICES

In the opinion of the Directors, the Company has complied with all applicable code provisions as set out in the Corporate Governance Code (the "CG Code" ) contained in Appendix 14 to the Rules Governing the Listing of Securities (the "Listing Rules" ) on The Stock Exchange of Hong Kong Limited (the "Stock Exchange" ) throughout the Period.

COMPLIANCE WITH MODEL CODE FOR SECURITIES TRANSACTIONS

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code" ) as set out in Appendix 10 to the Listing Rules (including amendments as effected from time to time) as its code of conduct for securities transactions by the Directors. After having made specific enquiries with all Directors, all Directors have confirmed that they have complied with the required standards as set out in the Model Code and its code of conduct regarding Directors' securities transactions throughout the Period.

CHANGES IN INFORMATION OF DIRECTORS

Changes in information of the Directors which are required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules are set out below:

Name of Director

Details of change

Mr. Li Qi

Re-designated as a member of the Audit Committee of the Company

with effect from 27 March 2020

Mr. Wong Kai Hing

Re-designated as the chairman of the Audit Committee of the Company

with effect from 27 March 2020

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES

Neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company' s listed securities during the Period.

18

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

OTHER INFORMATION

DIRECTORS' AND CHIEF EXECUTIVE' S INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES OF THE COMPANY AND ITS ASSOCIATED CORPORATIONS

As at 30 June 2020, the interests and short positions of the Directors and chief executive of the Company in the Shares or underlying Shares of the Company or its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the "SFO" )) (i) which 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 were taken or deemed to have taken under such provisions of the SFO), or (ii) which were required, pursuant to section 352 of the SFO to be entered in the register referred to therein, or (iii) which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code, were as follows:

  1. Long position in Shares and underlying Shares of the Company

Number of

underlying

Shares in

Total number

Approximate

respect

of Shares and

percentage of

Number of

of share

underlying

shareholding in

Capacity/

Shares held

options held

Shares held

the Company

Name of Director

Nature of interest

(a)

(b)

(a)+(b)

(Note 7)

Mr. Zhong Baisheng

Interest in a controlled

218,347,092(L)

-

218,347,092(L)

62.52%

(Note 2)

corporation

Mr. Yip Chee Lai, Charlie

Beneficial owner

6,046,000(L)

4,000,000(L)

10,046,000(L)

2.88%

(Note 3)

Interests of parties to

17,984,000(L)

-

17,984,000(L)

5.15%

an agreement to

acquire interest of

the Company

Total

24,030,000(L)

4,000,000(L)

28,030,000(L)

8.03%

Mr. Sun Yifei (Note 4)

Beneficial owner

-

4,000,000(L)

4,000,000(L)

1.15%

Mr. Han Biao (Note 5)

Beneficial owner

-

400,000(L)

400,000(L)

0.11%

Mr. Li Qi (Note 6)

Beneficial owner

-

400,000(L)

400,000(L)

0.11%

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

19

OTHER INFORMATION

Notes:

  1. The letter "L" denotes the Director' s long position in the Shares or underlying Shares.
  2. These Shares are held directly by Tempus Holdings (Hong Kong) Limited ( "Tempus Hong Kong" ), which is wholly owned by Tempus Value Chain Limited ( "Tempus Value Chain" ). Tempus Value Chain is wholly owned by Tempus Logistics Group Holding Ltd.* (騰邦物流集團股份有限公司) ( "Tempus Logistics" ), which is in turn owned as to 65% by Tempus Group Co., Ltd.* (騰邦集團有限公司) ( "Tempus Group" ) and 35% by Shenzhen Pingfeng Jewellery Ltd.* (深圳市平豐珠寶有限公司) ( "Pingfeng Jewellery" ), respectively. Pingfeng Jewellery is owned as to 67% by Mr. Zhong Baisheng and 33% by Ms. Duan Naiqi, respectively. Tempus Group is owned as to 98% by Pingfeng Jewellery, 1.34% by Mr. Zhong Baisheng and 0.66% by Ms. Duan Naiqi, respectively. As at the date of this report, Tempus Hong Kong held 201,534,092 Shares, representing approximately 57.7% of the issued share capital of the Company.
  3. Mr. Yip Chee Lai, Charlie, Mr. Yip Chee Seng, Mr. Yip Chee Way, David, Mr. Yep Gee Kuarn, Mr. Tan Beng Gim and Ms. Chua Siew Hun (the "Minority Shareholders" ) have been persons acting in concert since 1 April 2008 pursuant to a confirmatory agreement dated 1 February 2011 entered into by and among them. Accordingly, each of the Minority Shareholders is deemed to be interested in the shares in which the Minority Shareholders are interested pursuant to the SFO. Mr. Yip Chee Lai, Charlie' s long position in the underlying Shares comprises an aggregate of 4,000,000 options granted to him by the Company on 26 January 2017 and 16 April 2018 under the share option scheme adopted by the Company on 25 November 2011 (the "Share Option Scheme" ). Out of these options, 2,000,000 options are exercisable at the exercise price of HK$1.84 per Share during the period from 26 January 2017 to 25 January 2021; and 2,000,000 options are exercisable at the exercise price of HK$2.13 per Share during the period from 16 April 2018 to 15 April 2022, subject to the vesting schedule.

(4) Mr. Sun Yifei' s long position in the underlying Shares comprises an aggregate of 4,000,000 options granted to him by the Company on 26 January 2017 and 16 April 2018 under the Share Option Scheme. Out of these options, 2,000,000 options are exercisable at the exercise price of HK$1.84 per Share during the period from 26 January 2017 to 25 January 2021; and 2,000,000 options are exercisable at the exercise price of HK$2.13 per Share during the period from 16 April 2018 to 15 April 2022, subject to the vesting schedule.

  1. Mr. Han Biao' s long position in the underlying Shares comprises an aggregate of 400,000 options granted to him by the Company on 26 January 2017 and 16 April 2018 under the Share Option Scheme. Out of these options, 200,000 options are exercisable at the exercise price of HK$1.84 per Share during the period from 26 January 2017 to 25 January 2021; and 200,000 options are exercisable at the exercise price of HK$2.13 per Share during the period from 16 April 2018 to 15 April 2022, subject to the vesting schedule.

(6) Mr. Li Qi' s long position in the underlying Shares comprises an aggregate of 400,000 options granted to him by the Company on 26 January 2017 and 16 April 2018 under the Share Option Scheme. Out of these options, 200,000 options are exercisable at the exercise price of HK$1.84 per Share during the period from 26 January 2017 to 25 January 2021; and 200,000 options are exercisable at the exercise price of HK$2.13 per Share during the period from 16 April 2018 to 15 April 2022, subject to the vesting schedule.

  1. The approximate percentage of shareholding is calculated based on a total of 349,260,800 issued Shares of the Company as at 30 June 2020.
  • For identification purposes only

20

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

OTHER INFORMATION

(ii) Long position in Shares of the Company' s associated corporation

Approximate

Number and class

percentage of

of securities in

shareholding

Name of associated

associated corporation

in associated

Name of Director

corporation

interested

corporation

Mr. Zhong Baisheng

Tempus Hong Kong

10,000

100%

Ordinary Shares (L)

Notes:

  1. The letter "L" denotes the person' s long position in the Shares or underlying Shares of the associated corporation.
  2. Tempus Hong Kong is wholly owned by Tempus Value Chain, which is wholly owned by Tempus Logistics. Tempus Logistics is owned as to 65% by Tempus Group and 35% by Pingfeng Jewellery, respectively. Pingfeng Jewellery is owned as to 67% by Mr. Zhong Baisheng and 33% by Ms. Duan Naiqi, respectively. Tempus Group is owned as to 98% by Pingfeng Jewellery, 1.34% by Mr. Zhong Baisheng and 0.66% by Ms. Duan Naiqi, respectively. By virtue of the SFO, Mr. Zhong Baisheng is deemed to be interested in the 10,000 shares in Tempus Hong Kong.

Saved as disclosed above and disclosed under the paragraph headed "Share Option Scheme" in this report, as at 30 June 2020, none of the Directors and chief executive of the Company had or was deemed to have interests or short positions in the shares or underlying shares of the Company or any associated corporations (within the meaning of Part XV of the SFO) which would be required to (i) be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO, or (ii) which would be required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or (iii) which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code.

SUBSTANTIAL SHAREHOLDERS' INTERESTS IN SHARES AND UNDERLYING SHARES OF THE COMPANY

As at 30 June 2020, so far as is known to any Directors or chief executive of the Company, the following persons (other than (a) Director(s) or chief executive of the Company) had interests or short positions in the Shares or underlying Shares as recorded in the register required to be kept by the Company pursuant to section 336 of the SFO or which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who was, directly or indirectly, interested in 5% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other members of the Group:

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

21

OTHER INFORMATION

Number of

underlying

Shares in

Total number

Approximate

respect of

of Shares and

percentage of

Number of

equity

underlying

shareholding in

Capacity/

Shares held

derivatives held

Shares held

the Company

Name of Shareholder

Nature of interest

(a)

(b)

(a)+(b)

(Note 6)

Tempus Hong Kong (Note 2,5)

Beneficial owner

218,347,092(L)

-

218,347,092(L)

62.52%

Tempus Value Chain (Note 2,5)

Interest in a controlled

218,347,092(L)

-

218,347,092(L)

62.52%

corporation

Tempus Logistics (Note 2,5)

Interest in a controlled

218,347,092(L)

-

218,347,092(L)

62.52%

corporation

Tempus Group (Note 2,5)

Interest in a controlled

218,347,092(L)

-

218,347,092(L)

62.52%

corporation

Pingfeng Jewellery (Note 2)

Interest in a controlled

218,347,092(L)

-

218,347,092(L)

62.52%

corporation

Ms. Duan Naiqi (Note 2)

Interest in a controlled

218,347,092(L)

-

218,347,092(L)

62.52%

corporation

SCGC Capital Holding

Beneficial owner

20,300,000(L)

-

20,300,000(L)

5.81%

Company Limited (Note 3)

Shenzhen Capital (Hong Kong)

Interest in a controlled

20,300,000(L)

-

20,300,000(L)

5.81%

Company Limited (Note 3)

corporation

Shenzhen Capital Group Co., Ltd.

Interest in a controlled

20,300,000(L)

-

20,300,000(L)

5.81%

(Note 3)

corporation

Mr. Yip Chee Seng (Note 4)

Beneficial owner

5,774,000(L)

-

5,774,000(L)

1.65%

Interests of parties to

18,256,000(L)

4,000,000(L)

22,256,000(L)

6.37%

an agreement to acquire

interests of the Company

Total

24,030,000(L)

4,000,000(L)

28,030,000(L)

8.02%

Mr. Yep Gee Kuarn (Note 4)

Beneficial owner

6,114,000(L)

-

6,114,000(L)

1.75%

Interests of parties to

17,916,000(L)

4,000,000(L)

21,916,000(L)

6.27%

an agreement to acquire

interests of the Company

Total

24,030,000(L)

4,000,000(L)

28,030,000(L)

8.02%

22

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

OTHER INFORMATION

Number of

underlying

Shares in

Total number

Approximate

respect of

of Shares and

percentage of

Number of

equity

underlying

shareholding in

Capacity/

Shares held

derivatives held

Shares held

the Company

Name of Shareholder

Nature of interest

(a)

(b)

(a)+(b)

(Note 6)

Mr. Yip Chee Way, David (Note 4)

Beneficial owner

6,096,000(L)

-

6,096,000(L)

1.75%

Interests of parties to

17,934,000(L)

4,000,000(L)

21,934,000(L)

6.28%

an agreement to acquire

interests of the Company

Total

24,030,000(L)

4,000,000(L)

28,030,000(L)

8.03%

Mr. Tan Beng Gim (Note 4)

Beneficial owner

-

-

-

-

Interests of parties to

24,030,000(L)

4,000,000(L)

28,030,000(L)

8.03%

an agreement to acquire

interests of the Company

Total

24,030,000(L)

4,000,000(L)

28,030,000(L)

8.03%

Ms. Chua Siew Hun (Note 4)

Beneficial owner

-

-

-

-

Interests of parties to

24,030,000(L)

4,000,000(L)

28,030,000(L)

8.03%

an agreement to acquire

interests of the Company

Total

24,030,000(L)

4,000,000(L)

28,030,000(L)

8.03%

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

23

OTHER INFORMATION

Notes:

  1. The letter "L" denotes the person' s long position in the Shares or underlying Shares.
  2. These Shares are held directly by Tempus Hong Kong, which is wholly owned by Tempus Value Chain. Tempus Value Chain is wholly owned by Tempus Logistics, which is in turn owned as to 65% by Tempus Group and 35% by Pingfeng Jewellery, respectively. Pingfeng Jewellery is owned as to 67% by Mr. Zhong Baisheng and 33% by Ms. Duan Naiqi, respectively. Tempus Group is owned as to 98% by Pingfeng Jewellery, 1.34% by Mr. Zhong Baisheng and 0.66% by Ms. Duan Naiqi, respectively. Therefore, pursuant to Part XV of the SFO, each of Mr. Zhong Baisheng, Ms. Duan Naiqi, Pingfeng Jewellery, Tempus Group, Tempus Logistics and Tempus Value Chain is deemed to be interested in the Shares held by Tempus Hong Kong. As at the date of this report, Tempus Hong Kong held 201,534,092 Shares, representing approximately 57.7% of the issued share capital of the Company.
  3. SCGC Capital Holding Company Limited is wholly owned by Shenzhen Capital (Hong Kong) Company Limited, which is wholly owned by Shenzhen Capital Group Co., Ltd. Therefore, pursuant to Part XV of the SFO, each of Shenzhen Capital (Hong Kong) Company Limited and Shenzhen Capital Group Co., Ltd. is deemed to be interested in the Shares held by SCGC Capital Holding Company Limited.
  4. The Minority Shareholders have been the persons acting in concert since 1 April 2008 pursuant to a confirmatory agreement dated 1 February 2011 entered into by and among them. Accordingly, each of the Minority Shareholders is deemed to be interested in the Shares in which the Minority Shareholders are interested pursuant to section 318 of the SFO.
  5. On 12 September 2019, Tempus Hong Kong, Tempus Value Chain, Tempus Logistics, Tempus Group and Mr. Zhong Baisheng (collectively, the "Controlling Shareholder Group" ) entered into the voting rights entrustment agreement (the "Voting Rights Entrustment Agreement" ) with Zhongke Jianye High New Technology Co., Ltd* (中科建業高 新技術有限公司) ( "Zhongke Jianye" ). Pursuant to which, Tempus Hong Kong entrusted Zhongke Jianye to exercise the voting rights of 69,502,899 ordinary shares it directly held (the "Entrusted Voting Rights" ), representing 19.9% of the total issued Shares. On 13 May 2020, the Controlling Shareholder Group entered into a termination agreement to the Voting Rights Entrustment Agreement with Zhongke Jianye to terminate the Entrusted Voting Rights. For more details, please refer to the Company' s announcements dated 12 September 2019, 11 May 2020 and 13 May 2020.
  6. The approximate percentage of shareholding is calculated based on a total of 349,260,800 issued Shares as at 30 June 2020.

Save as disclosed above, as at 30 June 2020, the Directors were not aware of any persons, other than a Director or a chief executive of the Company, who had or were deemed or taken to have interests or short positions in Shares or underlying Shares, which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or which were required to be entered in the registered kept by the Company under the SFO.

24

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

OTHER INFORMATION

SHARE OPTION SCHEME

The Company has conditionally adopted the Share Option Scheme on 25 November 2011 for the purpose of enabling the Company to grant options to selected participants as incentives or rewards for their contribution to the Group.

On 29 January 2014, 31 August 2015, 26 January 2017 and 16 April 2018, the Group granted 3,180,000 share options (Lot 1), 5,400,000 share options (Lot 2), 23,420,000 share options (Lot 3) and 34,986,000 share options (Lot 4), respectively, under the Share Option Scheme at the exercise price of HK$0.62 per share, HK$3.38 per share, HK$1.84 per share and HK$2.13 per share, respectively, to certain Directors, senior management and selected employees of the Group.

At the annual general meeting of the Company held on 24 May 2019 (the "2019 AGM" ), the shareholders of the Company passed an ordinary resolution to refresh the scheme mandate limit of the share option scheme to 10% of the Shares in issue as at the date of the 2019 AGM. Therefore, the maximum number of Shares which may be issued upon exercise of all share options that may be granted under the refreshed scheme mandate limit is 34,926,080 Shares. For details, please refer to the Company' s circular dated 24 April 2019 and the Company' s announcement dated 24 May 2019.

Details of the movements in the share options during the Period are set out below:

Number of Share Options

Exercise

Outstanding

price per

as at

Granted

Exercised

Lapsed

Cancelled

Outstanding

Share

1 January

during the

during the

during the

during the

as at

Grantees

Date of grant

Vesting period

Exercise period

HK$

2020

Period

Period

Period

Period

30 June 2020

Mr. Yip Chee Lai,

26.1.2017

26.1.2017

26.1.2017 - 25.1.2021

1.84

200,000

-

-

-

-

200,000

Charlie

26.1.2017 - 25.1.2018

26.1.2018 - 25.1.2021

1.84

600,000

-

-

-

-

600,000

26.1.2017 - 25.1.2019

26.1.2019 - 25.1.2021

1.84

600,000

-

-

-

-

600,000

26.1.2017 - 25.1.2020

26.1.2020 - 25.1.2021

1.84

600,000

-

-

-

-

600,000

16.4.2018

16.4.2018

16.4.2018 - 15.4.2022

2.13

200,000

-

-

-

-

200,000

16.4.2018 - 15.4.2019

16.4.2019 - 15.4.2022

2.13

600,000

-

-

-

-

600,000

16.4.2018 - 15.4.2020

16.4.2020 - 15.4.2022

2.13

600,000

-

-

-

-

600,000

16.4.2018 - 15.4.2021

16.4.2021 - 15.4.2022

2.13

600,000

-

-

-

-

600,000

Sub-total

4,000,000

-

-

-

-

4,000,000

Mr. Sun Yifei

26.1.2017

26.1.2017

26.1.2017 - 25.1.2021

1.84

200,000

-

-

-

-

200,000

26.1.2017 - 25.1.2018

26.1.2018 - 25.1.2021

1.84

600,000

-

-

-

-

600,000

26.1.2017 - 25.1.2019

26.1.2019 - 25.1.2021

1.84

600,000

-

-

-

-

600,000

26.1.2017 - 25.1.2020

26.1.2020 - 25.1.2021

1.84

600,000

-

-

-

-

600,000

16.4.2018

16.4.2018

16.4.2018 - 15.4.2022

2.13

200,000

-

-

-

-

200,000

16.4.2018 - 15.4.2019

16.4.2019 - 15.4.2022

2.13

600,000

-

-

-

-

600,000

16.4.2018 - 15.4.2020

16.4.2020 - 15.4.2022

2.13

600,000

-

-

-

-

600,000

16.4.2018 - 15.4.2021

16.4.2021 - 15.4.2022

2.13

600,000

-

-

-

-

600,000

Sub-total

4,000,000

-

-

-

-

4,000,000

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

25

OTHER INFORMATION

Number of Share Options

Exercise

Outstanding

price per

as at

Granted

Exercised

Lapsed

Cancelled

Outstanding

Share

1 January

during the

during the

during the

during the

as at

Grantees

Date of grant

Vesting period

Exercise period

HK$

2020

Period

Period

Period

Period

30 June 2020

Mr. Han Biao

26.1.2017

26.1.2017

26.1.2017 - 25.1.2021

1.84

20,000

-

-

-

-

20,000

26.1.2017 - 25.1.2018

26.1.2018 - 25.1.2021

1.84

60,000

-

-

-

-

60,000

26.1.2017 - 25.1.2019

26.1.2019 - 25.1.2021

1.84

60,000

-

-

-

-

60,000

26.1.2017 - 25.1.2020

26.1.2020 - 25.1.2021

1.84

60,000

-

-

-

-

60,000

16.4.2018

16.4.2018

16.4.2018 - 15.4.2022

2.13

20,000

-

-

-

-

20,000

16.4.2018 - 15.4.2019

16.4.2019 - 15.4.2022

2.13

60,000

-

-

-

-

60,000

16.4.2018 - 15.4.2020

16.4.2020 - 15.4.2022

2.13

60,000

-

-

-

-

60,000

16.4.2018 - 15.4.2021

16.4.2021 - 15.4.2022

2.13

60,000

-

-

-

-

60,000

Sub-total

400,000

-

-

-

-

400,000

Mr. Li Qi

26.1.2017

26.1.2017

26.1.2017 - 25.1.2021

1.84

20,000

-

-

-

-

20,000

26.1.2017 - 25.1.2018

26.1.2018 - 25.1.2021

1.84

60,000

-

-

-

-

60,000

26.1.2017 - 25.1.2019

26.1.2019 - 25.1.2021

1.84

60,000

-

-

-

-

60,000

26.1.2017 - 25.1.2020

26.1.2020 - 25.1.2021

1.84

60,000

-

-

-

-

60,000

16.4.2018

16.4.2018

16.4.2018 - 15.4.2022

2.13

20,000

-

-

-

-

20,000

16.4.2018 - 15.4.2019

16.4.2019 - 15.4.2022

2.13

60,000

-

-

-

-

60,000

16.4.2018 - 15.4.2020

16.4.2020 - 15.4.2022

2.13

60,000

-

-

-

-

60,000

16.4.2018 - 15.4.2021

16.4.2021 - 15.4.2022

2.13

60,000

-

-

-

-

60,000

Sub-total

400,000

-

-

-

-

400,000

Other eligible

26.1.2017

26.1.2017

26.1.2017 - 25.1.2021

1.84

800,000

-

-

(350,000)

-

450,000

participants

26.1.2017 - 25.1.2018

26.1.2018 - 25.1.2021

1.84

2,400,000

-

-

(1,050,000)

-

1,350,000

26.1.2017 - 25.1.2019

26.1.2019 - 25.1.2021

1.84

2,400,000

-

-

(1,050,000)

-

1,350,000

26.1.2017 - 25.1.2020

26.1.2020 - 25.1.2021

1.84

2,400,000

-

-

(1,050,000)

-

1,350,000

16.4.2018

16.4.2018

16.4.2018 - 15.4.2022

2.13

1,259,860

-

-

(429,860)

-

830,000

16.4.2018 - 15.4.2019

16.4.2019 - 15.4.2022

2.13

3,779,580

-

-

(1,289,580)

-

2,490,000

16.4.2018 - 15.4.2020

16.4.2020 - 15.4.2022

2.13

3,779,580

-

-

(1,289,580)

-

2,490,000

16.4.2018 - 15.4.2021

16.4.2021 - 15.4.2022

2.13

3,779,580

-

-

(1,289,580)

-

2,490,000

Sub-total

20,598,600

-

-

(7,798,600)

-

12,800,000

Total

29,398,600

-

-

(7,798,600)

-

21,600,000

Note: Further details of the Share Option Scheme are set out in note 26 to the interim financial statements.

26

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

TO THE BOARD OF DIRECTORS OF TEMPUS HOLDINGS LIMITED

(incorporated in the Cayman Islands with limited liability)

INTRODUCTION

We have reviewed the condensed consolidated financial statements of Tempus Holdings Limited (the "Company" ) and its subsidiaries (collectively referred to as the "Group" ) set out on pages 29 to 64, which comprise the condensed consolidated statement of financial position as of 30 June 2020 and the related condensed consolidated statement of profit or loss and other comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the six-month period then ended, and certain explanatory notes. The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial information to be in compliance with the relevant provisions thereof and Hong Kong Accounting Standard 34 "Interim Financial Reporting" ( "HKAS 34" ) issued by the Hong Kong Institute of Certified Public Accountants. The directors of the Company are responsible for the preparation and presentation of these condensed consolidated financial statements in accordance with HKAS 34. Our responsibility is to express a conclusion on these condensed consolidated financial statements based on our review, and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

SCOPE OF REVIEW

We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Hong Kong Institute of Certified Public Accountants. A review of these condensed consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

27

REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with HKAS 34.

EMPHASIS OF MATTER

We draw your attention to Note 1 to the condensed consolidated financial statements, which states that the Group incurred a net loss of approximately HK$42 million for the six months ended 30 June 2020. As at 30 June 2020, the Group' s current liabilities exceeded its current assets by approximately HK$271 million. As at 30 June 2020, the Group has total bank and other borrowings of approximately HK$201 million, of which approximately HK$133 million are repayable within twelve months from 30 June 2020 and approximately HK$68 million contain a repayment on demand clause, as disclosed in Note 21. In addition, the Group' s convertible bonds together with interest payable amounted to approximately HK$180 million as at 30 June 2020 are repayable on demand since the Group and its guarantor failed to settle the principal and interest on the maturity date (which was 30 May 2019), as disclosed in Note

22. These conditions, together with other matters disclosed in Note 1 to the condensed consolidated financial statements, indicate the existence of material uncertainties which may cast significant doubt about the Group' s ability to continue as a going concern. Our conclusion is not modified in respect of this matter.

Moore Stephens CPA Limited

Certified Public Accountants

Chan King Keung

Practising Certificate Number: P06057

Hong Kong, 28 August 2020

28

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the six months ended 30 June 2020

Unaudited for the

six months ended

30 June

30 June

2020

2019

NOTES

HK$' 000

HK$' 000

(Restated)

Continuing operations

Revenue

3A, 3B

171,849

227,396

Cost of sales

(83,155)

(100,164)

Gross profit

88,694

127,232

Other income

4

5,985

7,641

Other gains and losses, net

5

(6,783)

(7,500)

Reversal of impairment losses/(impairment losses) on

financial assets

13,916

(5,929)

Share of results of associates

(3,262)

(419)

Selling and distribution expenses

(81,583)

(107,730)

Administrative expenses

(39,977)

(53,451)

Finance costs

6

(19,089)

(25,767)

Loss before tax

7

(42,099)

(65,923)

Income tax expense

8

(274)

(722)

Loss for the period from continuing operations

(42,373)

(66,645)

Discontinued operations

Loss for the period from discontinued operations

9

-

(878)

Loss for the period

(42,373)

(67,523)

Other comprehensive (loss)/income for the period

Item that may be reclassified subsequently to

profit or loss:

Exchange difference arising on translation

(2,682)

637

Total comprehensive loss for the period

(45,055)

(66,886)

Loss for the period attributable to:

Owners of the Company

- for continuing operations

(42,033)

(66,532)

- for discontinued operations

-

526

(42,033)

(66,006)

Non-controlling interests

- for continuing operations

(340)

(113)

- for discontinued operations

-

(1,404)

(340)

(1,517)

(42,373)

(67,523)

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

29

CONDENSED CONSOLIDATED STATEMENT OF

PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the six months ended 30 June 2020

Unaudited for the

six months ended

30 June

30 June

2020

2019

NOTE

HK$' 000

HK$' 000

(Restated)

Total comprehensive loss for the period

attributable to:

Owners of the Company

(44,398)

(65,392)

Non-controlling interests

(657)

(1,494)

(45,055)

(66,886)

Loss per share

11

- from continuing operations

(12.03)

(19.04)

- from discontinued operations

-

0.15

Basic and diluted (HK cents)

(12.03)

(18.89)

30

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2020

30 June

31 December

2020

2019

NOTES

HK$' 000

HK$' 000

(Unaudited)

(Audited)

Non-current assets

Property, plant and equipment

12

317,580

324,463

Right-of-use assets

12

46,240

63,828

Investment properties

13

-

-

Investment in a joint venture

14

-

-

Investments in associates

15

11,208

14,455

Financial assets at fair value through profit or loss

16

14,835

22,972

Deferred tax assets

1,253

1,253

Utility, other deposits paid and other receivable

18,112

8,452

409,228

435,423

Current assets

Inventories

17

30,249

33,429

Trade, bills and other receivables

18

84,709

144,478

Utility and other deposits paid

12,226

12,630

Amount due from a fellow subsidiary

877

-

Loan receivable

19

-

-

Tax recoverable

1,173

1,488

Pledged bank deposits

3,404

3,404

Bank balances and cash

84,750

73,340

217,388

268,769

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

31

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2020

30 June

31 December

2020

2019

NOTES

HK$' 000

HK$' 000

(Unaudited)

(Audited)

Current liabilities

Trade and other payables

20

65,994

86,734

Contract liabilities

11,441

11,628

Amount due to an intermediate holding company

124

-

Amount due to ultimate holding company

47

-

Amount due to a fellow subsidiary

906

-

Amount due to immediate holding company

600

600

Lease liabilities

24,943

38,829

Tax payable

2,719

2,637

Bank and other borrowings - due within one year

21

201,196

205,356

Convertible bonds

22

180,017

170,504

487,987

516,288

Net current liabilities

(270,599)

(247,519)

Total assets less current liabilities

138,629

187,904

Non-current liabilities

Lease liabilities

23,270

27,490

Net assets

115,359

160,414

Capital and reserves

Share capital

23

27,231

27,231

Reserves

64,132

108,530

Equity attributable to owners of the Company

91,363

135,761

Non-controlling interests

23,996

24,653

Total equity

115,359

160,414

32

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

2020 REPORT INTERIM LIMITED HOLDINGS TEMPUS

Attributable to owners of the Company

Retained

Capital

Share

Property

profits/

Non-

Share

Share

redemption

options

Translation

Capital

revaluation

Other

Statutory

(Accumulated

controlling

capital

premium

reserve

reserve

reserve

reserve

reserve

reserve

reserve

losses)

Total

interests

Total

HK$' 000

HK$' 000

HK$' 000

HK$' 000

HK$' 000

HK$' 000

HK$' 000

HK$' 000

HK$' 000

HK$' 000

HK$' 000

HK$' 000

HK$' 000

At 1 January 2019 (audited)

27,279

360,207

32

9,374

(14,695)

(124,750)

2,332

(20,677)

14,100

150,807

404,009

43,046

447,055

Loss for the period

-

-

-

-

-

-

-

-

-

(66,006)

(66,006)

(1,517)

(67,523)

Other comprehensive loss for the period

- exchange difference arising on translation

-

-

-

-

614

-

-

-

-

-

614

23

637

Total comprehensive income/(loss)

for the period

-

-

-

-

614

-

-

-

-

(66,006)

(65,392)

(1,494)

(66,886)

Reversal of equity-settledshare-based

payments

-

-

-

(214)

-

-

-

-

-

-

(214)

-

(214)

Transfer upon forfeiture of share options

-

-

-

(124)

-

-

-

-

-

124

-

-

-

Share repurchased and cancelled (Note 23)

(48)

(632)

-

-

-

-

-

-

-

-

(680)

-

(680)

Transfer to statutory reserve

-

-

-

-

-

-

-

-

399

(399)

-

-

-

At 30 June 2019 (unaudited)

27,231

359,575

32

9,036

(14,081)

(124,750)

2,332

(20,677)

14,499

84,526

337,723

41,552

379,275

At 1 January 2020 (audited)

27,231

359,575

32

2,546

(18,939)

(124,750)

-

(20,677)

14,067

(103,324)

135,761

24,653

160,414

Loss for the period

-

-

-

-

-

-

-

-

-

(42,033)

(42,033)

(340)

(42,373)

Other comprehensive loss for the period

- exchange difference arising on translation

-

-

-

-

(2,365)

-

-

-

-

-

(2,365)

(317)

(2,682)

Total comprehensive loss

for the period

-

-

-

-

(2,365)

-

-

-

-

(42,033)

(44,398)

(657)

(45,055)

Transfer upon forfeiture of share options

-

-

-

(744)

-

-

-

-

-

744

-

-

-

At 30 June 2020 (unaudited)

27,231

359,575

32

1,802

(21,304)

(124,750)

-

(20,677)

14,067

(144,613)

91,363

23,996

115,359

OF STATEMENTCONSOLIDATED CONDENSED EQUITY IN CHANGES 2020 June 30 ended months six the For

33

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2020

Unaudited for the

six months ended

30 June

30 June

2020

2019

NOTES

HK$' 000

HK$' 000

Operating activities

Operating cash flows before movements in working

capital

3,891

10,490

Decrease in inventories

3,180

26

Decrease in trade, bills and other receivables

63,024

30,438

Decrease in utility and other deposits paid

775

6,179

Decrease in trade and other payables

(20,738)

(5,988)

Decrease in contract liabilities

(187)

(3,413)

Cash generated from operations

49,945

37,732

Income taxes refunded/(paid)

123

(6,463)

Net cash generated from operating activities

50,068

31,269

Investing activities

Deposit received for disposal of a subsidiary

-

20,000

Purchases of property, plant and equipment

12

(2,516)

(5,888)

Interest received

102

213

Increase in pledged bank deposits

-

(17,449)

Repayment of a loan from a third party

19

-

900

Net cash used in investing activities

(2,414)

(2,224)

34

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2020

Unaudited for the

six months ended

30 June

30 June

2020

2019

NOTES

HK$' 000

HK$' 000

Financing activities

Interest paid

(2,334)

(3,399)

Repayment of convertible bonds

22

(5,000)

-

New bank and other borrowings raised

21

19,307

45,814

Repurchase of shares

23

-

(680)

Repayment of bank borrowings

21

(1,660)

(54,201)

Repayment of other borrowings

21

(21,807)

-

Repayment of senior note

-

(50,000)

Payment of lease liabilities

(22,606)

(25,336)

Other financing cash flows

197

(1,320)

Net cash used in financing activities

(33,903)

(89,122)

Net increase/(decrease) in cash and

cash equivalents

13,751

(60,077)

Cash and cash equivalents at the beginning

of the period

73,340

134,467

Effect of foreign exchange rate changes

(2,341)

126

Cash and cash equivalents at the end of

the period*

84,750

74,516

  • Cash and cash equivalents of the subsidiary classified as disposal group held for sale are included in cash and cash equivalents as stated in the condensed consolidated statement of cash flows.

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

35

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

1. BASIS OF PREPARATION

The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard ( "HKAS" ) 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants (the "HKICPA" ) as well as the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Stock Exchange" ) (the "Listing Rules" ).

The condensed consolidated financial statements is presented in Hong Kong Dollars ( "HK$" ).

Going concern

During the six months ended 30 June 2020, the Group reported a net loss of approximately HK$42 million. As at 30 June 2020, the Group' s current liabilities exceeded its current assets by approximately HK$271 million. As at 30 June 2020, the Group has total bank and other borrowings of approximately HK$201 million, of which are approximately HK$133 million are repayable within twelve months from 30 June 2020 and approximately HK$68 million contain a repayment on demand clause, as disclosed in Note 21. In addition, the Group' s convertible bonds together with interest payable amounting to approximately HK$180 million as at 30 June 2020 are repayable on demand since the Group and its guarantor failed to settle the principal and interest on the maturity date (which was 30 May 2019), as disclosed in Note 22. The bank balances and cash of the Group amounted to approximately HK$85 million as at 30 June 2020.

These conditions indicate the existence of a material uncertainty that may cast significant doubt on the Group' s ability to continue as a going concern and therefore, the Group may not be able to realise its assets and discharge its liabilities in the normal course of business.

Nevertheless, the Directors of the Company have adopted the going concern basis in the preparation of the condensed consolidated financial statements of the Group based on the following:

  1. The Group is discussing with the subscriber of the convertible bonds to extend the maturity date of the convertible bonds. No legal action to request immediate repayment has been taken by the subscriber of the convertible bonds up to the date of this interim report;
  2. The Group is looking for an opportunity to realise part of its investments and other assets to reduce its overall business risk and to obtain additional working capital;
  3. The Group has implemented measures to speed up the collection of outstanding sales proceeds; and
  4. The Group is planning to adopt various cost control measures to reduce various general and administrative and other operating expenses.

36

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

1. BASIS OF PREPARATION (Continued)

Going concern (Continued)

Provided that these measures can successfully improve the liquidity of the Group, the Directors of the Company are satisfied that the Group will be able to meet its financial obligation as and when they fall due for the foreseeable future. Accordingly, the condensed consolidated financial statements have been prepared on a going concern basis.

Should the Group be unable to continue as a going concern, adjustments would have to be made to the condensed consolidated financial statements to restate the values of assets to their estimated recoverable amounts, to provide for any further liabilities which might arise and to re-classifynon-current assets and liabilities as current assets and liabilities, respectively. The effects of these adjustments have not been reflected in these condensed consolidated financial statements.

2. PRINCIPAL ACCOUNTING POLICIES

The condensed consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments which are measured at fair values at the end of the reporting period.

Other than changes in accounting policies resulting from application of new Hong Kong Financial Reporting Standards ( "HKFRSs" ), 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 financial statements for the year ended 31 December 2019.

Application of new and amendments to HKFRSs and an interpretation

In the current interim period, the Group has applied, for the first time, the Amendments to Reference to the Conceptual Framework in HKFRS Standards and the following amendments to HKFRSs issued by the HKICPA which are mandatory 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

Definition of Material

HKAS 8

Amendments to HKFRS 3

Definition of a Business

Amendments to HKFRS 9,

Interest Rate Benchmark Reform

HKAS 39 and HKFRS 7

In addition, the Group has early applied the Amendment to HKFRS 16 "COVID-19-Related Rent Concessions" .

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

37

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

2. PRINCIPAL ACCOUNTING POLICIES (Continued)

Application of new and amendments to HKFRSs and an interpretation (Continued)

Except as described below, the application of the Amendments to References to the Conceptual Framework in HKFRS Standards and the amendments to HKFRSs in current period has had no material impact on the Group' s financial performance for current and prior periods and/or on the disclosures set out in these condensed consolidated financial statements.

Impacts and accounting policies on early application of Amendment to HKFRS 16 "COVID-19-Related Rent Concessions"

Accounting policies

Leases

COVID-19-related rent concessions

Rent concessions relating to lease contracts that occurred as a direct consequence of the COVID-19 pandemic, the Group has elected to apply the practical expedient not to assess whether the change is a lease modification if all of the following conditions are met:

  • The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;
  • Any reduction in lease payments affects only payments original due on or before 30 June 2021; and
  • There is no substantive change to other terms and conditions of the lease.

A lessee applying the practical expedient accounts for changes in lease payments resulting from rent concessions the same way it would account for the changes applying HKFRS 16 "Leases" if the changes were not a lease modification. Forgiveness or waiver of lease payments are accounted for as variable lease payments. The related lease liabilities are adjusted to reflect the amounts forgiven or waived with a corresponding adjustment recognised in the profit or loss in the period in which the event occurs.

Transition and summary of effects

The Group has early applied the amendment in the current interim period. The application has no impact to the opening accumulated losses at 1 January 2020. The Group recognised changes in lease payments that resulted from rent concessions of HK$4,192,000 in the profit or loss for the current interim period.

38

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

3A. REVENUE FROM GOODS AND SERVICES

Disaggregation of revenue

For the six months ended 30 June 2020

Continuing operations

Sales of

health and

wellness

products

Trading

business

business

Total

HK$' 000

HK$' 000

HK$' 000

(Unaudited)

(Unaudited)

(Unaudited)

Types of goods or services

Sales of health and wellness products:

Relaxation products

155,311

-

155,311

Fitness and other products

14,408

-

14,408

169,719

-

169,719

Sales of consumer products

-

2,130

2,130

Total

169,719

2,130

171,849

Geographical markets

Hong Kong

57,014

-

57,014

Macau

10,901

-

10,901

PRC

82,419

2,130

84,549

Singapore

17,916

-

17,916

Malaysia

1,469

-

1,469

Total

169,719

2,130

171,849

Timing of revenue recognition

A point in time

169,719

2,130

171,849

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

39

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

3A. REVENUE FROM GOODS AND SERVICES (Continued)

Disaggregation of revenue (Continued)

For the six months ended 30 June 2019 (restated)

Continuing operations

Sales of

health and

wellness

products

Trading

business

business

Total

HK$' 000

HK$' 000

HK$' 000

(Unaudited)

(Unaudited)

(Unaudited)

Types of goods or services

Sales of health and wellness products:

Relaxation products

219,315

-

219,315

Fitness and other products

7,550

-

7,550

226,865

-

226,865

Sales of consumer products

-

531

531

-

531

531

Total

226,865

531

227,396

Geographical markets

Hong Kong

70,359

-

70,359

Macau

14,054

-

14,054

PRC

112,752

531

113,283

Singapore

26,744

-

26,744

Malaysia

2,956

-

2,956

Total

226,865

531

227,396

Timing of revenue recognition

A point in time

226,865

531

227,396

40

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

3B. REVENUE AND SEGMENT INFORMATION

The following is an analysis of the Group' s revenue and results by reportable and operating segments based on information reported to the chief operating decision maker for the purposes of performance assessment and resource allocation.

The Group' s reportable and operating segments under HKFRS 8 Operating Segments are as follows:

Sales of health and wellness

- Sales and research and development of health and

products business

wellness related products

Trading business

- Trading and distribution of consumer products

As disclosed in Note 9, the Group ceased its existing logistics operations upon the partial disposal of the shareholding in Tempus Sky Enterprises Limited ( "Tempus Sky" ) and disposal of Shenzhen Qianhai Tempus Value Chain Co., Ltd ( "Qianhai Value Chain" ) during the year ended 31 December 2019 and its existing logistics operations that include "Hong Kong Logistic Business" (see Note 9) and "Value Chain Logistic Business" (see Note 9) were classified as discontinued operations. Comparative figures have been restated to reflect the cessation of the logistics business as discontinued operations, and segment information in this note includes only continuing operations.

For the six months ended 30 June 2020

Continuing operations

Sales of

health and

wellness

products

Trading

business

business

Total

HK$' 000

HK$' 000

HK$' 000

(Unaudited)

(Unaudited)

(Unaudited)

Revenue

External sales

169,719

2,130

171,849

Inter-segment sales

4,905

-

4,905

Segment revenue

174,624

2,130

176,754

(4,905)

Elimination

Group revenue

171,849

Segment loss

(11,496)

(1,269)

(12,765)

Share of results of associates

(3,262)

Reversal of impairment losses on financial assets

13,916

Unallocated administrative expenses

(14,218)

Other gains and losses

(6,783)

Bank interest income

102

Finance costs

(19,089)

Loss before tax

(42,099)

Income tax expense

(274)

Loss for the period from continuing operations

(42,373)

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

41

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

3B. REVENUE AND SEGMENT INFORMATION (Continued)

For the six months ended 30 June 2019 (Restated)

Continuing operations

Sales of

health and

wellness

products

Trading

business

business

Total

HK$' 000

HK$' 000

HK$' 000

(Unaudited)

(Unaudited)

(Unaudited)

Revenue

External sales

226,865

531

227,396

Inter-segment sales

-

1,569

1,569

Segment revenue

226,865

2,100

228,965

Elimination

(1,569)

Group revenue

227,396

Segment loss

(3,759)

(6,792)

(10,551)

Share of results of associates

(419)

Impairment losses on financial assets

(5,929)

Unallocated administrative expenses

(19,384)

Other gains and losses

(7,500)

Rental income

2,016

Bank interest income

198

Interest income on loan receivable

1,413

Finance costs

(25,767)

Loss before tax

(65,923)

Income tax expense

(722)

Loss for the period from continuing operations

(66,645)

42

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

4. OTHER INCOME

Unaudited for the

six months ended

30 June

30 June

2020

2019

HK$' 000

HK$' 000

(Restated)

Continuing operations

Bank interest income

102

198

Interest income on loan receivable

-

1,413

Rental income

-

2,016

Government grants (Note)

4,021

1,737

Sundry income

1,862

2,277

5,985

7,641

Note: During the current interim period the Group recognised government grants of HK$880,000 in respect of COVID-19-related subsidies, related to Retail Sector Subsidy Scheme provided by Hong Kong government. The remaining amount recognised for the six months ended 30 June 2019 and 2020 represented subsidies from government authority received before period ended 30 June 2019 and 2020, respectively, without any specific conditions attached to the grants.

5. OTHER GAINS AND LOSSES, NET

Unaudited for the

six months ended

30 June

30 June

2020

2019

HK$' 000

HK$' 000

(Restated)

Continuing operations

Gain on fair value change of derivatives embedded in

convertible bonds

-

6,895

Gain on lapse of conversion option of a convertible bond

-

3,200

Loss on fair value change on financial assets at

fair value through profit or loss ( "FVTPL" )

(8,137)

(1,347)

Loss on fair value change of investment properties (Note 13)

-

(4,980)

Loss on disposal group classified as held for sale

-

(13,388)

Gain on disposal of a lease

153

-

Net exchange gain

1,201

2,120

(6,783)

(7,500)

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

43

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

6. FINANCE COSTS

Unaudited for the

six months ended

30 June

30 June

2020

2019

HK$' 000

HK$' 000

(Restated)

Continuing operations

Interest on:

Bank borrowings

2,852

3,896

Other borrowings

445

-

Convertible bonds (Note 22)

14,513

17,996

Leases

1,279

1,121

Senior note

-

2,754

19,089

25,767

7. LOSS BEFORE TAX

Unaudited for the

six months ended

30 June

30 June

2020

2019

HK$' 000

HK$' 000

(Restated)

Loss before tax has been arrived at after charging/(crediting):

Continuing operations

Cost of inventories recognised as an expense

63,847

75,950

Depreciation of property, plant and equipment

9,025

8,460

Depreciation of right-of-use assets

20,992

19,172

Short-term leases expenses

1,020

460

Variable lease payments not included in the measurement

of lease liabilities (based on turnover generated

from the leased retail shops)

18,995

24,229

COVID-19-related rent concessions

(4,192)

-

Discontinued operations

Depreciation of property, plant and equipment Depreciation of right-of-use assets Short-term leases expenses

  • 1,124
  • 7,366
  • 769

44

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

8. INCOME TAX EXPENSE

Unaudited for the

six months ended

30 June

30 June

2020

2019

HK$' 000

HK$' 000

(Restated)

Continuing operations

Current tax expense:

Hong Kong Profits Tax

96

114

Macau Complementary Income Tax

165

386

Malaysian Corporate Income Tax

13

-

The PRC Enterprise Income Tax

-

222

274

722

Hong Kong Profits Tax is calculated at 16.5% on the estimated assessable profit for both periods.

The Macau Complementary Income Tax is calculated at 12% of the estimated assessable profit for both periods exceeding Macanese Pataca 600,000.

Taxable income of the subsidiary in Malaysia is subject to corporate income tax at the rate of 24% of taxable income for both periods.

Under the Law of the PRC on Enterprise Income Tax, the tax rate of the PRC subsidiary is 25% of taxable income for both periods.

9. DISCONTINUED OPERATION

Partial disposal of the shareholding in Tempus Sky

On 6 August 2019, OTO (BVI) Investment Limited ( "Vendor A" ), the Company' s direct wholly owned subsidiary and an independent third party ( "Purchaser A" ) entered into a sale and purchase agreement pursuant to which Vendor A has conditionally agreed to sell and Purchaser A has conditionally agreed to acquire the 2,000 ordinary shares, representing approximately 14.93% of the entire issued share capital of Tempus Sky, the Company' s indirect non-wholly owned subsidiary.

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

45

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

9. DISCONTINUED OPERATION (Continued)

Partial disposal of the shareholding in Tempus Sky (Continued)

Upon the completion of the partial disposal of shareholding in Tempus Sky on 19 August 2019, the equity interest of Tempus Sky held by the Group was diluted from 51.49% to 36.56%. Tempus Sky ceased to be a subsidiary of the Company and has become an associate of the Group.

The principal business and activity of Tempus Sky and its subsidiaries (together "Tempus Sky Group" ) is provision of logistics services and trading of consumer products in Hong Kong ( "Hong Kong Logistic Business" ). Upon completion of the partial disposal of shareholding in Tempus Sky Group, the Group ceased to engage in Hong Kong Logistic Business. Accordingly, the operation of Tempus Sky Group was classified as discontinued operation.

Disposal of entire equity interest in Qianhai Value Chain

On 30 December 2019, Shenzhen Tempus Value Chain Co., Ltd. ( "SZ Tempus Value Chain" ) ( "Vendor B" ), a non-wholly owned subsidiary directly held by the Company, and Shenzhen Youxingxin Logistics Co., Ltd.* (深圳市友興昕物流有限公司) (the "Purchaser B" ), an independent third party, entered into a sale and purchase agreement, pursuant to which Vendor B has agreed to sell and Purchaser B has agreed to acquire the entire equity interest of Qianhai Value Chain. The disposal was completed on 30 December 2019.

The principal business and activity of Qianhai Value Chain is trading and distribution of consumer products and provision of supply chain services in PRC ( "Value Chain Logistic Business" ). Upon the completion of the disposal of Qianhai Value Chain, the Group ceased to engage in Value Chain Logistic Business. Accordingly, the operation of Value Chain Logistic Business was classified as discontinued operation.

The loss for the period from the discontinued operations is set out below. The comparative figures in the condensed consolidated statement of profit or loss and other comprehensive income have been restated to re-present the result of Hong Kong Logistic Business and Value Chain Logistic Business as discontinued operations.

Unaudited for the

six months ended

30 June

30 June

2020

2019

HK$' 000

HK$' 000

Loss of Hong Kong Logistic Business

for the period

-

(6,144)

Profit of Value Chain Logistic Business

for the period

-

5,266

-

(878)

46

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

9. DISCONTINUED OPERATION (Continued)

The loss for the period from discontinued operations

Unaudited for the

six months ended

30 June

30 June

2020

2019

HK$' 000

HK$' 000

Revenue

-

154,914

Cost of sales

-

(139,344)

Gross profit

-

15,570

Other income

-

79

Other gains and losses

-

(677)

Selling and distribution expenses

-

(10,361)

Administrative expenses

-

(3,070)

Finance costs

-

(814)

Profit before tax

-

727

Income tax expense

-

(1,605)

Loss for the period from

discontinued operations

-

(878)

The net cash flows incurred by discontinued operations are as follows:

Unaudited for the

six months ended

30 June

30 June

2020

2019

HK$' 000

HK$' 000

Operating activities

-

10,365

Investing activities

-

(187)

Financing activities

-

(7,647)

Net cash inflow

-

2,531

10. DIVIDENDS

The director of the Company do not recommend an interim dividend for the six months ended 30 June 2020 (for six months ended 30 June 2019: Nil).

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

47

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

11. LOSS PER SHARE

Continuing operations

The calculation of the basic and diluted loss per share for continuing operations attributable to the owners of the Company is based on the following data:

Unaudited for the

six months ended

30 June

30 June

2020

2019

HK$' 000

HK$' 000

(Restated)

Loss

Loss for the period from continuing operations attributable

to owners of the Company

(42,033)

(66,532)

' 000

' 000

Number of shares

Weighted average number of ordinary shares for the

purposes of basic and diluted loss per share

349,261

349,363

Continuing and discontinued operations

The calculation of the basic and diluted loss per share attributable to owners of the Company is based on the following data:

Unaudited for the

six months ended

30 June

30

June

2020

2019

HK$' 000

HK$' 000

Loss

Loss for the period attributable to owners of the Company for

the purpose of basic and diluted loss per share

(42,033)

(66,006)

The denominators used are the same as those set out above for the continuing operations.

48

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

11. LOSS PER SHARE (Continued)

Discontinued operations

The calculation of the basic and diluted earnings per share for discontinued operations attributable to owners of the Company is based on the following data:

Unaudited for the

six months ended

30 June

30

June

2020

2019

HK$' 000

HK$' 000

(Restated)

Earnings

Profit for the period from discontinued operations

attributable to owners of the Company

-

526

The denominators used are the same as those set out above for the continuing operations.

Note: The computation of diluted loss per share for both interim periods does not assume the exercise of the Company' s share options because the exercise price of those share options was higher than the average market price of the Company' s shares and does not assume the conversion of the Company' s convertible bonds since their assumed conversion would result in a decrease in loss per share for both periods.

12. MOVEMENT IN PROPERTY, PLANT AND EQUIPMENT/RIGHT-OF-USE ASSETS

During the current interim period, the Group acquired property, plant and equipment of HK$2,516,000 (for the six months ended 30 June 2019: HK$5,888,000).

During the current interim period, the Group entered into leases for the use of buildings for two to three years. The Group is required to make fixed monthly payments. On lease commencement, the Group recognised HK$5,662,000 (for the six months ended 30 June 2019: HK$ 17,708,000) of right-of-use assets and HK$5,662,000 (for the six months ended 30 June 2019: HK$ 17,708,000) of lease liabilities.

During the current interim period, lessors of the relevant retail stores provided rent concessions to the Group through rent reductions ranging from 6% to 100% over 1 to 6 months.

These rent concessions occurred as a direct consequence of COVID-19 pandemic and met all of the conditions in HKFRS 16.46B, and the Group applied the practical expedient not to assess whether the changes constitute lease modifications. During the current interim period, the effects on changes in lease payments due to forgiveness or waiver by the lessors for the relevant leases of HK$4,192,000 were recognised as negative variable lease payments.

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

49

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

13. MOVEMENT IN INVESTMENT PROPERTIES

On 29 May 2019, an investment property of the Group was transferred from investment properties to disposal group held for sale. The fair value of the investment properties on the date of transfer amounting to HK$137,100,000 was valued by APAC Asset Valuation and Consulting Limited on 31 May 2019, which is a firm of independent professional valuers not connected with the Group, member of the Hong Kong Institute of Surveyors and has appropriate qualifications and recent experiences in the valuation of similar properties in the relevant locations. A loss on fair value change of HK$2,300,000 is recognised in profit or loss included in other gains and losses for the six months ended 30 June 2019. The disposal of the investment property was completed on 23 July 2019.

As 30 June 2019, another investment property of the Group was transferred from investment property to non-current assets classified as held for sale. The fair value of this investment property on the date of transfer amounting to HK$10,620,000 was valued by the management with reference to the consideration of the disposal of the property on 5 July 2019 (date of the provisional sale and purchase agreement). The consideration was arrived after arm' s length negotiations between the Group and the purchaser. A loss on fair value change of HK$2,680,000 is recognised in profit or loss included in other gains and losses for the six months ended 30 June 2019. The disposal of the investment property was completed on 21 July 2019.

The valuation has been arrived at using direct comparison method. The direct comparison method reflects recent transaction prices for similar properties, adjusted unit sale rate, taking into account the location, and individual factors, such as frontage and site.

In estimating the fair value of the properties, the highest and best use of the properties is their current use.

14. INVESTMENT IN A JOINT VENTURE

30 June

31 December

2020

2019

HK$' 000

HK$' 000

(Unaudited)

(Audited)

Cost of investments, unlisted

175

175

Share of post-acquisition losses

(175)

(175)

-

-

50

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

15. INVESTMENTS IN ASSOCIATES

30 June

31 December

2020

2019

HK$' 000

HK$' 000

(Unaudited)

(Audited)

Cost of investments, unlisted

57,470

57,470

Share of post-acquisition losses

(36,101)

(32,839)

Exchange adjustments

(2,811)

(2,826)

18,558

21,805

Less: Provision for impairment (Note)

(7,350)

(7,350)

11,208

14,455

Note: As disclosed in Note 9, upon the loss of control of Tempus Sky, the equity interest of Tempus Sky held by the Group was diluted from 51.49% to 36.56%. Tempus Sky became an associate of the Group since 19 August 2019. As at 31 December 2019, the management reviewed the recoverable amount of the interest in an associate after taking into account of the financial performance and financial position of the associate and the poor business outlook of the associate in 2020. The directors of the Company estimated that there was a significant decline in the present value of the estimated future cash inflow comprising expected dividend income from the associate and expected ultimate disposal. Based on the assessment, the recoverable amount of the Group' s interest in an associate was lower than the carrying amount and a full impairment loss of HK$7,350,000 was recognised during the year ended 31 December 2019. As at 30 June 2020, the directors of the Company revisited the recoverable amount of the associate after taking into account of the financial performance and financial position of the associate and the poor business outlook of the associate in 2020 and considered no reversal of impairment is necessary.

16. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at FVTPL comprise:

30 June

31 December

2020

2019

HK$' 000

HK$' 000

(Unaudited)

(Audited)

Financial assets mandatorily measured at FVTPL

Unlisted investments:

- Equity interest in TBRJ Fund I L.P.

6,472

10,120

- Equity interest in 重慶格洛博電子商務有限公司 ( "格洛博" )

8,363

12,852

14,835

22,972

17. INVENTORIES

All inventories represent finished goods held for resale.

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

51

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

18. TRADE, BILLS AND OTHER RECEIVABLES

30 June

31 December

2020

2019

HK$' 000

HK$' 000

(Unaudited)

(Audited)

Trade receivables

47,802

87,583

Bills receivable

5,699

3,301

Prepayments

15,156

17,140

Other receivables, net of expected credit loss

16,052

36,454

84,709

144,478

For sales of health and wellness products business:

Retail sales (other than those in department stores) are normally settled in cash or by credit cards with the settlement from the corresponding financial institutions within 14 days. Receivables from retail sales in department stores are collected within three months. The Group granted an average credit period from 30 days to 90 days to the corporate customers.

For trading and logistics business:

The Group granted credit period from 30 days to 180 days to the customers of logistics services and a credit period from 30 days to 60 days to customers of trading.

The following is an aging analysis of trade receivables presented based on the invoice date at the end of the reporting period:

30 June 31 December

2020 2019

HK$' 000 HK$' 000

(Unaudited) (Audited)

0 - 30 days

29,345

65,453

31 - 60 days

9,011

11,729

61 - 90 days

5,469

4,719

Over 90 days

3,977

5,682

47,802

87,583

52

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

18. TRADE, BILLS AND OTHER RECEIVABLES (Continued)

Bills receivable have an average original maturity period of 180 days and the aging analysis based on sales invoice dates are as follows:

30 June

31 December

2020

2019

HK$' 000

HK$' 000

(Unaudited)

(Audited)

0 - 30 days

506

595

31 - 60 days

616

509

61 - 90 days

1,204

-

Over 90 days

3,373

2,197

5,699

3,301

19. LOAN RECEIVABLE

Pursuant to an agreement dated 29 June 2017 entered into by the Group and an independent third party, the Group has provided to the independent third party a revolving loan of HK$30,000,000 which carries interest at 10% per annum, guaranteed by a related party of the borrower, and with an original maturity of three months, which can be revolved at a maximum of three times. On 19 June 2018, the Group renewed the loan agreement with the borrower for a year with maturity date on 18 June 2019 and carried interest at 12% per annum.

As at 31 December 2018, impairment allowance for the loan receivable amounted to HK$1,980,000 was provided based on the financial position and the economic environment the borrower operates.

During the year ended 31 December 2019, the borrower has partially repaid HK$900,000 of the principal. The borrower and the guarantor failed to repay the interest and principal according to the agreement. Full impairment allowance of HK$29,100,000 for the loan receivable was provided based on the financial position of the guarantor and the borrower and the economic environment the guarantor and the borrower operate. As a results, additional impairment allowance amounting to HK$27,120,000 (including impairment loss of HK$5,929,000 recognised for the six months ended 30 June 2019) included in impairment losses on financial assets was recognised in the profit or loss for the year ended 31 December 2019.

Up to the date of this interim report, the borrower or guarantor failed to repay the principal of HK$29,100,000. As a result, in the opinion of the directors of the Company, no reversal of impairment is considered necessary for the six months ended 30 June 2020.

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

53

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

20. TRADE AND OTHER PAYABLES

30 June

31 December

2020

2019

HK$' 000

HK$' 000

(Unaudited)

(Audited)

Trade payables

31,644

51,435

Receipts in advance

3,256

2,500

Accruals

12,368

13,234

Others

18,726

19,565

65,994

86,734

The following is an aging analysis of trade payables presented based on the invoice date at the end of the reporting period:

30 June 31 December

2020 2019

HK$' 000 HK$' 000

(Unaudited) (Audited)

0 - 30 days

19,132

37,840

31 - 60 days

3,900

11,861

61 - 90 days

6,714

641

Over 90 days

1,898

1,093

31,644

51,435

The average credit period for trade payables ranges from 0 to 60 days.

54

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

21. BANK AND OTHER BORROWINGS

30 June

31 December

2020

2019

HK$' 000

HK$' 000

(Unaudited)

(Audited)

Secured bank loans

181,996

183,656

Other borrowings

19,200

21,700

201,196

205,356

Carrying amount of the above borrowings that are repayable:

On demand and within one year

130,700

133,200

Carrying amount of bank borrowings that contain a

repayment on demand clause (shown under current

liabilities) and the maturity analysis based on the

scheduled repayment dates set out in the

loan agreements are:

Within one year

2,792

2,990

In more than one year but not more than two years

3,164

3,112

In more than two years but not more than five years

17,539

17,572

More than five years

47,001

48,482

70,496

72,156

201,196

205,356

Less: Amounts due within one year shown under current liabilities

(201,196)

(205,356)

Amounts shown under non-current liabilities

-

-

As at 30 June 2020, the bank borrowings of the Group are at variable interest rate and the weighted average effective interest rate is 1.75% - 2.40% (31 December 2019: 3.28% - 3.66%) per annum.

The other borrowings bear fixed interest rate at 8% (31 December 2019: 8%) per annum. The other borrowings are unsecured.

During the current interim period, the Group repaid bank borrowings amounting to HK$1,660,000 (six months ended 30 June 2019: HK$54,201,000). Besides, the Group repaid other borrowings amounting to HK$21,807,000 (six months ended 30 June 2019: Nil).

The Group' s convertible bonds together with interest payable amounting to approximately HK$180 million (31 December 2019: HK$171 million) as at 30 June 2020 are repayable on demand since the Group and its guarantor failed to settle the principal and interest on the maturity date (which was 30 May 2019), as disclosed in Note 22, this event constituted events of default under certain bank borrowings. As a consequence, bank borrowings with carrying amount of approximately HK$70,496,000 as at 30 June 2020 (31 December 2019: HK$72,156,000), of which the bank may on and at any time after the occurrence of the event of default continuing by notice in writing to the Group declare that the borrowings has become immediately due and payable, were classified as current liabilities. No action has been taken by the bank and no remedies in respect of the cross-defaults have been agreed with the bank up to the date of this interim report.

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

55

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

22. CONVERTIBLE BONDS

Convertible bonds issued on 1 June 2018 ( "CB 2018A" )

On 15 May 2018, the Company entered into a subscription agreement (the "Agreement A" ) with an independent third party (the "Subscriber" ). Pursuant to the Agreement A, the Subscriber agreed to subscribe the convertible bonds with principal amount of HK$160,000,000 at an interest rate of 7% per annum and guaranteed by the non-executive director, Mr. Zhong Baisheng. The CB 2018A was issued to the Subscriber on 1 June 2018 and would be due on 30 May 2019.

The Subscriber has the right to convert the CB 2018A in whole into shares at the maturity date. 67,510,549 new shares will be issued upon full conversion of the CB 2018A based on the initial conversion price of HK$2.37 per share which is subject to certain adjustments as set out in the Agreement A. The conversion option lapsed upon maturity of convertible bonds on 30 May 2019.

The CB 2018A would be redeemed on maturity at its principal amount outstanding together with accrued interest due and payable by the Company on the maturity date.

According to the Company' s announcement dated 11 June 2019, pursuant to the terms and conditions (the "Conditions" ) in the instruments of the convertible bonds, it is an event of default ( "EOD" ) if, among others, Tempus Group Co., Ltd.* (騰邦集團有限公司) ( "Tempus Group" ) fails to make any payment in respect of any financial indebtedness in an amount exceeding HK$30,000,000 (or its equivalent in another currency or currencies) on the due date for payment as extended by any originally applicable grace period. In case of an EOD, the convertible bonds will immediately become due and repayable upon notice of an EOD being given to the Company and additional interest will accrue on the outstanding principal amount of the convertible bonds from the date of the occurrence of an EOD to the date of actual payment at an internal rate of return of 18% per annum. Due to Tempus Group' s default on the corporate bonds on 25 May 2019, the directors of the Company consider that it has technically triggered an EOD under the Conditions.

Further, the Group and its guarantor failed to fully settle the principal amount outstanding of HK$162,752,000 together with accrued interest of HK$5,600,000 of CB 2018A on 30 May 2019. As at 30 June 2020, the interest accrued by the Group after default amounting to HK$26,507,000 (31 December 2019: HK$14,992,000). The Group partially settled HK$52,892,000 after the maturity date of CB 2018A of which HK$5,000,000 was settled during the period ended 30 June 2020. As at 30 June 2020, the principal amount outstanding together with accrued interest of CB 2018A amounted to HK$141,967,000 (31 December 2019: HK$135,452,000).

56

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

22. CONVERTIBLE BONDS (Continued)

Convertible bonds issued on 16 October 2018 ( "CB 2018B" )

On 9 October 2018, the Company entered into another subscription agreement (the "Agreement B" ) with a Subscriber. Pursuant to the Agreement B, the Subscriber agreed to further subscribe the convertible bonds with principal amount of HK$30,000,000 at an interest rate of 7% per annum and guaranteed by the non-executive director, Mr. Zhong Baisheng. The CB 2018B was issued to the Subscriber on 16 October 2018 and would be due on 14 October 2019.

The Subscriber has the right to convert the CB 2018B in whole into shares at the maturity date. 23,510,971 new shares will be issued upon full conversion of the CB 2018B based on the initial conversion price of HK$1.276 per share which is subject to certain adjustments as set out in the Agreement B. The conversion option lapsed upon maturity of convertible bonds on 14 October 2019.

The CB 2018B will be redeemed on maturity at its principal amount outstanding together with accrued interest due and payable by the Company on the maturity date.

Due to the occurrence of EOD mentioned in CB 2018A, CB 2018B immediately become due and repayable upon notice of repayment being given to the Company and additional interest will accrue on the outstanding principal amount of the CB 2018B from the date of the occurrence of an EOD to the date of actual payment at an internal rate of return of 18% per annum on the principal amount outstanding under CB 2018B.

Further, the Group and its guarantor failed to fully settle the principal amount outstanding of HK$30,516,000 together with accrued interest of HK$1,312,000 of CB 2018B on 30 May 2019. As at 30 June 2020, the interest accrued by the Group after default amounting to HK$6,222,000 (31 December 2019: HK$3,224,000). As at 30 June 2020, the principal amount outstanding together with accrued interest of CB 2018B amounted to HK$38,050,000 (31 December 2019: HK$35,052,000).

Up to the date of this interim report, the Company is still in discussion with the Subscriber as to the redemption schedule of CB 2018A and CB 2018B.

The movement of the debt components of CB 2018A and CB 2018B for the current period are set out as below:

Debt

component

HK$' 000

As at 1 January 2020 (audited)

170,504

Interest charged

14,513

Repayment of convertible bonds

(5,000)

As at 30 June 2020 (unaudited)

180,017

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

57

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

23. SHARE CAPITAL

Number

Share

of shares

capital

US$

Ordinary shares of US$0.01 each

Authorised:

At 1 January 2019, 31 December 2019 and 30 June 2020

10,000,000,000

100,000,000

Issued and fully paid or credited as fully paid

At 1 January 2019 (audited)

349,876,800

3,498,768

Share repurchased and cancellation

(616,000)

(6,160)

At 31 December 2019 (audited) and 30 June 2020 (unaudited)

349,260,800

3,492,608

30 June

31 December

2020

2019

HK$' 000

HK$' 000

(Unaudited)

(Audited)

Presented as

27,231

27,231

During the six months ended 30 June 2019, the Company repurchased a total of 616,000 ordinary shares of the Company at an aggregate purchase price of approximately HK$680,000 on the Stock Exchange. The repurchased shares were cancelled and accordingly the issued share capital of the Company was reduced by the nominal value of these ordinary shares of US$6,160 (equivalent to approximately HK$48,000). The premium paid on the repurchase of the ordinary shares of HK$632,000 was charged to share premium directly.

24. PLEDGE OF ASSETS

The following assets were pledged to banks as securities to secure the banking facilities granted to the Group at the end of the reporting period:

30 June 31 December

2020 2019

HK$' 000 HK$' 000

(Unaudited) (Audited)

Leasehold land and buildings

- included in property, plant and equipment

291,961

294,980

Bank deposits

3,404

3,404

295,365

298,384

In addition, certain of the Group' s lease liabilities are secured by the lessor' s charge over the leased assets with carrying values of HK$144,000 (31 December 2019: HK$267,000) as at 30 June 2020.

58

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

25. RELATED PARTY TRANSACTIONS

  1. Related Party balances
    The balance of amount with immediate holding company/an intermediate holding company/ultimate holding company/a fellow subsidiary is unsecured, interest-free and repayable on demand and is disclosed in the condensed consolidated statement of financial position. In the opinion of the directors of the Company, the amount due from/(to) immediate holding company/an intermediate holding company/ultimate holding company/ a fellow subsidiary is expected to be settled within twelve months from the end of the reporting period.
  2. Compensation of key management personnel
    Key management personnel comprises only the directors of the Company and their remuneration during the periods are as follows:

Unaudited for the

six months ended

30 June

30 June

2020

2019

HK$' 000

HK$' 000

Fee

250

251

Salaries and other benefits

3,767

4,326

Retirement benefits scheme contributions

36

33

Share-based payments

-

212

4,053

4,822

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

59

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

26. SHARE-BASED PAYMENTS

The Company' s share option scheme (the "Scheme" ) was adopted pursuant to a resolution in writing passed by all the shareholders of the Company on 25 November 2011 for the primary purpose of recognising and acknowledging the contribution of the eligible participant had or may have made to the Group. Under the Scheme, the board of directors of the Company may grant options to eligible employees, including directors of the Company and its subsidiaries, to subscribe for shares of the Company.

Vesting of the share options is conditional upon the fulfilment of certain performance targets as set out in the respective offer letters to the grantees including financial targets of the Group and individual performance targets for certain periods.

As at 30 June 2020, the number of shares in respect of which options had been granted and remained outstanding under the Scheme was 21,600,000 (31 December 2019: 29,399,000), representing approximately 6.2% (31 December 2019: 8.4%) of the shares of the Company in issue at that date.

The maximum number of shares in respect of which options may be granted under the Scheme must not in aggregate exceed 10% of the total number of shares in issue on the date on which trading of the shares commenced on the Main Board of the Stock Exchange. At the annual general meeting of the Company held on 24 May 2019 (the "2019 AGM" ), the shareholders of the Company passed an ordinary resolution to refresh the scheme mandate limit of the Scheme to 10% of the shares in issue as at the date of the 2019 AGM. Therefore, the maximum number of shares which may be issued upon exercise of all share options that may be granted under the refreshed scheme mandate limit is 34,926,080 shares. For details, please refer to the Company' s circular dated 24 April 2019 and the Company' s announcement dated 24 May 2019.

Pursuant to the terms of the Scheme and in accordance with the relevant provisions of Chapter 17 of the Listing Rules, the limit on the number of shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Scheme and any other share option schemes of the Company at any time must not exceed 30% of the shares in issue from time to time.

Options granted must be taken up within 21 days of the date of grant, upon payment of HK$1 per eligible participant. Options may be exercised at any time during the exercise period as disclosed below. The exercise price is determined by the directors of the Company, and will not be less than the higher of (i) the closing price of the Company' s shares on the date of grant, (ii) the average closing price of the shares for the five business days immediately preceding the date of grant; and (iii) the nominal value of the Company' s share.

60

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

26. SHARE-BASED PAYMENTS (Continued)

Details of the share options are as follows:

No. of share

Date of grant

options granted

Exercise period

Exercise price

26 January 2017

2,342,000

(Note a)

26.1.2017 to 25.1.2021

HK$1.84 per share

7,026,000

(Note b)

26.1.2018 to 25.1.2021

7,026,000

(Note b)

26.1.2019 to 25.1.2021

7,026,000

(Note b)

26.1.2020 to 25.1.2021

23,420,000

16 April 2018

3,498,600

(Note a)

16.4.2018 to 15.4.2022

HK$2.13 per share

10,495,800

(Note b)

16.4.2019 to 15.4.2022

10,495,800

(Note b)

16.4.2020 to 15.4.2022

10,495,800

(Note b)

16.4.2021 to 15.4.2022

34,986,000

Notes: (a) The option vested immediately on the date of grant.

  1. The options vested upon the fulfilment of certain performance targets to the grantees including financial targets of the Group and individual performance targets for certain periods.

The following table discloses movement of the Company' s share options held by directors and eligible employees during the period:

Outstanding

Lapsed

Outstanding

at 1 January

during the

at 30 June

Date of grant

2020

period

2020

26

January 2017

12,400,000

(3,500,000)

8,900,000

16

April 2018

16,998,600

(4,298,600)

12,700,000

29,398,600

(7,798,600)

21,600,000

Exercisable at the end of the period

2,399,900

-

1,620,000

Weighted average exercise price

HK$2.01

HK$2.01

No share options were granted or exercised during the six months ended 30 June 2020.

The Group recognised a reversal of remuneration expenses of HK$214,000 in the staff costs for the six months ended 30 June 2019 in relation to share options granted by the Company. During the six months ended 30 June 2020, as certain performance targets of the share options granted were not fulfilled. Hence, no share-based payment was recognised in the staff costs for the six months ended 30 June 2020.

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

61

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

27. FAIR VALUE OF THE GROUP' S FINANCIAL ASSETS AND FINANCIAL LIABILITIES THAT ARE MEASURED AT FAIR VALUE ON A RECURRING BASIS

Some of the Group' s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation techniques and inputs used) as well as the level of the fair value hierarchy into which the fair value measurements are categorised (levels 1 to 3) based on the degree to which the inputs to the fair value measurements is observable.

Fair value as at

Valuation

Significant

30 June

31 December

Fair value

techniques and

unobservable

2020

2019

hierarchy

key inputs

inputs

HK$' 000

HK$' 000

(Unaudited)

(Audited)

Financial assets at 14,835 22,972 Level 3 Income approach

FVTPL (UnlistedThe discounted cash flow

equity securities)

method was used to capture the present value of the expected future economic benefits to be derived from the ownership of these investees.

Long-term revenue growth rates, taking into account management' s experience and knowledge of market conditions of the specific industries, at 3 percent (31 December 2019: 3 percent).

Long-termpre-tax operating margin taking into account management' s experience and knowledge of market conditions of the specific industries ranging from 8 to 35 percent (31 December 2019: from 26 to 35 percent).

Weighted average cost of capital ( "WACC" ), ranging from 15 to 19 percent (31 December 2019: from 14 to 20 percent).

Note: There were no transfers between level 1, level 2 and level 3 during the six months ended 30 June 2020.

62

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

27. FAIR VALUE OF THE GROUP' S FINANCIAL ASSETS AND FINANCIAL LIABILITIES THAT ARE MEASURED AT FAIR VALUE ON A RECURRING BASIS (Continued)

Reconciliation of Level 3 fair value measurements of financial assets and financial liabilities

Derivative

Financial

components of

assets

convertible

at FVTPL

bonds

HK$' 000

HK$' 000

At 1 January 2019 (audited)

45,761

10,095

Fair value change recognised in profit or loss

(929)

(6,895)

Lapse of conversion option

-

(3,200)

30 June 2019 (unaudited)

44,832

-

At 1 January 2020 (audited)

22,972

-

Fair value change recognised in profit or loss

(8,137)

-

At 30 June 2020 (unaudited)

14,835

-

The total gains or losses for the period relating to financial assets and financial liabilities that are measured at fair value at the end of each reporting period are included in "other gains and losses".

Sensitivity analysis

Financial assets at FVTPL

At 30 June 2020, if the long-term revenue growth rate had been 5% higher/lower and all other input variables of the valuation model were held constant, the Group' s loss for the period would increase by HK$47,000/decrease by HK$46,000, as a result of changes in fair value of the financial assets at FVTPL. If the long-termpre-tax operating margin had been 5% higher/lower and all other input variables of the valuation model were held constant, the Group' s loss for the period would increase by HK$260,000/decrease by HK$260,000, as a result of changes in fair value of the financial assets at FVTPL. If the WACC had been 5% higher/lower and all other input variables of the valuation model were held constant, the Group' s loss for the period would decrease by HK$487,000/increase by HK$551,000, as a result of changes in fair value of the financial assets at

FVTPL.

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

63

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

27. FAIR VALUE OF THE GROUP' S FINANCIAL ASSETS AND FINANCIAL LIABILITIES THAT ARE MEASURED AT FAIR VALUE ON A RECURRING BASIS (Continued)

Fair value measurements and valuation processes

The board of directors of the Company determine the appropriate valuation technique and inputs for fair value measurements.

As at 30 June 2020, the valuation of financial assets at FVTPL was estimated by the management.

As at 31 December 2019, in estimating the fair value of an asset or a liability, the Group engaged third party qualified valuers to perform the valuation of financial assets at FVTPL. The management of the Group works closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model. The management reports the findings to the board of directors of the Company to explain the cause of fluctuations in the fair value of the assets.

Information about the valuation techniques and inputs used in determining the fair values of the asset are disclosed above.

The management of the Group considers that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the condensed consolidated financial statements approximate their fair values.

28. EVENTS AFTER THE REPORTING PERIOD

On 7 August 2020, the Group entered into an agreement with two independent third parties to sell its 1.7513% of the equity interest in 格洛博 of financial assets at FVTPL, for an aggregate consideration of RMB2,213,000. On 20 August 2020, the Group entered into another agreement with an independent third party to sell its 1.10% of the equity interest in 格洛博 for a consideration of RMB1,390,000. The Group recorded a gain of disposals of financial assets at FVTPL of RMB326,000. Up to the date of this interim report, the Group received all of the considerations.

29. COMPARATIVE FIGURES

Certain comparative figures have been adjusted to conform to the disclosure requirement in respect of the discontinued operations set out in Note 9 to the condensed consolidated financial statements. The comparative figures in the condensed consolidated statements of profit or loss have been restated to achieve consistent presentation as the current period.

64

TEMPUS HOLDINGS LIMITED INTERIM REPORT 2020

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Tempus 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 08:14:09 UTC