HENGTAI：202021InterimReport.pdf

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1、2020/21Interim Report1Interim Report 2020/21The board(the“Board”)of directors(the“Directors”)of Heng Tai Consumables Group Limited(the“Company”)is pleased to announce the unaudited condensed consolidated interim financial statements of the Company and its subsidiaries(collectively the“Group”)for the

2、 six months ended 31 December 2020(the“Period”)together with the comparative figures for the corresponding period as follows:CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSSFor the six months ended 31 December 2020Six months ended 31 December20202019(Unaudited)(Unaudited)NoteHK$000HK$000REVENUE428

3、0,311344,866Cost of sales(267,117)(318,355)GROSS PROFIT13,19426,511Changes in fair value due to biological transformation(14,879)(9,389)Other gains and income20,99516,899Selling and distribution expenses(22,998)(31,554)Administrative expenses(33,150)(44,235)Other operating expenses(3,852)(4,696)LOSS

4、 FROM OPERATIONS(40,690)(46,464)Finance costs6(269)(288)LOSS BEFORE TAX(40,959)(46,752)Income tax credit7121776 LOSS FOR THE PERIOD8(40,838)(45,976)Attributable to:Owners of the Company(40,835)(45,973)Non-controlling interests(3)(3)(40,838)(45,976)LOSS PER SHARE10 BasicHK(2.18 cents)HK(2.45 cents)Di

5、lutedN/AN/A 2Heng Tai Consumables Group LimitedCONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFor the six months ended 31 December 2020Six months ended 31 December20202019(Unaudited)(Unaudited)HK$000HK$000Loss for the Period(40,838)(45,976)Other comprehensive income

6、:Items that may be reclassified to profit or loss:Exchange differences on translating foreign operations21,184(13,770)Fair value changes on financial assets at fair value through other comprehensive income(“FVTOCI”)1,024 Other comprehensive income for the Period,net of tax22,208(13,770)Total compreh

7、ensive income for the Period(18,630)(59,746)Attributable to:Owners of the Company(18,627)(59,743)Non-controlling interests(3)(3)(18,630)(59,746)3Interim Report 2020/21CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAt 31 December 202031 December30 June20202020(Unaudited)(Audited)NoteHK$000HK$0

8、00ASSETSNon-current assetsFixed assets240,444251,861Right-of-use assets90,61697,870Construction in progress70,07960,592Bearer plants99,997100,516Goodwill19,08319,083Other intangible assets53,70164,516Other assets2051,029Investment in a club membership108108Investments11177,81625,850Deferred tax asse

9、ts5,3895,025 757,438626,450 Current assetsBiological assets24,76023,948Inventories128,651123,204Trade receivables12268,255206,521Prepayments,deposits and other receivables116,147112,124Investments11103181,324Pledged bank deposits13,635424Client trust bank balances6,5937,457Bank and cash balances289,

10、942349,334 848,0861,004,336 TOTAL ASSETS1,605,5241,630,786 4Heng Tai Consumables Group Limited31 December30 June20202020(Unaudited)(Audited)NoteHK$000HK$000EQUITY AND LIABILITIESEquity attributable to owners of the CompanyShare capital14187,270187,270Reserves1,315,4231,334,050 1,502,6931,521,320Non-

11、controlling interests(15,891)(15,888)Total equity1,486,8021,505,432 Non-current liabilitiesLease liabilities3,8624,980Deferred tax liabilities10,80010,152 14,66215,132 Current liabilitiesTrade payables1372,90669,213Accruals and other payables17,08016,844Borrowings10,52820,424Lease liabilities3,0493,

12、087Current tax liabilities497654 104,060110,222 Total liabilities118,722125,354 TOTAL EQUITY AND LIABILITIES1,605,5241,630,786 Net current assets744,026894,114 Total assets less current liabilities1,501,4641,520,564 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION(Continued)At 31 December 2020

13、5Interim Report 2020/21CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the six months ended 31 December 2020Unaudited Attributable to owners of the Company ForeignShare-SharecurrencybasedPropertyNon-SharepremiumLegaltranslationpaymentrevaluationFVTOCISpecialAccumulatedcontrollingTotalcapita

14、laccountreservereservereservereservereservereservelossesTotalinterestsequityHK$000HK$000HK$000HK$000HK$000HK$000HK$000HK$000HK$000HK$000HK$000HK$000At 1 July 2019187,2702,389,5369790,12611,61211,234(86,094)(751,789)1,851,992(15,877)1,836,115Total comprehensive income for the period(13,770)(45,973)(5

15、9,743)(3)(59,746)Transfer of reserve upon lapse of share options(132)132 Change in equity for the period(13,770)(132)(45,841)(59,743)(3)(59,746)At 31 December 2019187,2702,389,5369776,35611,48011,234(86,094)(797,630)1,792,249(15,880)1,776,369 Unaudited Attributable to owners of the Company ForeignSh

16、are-SharecurrencybasedPropertyNon-SharepremiumLegaltranslationpaymentrevaluationFVTOCISpecialAccumulatedcontrollingTotalcapitalaccountreservereservereservereservereservereservelossesTotalinterestsequityHK$000HK$000HK$000HK$000HK$000HK$000HK$000HK$000HK$000HK$000HK$000HK$000At 1 July 2020187,2702,389

17、,5369776,42612,251350(86,094)(1,058,516)1,521,320(15,888)1,505,432Total comprehensive income for the Period21,1841,024(40,835)(18,627)(3)(18,630)Change in equity for the Period21,1841,024(40,835)(18,627)(3)(18,630)At 31 December 2020187,2702,389,5369797,61012,2511,374(86,094)(1,099,351)1,502,693(15,

18、891)1,486,802 6Heng Tai Consumables Group LimitedCONDENSED CONSOLIDATED STATEMENT OF CASH FLOWSFor the six months ended 31 December 2020Six months ended 31 December20202019(Unaudited)(Unaudited)HK$000HK$000Operating activitiesOperating loss before working capital changes(11,273)(10,047)Proceeds from

19、 redemption of financial assets at fair value through profit or loss(“FVTPL”)93,500Purchase of financial assets at FVTPL(60,000)(Increase)/decrease in other working capital(72,490)7,825 Cash used in operations(50,263)(2,222)Income tax paid(400)Interest on borrowings paid(103)(173)Net cash used in op

20、erating activities(50,766)(2,395)Investing activitiesPurchase of fixed assets(153)(6,168)Purchase of other intangible assets(18,330)Payments of right-of-use assets(10,088)Increase in pledged bank deposits(13,211)Decrease in time deposits with original maturity over three months11,761Other cash flows

21、 arising from investing activities3,97916,226 Net cash used in investing activities(9,385)(6,599)Financing activitiesRepayment of bank borrowings(19,896)(19,949)Drawdown of bank borrowings10,00020,000Other cash flows arising from financing activities(1,606)(622)Net cash used in financing activities(

22、11,502)(571)Net decrease in cash and cash equivalents(71,653)(9,565)Cash and cash equivalents at 1 July349,334449,665Effect of foreign exchanges rate changes12,261(9,444)Cash and cash equivalents at 31 December289,942430,656 ANALYSIS OF CASH AND CASH EQUIVALENTSBank and cash balances in the condense

23、d consolidated statement of financial position289,942432,472Less:Time deposits with original maturity over three months(1,816)Cash and cash equivalents in the condensed consolidated statement of cash flows289,942430,656 7Interim Report 2020/21NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSFor t

24、he six months ended 31 December 20201.BASIS OF PREPARATION AND ACCOUNTING POLICIES Basis of preparationThese unaudited condensed consolidated interim financial statements have been prepared in accordance with Hong Kong Accounting Standard(“HKAS”)34“Interim Financial Reporting”issued by the Hong Kong

25、 Institute of Certified Public Accountants(the“HKICPA”)and the applicable disclosures required by the Rules Governing the Listing of Securities(the“Listing Rules”)on The Stock Exchange of Hong Kong Limited(the“Stock Exchange”).These unaudited condensed consolidated interim financial statements shoul

26、d be read in conjunction with the audited financial statements for the year ended 30 June 2020.The accounting policies and methods of computation used in the preparation of these condensed consolidated interim financial statements and segment information are consistent with those used in the audited

27、 financial statements and segment information for the year ended 30 June 2020.2.ADOPTION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDSIn the current interim period,the Group has adopted all the new and revised Hong Kong Financial Reporting Standards(“HKFRSs”)issued by the HKICPA that ar

28、e relevant to its operations and effective for its accounting year beginning on 1 July 2020.HKFRSs comprise Hong Kong Financial Reporting Standards(“HKFRS”);Hong Kong Accounting Standards(“HKAS”);and Interpretations.The adoption of these new and revised HKFRSs did not result in significant changes t

29、o the Group s accounting policies,presentation of the Group s financial statements and amounts reported for the current period and the prior years.8Heng Tai Consumables Group Limited3.FINANCIAL INSTRUMENTS Fair value measurementsThe carrying amounts of the Group s financial assets and financial liab

30、ilities as reflected in the condensed consolidated statement of financial position approximate their respective fair values.Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.Th

31、e following disclosures of fair value measurements use a fair value hierarchy that categories into three levels the inputs to valuation techniques used to measure fair value:Level 1 inputs:quoted prices(unadjusted)in active markets for identical assets or liabilities that the Group can access at the

32、 measurement date.Level 2 inputs:inputs other than quoted prices included within Level 1 that are observable for the asset or liability,either directly or indirectly.Level 3 inputs:unobservable inputs for the asset or liability.The Group s policy is to recognise transfers into and transfers out of a

33、ny of the three levels as of the date of the event or change in circumstances that caused the transfer.Disclosures of level in fair value hierarchy at the end of the reporting period:DescriptionFair value measurements using:Total31 December 2020Level 1Level 2Level 3(Unaudited)HK$000HK$000HK$000HK$00

34、0Recurring fair value measurements:Financial assets at FVTPL Listed equity securities in Hong Kong103103 Unlisted debt investments in Hong Kong150,942150,942Financial assets at FVTOCI Unlisted debt investments in Hong Kong26,87426,874BuildingsCommercial and industrial the PRC95,83095,830 Total recur

35、ring fair value measurements103273,646273,749 9Interim Report 2020/21DescriptionFair value measurements using:Total30 June2020Level 1Level 2Level 3(Audited)HK$000HK$000HK$000HK$000Recurring fair value measurements:Financial assets at FVTPL Listed equity securities in Hong Kong9292 Unlisted debt inve

36、stments in Hong Kong181,232181,232Financial assets at FVTOCI Unlisted debt investments in Hong Kong25,85025,850BuildingsCommercial and industrial the PRC91,20991,209 Total recurring fair value measurements92298,291298,383 There are no transfers into and transfers out of any of the three levels durin

37、g the period.4.REVENUE Disaggregation of revenueDisaggregation of revenue from contracts with customers by major products or service lines for the period is as follows:Six months ended 31 December20202019(Unaudited)(Unaudited)HK$000HK$000Revenue from contracts with customers within the scope of HKFR

38、S 15Disaggregated by major products or service lines Sales of consumer goods173,889190,803 Sales of agri-products103,303143,850 Logistics services income1,7726,913 Sales of jewellery products in tourist retailing72,157 Commission and brokerage income on securities dealings1,3401,143 280,311344,866 1

39、0Heng Tai Consumables Group LimitedThe Group derives revenue from the transfer of products and services over time and at a point in time in the following major product lines and geographical regions:For the six months ended 31 December 2020Consumer goodsAgri-productsLogistics servicesTourist retaili

40、ngSecurities dealing servicesTotalHK$000HK$000HK$000HK$000HK$000HK$000Primary geographical marketsHong Kong24,35771,34025,704PRC except Hong Kong173,88978,9461,772254,607 Revenue from external customers173,889103,3031,77271,340280,311 Timing of revenue recognitionProducts transferred at a point in t

41、ime173,889103,3031,77271,340280,311 For the six months ended 31 December 2019Consumer goodsAgri-productsLogistics servicesTourist retailingSecurities dealing servicesTotalHK$000HK$000HK$000HK$000HK$000HK$000Primary geographical marketsHong Kong28,3662,1571,14331,666PRC except Hong Kong190,803115,484

42、6,913313,200 Revenue from external customers190,803143,8506,9132,1571,143344,866 Timing of revenue recognitionProducts transferred at a point in time190,803143,8506,9132,1571,143344,866 11Interim Report 2020/215.SEGMENT INFORMATIONThe Group has three reporting segments as follows:(i)The sale and tra

43、ding of FMCG including packaged foods,beverages and household consumable products(“FMCG Trading Business”);(ii)The cultivation,sale and trading of fresh and processed fruits and vegetables(“Agri-Products Business”);and(iii)Provision of logistics services(“Logistics Services Business”).The Group s ot

44、her operating segments include the provision of securities dealing services and tourist retailing of jewellery products.None of these segments meets any of the quantitative thresholds for determining reportable segments.The information of these other operating segments is included in the All other s

45、egments column.The Group accounts for intersegment sales and transfers as if the sales or transfers were to third parties,i.e.,at current market prices.The segment information of the Group was as follows:FMCGAgri-LogisticsTradingProductsServicesAll otherBusinessBusinessBusinesssegmentsTotal(Unaudite

46、d)(Unaudited)(Unaudited)(Unaudited)(Unaudited)HK$000HK$000HK$000HK$000HK$000For the six months ended 31 December 2020Revenue from external customers173,889103,3031,7721,347280,311 Segment loss(11,362)(27,265)(2,516)(1,686)(42,829)At 31 December 2020Segment assets563,545566,110146,24892,7141,368,617

47、12Heng Tai Consumables Group LimitedFMCGAgri-LogisticsTradingProductsServicesAll otherBusinessBusinessBusinesssegmentsTotal(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)HK$000HK$000HK$000HK$000HK$000For the six months ended 31 December 2019Revenue from external customers190,803143,8506,9133

48、,300344,866 Segment loss(8,930)(27,456)(2,091)(6,711)(45,188)At 30 June 2020Segment assets(Audited)556,633543,412145,90646,6861,292,637 Six months ended 31 December20202019(Unaudited)(Unaudited)HK$000HK$000Reconciliation of segment loss:Total loss of reportable segments(42,829)(45,188)Unallocated am

49、ounts:Fair value gain on financial assets at FVTPL7,0736,122Other corporate expenses(5,082)(6,910)Consolidated loss for the Period(40,838)(45,976)6.FINANCE COSTSSix months ended 31 December20202019(Unaudited)(Unaudited)HK$000HK$000Interest on borrowings103173Interest on lease liabilities166115 26928

50、8 13Interim Report 2020/217.INCOME TAX CREDITSix months ended 31 December20202019(Unaudited)(Unaudited)HK$000HK$000Current period tax:Hong Kong(243)(71)OverseasDeferred tax364847 121776 Under the two-tiered profits tax regime,profit tax rate for the first HK$2 million of assessable profits of qualif

51、ying corporations in Hong Kong will be lower to 8.25%and profits above that amount will be subject to the tax rate of 16.5%.Tax charges on profits assessable elsewhere in other jurisdictions have been calculated at the rates of tax prevailing in the relevant jurisdictions in which the Group operates

52、,based on existing legislation,interpretation and practices in respect thereof.According to the Income Tax Law of the Macau Special Administrative Region,two subsidiaries operating in Macau during the Period are in compliance with the Decree-Law No.58/99/M of Macau Special Administrative Region,and

53、thus,the loss/(profit)generated by the subsidiaries are exempted from the Macau Complementary Tax.Furthermore,in the opinion of the directors,that portion of the Group s loss/(profit)is not at present subject to taxation in any other jurisdictions in which the Group operates.The provision for income

54、 tax of subsidiaries operating in the PRC has been calculated at the rate of 25%(2019:25%),based on existing legislation,interpretation and practices in respect thereof.14Heng Tai Consumables Group Limited8.LOSS FOR THE PERIODThe Group s loss for the Period is stated after charging/(crediting)the fo

55、llowing:Six months ended 31 December20202019(Unaudited)(Unaudited)HK$000HK$000Amortisation and depreciation,net of amount capitalised23,56139,876Cost of inventories sold252,889299,645Directors emoluments3,7963,780Exchange(gain)/loss,net(4,745)2,130Fair value gain on financial assets at FVTPL(7,073)(

56、6,122)Interest income on financial assets at FVTPL(5,695)(6,893)Interest income on financial assets at FVTOCI(771)Loss on redemption of financial assets at FVTPL,net3,852Operating lease charges in respect of land and buildings,net of amount capitalised5,394Staff costs(excluding directors emoluments)

57、Staff salaries,bonus and allowances11,15611,734Retirement benefits scheme contributions27038411,42612,118 9.DIVIDENDThe Board does not declare the payment of an interim dividend for the six months ended 31 December 2020(2019:Nil).10.LOSS PER SHAREThe calculation of basic loss per share attributable

58、to owners of the Company is based on the loss for the Period attributable to owners of the Company of approximately HK$40,835,000(2019:HK$45,973,000)and the weighted average number of ordinary shares of the Company of 1,872,696,182(2019:1,872,696,182)in issue during the Period.15Interim Report 2020/

59、2111.INVESTMENTS31 December30 June20202020(Unaudited)(Audited)HK$000HK$000Non-current assetsFinancial assets at FVTOCI Unlisted debt investments in Hong Kong26,87425,850Financial assets at FVTPL Unlisted debt investments in Hong Kong150,942 177,81625,850 Current assetsFinancial assets at FVTPL Unlis

60、ted debt investments in Hong Kong181,232 Listed equity securities in Hong Kong10392 103181,324 The fair value of the listed equity securities is based on quoted closing price at the end of reporting period.The fair values of the unlisted debt investments was reference to the valuation performed by a

61、 firm of independent professional qualified valuers.The carrying amounts of the above financial assets at FVTPL are measured at fair value through profit or loss in accordance with HKFRS 9.12.TRADE RECEIVABLES31 December30 June20202020(Unaudited)(Audited)HK$000HK$000Trade receivables arising fromTra

62、ding279,958258,972Dealing in securities Cash clients8,8089,720 Clearing house298 Margin clients41,362 330,426268,692Impairment loss on trade receivables(62,171)(62,171)268,255206,521 16Heng Tai Consumables Group LimitedFor trade receivables arising from trading,the Group normally allows credit terms

63、 to established customers ranging from 30 to 210 days(30 June 2020:30 to 210 days).The aging analysis of trade receivables arising from trading,net of impairment loss,based on the date of recognition of the sale,is as follows:31 December30 June20202020(Unaudited)(Audited)HK$000HK$0001 30 days41,2064

64、0,31831 60 days34,66731,63361 90 days33,97824,974Over 90 days113,317105,257 223,168202,182 Cash client receivables arising from dealing in securities which are neither past due nor impaired of approximately HK$360,000(30 June 2020:HK$1,088,000)represent unsettled client trades on various securities

65、exchanges transacted on the last two business days prior to the end of the reporting period.Such cash client receivable is considered as past due when the client fails to settle its securities trading balances on the settlement date.At 31 December 2020,cash client receivables of approximately HK$8,4

66、48,000(30 June 2020:HK$8,632,000)were past due.These past due cash client receivables,net of impairment,were substantially settled after the period ended date,hence no impairment loss was recognised during the Period.Trade receivables from clearing house arising from dealing in securities represent

67、unsettled trades on various securities exchanges transacted on the last two business days prior to the end of the reporting period.Margin client receivables arising from dealing in securities are repayable on demand.Margin clients are required to pledge the underlying securities to the Group in orde

68、r to obtain credit facilities for securities trading.No aging analysis of is disclosed as,in the opinion of the directors,an aging analysis does not give additional value in view of the nature of these trade receivables arising from dealing in securities.17Interim Report 2020/2113.TRADE PAYABLES31 D

69、ecember30 June20202020(Unaudited)(Audited)HK$000HK$000Trade payables arising fromTrading66,24560,838Dealing in securities Cash clients6,6617,456 Clearing house919 72,90669,213 The trade payables to cash clients arising from dealing in securities are repayable on demand.The Group has a practice to sa

70、tisfy all the requests for payment within one business day.Trade payables to clearing house arising from dealing in securities represent unsettled trades on various securities exchanges transacted on the last two business days prior to the end of the reporting period.No aging analysis is disclosed a

71、s,in the opinion of the directors,the aging analysis does not give additional value in view of the nature of these businesses.The aging analysis of trade payables arising from trading,based on the date of receipt of goods purchased,is as follows:31 December30 June20202020(Unaudited)(Audited)HK$000HK

72、$0001 30 days66,16246,45831 60 days14,29361 90 daysOver 90 days8387 66,24560,838 Trade payables to cash clients arising from dealing in securities also include those payables where the corresponding clients monies are placed in trust and segregated accounts with authorised financial institutions of

73、approximately HK$6,593,000(30 June 2020:HK$7,457,000).18Heng Tai Consumables Group Limited14.SHARE CAPITALNumber ofsharesAmount(Unaudited)(Unaudited)HK$000Authorised:At 30 June 2020,1 July 2020 and 31 December 2020,par value HK$0.10 each10,000,000,0001,000,000 Issued and fully paid:At 30 June 2020,1

74、 July 2020 and 31 December 20201,872,696,182187,270 15.CONTINGENT LIABILITIESThe Group did not have any significant contingent liabilities at 31 December 2020(30 June 2020:Nil).16.CAPITAL COMMITMENTSThe Group s capital commitments at the end of the reporting period were as follows:31 December30 June

75、20202020(Unaudited)(Audited)HK$000HK$000Contracted but not provided for Fixed assets7,0756,593 Construction in progress13,83620,099 20,91126,692 19Interim Report 2020/21INTERIM DIVIDENDThe Board does not declare the payment of an interim dividend for the six months ended 31 December 2020(2019:Nil).M

76、ANAGEMENT DISCUSSION AND ANALYSISFINANCIAL PERFORMANCEDuring the six months ended 31 December 2020(the“Period”),the Group was principally engaged in(i)the trading of packaged foods,beverages and household consumable products(the“FMCG Trading Business”);(ii)the trading of agri-products and the upstre

77、am farming business(the“Agri-Products Business”);(iii)the provision of cold chain logistics services and value-added post-harvest food processing(the“Logistics Services Business”);and(iv)other businesses primarily arising from the securities brokerage business and the tourist retailing business(the“

78、Other Business”).The first three businesses came together to form two vertically integrated supply chains allowing the Group to effectively deliver perishable and non-perishable consumer products in China.During the Period,the Groups turnover was approximately HK$280.3 million,representing a decreas

79、e of approximately 18.7%,compared to approximately HK$344.9 million in the same period last year.All major business segments recorded falling revenues in the aftermath of the outbreak of the novel coronavirus disease 2019(COVID-19)(the“pandemic”)during the Period.The pandemic caused widespread disru

80、ption to global supply chain,many factories shutdown,freight restrictions and more stringent customs clearance process,the impacts were particularly severe for the Group s traditional trading business and its associated logistics business.Furthermore,the weak market demand and keen competition from

81、domestic brands remained key threats to the Group s businesses.As a result,the revenue of the agri-products trading business declined by approximately 30.4%compared to the corresponding period last year.The FMCG Trading Business s revenue declined by a lesser extent at approximately 8.9%thanks to th

82、e introduction of new products and the implementation of more aggressive pricing strategy to stimulate sales volume during the Period.The revenue of the Logistics Service Business also significantly declined not only because of the negative impact from the pandemic and the resultant decrease in the

83、traditional trading businesses,but also the Group had trimmed down third party transportation services during the Period in order to reduce its operating and administrative costs.On the other hand,the pandemic essentially wiped out the tourism business from the mainland Chinese visitors in Hong Kong

84、,which hit hardest the Group s tourist retailing business and resulted in a substantial decrease in the revenue of the Other Business during the Period.20Heng Tai Consumables Group LimitedGross profit margin decreased from approximately 7.7%to approximately 4.7%compared with the same period last yea

85、r.The decrease in gross profit margin was mainly attributable to the lower selling prices to maintain competitiveness amid the pandemic during the Period.The reduction in selling prices was across different kinds of products,in particular the Group s traditional trading business including packaged f

86、oods and imported fruits,the Group had offered a special discount for these products to our loyal customers during the Period to increase stock turnover and maintain competitiveness against domestic brands amid the pandemic,together with the effect from the increase in the purchase costs for importe

87、d products due to various factors such as freight restrictions and factory shutdown,resulting in a significant decline in the gross profit margins of the FMCG Trading Business and the agri-products trading business.Changes in fair value due to biological transformation increased from approximately H

88、K$9.4 million to approximately HK$14.9 million compared with the same period last year.The increase was mainly attributable to the increased plantation costs.Other gains and income increased from approximately HK$16.9 million to approximately HK$21.0 million.The other gains and income for the Period

89、 was mainly attributable to the interest income of approximately HK$6.5 million derived from the investment in financial instruments issued by China Healthwise Holdings Limited(“China Healthwise”),Global Mastermind Holdings Limited(“Global Mastermind”)and Earthasia International Holdings Limited(“Ea

90、rthasia”),the unrealized fair value gain on investment of convertible bonds approximately HK$7.1 million and exchange gain of approximately HK$4.7 million on certain assets denominated in Renminbi due to Renminbi appreciation.Selling and distribution expenses decreased by approximately 27.1%from app

91、roximately HK$31.6 million to approximately HK$23.0 million.These expenses represented approximately 8.2%of turnover which decreased compared to 9.1%of the same period last year.The decrease in the selling and distribution expenses was mainly attributable to the decrease in sales commission,promotio

92、n,and handling and distribution expenses for the traditional trading business.Selling and distribution expenses included,among others,the development of sales and marketing channels,outlays on brand building,freight and transportation,commission as well as distribution expenses all together spent in

93、 support of the Group s sales activities.Administrative expenses decreased by approximately 25.1%from approximately HK$44.2 million to approximately HK$33.2 million.The decrease was mainly attributable to the various cost-saving initiatives taken by the Group.During the Period,the Group thoroughly s

94、crutinized its operations to implement various austerity measures,including trimming down of third party logistics business to save considerable amount of administrative expenses.21Interim Report 2020/21Other operating expenses decreased from approximately HK$4.7 million to approximately HK$3.9 mill

95、ion.The other operating expenses for the Period represented a net loss on redemption of convertible bonds issued by China Healthwise and Global Mastermind.Finance costs were kept at a minimal level during the Period.The decrease in the Group s net loss can be summarized as mainly attributable to app

96、roximately HK$4.1 million increase in other gains and income,approximately 27.1%decrease in selling and distribution expenses,approximately 25.1%decrease in administrative expenses,and approximately HK$0.8 million decrease in other operating expenses,but partly offset by approximately 18.7%decrease

97、in turnover and approximately 3.0%decrease in gross profit margin.BUSINESS REVIEW,DEVELOPMENT AND PROSPECTThe pandemic posed an unprecedented challenge to the global economy,despite the fact that China s economy showed signs of recovery during the second half of 2020,the overall operating environmen

98、t remained difficult.The pandemic did not only affect China,but also most of countries in which the Group s suppliers are located,the Group faced difficulties in maintaining stable supply chain due to freight restrictions and large-scale lockdowns across the globe.The increase in protectionism arisi

99、ng from the China-United States trade tensions further damaged international trades and import business.On the other hand,the competition from domestic products was increasingly fiercer,especially considering their overwhelming advertisements and promotions.Against this backdrop,the Group had implem

100、ented aggressive pricing strategies and offered special discounts and promotions to our customers to maintain competitiveness,giving rise to a decrease in the gross profit margin during the Period.In the meantime,the Group continued to trim down unprofitable operations such as third party transporta

101、tion services to streamline its operation model and implemented various cost saving initiatives to reduce operating costs.For the tourist retailing business,as its major customers were from mainland China,the border restrictions kept nearly all the crowds of mainland Chinese tourists away during the

102、 Period,thus severely affecting its operations.22Heng Tai Consumables Group LimitedThe FMCG Trading Business sells finished consumer products into the domestic Chinese consumer market.These products are largely sourced overseas through the Group s widereaching global procurement network and are impo

103、rted from different regions around the world including Europe,the Americas,Australasia and South East Asia.This business unit can be classified into three categories including packaged foods,beverages and household consumable products with their respective contribution of approximately 65%,28%,and 7

104、%.Packaged foods,including biscuits,candies,chocolate,condiments,margarine,milk powder products,healthy food,noodles,snacks,rice and nourishing and exclusively licensed branded products,remained the most important category,but its contribution as a percentage of the revenue of the FMCG Trading Busin

105、ess decreased because some new products of beverages category were launched which boosted the revenue of the latter during the Period.FMCG Trading Business was the most important business unit and contributed approximately 62.0%of the Group s total revenues during the Period.The pandemic unavoidably

106、 caused severe impact on the FMCG Trading Business,the persistently weak market demand and the keen competition from domestic brands further worsened the operating environment.The pandemic caused disruptions to entire supply chain such as factory shutdown,freight restrictions,and more complicated cu

107、stoms formalities.Although Chinese economy has gradually returned to normal during the Period,some countries where the Group s suppliers are located were still severely affected by the pandemic,which put the Group at a disadvantage in comparison with other domestic brands in terms of product supply

108、and variety.As a result,the Group had to adopt more attractive and aggressive offers to our customers for different kinds of products in order to increase its competitiveness against domestic brands during the Period,which substantially suppressed the gross profit margin amid the weak market conditi

109、ons.In order to counteract the negative impact from the pandemic,the Group implemented various austerity measures to reduce selling and distribution expenses.In view of the difficulty in ascertaining how long the pandemic will last and the level of its impact on the global economy,the Group will con

110、tinue to implement relatively aggressive pricing strategies for a longer period of time,and simultaneously strengthen the long term relationship and collaboration with the suppliers and customers for the FMCG Trading Business.The Agri-Products Business contains trading fresh produce grown domestical

111、ly and imported from countries like Australasia and South East Asia as well as upstream cultivations in China.During the Period,the revenue of this business unit declined by approximately 28.2%primarily attributable to the decline in the revenue of the agri-products trading business by approximately

112、 30.4%,whereas the upstream farming business recorded an approximately 16.7%increase in its revenue.Similar to the FMCG Trading Business,the imported agri-products trading business encountered severe difficulties caused by the pandemic,especially considering the short life cycle and perishable natur

113、e of agricultural products.Worse still,the rise of global protectionism and the more stringent customs formalities for fresh produce further increased the import costs.On the contrary,the competitiveness of our domestic agri-products trading business has been improving over past few years in terms o

114、f product quality and product variety thanks to the improving agricultural knowledge and sourcing 23Interim Report 2020/21network.Therefore,the percentage of the revenue of domestic fresh produce over the revenue of the agri-products trading business increased from approximately 20.7%to approximatel

115、y 25.5%compared to the same period last year.The revenue of the upstream farming business derived from the farming base for various fruits such as early crop oranges and ponkans in Jiangxi increased by approximately 16.7%.The increase was primarily attributable to additional arable land deployed dur

116、ing the Period.Although the pandemic also affected its operations,the Group is cautiously optimistic on the prospect of this business segment thanks to its better distribution channels and agricultural skills accumulated by years of operations,which was reflected by the improved revenues during the

117、Period.The Group will carefully operate and monitor its future development according to market conditions.To further exploit its potential,the Group has been developing a project including the construction of a fruit processing centre and the development of agri-tourism business nearby.The construct

118、ion of the initial phrase of the fruit processing centre was nearly complete,at which the trial runs of the production lines have begun.The fruit processing centre will be further equipped with cold chain storage and other advanced machineries to enable it providing a full range of services from was

119、hing,packaging to cold-storage warehousing for agricultural products in coming years.The remaining part of the project including agri-tourism facilities such as pick-your-own farm and recreational facilities will be carefully developed after the completion of the processing centre.On 23 September 20

120、20,the Group entered into a memorandum of understanding for exploring an opportunity to develop ecological agricultural business.However,since the Group and the negotiating party could not reach an agreement,the memorandum of understanding lapsed on 22 December 2020 and the project would not proceed

121、.The Logistics Services Business provides a full range of services to customers including warehousing,food processing production lines for fresh produce,as well as trucking fleets for nationwide and regional distribution.This business unit contributed approximately 0.6%of overall revenues for the Pe

122、riod.The decrease in revenue of this business segment was primarily attributable to the drop of the traditional trading business as well as the trimming down of the scale of third party transportation services,which in return could reduce maintenance and administrative costs and the effect was alrea

123、dy reflected by the fact that the administrative expenses decreased during the Period.Going forward,this business unit will focus on serving the Group s traditional trading business and the Group will continue to streamline and review its operations in order to reduce costs.The Other Business contai

124、ns providing securities trading,margin financing and IPO subscription brokerage services through Sino Wealth Securities Limited(“Sino Wealth”)and operating tourist retailing business.The decline in the revenue of the Other Business was primarily attributable to the drastic plunge in the tourism indu

125、stry from the mainland Chinese visitors in Hong Kong during the Period.The recovery of the tourism industry is highly dependent on the removal of the border restrictions,which is unfortunately uncertain in the foreseeable future.Therefore,the Group has 24Heng Tai Consumables Group Limitedbeen carefu

126、lly reviewing this business unit and implementing various austerity measures to cope with the toughest time.The securities brokerage business benefited from the increase in the stock market transactions during the Period,its revenue,primarily brokerage commission and margin financing income,increase

127、d by approximately 17.2%compared to the same period last year.As the global financial markets have been experiencing positive growth as a result of various expansionary policies taken or pandemic relief packages initiated by major countries,the Group has grasped the opportunities and accepted new ma

128、rgin clients and injected additional funding to the securities brokerage business during the Period accordingly.Although the Group has continuously been reviewing potential risks and returns before accepting these new margin clients,in the face of the unprecedented global pandemic and sudden changes

129、 of financial and securities policies in certain major countries which had unintended and drastic impact to the global business and securities markets,the Board realized that political risks that potentially may affect the securities markets could never be adequately anticipated as a result.Therefor

130、e,the Group aims to reduce the risk considering the volatile and unpredictable changing nature of the financial markets and has continuously been reviewing the Group s business strategies,but similar to many others,could not be finalized as these are subject to the global markets having better and c

131、learer understanding to the geopolitical and pandemic situations.The proceeds of the right issue completed on 11 January 2017 was earmarked for the securities brokerage business,of which HK$20 million was already been used after completion of the right issue,HK$40 million has been used as intended b

132、y various capital injections into Sino Wealth from July 2020 to September 2020 and HK$20 million has been used as intended by capital injection in Sino Wealth in November 2020.Hence,a total of HK$80 million has been used as intended with the remaining proceeds of approximately HK$127.3 million as at

133、 the date of this report,which shall continue its original intended use and has been extended to 10 March 2021.As said,the Board has continuously been reviewing the Group s business objectives and strategies,including but not limited to the use of the remaining proceeds,and will make further announc

134、ement informing the shareholders of the Company of future update of such use.Looking forward,the pandemic remains the greatest uncertainty for the global economy,there will be substantial consequences for China and global economy if the vaccines cannot effectively reduce the number of infections.On

135、top of that,there are many other uncertainties such as the rise on protectionism and the increasing competition from domestic brands.The Group will take a more cautious stance for future development and continue to implement cost-saving initiatives,as well as ensure a strong and healthy financial po

136、sition to weather any unforeseeable headwinds.25Interim Report 2020/21SIGNIFICANT INVESTMENTS HELD AND THEIR PERFORMANCEAt 31 December 2020,the Group held two convertible bonds issued by China Healthwise and Global Mastermind and a bond issued by Earthasia with principal amount of HK$85.5 million,HK

137、$60 million and HK$25.5 million respectively.China Healthwise is a listed company in the main board of the Stock Exchange and together with its subsidiaries are principally engaged in sale of Chinese health products,money lending business and investment in financial instruments.On 28 August 2020,a s

138、upplemental agreement was signed to conditionally extend the original maturity date of the outstanding HK$85.5 million principal amount of the convertible bond issued by China Healthwise for another two years to 10 October 2022.An extraordinary general meeting was held on 7 October 2020 with shareho

139、lders approval obtained,and the proposed amendments became effective on 10 October 2020.At 31 December 2020,the fair value of the Group s investment in the convertible bond issued by China Healthwise was approximately HK$89.1 million(30 June 2020:HK$97.1 million),representing approximately 5.5%(30 J

140、une 2020:6.0%)of the Group s total assets,and recorded an unrealised fair value gain on investment of approximately HK$5.2 million,a gain on redemption of approximately HK$0.3 million and an interest income of approximately HK$2.7 million during the Period.Global Mastermind is a listed company in th

141、e GEM of the Stock Exchange and together with its subsidiaries are principally engaged in provision and operation of travel business,treasury management business,money lending business and provision of securities,asset management and financial advisory services.On 25 September 2020,a subscription ag

142、reement was signed to conditionally subscribe a new convertible bond issued by Global Mastermind in the principal amount of HK$60 million.The subscription price was offset and deducted on a dollar-to-dollar basis from the repayment of all sums due under the previous convertible bond payable by Globa

143、l Mastermind to the Group due on 12 November 2020.An extraordinary general meeting was held on 10 November 2020 with shareholders approval obtained,and the subscription took place on 12 November 2020.At 31 December 2020,the fair value of the Group s investment in the convertible bond issued by Globa

144、l Mastermind was approximately HK$61.9 million(30 June 2020:HK$84.1 million),representing approximately 3.9%(30 June 2020:5.2%)of the total assets,and recorded an unrealised fair value gain on investment of approximately HK$1.9 million,a loss on redemption of approximately HK$4.1 million and an inte

145、rest income of approximately HK$3.0 million during the Period.26Heng Tai Consumables Group LimitedEarthasia is a listed company in the main board of the Stock Exchange and together with its subsidiaries are principally engaged in the provision of graphene business and landscape architecture business

146、.At 31 December 2020,the fair value of the Group s investment in its bond was approximately HK$26.9 million,representing approximately 1.7%of the Group s total assets(30 June 2020:1.6%),and recorded an increase in investment revaluation reserve of approximately HK$1.0 million and an interest income

147、of approximately HK$0.8 million during the Period.The objective for the above investments is to better utilise the Group s available cash and seek higher interest income in view of the current uncertain global trading market.CAPITAL STRUCTURE,LIQUIDITY AND FINANCIAL RESOURCESThe Group maintained a s

148、trong financial position throughout the Period.During the Period,the Group financed its operations and business development with internally generated resources and banking facilities.On 11 January 2017,the Company raised from a rights issue the net proceeds of approximately HK$207.3 million,which we

149、re intended to inject into the securities brokerage business.Out of the net proceeds,HK$20 million was already been used after completion of the right issue,HK$40 million has been used as intended by various capital injections into Sino Wealth from July 2020 to September 2020 and HK$20 million has b

150、een used as intended by capital injection in Sino Wealth in November 2020.Hence,a total of HK$80 million has been used as intended with the remaining proceeds of approximately HK$127.3 million as at the date of this report,which shall continue its original intended use and has been extended to 10 Ma

151、rch 2021.As said,the Board has continuously been reviewing the Group s business objectives and strategies,including but not limited to the use of the remaining proceeds,and will make further announcement informing the shareholders of the Company of future update of such use.At 31 December 2020,the G

152、roup had interest-bearing borrowings of approximately HK$10.5 million(30 June 2020:HK$20.4 million)of which all borrowings were denominated in Hong Kong dollars or US dollars and all would mature within one year.All of the Group s banking borrowings were floating-interest bearing and secured by corp

153、orate guarantees provided by the Company and certain subsidiaries of the Company and pledged bank deposits of certain subsidiaries in carrying amount of approximately HK$13.6 million(30 June 2020:HK$0.4 million).A significant portion of sales,purchases,services income and bank and cash equivalents o

154、f the Group were either denominated in Renminbi,Hong Kong dollars or US dollars.During the Period,the Group experienced a high volatility in Renminbi,and the Group will closely monitor the foreign currency exposure and may consider arranging for hedging facilities when it is necessary.At 31 December

155、 2020,the Group did not have any significant hedging instrument outstanding.27Interim Report 2020/21At 31 December 2020,the Group s current assets amounted to approximately HK$848.1 million(30 June 2020:HK$1,004.3 million)and the Group s current liabilities amounted to approximately HK$104.1 million

156、(30 June 2020:HK$110.2 million).The Group s current ratio maintained to a level of approximately 8.1 as at 31 December 2020(30 June 2020:9.1).At 31 December 2020,the Group had total assets of approximately HK$1,605.5 million(30 June 2020:HK$1,630.8 million)and total liabilities of approximately HK$1

157、18.7 million(30 June 2020:HK$125.4 million)with a gearing ratio of approximately 0.7%(30 June 2020:1.3%).The gearing ratio was expressed as a ratio of total bank borrowings to total assets.The Group s gearing ratio remained fairly low level as at 31 December 2020 and 30 June 2020.NUMBER AND REMUNERA

158、TION OF EMPLOYEESAt 31 December 2020,the Group had approximately 370 employees for its operations in China,Hong Kong and Macau.The Group s employees are remunerated in accordance with their work performance and experience.The Group also participates in a retirement benefit scheme for its staff in th

159、e PRC and a defined Mandatory Provident Fund Scheme for its staff in Hong Kong.The Group has adopted a share option scheme as well as a share award plan of which the Board may,at its discretion,grant options or award shares to eligible participants of the share option scheme and the share award plan

160、 respectively.OTHER INFORMATIONDIRECTORS INTERESTS IN SECURITIESAs at 31 December 2020,the interests and short positions of each Director and chief executive in the shares,underlying shares and debentures of the Company or any associated corporations(within the meaning of Part XV of the Securities a

161、nd Futures Ordinance(the“SFO”),as recorded in the register required to be kept by the Company under Section 352 of Part XV of the SFO,or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers(“Model Code”),wer

162、e as follows:LONG POSITIONSDirectorNoteCapacity/nature of interestsNumber of shares in interestApproximate percentage of the issued sharesMr.Lam Kwok Hing(“Mr.Lam”)1Interest in controlled corporation275,078,91414.69%Ms.Lee Choi Lin,Joecy(“Ms.Lee”)1Family interest275,078,91414.69%Mr.Chan Cheuk Yu,Ste

163、phen(“Mr.Chan”)2Interest in controlled corporation436,755,07323.32%28Heng Tai Consumables Group LimitedNotes:1.275,078,914 shares are held by Best Global Asia Limited(“Best Global”),a company incorporated in the British Virgin Islands(the“BVl”)wholly and beneficially owned by Mr.Lam.Ms.Lee is the sp

164、ouse of Mr.Lam,by virtue of the SFO,Ms.Lee is deemed to be interested in said 275,078,914 shares.2.436,755,073 shares are held by Glazy Target Limited(“Glazy Target”),a company incorporated in the BVI wholly and beneficially owned by Mr.Chan.Save as disclosed above,as at 31 December 2020,none of the

165、 Directors or chief executive of the Company and their respective associates had any interests or short positions in shares,underlying shares or debentures of the Company,its subsidiaries or any associated corporation(within the meaning of Part XV of the SFO).DIRECTORS RIGHTS TO ACQUIRE SHARES OR DE

166、BENTURESSave as disclosed in the section titled“Directors Interests in Securities”,at no time during the Period were there rights to acquire benefits by means of the acquisition of shares in,or debentures of the Company or any other body corporate granted to any Directors or their respective spouse

167、or children under 18 years of age,or where there such rights exercised by them;or was the Company,its holding company or any of its subsidiaries a party to any arrangement to enable the Directors,their respective spouses or children under 18 years of age to acquire such rights in the Company or any

168、other body corporate.SUBSTANTIAL SHAREHOLDERS INTERESTS IN SECURITIESAs at 31 December 2020,the interests of every person,other than a Director or chief executive of the Company,in the shares or underlying shares of the Company as recorded in the register required to be kept by the Company under Sec

169、tion 336 of the SFO and to the best knowledge of the Directors were as follows:LONG POSITIONSSubstantial shareholderNoteCapacity/nature of interestsNumber of shares in interestApproximate percentage of the issued sharesBest Global1Beneficial owner275,078,91414.69%Glazy Target2Beneficial owner436,755

170、,07323.32%Notes:1.These shares are in duplicate the interests held by Mr.Lam and Ms.Lee as stated in section“Directors Interests in Securities”.2.These shares are in duplicate the interests held by Mr.Chan as stated in section“Directors Interests in Securities”.29Interim Report 2020/21Save as disclo

171、sed above,as at 31 December 2020,no person,other than a Director and chief executive of the Company whose interests are set out in the section titled“Directors Interests in Securities”above,had any interest or short position in the shares or underlying shares of the Company that was recorded in the

172、register required to be kept by the Company pursuant to Section 336 of the SFO.SHARE OPTION SCHEMEAt 31 December 2020,the Company had no share option outstanding(31 December 2019:45,448,000).No share option was granted,exercised,cancelled or lapsed during the period under review.SHARE AWARD PLANThe

173、Company has adopted the share award plan(the“Plan”)on 12 June 2020.At 31 December 2020,no share was purchased for the Plan and no share award was granted pursuant to the Plan.DISCLOSURE OF INFORMATION ON DIRECTORSMr.Hung Hing Man resigned as an Independent Non-executive Director of REXlot Holdings L

174、imited(“REXlot”)and a member of the Audit Committee,the Nomination Committee and the Remuneration Committee of REXlot with effect from 26 November 2020.Save as disclosed above,during the Period under review,there is no change in information of the Directors since the date of the 2019/20 annual repor

175、t of the Company which is required to be disclosed pursuant to Rule 13.51B(1)of the Listing Rules.PURCHASE,SALE OR REDEMPTION OF THE COMPANY S LISTED SECURITIESNeither the Company,nor any of its subsidiaries,purchased,sold or redeemed any of the Company s listed securities during the six months ende

176、d 31 December 2020.CORPORATE GOVERNANCEThe Company has applied the principles of the Corporate Governance Code(the“CG Code”)as set out in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and complied with all the applicable code provisions of th

177、e CG Code throughout the six months ended 31 December 2020,except with deviation from code provision A.2.1.30Heng Tai Consumables Group LimitedUnder the code provision A.2.1 of the CG Code,the roles of chairman and chief executive should be separate and should not be performed by the same individual

178、.Since March 2012,the Board has appointed Mr.Lam Kwok Hing(“Mr.Lam”)as Chief Executive Officer in view of Mr.Lam s in-depth experience in the industry and the Group s overall operations.As a result of the appointment,the roles of Chairman and Chief Executive Officer are performed by Mr.Lam.Mr.Lam is

179、 the co-founder of the Group and has over 30 years experience in the consumer products industry.In the context of the challenging business environment,the Board believes that a consistent leadership,effective and efficient planning and implementation of business decisions and strategies are of utmos

180、t importance.By virtue of Mr.Lam s in-depth experience and understanding of the Group,therefore,vesting the roles of Chairman and Chief Executive Officer on Mr.Lam can generate benefits for the Group and shareholders as a whole.COMPLIANCE WITH THE MODEL CODEThe Company has adopted the Model Code as

181、the code of conduct regarding Directors securities transactions.Having made specific enquiry of all Directors,they all confirmed that they had fully complied with the required standard set out in the Model Code throughout the six months ended 31 December 2020.REVIEW OF INTERIM REPORTThe interim repo

182、rt for the six months ended 31 December 2020 has been reviewed by the Audit Committee of the Company,but not audited by the Company s external auditors.On behalf of the BoardLam Kwok HingChairmanHong Kong,26 February 2021As at the date of this report,the Board comprises four executive directors,namely Mr.Lam Kwok Hing(Chairman),Ms.Lee Choi Lin,Joecy,Ms.Gao Qin Jian and Mr.Chan Cheuk Yu,Stephen;and three independent non-executive directors,namely Ms.Mak Yun Chu,Mr.Poon Yiu Cheung,Newman and Mr.Hung Hing Man.