YURUNFOOD：InterimReport2020.pdf

《YURUNFOOD：InterimReport2020.pdf》由會員分享，可在線閱讀，更多相關《YURUNFOOD：InterimReport2020.pdf（36頁珍藏版）》請在三個皮匠報告上搜索。

1、INTERIM REPORT 2020INTERIM REPORT 2020ContentsI 1 Corporate Information I 2 Management Discussion and Analysis I 10 Other Information I 15 Consolidated Statement of Profit or LossI 16 Consolidated Statement of Profit or Loss and Other Comprehensive IncomeI 17 Consolidated Statement of Financial Posi

2、tionI 19 Consolidated Statement of Changes in EquityI 20 Condensed Consolidated Statement of Cash FlowsI 21 Notes to the Unaudited Interim Financial ReportCORPORATE INFORMATION001INTERIM REPORT 2020BOARD OF DIRECTORSExecutive DirectorsZhu Yuan(Chairman and Chief Executive Officer)Yang LinweiIndepend

3、ent Non-executive DirectorsGao HuiChen JianguoMiao YelianAUDIT COMMITTEEGao Hui(Chairman)Chen JianguoMiao YelianREMUNERATION COMMITTEEGao Hui(Chairman)Chen JianguoZhu YuanNOMINATION COMMITTEEChen Jianguo(Chairman)Gao HuiZhu YuanCOMPANY SECRETARYLee Wing Sze,Rosa HKICPA,FCCAAUTHORISED REPRESENTATIVES

4、Zhu YuanLee Wing Sze,RosaAUDITORBDO LimitedPRINCIPAL BANKERSBank of China LimitedAgricultural Bank of China LimitedChina CITIC Bank Corporation LimitedIndustrial and Commercial Bank of China LimitedChina Merchants Bank Co.,Ltd.China Minsheng Banking Corp.,Ltd.REGISTERED OFFICEClarendon House2 Church

5、 StreetHamilton HM 11BermudaHEAD OFFICE10 Yurun RoadJianye DistrictNanjingThe Peoples Republic of ChinaPRINCIPAL PLACE OF BUSINESS IN HONG KONGSuite 4707,47th FloorCentral Plaza18 Harbour Road,WanchaiHong KongPRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICEMUFG Fund Services(Bermuda)Limited4th Floor No

6、rthCedar House41 Cedar AvenueHamilton HM 12BermudaHONG KONG BRANCH SHARE REGISTRAR AND TRANSFER OFFICETricor Investor Services LimitedLevel 54,Hopewell Centre183 Queens Road EastHong KongLEGAL ADVISORSAs to Hong Kong LawNorton Rose Fulbright Hong KongIu,Lai&Li Solicitors&NotariesAs to Bermuda LawCon

7、yers Dill&PearmanSTOCK CODE1068WEBSITE.hkMANAGEMENT DISCUSSION AND ANALYSIS002China Yurun Food Group LimitedINDUSTRY OVERVIEWThe global economy was under severe pressure in the first half of 2020,due to the complex and changeable environment,whether domestic or overseas,coupled with the COVID-19 ord

8、eal.In the first half of 2020,Chinas economy first declined and bounced back.According to the data published by the National Bureau of Statistics of China(“NBS”),Chinas gross domestic product(“GDP”)contracted by 1.6%year on year in the first half of 2020 when calculated at comparable prices.The cons

9、umer price index(“CPI”)was up 3.8%year on year,while the core CPI was up 1.2%,which basically remained stable.The food and beverage sector bore the brunt of COVID-19.According to the latest data published by the NBS,the revenue of the sector across China was RMB1.4609 trillion in the first half of 2

10、020,decreasing by 32.8%year on year.Since late February,the capacity utilization rate of the food and beverage sector has been increasing steadily.As of mid-June,the capacity utilization rates of fast food and takeaway sectors were higher than that of the overall food and beverage sector by approxim

11、ately 10 percentage points and demonstrated the revenue of the food and beverage sector continued to improve.During the six months ended 30 June 2020(the“Review Period”),the hog industry was hit by the combined impact of the African swine fever epidemic and the COVID-19 outbreak.In the first half of

12、 2020,the number of hogs slaughtered nationwide was 251 million,representing a significant year on year decrease of 19.9%.Pork production in China was 19.98 million tonnes,down 19.1%.The average pork price in China soared by 104.3%or up 96.6 percentage points over the same period last year.During th

13、e Review Period,China continued to promote the transformation and upgrade of the slaughter industry through various proactive measures,including strict approval process of new hog slaughter companies,priority support to the construction of new large slaughterhouses,and thorough rectification and cle

14、arance of small slaughterhouses,so as to ensure decrease in the number of small slaughterhouses.In addition,China provided substantial policy support for the resumption of hog production.Notably,the“No.1 central document”released in 2020 and the relevant government report both stressed the resumptio

15、n of hog production to ensure that the hog production capability would be generally recovered close to a normal annual level by the end of 2020.In the long run,it is expected that industry regulation and epidemic impact will accelerate the concentration of industrial capacity within sizable enterpri

16、ses.The Group will continue to capitalize its core competitiveness in resources,strategy and brand,seize the opportunities arising from challenges,and vigorously promote smooth business development.Despite all various uncertainties during the Review Period,the management of China Yurun Food Group Li

17、mited(“Yurun Food”or“the Company”)and its subsidiaries(collectively referred to as“the Group”)adopted a more prudent strategy and remained persistent to our belief to provide consumers with high-quality meat products in such turbulent market environment.MANAGEMENT DISCUSSION AND ANALYSIS003INTERIM R

18、EPORT 2020BUSINESS REVIEWSince the Chinese New Year,pork price in wholesale market continued to fall until May,impacted by the continuous increase in production capacity of hog and slow recovery of consumption caused by the epidemic.From June,pork price began to rebound as a result of significant in

19、crease in pork consumption driven by the recovery of a series of consumer activities,such as business resumption of the food and beverage sector,production resumption of plants and school resumption.Some domestic sectors,such as food and beverage,resident consumption,and feed and breeding,were hit b

20、y the outbreak and resurgence of COVID-19.Consumers were more cautious about the safety of pork products.As a leader in the sector,the Group strengthened its epidemic prevention during the period so as to ensure product safety and deliver safe and reliable products to consumers.Product Quality and R

21、esearch and DevelopmentAs one of the leaders in the industry,Yurun Food products are well received by the market.Apart from the three well-known trademarks,namely“Yurun(雨潤)”,“Wangrun(旺潤)”and“Haroulian(哈肉聯)”,the Group also owns a China Time-honored Brand,“Popular Meat Packing(大眾肉聯)”.At the“2020(28th)

22、China Market Sales Statistical Results Press Conference”2020（第二十八屆）中國市場商品銷售統計結果新聞發佈會 held in April 2020,Yurun Food was ranked first again in the market sales of low temperature meat products(“LTMP”)and Chilled Pork as a result of their excellent performance.In respect of LTMP,Yurun Food has been ran

23、ked first for more than twenty consecutive years.As for Chilled Pork,it has also been ranked first for consecutive years.These honors not only reflect the high quality and reliability of Yurun Food,but also prove the high customer trust and market recognition of Yurun brand.While continuing to ensur

24、e high product quality,the Group will have its eye on the R&D of new products preferred by the market to further enhance competitiveness and maintain its leadership in the sector.Sales and DistributionChilled pork and LTMP,being the Groups products with higher added value,remained the key drivers fo

25、r the Groups overall business development during the Review Period.During the Review Period,sales of chilled pork of the Group were HK$5.642 billion(first half of 2019:HK$5.450 billion),representing an increase of 3.5%over the same period last year,accounted for approximately 75%(first half of 2019:

26、72%)of the total revenue of the Group prior to inter-segment eliminations and approximately 88%(first half of 2019:85%)of the total revenue of the upstream slaughtering segment.Sales of LTMP were HK$943 million(first half of 2019:HK$968 million),representing a decrease of 2.6%over the same period la

27、st year,accounted for approximately 12%(first half of 2019:13%)of the total revenue of the Group prior to inter-segment eliminations and approximately 82%(first half of 2019:89%)of the total revenue of the downstream processed meat segment.Production Facilities and Production CapacityAs at 30 June 2

28、020,the annual production capacity of the Groups upstream slaughtering and downstream processed meat product segment was approximately 52.65 million heads and 312,000 tons respectively,comparable to the production capacity as at 31 December 2019.MANAGEMENT DISCUSSION AND ANALYSIS004China Yurun Food

29、Group LimitedFINANCIAL REVIEWThe Group reported revenue of HK$7.536 billion during the Review Period,representing an increase of 1.9%from HK$7.392 billion of the same period last year.Loss attributable to the equity holders of the Company during the Review Period was HK$408 million(first half of 201

30、9:HK$448 million),representing a reduction in loss of approximately 9.0%over the same period last year.Loss arising from principal business,being loss attributable to equity holders excluding government subsidies,gain/loss on disposal of non-current assets,net foreign exchange gain/loss,impairment l

31、osses on non-current assets and provision for losses on litigations,was HK$322 million(first half of 2019:HK$340 million),representing a reduction in loss of approximately 5.2%from same period last year.Diluted loss per share was HK$0.224(first half of 2019:HK$0.246).The Board and the management ass

32、essed the business development,performance and position of the Group according to the following key performance indicators.Impairment losses on non-current assetsAs at 30 June 2020,the Board evaluated the non-current assets of the Group in accordance with the requirements of the“International Accoun

33、ting Standard 36 Impairment of Assets”(the“IAS 36”).In the evaluation,the Board took into account the continued decline of Chinas and global economy since 2019,the impact of African swine fever and COVID-19 on the overall industry and the fact that our operation of upstream slaughtering business dur

34、ing the Review Period was behind our expectation.These factors were expected to have ongoing unpredictable impact on the business of the Group in the second half of 2020.Due to these external factors,the Board adjusted the assumptions used in the cash flow forecast for the upstream slaughtering busi

35、ness for the second half of 2020 when assessing the recoverable amount of each cash-generating unit.Accordingly,the Group made a provision for impairment losses of approximately HK$37 million(first half of 2019:HK$Nil)during the Review Period.The impairment losses of non-current assets is an account

36、ing losses and a non-cash item and does not affect the cash flow of the Groups operating activities.REVENUEChilled and Frozen PorkDuring the Review period,the Groups average purchase price of hogs was higher than that of the first half of 2019 by approximately 144%.Affected by COVID-19,certain produ

37、ction bases were forced to suspend production in the first quarter.In addition,high pork prices hindered pork consumption,and the decline in hog inventory made purchase of hogs difficult.As a result,the slaughtering volume decreased by approximately 61.6%to approximately 1.45 million heads from the

38、same period last year.Since the significant increase in pork prices offset the impact of decline in the slaughtering volume,the overall sales revenue of the upstream prior to inter-segment eliminations only slightly decreased by 0.1%from the same period of last year to HK$6.426 billion(first half of

39、 2019:HK$6.432 billion).Specifically,the revenue from chilled pork accounted for approximately 75%of the Groups total revenue prior to inter-segment eliminations(first half of 2019:72%)and approximately 88%of the upstream business total revenue(first half of 2019:85%).It reached HK$5.642 billion(fir

40、st half of 2019:HK$5.450 billion),representing an increase of 3.5%from the same period last year.The revenue from frozen pork represented approximately 12%of the total revenue of the upstream business(first half of 2019:15%),and reached a sales amount of HK$784 million(first half of 2019:HK$982 mill

41、ion),down 20.1%compared with the same period in 2019.Processed Meat ProductsDuring the Review Period,the sales amount of the Groups processing meat products prior to inter-segment eliminations was HK$1.152 billion(first half of 2019:HK$1.089 billion),up 5.7%from the same period last year.MANAGEMENT

42、DISCUSSION AND ANALYSIS005INTERIM REPORT 2020Specifically,the revenue from LTMP was HK$943 million,representing a decrease of 2.6%from HK$968 million of last year.It accounted for approximately 82%of the revenue of the processed meat segment(first half of 2019:89%),remaining the principal source of

43、income for the processed meat segment.The revenue from high temperature meat products(“HTMP”)was HK$209 million(first half of 2019:HK$121 million),representing an increase of 72.1%from the same period of last year and accounting for approximately 18%of the revenue of the processed meat segment(first

44、 half of 2019:11%).Gross Profit and Gross Profit MarginAffected by the African swine fever epidemic and COVID-19,coupled with the surge in pork price,profits from slaughtering were contracted because consumers reduced their demand for pork and the market was compressed.The Groups gross profit decrea

45、sed by 14.0%from HK$517 million in the first half of 2019 to HK$444 million in the Review Period.The overall gross profit margin decreased by 1.1 percentage points to 5.9%from 7.0%of the same period last year.In respect of the upstream business,the gross profit margins of chilled pork and frozen por

46、k were 2.2%and-4.5%respectively(first half of 2019:4.9%and 4.9%,respectively).The overall gross profit margin of the upstream business was 1.4%,representing a decrease of 3.5 percentage points from 4.9%of the same period last year.In respect of the downstream business of processed meat products,its

47、demands increased due to COVID-19,resulting in an increase in unit selling price and good performance in gross profit.Gross profit margin of LTMP was 29.7%,representing an increase of 11.6 percentage points from 18.1%of the same period last year.The gross profit margin of HTMP rose significantly by

48、13.3 percentage points to 35.9%from 22.6%of the same period last year.The overall gross profit margin of the downstream business was 30.9%,up 12.3 percentage points from 18.6%of the same period last year.Other Net Income/(Losses)During the Review Period,the Group recorded other net income of HK$11 m

49、illion(first half of 2019:other net losses of HK$54 million).Other net income during the Review Period was mainly the net amount of rental income after deduction of non-recurring losses,such as provision for losses on litigations(please refer to the section headed“Contingent Liabilities”for details)

50、,loss on disposal of property,plant and equipment and lease prepayments.The position changed from other net losses of HK$54 million in same period last year to other net income of HK$11 million mainly due to the significant decrease in provision for losses on litigations during the Review Period.Ope

51、rating ExpensesOperating expenses include distribution expenses and administrative and other operating expenses.The Groups operating expenses during the Review Period were HK$595 million,increased by 1.7%from HK$585 million of the same period last year and included the provision of approximately HK$

52、37 million(first half of 2019:HK$Nil)for impairment losses of non-current assets.Operating expenses excluding impairment losses was HK$558 million,representing a decrease of 4.6%from the same period last year and accounting for 7.4%(first half of 2019:7.9%)of the Groups revenue.The main reason for t

53、he increase was attributable to the provision of approximately HK$37 million during the Review Period(first half of 2019:HK$Nil)for impairment losses on non-current assets but its impact was offset by the decrease in the transportation cost due to decline in sales.MANAGEMENT DISCUSSION AND ANALYSIS0

54、06China Yurun Food Group LimitedResults of Operating ActivitiesDuring the Review Period,operating loss of the Group was HK$139 million(first half of 2019:HK$122 million),representing an increase of 14.2%from last year.Net Finance CostsDuring the Review Period,net finance costs of the Group were HK$2

55、51 million,representing a significant decrease of 21.8%from approximately HK$321 million of the same period last year.The decrease in net finance costs was mainly because certain bank borrowings breached the covenants during the same period last year and an one-off provision of default interests for

56、 previous years was accordingly made at that time.Income TaxDuring the Review Period,the income tax expense was approximately HK$14 million,representing an increase of HK$11 million from approximately HK$3 million of the same period last year.Loss Attributable to the Equity Holders of the CompanyGiv

57、en all the above factors,loss attributable to the equity holders of the Company during the Review Period was HK$408 million(first half of 2019:HK$448 million),representing a reduction in loss of 9.0%from the same period last year.Loss from the principal business(loss attributable to equity holders e

58、xcluding government subsidies,gain/loss on disposal of non-current assets,net foreign exchange gain/loss,impairment losses on non-current assets and provision for losses on litigations,and other one-off losses)was HK$322 million(first half of 2019:HK$340 million),representing a reduction in loss of

59、approximately 5.2%from the same period last year.Financial ResourcesAs at 30 June 2020,the Groups cash balance together with restricted bank deposits were HK$406 million,representing an increase of approximately HK$149 million from HK$257 million as at 31 December 2019.Approximately 96%(31 December

60、2019:96%)of the above-mentioned financial resources was denominated in Renminbi(“RMB”),and approximately 4%(31 December 2019:4%)was denominated in US Dollars,while the rest was denominated in other currencies.As at 30 June 2020,the outstanding bank and other borrowings of the Group amounted to HK$6.

61、527 billion,representing a decrease of HK$55 million from HK$6.582 billion as of 31 December 2019.Bank and other borrowings of HK$6.476 billion(31 December 2019:HK$5.9 billion)are due within one year.All borrowings were denominated in RMB,which were the same with the borrowings as at 31 December 201

62、9.As at 30 June 2020,the Groups fixed-rate debt ratio was 80.5%(31 December 2019:80.3%).The net cash inflow of the Group during the Review Period was mainly net cash generated from operating activities and the net amounts of borrowings from a related company.During the Review Period,the capital expe

63、nditure was HK$120 million(first half of 2019:HK$30 million)for the payment for construction in progress of those projects already commenced.MANAGEMENT DISCUSSION AND ANALYSIS007INTERIM REPORT 2020Breach of Loan AgreementsCertain of the Groups bank borrowing facilities were subject to the fulfillmen

64、t of covenants as commonly seen in lending arrangements with financial institutions.As at 30 June 2020,the Group could not fulfil covenants imposed by banks on certain bank borrowings with an aggregate amount of HK$4.997 billion(31 December 2019:HK$4.937 billion)and these bank borrowings were classi

65、fied as current liabilities in the consolidated statement of financial position.From 30 June 2020 to the date of this report,the above-mentioned bank loans have not yet been renewed.The Group has kept close communication with the banks regarding the above matters and the renewal of those matured ban

66、k borrowings.In the course of communication,the Group understood that the banks will not take any radical actions against the Group and all parties hoped that the Group can maintain normal operations.As such,the Board believes that the likelihood of demands from bank for immediate repayment is not h

67、igh and the above matters do not have significant impact on the operations of the Group.ASSETS AND LIABILITIESThe total assets of the Group as at 30 June 2020 were HK$9.271 billion(31 December 2019:HK$9.681 billion),representing a decrease of HK$410 million from that of 31 December 2019.The total li

68、abilities of the Group as at 30 June 2020 were HK$11.132 billion,representing an increase of approximately HK$134 million from that as at 31 December 2019.As at 30 June 2020,the property,plant and equipment of the Group amounted to HK$3.909 billion(31 December 2019:HK$4.134 billion),representing a d

69、ecrease of 5.4%from that as at 31 December 2019.The lease prepayments of the Group as at 30 June 2020 were HK$1.275 billion(31 December 2019:HK$1.353 billion).This represents the cost of land use right of the Group which was amortized on a straight-line basis over the relevant useful life.Non-curren

70、t prepayments and other receivables of the Group mainly represented the prepayments for acquisitions of land use rights and property,plant and equipment and the non-current portion of value-added tax recoverable.As at 30 June 2020,they amounted to HK$92 million(31 December 2019:HK$108 million)and HK

71、$607 million(31 December 2019:HK$730 million)respectively.Prepayments for acquisitions of land use rights and property,plant and equipment have not started to depreciate nor amortize yet.Despite the net liabilities position as at 30 June 2020,the Group had non-current assets of approximately HK$6.07

72、9 billion to support the daily production and operations of the Group.Such position has not materially impaired the Groups ability to continue its daily business operation.The Directors believe that by leveraging the improvement in the economic environment and the managements proactive efforts to ke

73、ep improving its operating profit and reducing pressure from borrowings,we are confident that the Group will return back to the net assets position.During the Review Period,the Group recorded a net loss of HK$405 million(first half of 2019:HK$446 million).As at 30 June 2020,the net current liabiliti

74、es of the Group were HK$7.796 billion(31 December 2019:HK$7.078 billion).Bank and other borrowings were HK$6.527 billion(31 December 2019:HK$6.582 billion),of which HK$6.476 billion will expire within twelve months from the date(31 December 2019:HK$5.90 billion).As mentioned above,although the Group

75、 could not fulfil certain bank covenants relating to certain bank borrowings and some subsidiaries of the Group are facing various litigations,the Group has been in active negotiations with banks on renewal and waiver of the repayable on demand clause and breach of the undertakings and restrictive c

76、ovenants of certain bank loans.The negotiations have been relatively optimistic.In addition,the Group will implement operating plans to increase profitability and control costs to generate sufficient operating cash flows.In view of these,the Directors believe that the Group has sufficient financial

77、resources to finance operations and to meet financial obligations as and when they fall due within the next twelve months from the end of the Review Period.MANAGEMENT DISCUSSION AND ANALYSIS008China Yurun Food Group LimitedAs at 30 June 2020,the total debt/gearing ratio(total debt represented by the

78、 sum of bank and other borrowings divided by the sum of total debt and equity attributable to shareholders)of the Group was 141.6%(31 December 2019:126.3%).As at 30 June 2020,after excluding cash in bank and restricted bank deposits,the net debt/gearing ratio was 132.8%(31 December 2019:121.4%).CHAR

79、GES ON ASSETSAs at 30 June 2020,certain properties,plant and equipment and construction in progress of the Group with a carrying amount of HK$1.491 billion(31 December 2019:HK$1.568 billion),certain investment properties of the Group with a carrying amount of HK$37 million(31 December 2019:HK$42 mil

80、lion),certain lease prepayments of the Group with a carrying amount of approximately HK$574 million(31 December 2019:HK$685 million),and certain trade receivables of the Group with a carrying amount of approximately HK$3 million(31 December 2019:HK$6 million)were pledged against certain bank borrowi

81、ngs with a total amount of approximately HK$3.889 billion(31 December 2019:HK$3.862 billion).SIGNIFICANT INVESTMENT,MATERIAL ACQUISITION AND DISPOSAL OF SUBSIDIARIES AND ASSOCIATED COMPANIES,AND FUTURE PLANS FOR MATERIAL INVESTMENT OR ACQUISITION OF CAPITAL ASSETSThe Group did not hold any other sig

82、nificant investment nor have any substantial acquisition and disposal of subsidiaries during the Review Period.As at the date of this report,the Group has no plan to make any significant investment or acquisition of capital assets.CONTINGENT LIABILITIESAs at 30 June 2020,there were outstanding litig

83、ations initiated by banks in the PRC against certain subsidiaries of the Group demanding them to secure an immediate repayment of the outstanding bank borrowings of approximately HK$2.128 billion(31 December 2019:HK$2.121 billion)or otherwise assets of equivalent amount.As at 30 June 2020,certain as

84、sets of the Group with a carrying amount of approximately HK$313 million(31 December 2019:HK$348 million)were frozen by the courts of the PRC,including the restricted bank deposits of HK$13 million(31 December 2019:HK$22 million).The Group is negotiating with the banks to resolve such litigations.Th

85、ere were outstanding litigations initiated by several contractors against certain subsidiaries of the Group claiming an aggregate construction fee together with the late penalties of approximately HK$329 million(31 December 2019:HK$328 million)in aggregate.However,based on the advice of the Groups i

86、n-house legal counsel,the Directors estimated that the Group may be liable to pay approximately HK$207 million(31 December 2019:HK$197 million)for the aforesaid construction fee and penalties.Provision for such amounts has been made accordingly.Pursuant to the judgments,the Group was ordered to make

87、 an immediate payment of payable construction fee of approximately HK$140 million(31 December 2019:HK$93 million)and the corresponding late penalties of approximately HK$50 million(31 December 2019:HK$51 million)during the Review Period.As of the date of this report,litigations regarding the remaini

88、ng claims of approximately HK$139 million(31 December 2019:HK$185 million)are still in progress.MANAGEMENT DISCUSSION AND ANALYSIS009INTERIM REPORT 2020There were outstanding litigations initiated by certain local governments in the PRC against certain subsidiaries of the Group demanding an immediat

89、e cash repayment of approximately HK$35 million(31 December 2019:HK$139 million).The Group has made full provisions for the aforesaid claims.In respect of the progress of the above litigations,the Company will make further announcements in due course in accordance with the requirements of the Rules

90、Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited(the“Listing Rules”)as and when required.EXPOSURE TO FLUCTUATIONS IN EXCHANGE RATES AND RELATED HEDGESOther than purchases of certain equipment and materials and payment of certain professional fees in USD,Euros or Hong Ko

91、ng dollars,the Groups transactions are mainly settled in RMB.RMB is the functional currency of the operating subsidiaries of the Group in the PRC,and is not freely convertible into foreign currencies.The Group will monitor its exposure by considering factors including,but not limited to,exchange rat

92、e movement of the relevant foreign exchange currencies as well as the Groups cash flow requirements to ensure that its foreign exchange exposure is kept at an acceptable level.HUMAN RESOURCESAs at 30 June 2020,the Group had approximately 10,400(31 December 2019:approximately 9,400)employees in the P

93、RC and Hong Kong in total.During the Review Period,total staff cost was HK$305 million,accounting for 4.0%of the revenue(first half of 2019:HK$308 million,accounting for 4.2%of the revenue)of the Group.The Group offers its employees competitive remuneration and other employee benefits,including cont

94、ributions to social security schemes,such as retirement benefits scheme.In line with the industry and market practice,the Group also offers performance linked bonus and a share option scheme to encourage and reward employees to contribute in terms of innovation and improvement.In addition,the Group

95、allocates resources to provide continuing education and training to the management and employees so as to improve their skills and knowledge.ENVIRONMENTAL PROTECTION AND PERFORMANCEAs a responsible corporation,the Group is committed to promoting environmental protection and minimizing the impact of

96、production and business activities on the environment.During the Review Period,the Group implemented measures to reduce waste generated during its production process.In the future,the Group aims at improving relevant measures to minimize waste generation and participating in environmental protection

97、 and sustainability plans,which are part of the Groups long-term environmental protection policy.OTHER INFORMATION010China Yurun Food Group LimitedINTERIM DIVIDENDThe Board has resolved not to declare an interim dividend for the Review Period(first half of 2019:HK$Nil).DIRECTORS AND CHIEF EXECUTIVES

98、 INTERESTS AND SHORT POSITIONS IN SHARES,UNDERLYING SHARES AND DEBENTURESAs at 30 June 2020,the number of issued ordinary shares of the Company was 1,822,755,650;and the interests and short positions of the Directors and the chief executive of the Company in the shares,underlying shares and debentur

99、es of the Company or any associated corporation(within the meaning of Part XV of the Securities and Futures Ordinance(Chapter 571 of the Laws of Hong Kong)(the“SFO”),as recorded in the register of the Company required to be kept under Section 352 of the SFO,or as otherwise notified to the Company an

100、d The Stock Exchange of Hong Kong Limited(the“Hong Kong Stock Exchange”)pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers(the“Model Code”)contained in Appendix 10 to the Listing Rules were as follows:Interest in shares and underlying shares of the CompanyName ofDi

101、rectorsCapacityInterest inordinarysharesInterest inunderlyingshares(Note)TotalApproximatepercentageof interestYang LinweiBeneficial owner2,000,0002,000,0000.11%Note:The interests in underlying shares represent the interests in the share options granted on 25 March 2013 pursuant to the Companys share

102、 option scheme,details of which are set out in the section headed“Share Option Schemes”below.Save as disclosed above,as at 30 June 2020,none of the Directors and/or the chief executive of the Company had any interests or short positions in the shares,underlying shares or debentures of the Company or

103、 any associated corporation(within the meaning of Part XV of the SFO)as recorded in the register of the Company required to be kept under Section 352 of the SFO or as otherwise notified to the Company and the Hong Kong Stock Exchange pursuant to the Model Code.OTHER INFORMATION011INTERIM REPORT 2020

104、SUBSTANTIAL SHAREHOLDERS INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARESAs at 30 June 2020,so far as is known to the Directors and the chief executive of the Company,the interests or short positions of substantial shareholders/other persons(other than Directors and chief executive of t

105、he Company)in the shares and underlying shares of the Company as recorded in the register of the Company required to be kept under Section 336 of the SFO were as follows:NameNatureNumber of shares(Note)Approximatepercentage ofthe issued sharesWillie Holdings LimitedLong position470,699,90025.82%Zhu

106、YicaiLong position470,699,90025.82%Wu XueqinLong position470,699,90025.82%Note:These shares represent the shares of the Company held by Willie Holdings Limited(“Willie Holdings”)as beneficial owner.Willie Holdings is owned as to 93.41%by Zhu Yicai(“Mr.Zhu”),a former executive Director and Chairman o

107、f the Company,and as to 6.59%by Wu Xueqin(“Ms.Wu”),the spouse of Mr.Zhu.Mr.Zhu is deemed to be interested in the shares of the Company held by Willie Holdings as well as the entire issued share capital of Willie Holdings by virtue of Part XV of the SFO.Ms.Wu,being the spouse of Mr.Zhu,is also deemed

108、 to be interested in these shares by virtue of Part XV of the SFO.Save as disclosed above,as at 30 June 2020,no other parties were recorded in the register of the Company required to be kept under Section 336 of the SFO as having interests or short positions in the shares or underlying shares of the

109、 Company.SHARE OPTION SCHEMESThe Company unconditionally adopted a share option scheme(the“Old Scheme”)on 3 October 2005.The Old Scheme was in force for ten years and expired on 2 October 2015.In order to enable the continuity of the Old Scheme,the Company unconditionally adopted a new share option

110、scheme(the“New Share Option Scheme”)on 7 August 2015 and concurrently,early terminated the Old Scheme pursuant to the ordinary resolution passed at the annual general meeting of the Company held on 24 June 2015.The share options granted under the Old Scheme prior to its termination,if not yet exerci

111、sed,would continue to be valid and exercisable in accordance with the rules of the Old Scheme.The detailed terms of the New Share Option Scheme were disclosed in the 2018 and 2019 annual reports of the Company.The Company had not granted any share option under the New Share Option Scheme since its a

112、doption.OTHER INFORMATION012China Yurun Food Group LimitedDetails of the outstanding share options under the Old Scheme during the Review Period are shown below:Number of shares which may be issued pursuant to the share options Name or category of participantAs at 1 January 2020Granted during the Re

113、viewPeriodExercised during the ReviewPeriodLapsed during the ReviewPeriodAs at 30 June2020Exercise price per share(3)Date of grantOption period(1)HK$(DD.MM.YYYY)(DD.MM.YYYY)DirectorsYang Linwei2,000,0002,000,0005.14225.03.201325.03.2013 24.03.2023Yao Guozhong (resigned on 6 January 2020)750,000(750,

114、000)5.14225.03.201325.03.2013 24.03.2023 Subtotal2,750,000(2)(750,000)2,000,000 Other employees (including ex-employees)In aggregate21,550,000(16,250,000)5,300,0005.14225.03.201325.03.2013 24.03.2023In aggregate26,650,000(12,400,000)14,250,0005.00214.06.201314.06.2013 13.06.2023 Subtotal48,200,000(2

115、8,650,000)19,550,000 Total50,950,000(29,400,000)21,550,000 Notes:(1)Subject to the satisfaction of other conditions such as performance targets of the Group and/or individual grantees,if any,as set out in the respective offer letters,the share options granted on 25 March 2013 and 14 June 2013 would

116、be vested in the grantees in four equal tranches,i.e.,25%of the share options will be vested after the publication of the results of the financial years ended 2013,2014,2015 and 2016 respectively.The first tranche(25%)and second tranche(25%)of the share options had lapsed due to the performance targ

117、ets of the Group and the individual grantees not having been achieved.For the third tranche(25%)and fourth tranche(25%)of the share options,the Board had approved to waive the performance-based condition set by the Company in order to provide incentives for the qualified employees.(2)The share optio

118、ns represent personal interests held by the relevant Directors as beneficial owners.(3)The closing price of the shares of the Company immediately before the date of grant(i.e.22 March 2013 and 13 June 2013 respectively)were HK$5.17 and HK$4.83 respectively.(4)No share options were cancelled under th

119、e Old Scheme during the Review Period.Save as disclosed above,at no time during the Review Period was the Company or any of its subsidiaries a party to any arrangement to enable the Directors to acquire benefits by means of acquisition of shares in or debentures of the Company or any other body corp

120、orate.OTHER INFORMATION013INTERIM REPORT 2020CORPORATE GOVERNANCEThe Company adheres to corporate governance principles of integrity,transparency,openness and efficiency.It has strived to strictly observe and follow stringent corporate governance practice at all times through a comprehensive corpora

121、te governance structure and measures,so as to achieve a high standard of corporate governance and enhance shareholders value.The Board currently comprises five Directors.To facilitate effective management,the Board has delegated certain functions to various Board committees,including the Audit Commi

122、ttee,the Remuneration Committee and the Nomination Committee.The Company has formulated specific terms of reference of each committee,covering its authority,responsibilities and functions.The major responsibilities of the Board and its committees include supervising the implementation of corporate g

123、overnance,monitoring and advising the management in respect of financial and business strategy and targets,monitoring public disclosures,as well as assessing whether the performances of the management are in line with the Companys operating objectives.The Company has also established risk management

124、 and internal control systems to ensure that the Companys assets are under protection,operating and governance measures are in place,business risks are properly managed and accounting records and financial statements are properly kept and maintained.The Audit Committee is responsible for reviewing t

125、he effectiveness of the Groups risk management and internal control systems with the assistance of the Groups Internal Audit Department.The Company maintains a highly transparent governance mechanism by publishing information to shareholders and investors in a timely manner.We use several communicat

126、ion channels to ensure that the Companys shareholders are provided with ready,equal and timely access to information about the Company.The Board has reviewed the Companys corporate governance practices and is satisfied that the Company was in compliance with all applicable code provisions of the Cor

127、porate Governance Code(“CG Code”)as set out in Appendix 14 to the Listing Rules during the Review Period except for the matter disclosed below:In compliance with code provision A.2.1 of the CG Code,the roles of chairman and chief executive officer should be separate and should not be performed by th

128、e same individual.The division of responsibilities between the chairman and chief executive officer should be clearly established and set out in writing.Nonetheless,the Company appointed Ms.Zhu Yuan as both its chairman and chief executive officer on 28 March 2019.The Board believes that vesting the

129、 roles of the chairman and the chief executive officer in the same person would allow the Company to be more effective and efficient in developing business strategies and executing business plans,and is beneficial to the business prospects and management of the Group.The Board believes that the bala

130、nce of power can be ensured by the composition of the Board which includes members who are experienced and technical individuals and of which more than half are independent non-executive Directors.In the long run,the Company would seek and appoint a suitable individual to take up the role of chief e

131、xecutive officer.OTHER INFORMATION014China Yurun Food Group LimitedMODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORSThe Company has adopted the Model Code contained in Appendix 10 to the Listing Rules as the Companys code of conduct and rules governing dealings by all Directors in the securities o

132、f the Company.The Company,having made specific enquiries with all Directors,confirms that the Directors have complied with the required standards set out in the Model Code throughout the Review Period.PURCHASE,SALE OR REDEMPTION OF LISTED SECURITIES OF THE COMPANYNeither the Company nor any of its s

133、ubsidiaries purchased,sold or redeemed any of the Companys listed securities during the Review Period.AUDIT COMMITTEEThe Audit Committee of the Company has reviewed,with the management,the accounting principles and practices adopted by the Group and has discussed internal controls,risk management an

134、d financial reporting matters,including the review of the unaudited interim results of the Group for the Review Period.IMPORTANT EVENTS AFFECTING THE GROUP AFTER THE REVIEW PERIODThere was no other important event affecting the Group since 30 June 2020 and up to the date of this interim report.By Or

135、der of the BoardZhu YuanChairman and Chief Executive OfficerHong Kong,18 August 2020015INTERIM REPORT 2020For the six months ended 30 June 2020 unaudited(Expressed in Hong Kong dollars)CONSOLIDATED STATEMENT OF PROFIT OR LOSSSix months ended 30 June20202019Notes$000$000Revenue47,536,3167,392,433Cost

136、 of sales(7,092,161)(6,875,798)Gross profit444,155516,635Other net income/(losses)611,369(53,960)Distribution expenses(280,100)(260,854)Administrative and other operating expenses(314,835)(323,947)Results from operating activities(139,411)(122,126)Finance income1,0824,180Finance costs(252,288)(325,6

137、09)Net finance costs7(a)(251,206)(321,429)Loss before income tax7(390,617)(443,555)Income tax expenses8(14,118)(2,690)Loss for the period(404,735)(446,245)Attributable to:Equity holders of the Company(407,917)(448,104)Non-controlling interests3,1821,859 Loss for the period(404,735)(446,245)Loss per

138、shareBasic and diluted($)10(0.224)(0.246)The notes on pages 21 to 34 form part of this interim financial report.016China Yurun Food Group LimitedFor the six months ended 30 June 2020 unaudited(Expressed in Hong Kong dollars)CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMESix m

139、onths ended 30 June20202019Note$000$000Loss for the period(404,735)(446,245)Other comprehensive income for the period(after tax and reclassification adjustments)9Items that may be reclassified subsequently to profit or loss:Foreign currency translation differences for foreign operations(139,655)(85,

140、439)Total comprehensive income for the period(544,390)(531,684)Attributable to:Equity holders of the Company(546,508)(532,949)Non-controlling interests2,1181,265 Total comprehensive income for the period(544,390)(531,684)The notes on pages 21 to 34 form part of this interim financial report.017INTER

141、IM REPORT 202030 June 2020 unaudited(Expressed in Hong Kong dollars)CONSOLIDATED STATEMENT OF FINANCIAL POSITION30 June31 December20202019Notes$000$000Non-current assetsProperty,plant and equipment113,909,0584,134,195Investment properties196,627202,468Lease prepayments1,275,0211,353,200Non-current p

142、repayments and other receivables698,567837,888Deferred tax assets7,877 6,079,2736,535,628 Current assetsInventories12759,9511,037,256Trade and other receivables132,024,0281,849,079Income tax recoverable2,1912,507Restricted bank deposits12,93539,308Cash and cash equivalents14392,887217,403 3,191,9923

143、,145,553 Current liabilitiesBank and other borrowings6,475,5775,899,841Lease liabilities2,9142,890Trade and other payables154,503,5104,315,974Income tax payable6,2125,334 10,988,21310,224,039 Net current liabilities(7,796,221)(7,078,486)Total assets less current liabilities(1,716,948)(542,858)018Chi

144、na Yurun Food Group Limited30 June 2020 unaudited(Expressed in Hong Kong dollars)CONSOLIDATED STATEMENT OF FINANCIAL POSITION30 June30 June20202019$000$000Non-current liabilitiesBank borrowings51,785682,548Lease liabilities87,19090,965Other long term liabilities4,927Deferred tax liabilities89 143,90

145、2773,602 Net liabilities(1,860,850)(1,316,460)EquityShare capital182,276182,276Reserves(2,099,247)(1,552,739)Total equity attributable to equity holders of the Company(1,916,971)(1,370,463)Non-controlling interests56,12154,003 Total equity(1,860,850)(1,316,460)Approved and authorised for issue by th

146、e board of directors on 18 August 2020.Zhu YuanYang LinweiDirectorDirectorThe notes on pages 21 to 34 form part of this interim financial report.019INTERIM REPORT 2020For the six months ended 30 June 2020 unaudited(Expressed in Hong Kong dollars)CONSOLIDATED STATEMENT OF CHANGES IN EQUITYAttributabl

147、e to equity holders of the Company Share capitalShare premiumCapital surplusMerger reservePRC statutory reservesExchange reserveAccumulated lossesTotalNon-controlling interestsTotal equity$000$000$000$000$000$000$000$000$000$000At 1 January 2019182,2767,400,4183,643(70,363)863,828491,372(6,097,079)2

148、,774,09550,7282,824,823 Loss for the period(448,104)(448,104)1,859(446,245)Total other comprehensive income for the period(84,845)(84,845)(594)(85,439)Total comprehensive income for the period(84,845)(448,104)(532,949)1,265(531,684)At 30 June 2019182,2767,400,4183,643(70,363)863,828406,527(6,545,183

149、)2,241,14651,9932,293,139 At 1 January 2020182,2767,400,4183,643(70,363)863,828287,298(10,037,563)(1,370,463)54,003(1,316,460)Loss for the period(407,917)(407,917)3,182(404,735)Total other comprehensive income for the period(138,591)(138,591)(1,064)(139,655)Total comprehensive income for the period(

150、138,591)(407,917)(546,508)2,118(544,390)Transfer from accumulated losses4,753(4,753)At 30 June 2020182,2767,400,4183,643(70,363)868,581148,707(10,450,233)(1,916,971)56,121(1,860,850)The notes on pages 21 to 34 form part of this interim financial report.020China Yurun Food Group LimitedFor the six mo

151、nths ended 30 June 2020 unaudited(Expressed in Hong Kong dollars)CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWSSix months ended 30 June20202019Note$000$000Cash generated from operations172,6506,360Finance costs paid(4,029)(6,728)Tax paid(5,136)(4,815)Net cash generated from/(used in)operating activi

152、ties163,485(5,183)Investing activitiesAcquisitions of property,plant and equipment(119,651)(29,985)Proceeds from disposal of lease prepayments and property,plant and equipment47,239Other cash flows arising from investing activities1,0824,180 Net cash(used in)/generated from investing activities(118,

153、569)21,434 Financing activitiesNet repayments of bank borrowings(30,641)New borrowing from a related company78,092Other cash flows arising from financing activities21,084(512)Net cash generated from/(used in)financing activities99,176(31,153)Net increase/(decrease)in cash and cash equivalents144,092

154、(14,902)Cash and cash equivalents at 1 January217,403218,687Effect of exchange rate fluctuations on cash held31,392(1,900)Cash and cash equivalents at 30 June14392,887201,885 The notes on pages 21 to 34 form part of this interim financial report.021INTERIM REPORT 2020For the six months ended 30 June

155、 2020 unaudited(Expressed in Hong Kong dollars)NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT1.REPORTING ENTITYChina Yurun Food Group Limited(the“Company”)was incorporated in Bermuda on 21 March 2005 as an exempted company with limited liability under the Bermuda Companies Act 1981.The interim fina

156、ncial report of the Company as at and for the six months ended 30 June 2020 comprises the financial information of the Company and its subsidiaries(collectively referred to as the“Group”).2.BASIS OF PREPARATIONThe interim financial report of the Group has been prepared in accordance with the applica

157、ble disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited(the“Listing Rules”),including compliance with International Accounting Standard 34(“IAS 34”),Interim Financial Reporting,issued by the International Accounting Standards Board(“IASB”

158、).It was authorised for issue on 18 August 2020.The interim financial report should be read in conjunction with the annual financial statements for the year ended 31 December 2019(the“2019 annual financial statement”),which have been prepared in accordance with International Financial Reporting Stan

159、dards(“IFRS”).Except as described in note 3,the interim financial report has been prepared in accordance with the same accounting policies adopted in the 2019 annual financial statements.The preparation of an interim financial report in conformity with IAS 34 requires management to make judgements,e

160、stimates and assumptions that affect the application of policies and reported amounts of assets and liabilities,income and expenses on a year to date basis.Actual results may differ from these estimates.This interim financial report contains condensed consolidated financial statements and selected e

161、xplanatory notes.The notes include an explanation of events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the 2019 annual financial statements.The condensed consolidated interim financial statements and notes thereon

162、 do not include all of the information required for full set of financial statements prepared in accordance with IFRSs.The financial information relating to the financial year ended 31 December 2019 that is included in the interim financial report as comparative information does not constitute the C

163、ompanys statutory financial statements for that financial year but is derived from those financial statements.Statutory financial statements for the year ended 31 December 2019 are available from the Companys principal place of business in Hong Kong.The auditor has disclaimed an opinion on those fin

164、ancial statements in its report dated 27 March 2020.The Group incurred a net loss of$404,735,000(six months ended 30 June 2019:$446,245,000)for the six months ended 30 June 2020 and as at 30 June 2020,the Group had net current liabilities of$7,796,221,000(31 December 2019:$7,078,486,000).Its current

165、 and non-current bank and other borrowings amounted to$6,475,577,000(31 December 2019:$5,899,841,000)and$51,785,000(31 December 2019:$682,548,000)as at 30 June 2020 respectively,while the Group maintained its cash and cash equivalents of$392,887,000(31 December 2019:$217,403,000)only.The Group could

166、 not fulfil certain bank covenants relating to certain bank borrowings amounted to$4,996,982,000(31 December 2019:$4,937,349,000)as at 30 June 2020.These bank borrowings were presented as current liabilities in the consolidated statement of financial position.Included in these bank borrowings were$2

167、,127,801,000(31 December 2019:$2,120,682,000)of which the banks have commenced litigations against the Group to repay the outstanding balances.As at 30 June 2020 and up to date of this report,the courts in the Peoples Republic of China(the“PRC”)have ordered to freeze the Groups bank deposits of$12,9

168、35,000(31 December 2019:$21,951,000)and certain property,plant and equipment with carrying amount of$313,443,000(31 December 2019:$348,384,000).These conditions indicate the existence of material uncertainties which may cast significant doubt about the Groups ability to continue as a going concern.0

169、22China Yurun Food Group LimitedFor the six months ended 30 June 2020 unaudited(Expressed in Hong Kong dollars)NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT2.BASIS OF PREPARATION(CONTINUED)The directors of the Company(the“Directors”)have taken the following measures to mitigate the liquidity press

170、ure and to improve its financial position:(i)Actively negotiating with banks for the waiver of the repayable on demand clause and breach of the undertaking and restrictive covenant requirements of certain bank borrowings;(ii)Actively negotiating with banks to obtain additional new financing and othe

171、r source of funding as and when required;and(iii)Implementing operation plans to enhancing profitability and control costs and to generate adequate cash flows from operation.Taking into account the Groups cash flow projections covering a period of twelve months from the end of the reporting period p

172、repared by management,and assuming the successful implementation of the above measures,the Directors consider the Group would be able to finance its operations and to meet its financial obligations as and when they fall due within the next twelve months from the end of the reporting period.According

173、ly,the condensed consolidated financial statements have been prepared on a going concern basis.The audit committee of the Company has no disagreement with the Directors on the above position and the going concern basis.Should the Group be unable to operate as a going concern,adjustments would have t

174、o be made to write down the carrying value of the Groups assets to their recoverable amounts,to provide for any future liabilities that may arise and to re-classify non-current assets and non-current liabilities as current assets and current liabilities respectively.The effect of these adjustments h

175、as not been reflected in these condensed consolidated financial statements.3.CHANGES IN ACCOUNTING POLICIESThe IASB has issued a number of new or revised IFRSs that are first effective for the current accounting period of the Group.Of these,the followings are relevant to the Group.Amendments to IFRS

176、 3Definition of a BusinessAmendments to IFRS 7,IFRS 9 and IAS 39Interest Rate Benchmark ReformAmendments to IAS1 and IAS 8Definition of MaterialAmendments to IFRS 16Covid-19-Related Rent ConcessionsConceptual Framework for Financial Reporting(Revised)The application of the new or amended IFRSs did n

177、ot have any significant impact on the Groups accounting policies.023INTERIM REPORT 2020For the six months ended 30 June 2020 unaudited(Expressed in Hong Kong dollars)NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT4.REVENUE AND SEGMENT INFORMATION(a)Segment resultsInformation regarding the Groups rep

178、ortable segments as provided to the Groups most senior executive management for the purposes of resource allocation and assessment of segment performance for the six months ended 30 June 2020 and 2019 is set out below:Chilled and frozen meat Six months ended 30 JuneProcessed meat products Six months

179、 ended 30 JuneTotal Six months ended 30 June202020192020201920202019$000$000$000$000$000$000External revenue6,386,6226,305,2981,149,6941,087,1357,536,3167,392,433Inter-segment revenue39,577126,8111,9282,36441,505129,175 Reportable segment revenue6,426,1996,432,1091,151,6221,089,4997,577,8217,521,608

180、 Reportable segment results(237,146)(126,980)106,88915,757(130,257)(111,223)Depreciation and amortisation(101,828)(132,708)(10,450)(24,304)(112,278)(157,012)Impairment losses on trade receivables(1,047)(2,997)(10,175)(708)(11,222)(3,705)Impairment losses on property,plant and equipment and lease pre

181、payments(37,112)-(37,112)-Government subsidies1,2682,0501,9765,4883,2447,538Income tax expenses(9,902)(979)(4,216)(1,711)(14,118)(2,690)Segment assets and liabilities of the Group are not reported to the Groups most senior executive management regularly.As a result,reportable segment assets and liab

182、ilities have not been presented in the interim financial report.024China Yurun Food Group LimitedFor the six months ended 30 June 2020 unaudited(Expressed in Hong Kong dollars)NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT4.REVENUE AND SEGMENT INFORMATION(CONTINUED)(b)Reconciliations of reportable

183、segment revenue and lossSix months ended 30 June20202019$000$000RevenueTotal revenue from reportable segments7,577,8217,521,608Elimination of inter-segment revenue(41,505)(129,175)Consolidated revenue7,536,3167,392,433 LossTotal reportable segment results before income tax(130,257)(111,223)Eliminati

184、on of inter-segment loss(175)(3,315)(130,432)(114,538)Net finance costs(251,206)(321,429)Income tax expenses(14,118)(2,690)Unallocated head office and corporate expenses(8,979)(7,588)Consolidated loss for the period(404,735)(446,245)5.SEASONALITY OF OPERATIONSThe Groups operations are subject to sea

185、sonal fluctuations.Demand for processed meat products in general peaks during the period immediately before the Chinese New Year in January or February each year and returns to a normal level thereafter.025INTERIM REPORT 2020For the six months ended 30 June 2020 unaudited(Expressed in Hong Kong doll

186、ars)NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT6.OTHER NET INCOME/(LOSSES)Six months ended 30 June20202019$000$000Government subsidies3,24423,156Provision for losses on litigations(note 19(b)(34,914)(91,488)Loss on disposal of property,plant and equipment and lease prepayments(1,927)(27,251)Rent

187、al income30,02826,553Sales of scrap623980Sundry income14,31514,090 11,369(53,960)7.LOSS BEFORE INCOME TAXLoss before income tax is arrived at after charging/(crediting):(a)Net finance costsSix months ended 30 June20202019$000$000Interest on bank and other borrowings235,762314,998Interest on lease li

188、abilities3,712669Less:Interest expense capitalised into construction in progress(2,596)(3,068)236,878312,599Bank charges260265Net foreign exchange loss15,15012,745Interest income from bank deposits(1,082)(4,180)251,206321,429 026China Yurun Food Group LimitedFor the six months ended 30 June 2020 una

189、udited(Expressed in Hong Kong dollars)NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT7.LOSS BEFORE INCOME TAX(CONTINUED)Loss before income tax is arrived at after charging/(crediting):(continued)(a)Net finance costs(continued)Certain of the Groups bank borrowing facilities were subject to the fulfil

190、ment of covenants as are commonly found in lending arrangements with financial institutions.At 30 June 2020,the Group could not fulfil covenants imposed by banks on certain borrowings with an aggregate amount of$4,996,982,000(31 December 2019:$4,937,349,000).These bank borrowings were classified as

191、current liabilities in the consolidated statement of financial position at the end of the reporting period.The Group is negotiating with banks to renew the bank borrowing facilities at the end of the reporting period.Subsequent to 30 June 2020 and up to the date of this interim financial report,the

192、aforesaid bank borrowing facilities were not yet renewed.At 30 June 2020,there were outstanding litigations commenced by banks in the PRC against certain subsidiaries of the Group requesting such subsidiaries to repay the outstanding bank borrowings of$2,127,801,000(31 December 2019:$2,120,682,000)o

193、r to secure the repayment with assets of equivalent amount immediately.Certain property,plant and equipment and bank deposits of the Group with carrying value of$313,443,000(31 December 2019:$348,384,000)and$12,935,000(31 December 2019:$21,951,000)respectively have been frozen by the courts in the P

194、RC as of 30 June 2020.The Group is negotiating with the banks to settle these litigations.(b)Personnel expensesSix months ended 30 June20202019$000$000Salaries,wages and other benefits301,260284,570Contributions to defined contribution pension schemes3,85223,779 305,112308,349 (c)Other itemsSix mont

195、hs ended 30 June20202019$000$000Cost of inventories#7,092,1616,875,798Impairment losses on trade receivables11,2224,863Reversal of impairment losses on trade receivables(1,158)Impairment losses on property,plant and equipment and lease prepayments37,112Amortisation of lease prepayments16,53422,672Am

196、ortisation of intangible assets1,811Depreciation of property,plant and equipment95,744132,529#Cost of inventories includes approximately$104,954,000(six months ended 30 June 2019:$148,608,000)relating to personnel expenses,which the amount is also included in the above note 7(b).027INTERIM REPORT 20

197、20For the six months ended 30 June 2020 unaudited(Expressed in Hong Kong dollars)NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT8.INCOME TAX EXPENSESSix months ended 30 June20202019$000$000Current tax expense Current year4,6201,711Under-provision in respect of prior year1,710 6,3301,711Deferred tax

198、expense7,788979 Total income tax expenses14,1182,690 (a)Pursuant to the rules and regulations of Bermuda and the British Virgin Islands(the“BVI”),the Group is not subject to any income tax in Bermuda and the BVI.(b)No provision for Hong Kong Profits Tax has been made as the Group did not have assess

199、able profits subject to Hong Kong Profits Tax for the six months ended 30 June 2020 and 2019.(c)Pursuant to the income tax rules and regulations of the PRC,the companies comprising the Group in the PRC are liable to PRC corporate income tax at a rate of 25%during the six months ended 30 June 2020 an

200、d 2019,except for the enterprises engaged in the primary processing of agricultural products which are exempted from PRC corporate income tax.As a result,the profits from slaughtering operations are exempted from PRC corporate income tax for the six months ended 30 June 2020 and 2019.(d)Under the PR

201、C tax law,enterprises established outside the PRC with their de facto management bodies located within the PRC may be considered as a PRC resident enterprise and subject to PRC corporate income tax on their global income at the rate of 25%.The Group may be deemed to be a PRC resident enterprise and

202、subject to PRC corporate income tax at 25%on its global income.In certain circumstances,dividends received by a PRC resident enterprise from another PRC resident enterprise would be tax exempted,but there is no guarantee that the Group will qualify for this exemption.9.OTHER COMPREHENSIVE INCOMEThe

203、components of other comprehensive income do not have any tax effect for the six months ended 30 June 2020(six months ended 30 June 2019:$Nil).028China Yurun Food Group LimitedFor the six months ended 30 June 2020 unaudited(Expressed in Hong Kong dollars)NOTES TO THE UNAUDITED INTERIM FINANCIAL REPOR

204、T10.LOSS PER SHARE(a)Basic loss per shareThe calculation of basic loss per share is based on the loss attributable to equity holders of the Company of$407,917,000(six months ended 30 June 2019:$448,104,000)and the weighted average number of ordinary shares of 1,822,756,000(six months ended 30 June 2

205、019:1,822,756,000).(b)Diluted loss per shareDiluted loss per share equals to basic loss per share for the six months ended 30 June 2020 and 2019 because all potential ordinary shares outstanding were anti-dilutive.11.PROPERTY,PLANT AND EQUIPMENTThe additions and disposals of items of property,plant

206、and equipment during the six months ended 30 June 2020 and 2019 are as follows:Six months ended 30 June20202019$000$000Additions125,75268,789Carrying value of other assets disposed of1,932122,324 As at 30 June 2020,the Group assessed the recoverable amounts of certain assets which management conside

207、rs are likely to be recoverable through continuing use,the Group assessed the recoverable amount of each cash-generating unit(“CGU”)to which these assets belong based on value-in-use calculations.These calculations use cash flow projections based on financial forecasts approved by management coverin

208、g a five-year period.Management determined the budgeted gross profit margin and growth rate based on past performance and its expectation for market development.The discount rate used is pre-tax and reflects specific risks relating to the relevant CGU.Except for the change in budgeted gross profit m

209、argin of chilled and frozen meat segment for the next six months to 2%(31 December 2019:4%),the other key assumptions remain unchanged.Cash flows beyond the five-year period are extrapolated using growth rate of 0%(31 December 2019:0%),which does not exceed the long-term average growth rate for the

210、business in which the CGU operates.At 30 June 2020,the recoverable amounts of chilled and frozen meat segment based on the estimated value-in-use calculation were lower than their carrying amounts.The property,plant and equipment and lease prepayments relating to this CGU were written down to their

211、recoverable amounts,with impairment losses of$27,630,000(six months ended 30 June 2019:$Nil)and HK$9,482,000(six months ended 30 June 2019:$Nil)respectively recognised in“administrative and other operating expenses”for the six months ended 30 June 2020.The audit committee of the Company has no disag

212、reement with the management on the above position and the basis of the review on the impairment assessment.029INTERIM REPORT 2020For the six months ended 30 June 2020 unaudited(Expressed in Hong Kong dollars)NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT12.INVENTORIES30 June 202031 December 2019$00

213、0$000Raw materials392,750619,399Work in progress38,64166,312Finished goods328,560351,545 759,9511,037,256 At 30 June 2020,the Group wrote down the inventories of$Nil(31 December 2019:$58,228,000)to the net realisable value and recorded in“cost of sales”in the consolidated statement of profit or loss

214、 for the six months ended 30 June 2020.13.TRADE AND OTHER RECEIVABLESAn ageing analysis of trade receivables(net of impairment losses)of the Group based on invoice date and a breakdown of trade and other receivables as at the end of the reporting period are analysed as follows:30 June 202031 Decembe

215、r 2019$000$000Trade receivables Within 30 days211,891233,846 31 days to 90 days126,646109,248 91 days to 180 days39,92026,193 Over 180 days78,33444,318 456,791413,605Less:Impairment losses(40,832)(30,202)Total trade receivables,net of impairment losses415,959383,403Bills receivables3,941614Value-add

216、ed tax(“VAT”)recoverable1,238,6741,163,589Deposits and prepayments286,814234,273Other receivables78,64067,200 2,024,0281,849,079 All of the trade and other receivables are expected to be recovered within one year.030China Yurun Food Group LimitedFor the six months ended 30 June 2020 unaudited(Expres

217、sed in Hong Kong dollars)NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT14.CASH AND CASH EQUIVALENTS30 June 202031 December 2019$000$000Renminbi(“RMB”)376,390206,322United States dollars(“USD”)15,64610,242Euro dollars(“EUR”)209209Other currencies642630 392,887217,403 At the end of the reporting peri

218、od,the cash and cash equivalents of the Group denominated in RMB amounted to approximately$376,390,000(31 December 2019:approximately$206,322,000).RMB is not freely convertible into other currencies,however,under Mainland Chinas Foreign Exchange Control Regulations and Administration of Settlement,S

219、ale and Payment of Foreign Exchange Regulations,the Group is permitted to exchange RMB for other currencies through banks that are authorized to conduct foreign exchange business.15.TRADE AND OTHER PAYABLESAn ageing analysis of trade payables based on invoice date and a breakdown of trade and other

220、payables(including amounts due to related parties)as at the end of the reporting period are analysed as follows:30 June 202031 December 2019$000$000Trade payables Within 30 days227,416422,429 31 days to 90 days48,553150,790 91 days to 180 days115,67414,466 Over 180 days130,46425,776 Total trade paya

221、bles522,107613,461Deposits from customers84,09290,692Contract liabilities219,556327,142Salary and welfare payables90,09780,867VAT payable5,8183,313Payables for acquisitions of property,plant and equipment551,174548,490Provision for losses on litigations165,306132,954Interest payables1,479,3321,265,4

222、99Other payables and accruals1,386,0281,253,556 4,503,5104,315,974 031INTERIM REPORT 2020For the six months ended 30 June 2020 unaudited(Expressed in Hong Kong dollars)NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT16.CAPITAL,RESERVES AND DIVIDENDS(a)Dividends payable to equity holders attributable

223、to the interim periodThe Directors do not recommend the payment of an interim dividend for the six months ended 30 June 2020(six months ended 30 June 2019:$Nil).(b)Equity settled share-based transactionsOn 25 March 2013 and 14 June 2013,59,600,000 share options(“2013 March Options”)and 105,500,000 s

224、hare options(“2013 June Options”)were granted for$1 to qualified employees of the Group under the Companys employee share option scheme(no share options were granted during the six months ended 30 June 2020 and 2019).Each option gives the holder the right to subscribe for one ordinary share of the C

225、ompany.The options granted are subject to a vesting scale in tranches of 25%each annum starting from 2014 after announcement of results for the previous year and achievement of performance-based vesting condition.The option shall lapse when the performance-based condition is not satisfied.2013 March

226、 Options and 2013 June Options outstanding at 30 June 2020 had exercise price of$5.142 and$5.002 respectively.During the six months ended 30 June 2020,no options were exercised(six months ended 30 June 2019:Nil)and 29,400,000 share options were lapsed(six months ended 30 June 2019:Nil).17.FAIR VALUE

227、 MEASUREMENT OF FINANCIAL INSTRUMENTSFair values of financial assets and liabilities carried at other than fair valueThe carrying amounts of the Groups financial instruments carried at cost or amortised cost are not materially different from their fair values as at 30 June 2020 and 31 December 2019.

228、18.CAPITAL COMMITMENTS OUTSTANDING NOT PROVIDED FOR IN THE INTERIM FINANCIAL REPORT30 June202031 December2019$000$000Contracted for2,849,3142,843,973 032China Yurun Food Group LimitedFor the six months ended 30 June 2020 unaudited(Expressed in Hong Kong dollars)NOTES TO THE UNAUDITED INTERIM FINANCI

229、AL REPORT19.CONTINGENT LIABILITIES(a)In addition to the litigations commenced by banks against subsidiaries of the Group as disclosed in note 7(a),there were outstanding litigations commenced by several constructors against certain subsidiaries of the Group claiming construction fees,together with t

230、he late penalties,totaling approximately$329,435,000(31 December 2019:$328,458,000).Based on the advice of the Groups in-house legal counsel,the Directors estimated the Group will likely be liable to pay a total of approximately$206,513,000(31 December 2019:$196,551,000)(“Provision Amount”)for the a

231、foresaid construction fees and corresponding late penalties,which had been provided and included in“trade and other payables”as at 30 June 2020.During the six months ended 30 June 2020,pursuant to the judgements made by the courts in the PRC in relation to certain of these litigations,the Group was

232、ordered to make immediate repayment of construction fees payables of approximately$140,371,000(31 December 2019:$92,698,000)and corresponding late penalties of approximately$49,667,000(31 December 2019:$50,725,000).These amounts were included in the Provision Amount already and the settlement had no

233、t yet been made at the end of the reporting period.Up to the date of this interim financial report,the remaining litigation claims with an aggregate amount of approximately$139,397,000(31 December 2019:$185,034,000)are still in process,of which an aggregate amount of$16,475,000(31 December 2019:$53,

234、128,000)had been included in the Provision Amount as at 30 June 2020.In the opinion of the Directors,no further provision for litigation was required to be made for the six months ended 30 June 2020.(b)During the six months ended 30 June 2020,there were litigations initiated by municipal peoples gov

235、ernments in the PRC claiming against certain subsidiaries of the Group in view of the suspension of the development in certain areas.The Group recognised losses of$34,914,000(six months ended 30 June 2019:$91,488,000)as“provision for losses on litigations”in“other net income/losses”in the consolidat

236、ed statement of profit or loss for the six months ended 30 June 2020.Other than the disclosure of above,as at the end of the reporting period,the Group did not involve in any other material litigation or arbitration.As far as the management of the Group was aware,the Group had no other material liti

237、gation or claim which was pending or threatened against the Group.As at 30 June 2020,the Group was the defendant of certain non-material litigations,and also a party to certain litigations arising from the ordinary course of business of the Group.The likely outcome of these contingent liabilities,li

238、tigations or other legal proceedings cannot be ascertained with reasonable certainty at present,but the management of the Group believes that any possible legal liability which may be incurred from the aforesaid cases will not have any material impact on the financial position or results of the Grou

239、p.033INTERIM REPORT 2020For the six months ended 30 June 2020 unaudited(Expressed in Hong Kong dollars)NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT20.RELATED PARTY TRANSACTIONS AND BALANCESDuring the six months ended 30 June 2020 and 2019,in addition to the transactions and balances disclosed els

240、ewhere in this interim financial report,the Group had the following material related party transactions and balances:(a)Significant related party transactions(i)Sales and purchases of raw materials and finished goods:Six months ended 30 June20202019$000$000Sales of raw materials to related companies

241、(note 20(a)(vii)3901,379Sales of finished goods to related companies(note 20(a)(vii)2,9862,772Purchases of raw materials from related companies(note 20(a)(vii)22,44934,227 (ii)The Group leased certain property,plant and equipment and land use rights owned by the related parties(note 20(a)(vii).The r

242、ental paid or payable to the related parties for the six months ended 30 June 2020 amounted to$1,607,000(six months ended 30 June 2019:$1,688,000).(iii)Certain related parties(note 20(a)(vii)made available their properties and land use rights with a total carrying value of$51,768,000(31 December 201

243、9:$53,321,000)as at 30 June 2020 to the Group.No rental is paid or payable by any of the group companies.(iv)As at 30 June 2020,bank borrowings of$1,642,216,000(31 December 2019:$1,674,481,000)were guaranteed by related companies and secured by assets owned by related companies,including equity secu

244、rities with market value of$231,970,000(31 December 2019:$234,247,000),land use rights owned by a related company with fair value of$789,213,000(31 December 2019:$789,431,000)and trade receivables of$598,075,000(31 December 2019:$603,945,000).These related companies were owned by Mr.Zhu Yicai(“Mr.Zh

245、u”).In addition,bank borrowings of$109,481,000(31 December 2019:$111,632,000)were guaranteed by Mr.Zhu.(v)A related company(note 20(a)(vii)provided a borrowing of$943,946,000(31 December 2019:$962,492,000)to a subsidiary of the Company.The borrowing is unsecured,interest bearing at 4.35%(31 December

246、 2019:4.35%)per annum and repayable on demand(31 December 2019:repayable on demand).Interest expenses of$20,446,000(six months ended 30 June 2019:$23,932,000)were incurred for the six months ended 30 June 2020.(vi)During the six months ended 30 June 2020,a related company(note 20(a)(vii)provided a b

247、orrowing of$76,637,000(31 December 2019:$Nil)to a subsidiary of the Company.The borrowing is unsecured,interest bearing at 4.35%per annum and with repayment term of 12 months.Interest expenses of$508,000(six months ended 30 June 2019:$Nil)were incurred for the six months ended 30 June 2020.(vii)Mr.Z

248、hu is the beneficial shareholder of the Company and also has beneficial interest in the related companies.Mr.Zhu is the honorary chairman and the senior advisor of the board of the Company.(viii)During the six months ended 30 June 2020,a subsidiary of the Company entered into the products consignmen

249、t agreement with a related company,consignment fee expense of$6,233,000 was paid for the six months ended 30 June 2020(six months ended 2019:$Nil).The related company is owned by Mr.Zhu.Ms.Zhu Yuan(“Ms.Zhu”),an executive director of the Company,is also a director of the related company.034China Yuru

250、n Food Group LimitedFor the six months ended 30 June 2020 unaudited(Expressed in Hong Kong dollars)NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT20.RELATED PARTY TRANSACTIONS AND BALANCES(CONTINUED)(b)Amounts due from related parties30 June 202031 December 2019$000$000Trade receivables due from rel

251、ated parties(note 20(a)(vii)36,59812,631Other receivables due from related parties(note 20(a)(vii)2,9658,569 Amounts due from related parties are unsecured,interest-free and are expected to be recovered within one year.(c)Amounts due to related parties30 June 202031 December 2019$000$000Trade payabl

252、es due to related parties(note 20(a)(vii)31,23138,865Other payables due to related parties(notes 20(a)(vii)and 20(c)(i)46,99924,829Other borrowings due to related parties(notes 20(a)(v),(vi)and(vii)1,020,583962,492 (i)Certain related companies settled certain payables on behalf of the Group for the

253、six months ended 30 June 2020 and 2019.Amounts due to related parties are unsecured,interest-free and have no fixed terms of repayment except for the other borrowings due to related parties.(d)Key management personnel remunerationRemuneration for key management personnel is as follows:Six months ended 30 June20202019$000$000Salaries and other emoluments1,4061,434Contributions to retirement benefit schemes258 1,4081,492