Tou Rong Chang Fu Group Limited (Incorporated in the Cayman Islands with limited liability) ( ) (HKEx Stock Code : 850) Interim Report 2017

Transcription

1 Tou Rong Chang Fu Group Limited (Incorporated in the Cayman Islands with limited liability) () (HKEx Stock Code : 850) Interim Report 2017

2 Contents 目錄 2 Corporate Information 4 Management Discussion and Analysis 10 Interim Condensed Consolidated Income Statement 11 Interim Condensed Consolidated Statement of Comprehensive Income 12 Interim Condensed Consolidated Statement of Financial Position 14 Interim Condensed Consolidated Statement of Changes in Equity 15 Interim Condensed Consolidated Statement of Cash Flows 16 Notes to the Condensed Consolidated Interim Financial Information 41 Corporate Governance and Other Information

3 Corporate Information 公司資料 BOARD OF DIRECTORS Executive Directors: Mr. Li Zhenjun (Chairman) Mr. Poon Sum (Honorary Chairman) (retired on 28 August 2017) Mr. Wong Kwok Leung (Chief Executive Officer) Mr. Poon Wai Kong Mr. Hu Dehua Independent Non-executive Directors: Mr. Chan Shu Kin Mr. Cheung Kwan Hung Mr. Chiu Wai Piu AUDIT COMMITTEE Mr. Chan Shu Kin (Chairman) Mr. Cheung Kwan Hung Mr. Chiu Wai Piu REMUNERATION COMMITTEE Mr. Chan Shu Kin (Chairman) Mr. Cheung Kwan Hung Mr. Chiu Wai Piu Mr. Poon Sum (retired on 28 August 2017) NOMINATION COMMITTEE Mr. Cheung Kwan Hung (Chairman) Mr. Chan Shu Kin Mr. Chiu Wai Piu Mr. Poon Sum (retired on 28 August 2017) CORPORATE GOVERNANCE COMMITTEE Mr. Chan Shu Kin Mr. Cheung Kwan Hung Mr. Chiu Wai Piu Mr. Poon Wai Kong COMPANY SECRETARY Mr. Poon Wai Kong 公司 2 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

4 Corporate Information 公司資料 REGISTERED OFFICE Cricket Square Hutchins Drive P.O. Box 2681, Grand Cayman, KY Cayman Islands HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS 21st Floor 80 Gloucester Road Wan Chai Hong Kong PRINCIPAL SHARE REGISTRAR Conyers Trust Company (Cayman) Limited Cricket Square Hutchins Drive P.O. Box 2681, Grand Cayman, KY Cayman Islands BRANCH SHARE REGISTRAR Computershare Hong Kong Investor Services Limited 46th Floor Hopewell Centre 183 Queen s Road East Hong Kong LEGAL ADVISER Michael Li & Co AUDITOR PricewaterhouseCoopers PRINCIPAL BANKERS DBS Bank (Hong Kong) Limited Industrial and Commercial Bank of China (Asia) Limited STOCK CODE 850 CONTACT Telephone: (852) Facsimile: (852) Website: Cricket Square Hutchins Drive P.O. Box 2681, Grand Cayman, KY Cayman Islands 告 Conyers Trust Company (Cayman) Limited Cricket Square Hutchins Drive P.O. Box 2681, Grand Cayman, KY Cayman Islands 中 有限公司 183 中 46 有限公司中 有限公司 850 資料 (852) (852) Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 3

5 Management Discussion and Analysis 管理層討論及分析 Overview on consolidated operating results During the six months ended 30 September 2017, the Group achieved a revenue of approximately HK$3,987,111,000 (six months ended 30 September 2016: HK$5,992,877,000), representing a decrease of 33% from the same period in Decrease in the Group s revenue was mainly attributable from the decrease in revenue in commodity trading segment. The Group recorded consolidated operating profit of approximately HK$55,141,000 (six months ended 30 September 2016: HK$69,326,000), representing a decrease of 20% from the same period in Significant decrease in operating profit of the Group was mainly due to decrease in revenue in commodity trading segment. Business Review Commodity trading During the period under review, commodity trading business contributed the majority revenue of the Group, amounting to approximately HK$3,965,393,000 (six months ended 30 September 2016: HK$5,983,391,000) which accounted for 99.5% of the Group s revenue (six months ended 30 September 2016: 99.8%), representing a decrease of 34% as compared with the same period in This was mainly decrease in trading volume in non-oil product lines in particular plastic materials, chemical products and Indium Tin Oxide ( ITO ) products during the reporting period. International crude oil price went slightly upward at the beginning of 2017 and then fluctuated downward. With abundant supply, domestic refined oil products market witnessed strong competition. There was slightly increase in the demand for petroleum products as compared with same period of Our operation teams took advantage of this market situation to increase the trading volume and revenue of the Group s oil product trading business significantly during the six months ended 30 September To reduce the reliance of few major customers and suppliers, the Group has recently put in place measures to gradually diversify both its customer and supplier bases, which include signing up new customers with more diversified product lines as well as securing new suppliers. 集團 3,987,111,000 5,992,877,000 期 33% 集團 集團 55,141,000 69,326,000 期 20% 集團 期 集團 3,965,393,000 5,983,391,000 集團 99.5% 99.8% 期 34% 報告期 ITO 期 團 集團 集團 有 4 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

6 Management Discussion and Analysis 管理層討論及分析 As for the oil products trading, the Group recorded revenue of approximately HK$1,871,657,000 for the six months ended 30 September 2017 (six months ended 30 September 2016: HK$965,746,000), representing an increase of 94% as compared with the same period in A total of 31,243 tons (six months ended 30 September 2016: 42,346 tons) and 409,289 tons (six months ended 30 September 2016: 230,301 tons) of oil products were traded in China and in other Asia Pacific countries respectively, and maintaining steady gross profit. 集團 1,871,657, ,746,000 期 94% 集團 中 31,243 42, , ,301 To ensure a steady profit growth in commodity trading business and achieve risk diversification, our operating teams carried out non-oil product lines for trading since July 2015 such as plastic material products, ITO products and display driver IC products. During the six months ended 30 September 2017, revenue of approximately HK$2,091,056,000 was generated from these product lines (six months ended 30 September 2016: HK$4,968,718,000). 長 團 ITO IC 2,091,056,000 4,968,718,000 The commodity trading segment also includes trading of chemical products, the Group strived to maintain its loyal customers and suppliers for chemical products trading business during the reporting period. The revenue of approximately HK$2,680,000 was recognised for the six months ended 30 September 2017 (six months ended 30 September 2016: HK$48,927,000). 報告期 集團 2,680,000 48,927,000 Looking forward into the next half year, the international oil price is expected to maintain at comparatively low level with narrow recovery. Meanwhile, our operation teams will take this opportunity to optimise the transaction model; broaden our supplier and customer base; explore new opportunity in oil derivatives, clean energy, chemicals or electronic related markets; and utilise domestic and international resources to achieve the Group s commodity diversification and steady profit growth. 團 集團 長 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 5

7 Management Discussion and Analysis 管理層討論及分析 Crude oil The Group owns 96% interest of an indirect owned subsidiary 有限 公司, which owns an oilfield project in Fularji District near Qiqihar City of Heilongjiang Province of China ( Oilfields ). 集團 有 公司 有限 公司 96% 公司 有 中 富 During the period under review, the supply in the international oil market was still ample. International oil prices continued to fluctuate at a low level. In view of the low oil prices and high production cost, the management considered to diminish the risk and loss by fine tuning the development plan in the Oilfields and slowing down the oil exploitation process in the Oilfields since last financial year. The management expected that the development progress will be further delayed. 期 期 Financial Services The financial services segment includes money lending, securities brokerage and asset management businesses. 融 (a) Money lending (a) Two indirect wholly-owned subsidiaries of the Company have obtained the money lending licences in Hong Kong. For the six months ended 30 September 2017, interest revenue was HK$11,341,000 (six months ended 30 September 2016: HK$8,026,000) representing an increase of 41% and maintained a steady profit. 公司 公司 11,341,000 8,026,000 41% The licensing of money lenders and regulation of money-lending transactions are governed by the Money Lenders Ordinance, Chapter 163 of the Laws of Hong Kong. The market of money lending business by licensed money lenders in Hong Kong is keen and competitive. In order to optimize the funding use in business but also to ensure the compliance of the related laws and regulations, the operation team has established a credit policy and loan approval process to minimise the credit risk. 163 團 6 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

8 Management Discussion and Analysis 管理層討論及分析 (b) Securities brokerage An indirect wholly-owned subsidiary of the Company, namely China-Hong Kong Link Securities Company Limited ( CHKLS ) has obtained a licence by Securities and Futures Commission of Hong Kong to carry out type 1 (dealing in securities) regulated activities on 30 September The Group commenced the business on 30 March During the reporting period, CHKLS mainly provided securities brokerage, underwriting and IPO placements services. CHKLS has successfully acted as placing agents, co-lead managers and underwriters of several listed companies in Hong Kong. During the reporting period, CHKLS has generated revenue of approximately HK$4,822,000 (six months ended 30 September 2016: HK$1,000) to the Group and was profit making. (c) Asset management To cope with the development strategy of stepping into the financial services market in Hong Kong, a newly acquired indirect wholly-owned subsidiary of the Company, namely China Hong Kong Link Asset Management Limited ( CHKLAM ), has successfully obtained a licence by Securities and Futures Commission of Hong Kong to carry out type 9 (asset management) regulated activities on 16 February On 11 September 2017, CHKLAM is appointed as the investment manager of Convoy Investment Services Limited to provide the investment management services. Insurance In August 2016, the Group acquired 100% equity interests in People Insurance Broker Limited ( People Insurance ). People Insurance is carrying out insurance brokerage service in Hong Kong with the licence to transact all types of general insurance business and long term insurance business in Hong Kong. During the reporting period, the insurance brokerage income was approximately HK$4,015,000 (six months ended 30 September 2016: HK$161,000) representing an increase of 2,394% and maintained a steady profit. Other investment The Group has an investment in a Hong Kong listed equity security namely Gold Tat Group International Limited ( Gold Tat ) with 8.63% equity interest as at 30 September Pursuant to the joint announcement of Gold Tat and Pine Cypress Development Limited ( Offeror ) dated 11 October 2017, in relation to, among others, the conditional mandatory cash offers by Kingston Securities Limited for and on behalf of the Offeror to acquire all the issued shares of Gold Tat, the board of directors are still waiting for the official offer letter from the Offeror and will make an appropriate decision in the interest of the Company and the shareholders of the Company. (b) 公司 公司中 有限公司 中 期 1 集團 報告期 中 公 中 公司 報告期 中 集團 4,822,000 1,000 (c) 融 公司 公司中 有限公司 中 期 9 中 投 有限公司 投 投 集團 有限公司 有 有 長期 報告期 4,015, ,000 2,394% 集團 有 投 集團 有限公司 8.63% 有限公司 有 中 有限公司 有 有 公 公司 公司 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 7

9 Management Discussion and Analysis 管理層討論及分析 Financial Review Revenue and operating results For the six months ended 30 September 2017, the Group recorded a consolidated revenue of approximately HK$3,987,111,000 (six months ended 30 September 2016: HK$5,992,877,000), representing a decrease of 33% from the same period in The Group s profit for the period attributable to owners of the Company was approximately HK$29,714,000 (six months ended 30 September 2016: HK$52,354,000). Basic earnings per share was HK$0.39 cents (six months ended 30 September 2016: basic earnings per share of HK$0.70 cents). The decline of the Group s results was mainly due to the decrease in revenue in commodity trading segment and increase in finance costs. Working capital As at 30 September 2017, the Group s current assets were kept at approximately HK$1,073,344,000 (31 March 2017: HK$1,052,175,000) whilst current liabilities were approximately HK$235,295,000 (31 March 2017: HK$338,470,000). The current ratio, being the proportion of total current assets against current liabilities, was 4.56 (31 March 2017: 3.11). The directors consider that the present working capital level is conservatively sufficient to meet the upcoming operating needs. Liquidity and financial resources The Group generally finances its operations with internally generated cash flows and facilities provided by its principal bankers in Hong Kong and in China. The Group had cash and cash equivalent of approximately HK$77,227,000 at 30 September 2017 (31 March 2017: HK$278,866,000). The Group had cash and bank balances which were mostly held in Hong Kong dollar and Renminbi. At 30 September 2017, the Group s total carrying amount of bank borrowings and bonds were approximately HK$31,151,000 (31 March 2017: HK$32,818,000) and HK$532,286,000 (31 March 2017: HK$439,227,000) respectively, while total assets were approximately HK$1,447,878,000 (31 March 2017: HK$1,432,419,000). The gearing ratio, calculated by dividing the total bank borrowings and bonds by the total assets, was equal to 39% at 30 September 2017 (31 March 2017: 33%). 集團 3,987,111,000 5,992,877,000 期 33% 公司 有 集團 期 29,714,000 52,354, 集團 融 集團 1,073,344,000 1,052,175, ,295, ,470, 集團 中 集團 77,227, ,866,000 集團 有 集團 31,151,000 32,818, ,286, , 2 2 7, ,447,878,000 1,432,419,000 39% 33% 8 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

10 Management Discussion and Analysis 管理層討論及分析 Pledge of assets Details of the Group s pledge of assets at 30 September 2017 are set out in Note 19 to the condensed consolidated interim financial information. Commitments Details of the Group s commitments at 30 September 2017 are set out in Note 23 to the condensed consolidated interim financial information. Interim dividend The Board of Directors of the Company does not recommend the payment of an interim dividend for the six months ended 30 September 2017 (30 September 2016: Nil). EXPOSURE TO FOREIGN EXCHANGE RISK AND INTEREST RATE RISK The Group s business transactions are mainly denominated in United States dollars, Hong Kong dollars and Renminbi. Most of the Group s bank borrowings are interest bearing at floating rate basis. The management monitors foreign currency exposure and will consider hedging significant foreign currency exposures should the need arise. The Group also uses derivative financial instruments to manage interest rate exposures for hedging purpose only. EMPLOYEES AND REMUNERATION POLICIES As at 30 September 2017, the Group had an aggregate of 78 employees (30 September 2016: 76) of which about 28 employees (30 September 2016: 35) were located in Mainland China while the rest were based in Hong Kong, Kazakhstan and Macau. The employee s remuneration package includes salary, bonus, share options and awarded shares. Pursuant to the Group s remuneration policy, employees are rewarded on the basis of merit and market conditions and in accordance with the statutory requirements of the respective jurisdiction where the employees located. 集團 中期 19 集團 中期 23 公司 中期 及 集團 集團 有 集團 融 及 集團 中 中 集團 報 司 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 9

11 Interim Condensed Consolidated Income Statement 中期簡明綜合收益表 For the six months ended 30 September 2017 (Expressed in Hong Kong dollars) 截至二零一七年九月三十日止六個月 ( 以港幣列示 ) (Unaudited) (Unaudited) () 30 September 30 September 二零一六年 九月三十日 Note 港幣 Revenue 6 3,987,111 5,992,877 Cost of sales 8 (3,887,305) (5,857,037) Gross profit 99, ,840 Other gains/(losses), net () 7 17,155 (786) Selling and distribution costs 8 (11,552) (15,382) Administrative expenses 8 (50,268) (50,346) Operating profit 55,141 69,326 Finance income 融 Finance costs 融 (25,103) (18,642) Profit before income tax 30,072 50,931 Income tax expense 9 (1,370) (282) Profit for the period 期 28,702 50,649 Profit for the period attributable to: 以 期 Owners of the Company 公司 有 29,714 52,354 Non-controlling interests (1,012) (1,705) 28,702 50,649 Earnings per share (HK cents) ( 港 ) 10 Basic Diluted Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

12 Interim Condensed Consolidated Statement of Comprehensive Income 中期簡明綜合全面收益表 For the six months ended 30 September 2017 (Expressed in Hong Kong dollars) (Unaudited) (Unaudited) 30 September 30 September Note Profit for the period 期 28,702 50,649 Other comprehensive income/(loss): Items that may be reclassified subsequently to profit or loss: Exchange differences arising on translation of foreign operations Changes in fair value of available-for-sale investments 7,306 (8,999) 投 公 15 (4,978) 3,913 Total comprehensive income for the period 期 2,328 (5,086) 31,030 45,563 Total comprehensive income/ (loss) attributable to: Owners of the Company 公司 有 32,014 49,253 Non-controlling interests (984) (3,690) 31,030 45,563 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 11

13 Interim Condensed Consolidated Statement of Financial Position 中期簡明綜合財務狀況表 As at 30 September 2017 (Expressed in Hong Kong dollars) 於二零一七年九月三十日 ( 以港幣列示 ) (Unaudited) (Audited) ( ) 30 September 31 March 二零一七年 三月三十一日 Note 港幣 Assets Non-current assets Property, plant and equipment 12 77,561 83,266 Investment properties 投 , ,118 Intangible assets 128, ,273 Interest in an associate 於一 公司 14 Prepayments, deposit and other receivables 39,418 32,346 Other financial assets 融 15 24,263 29, , ,244 Current assets Inventories 5,496 2,225 Trade receivables , ,441 Loans receivable , ,125 Prepayments, deposits and other receivables 298, ,206 Financial assets at fair value through profit or loss 公 列 融 40,434 Other financial assets 融 Cash and bank balances 85, ,922 1,073,344 1,052,175 Total assets 1,447,878 1,432, Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

14 Interim Condensed Consolidated Statement of Financial Position 中期簡明綜合財務狀況表 As at 30 September 2017 (Expressed in Hong Kong dollars) (Unaudited) (Audited) 30 September 31 March Note Equity and liabilities Equity attributable to owners of the Company Share capital 20 75,507 75,507 Reserves 613, , , ,581 Non-controlling interests (3,655) (2,671) Total equity 684, ,910 Liabilities Non-current liabilities Deferred tax liabilities 1,849 1,816 Bonds , , , ,039 Current liabilities Trade payables , ,197 Accruals and other payables 74, ,474 Bank borrowings 19 31,151 32,818 Current income tax liabilities 期 3,440 1,977 Bonds 21 6,492 1, , ,470 Total liabilities 762, ,509 Total equity and liabilities 1,447,878 1,432,419 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 13

15 Interim Condensed Consolidated Statement of Changes in Equity 中期簡明綜合權益變動報表 For the six months ended 30 September 2017 (Expressed in Hong Kong dollars) 截至二零一七年九月三十日止六個月 ( 以港幣列示 ) Share capital Share premium Attributable to owners of the Company Sharebased payment reserve Other reserves Exchange reserve Accumulated losses Total Noncontrolling interests Total equity At 1 April 2017 (audited) 75, ,506 12,087 (245,444) 2,902 (104,977) 656,581 (2,671) 653,910 Comprehensive income Profit for the period 期 29,714 29,714 (1,012) 28,702 Other comprehensive income/(loss) Exchange differences arising on translation of foreign operations Change in fair value of available-for-sale investments 投 公 7,278 7, ,306 (4,978) (4,978) (4,978) Total other comprehensive income/(loss) (4,978) 7,278 2, ,328 Total comprehensive income/(loss) for the period (4,978) 7,278 29,714 32,014 (984) 31,030 Transactions with owners Forfeit of share options (22) 22 Total transactions with owners (22) 22 At 30 September 2017 (unaudited) 75, ,506 12,065 (250,422) 10,180 (75,241) 688,595 (3,655) 684,940 Share capital Treasury Shares Share premium Attributable to owners of the Company 公司 有 Sharebased payment reserve 以 Other reserves Exchange Accumulated reserve losses Total Noncontrolling interests Total equity 港幣 港幣 港幣 港幣 港幣 港幣 港幣 港幣 港幣 港幣 At 1 April 2016 (audited) 62,174 (5,370) 764,306 6,440 (243,152) 23,940 (223,906) 384,432 (3,096) 381,336 Comprehensive income Profit for the period 期 52,354 52,354 (1,705) 50,649 Other comprehensive income/(loss) Exchange differences arising on translation of foreign operations Change in fair value of available-for-sale investments 投 公 (7,014) (7,014) (1,985) (8,999) 3,913 3,913 3,913 Total other comprehensive income/(loss) 3,913 (7,014) (3,101) (1,985) (5,086) Total comprehensive income/(loss) for the period 3,913 (7,014) 52,354 49,253 (3,690) 45,563 Transactions with owners Placement of new shares 13, , , ,533 Recognition of equity-settled share-based payments 以 以 12,186 12,186 12,186 Lapse of share options (85) 85 Vesting of shares of share award scheme 5,370 (5,370) Total transactions with owners 13,333 5, ,200 6, , ,719 At 30 September 2016 (unaudited) 75, ,506 13,171 (239,239) 16,926 (171,467) 611,404 (6,786) 604, Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

16 Interim Condensed Consolidated Statement of Cash Flows 中期簡明綜合現金流量表 For the six months ended 30 September 2017 (Expressed in Hong Kong dollars) (Unaudited) (Unaudited) 30 September 30 September Cash flows from operating activities Cash used in operations (267,480) (54,566) Hong Kong profits tax paid (89) (82) Net cash used in operating activities (267,569) (54,648) Cash flows from investing activities Purchase of property, plant and equipment (321) (3,682) Proceeds from disposal of property, plant and equipment 23 Net cash outflow arising on acquisition of a subsidiary 公司 (2,098) Net cash outflow arising on acquisition of an available-for-sale investment 投 (5,000) Interest received Net cash used in investing activities (287) (10,510) Cash flows from financing activities Net proceeds from placement of new shares 165,533 Additional bank borrowings 35,000 Repayments of bank borrowings (1,667) (811) Net proceeds from issuance of bonds 83,097 25,390 Interest paid (15,141) (14,296) Net cash generated from financing activities 66, ,816 Net (decrease)/increase in cash and cash equivalents (201,567) 145,658 Cash and cash equivalents at the beginning of the period 期 278, ,168 Effect of foreign exchange rate changes (72) (2,450) Cash and cash equivalents at the end of the period 77, ,376 Analysis of cash and cash equivalents: Cash at bank and on hand 85, ,376 Less: Client trust bank balances (7,911) Cash and cash equivalents 77, ,376 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 15

17 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September 2017 截至二零一七年九月三十日止六個月 1 GENERAL INFORMATION Tou Rong Chang Fu Group Limited (the Company ) is a limited liability company incorporated in the Cayman Islands and its shares are listed on The Stock Exchange of Hong Kong Limited (the Stock Exchange ). The addresses of the registered office and the principal place of business of the Company are Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands and 21st Floor, 80 Gloucester Road, Wan Chai, Hong Kong, respectively. 1 資料 投融長富集團有限公司 公司 有限公司 有限公司 公司 Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands 告 The principal activity of the Company is investment holding. The principal activities of its subsidiaries are trading of commodities and chemical products, property investment, money lending business, securities brokerage, asset management, insurance brokerage and the exploitation and sale of crude oil. The Company and its subsidiaries are referred to as the Group. 公司 投 公司 投 公司 公司 集團 The condensed consolidated interim financial information is presented in thousands of Hong Kong dollars ( ), unless otherwise stated. This condensed consolidated interim financial information has been approved by the Board of Directors on 24 November 有 中期 中期 二零一七年十一月二十 日 2 BASIS OF PREPARATION The condensed consolidated interim financial information has been prepared in accordance with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on the Stock Exchange (the Listing Rules ) and with Hong Kong Accounting Standard (the HKAS ) 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 March 2017, which have been prepared in accordance with Hong Kong Financial Reporting Standards (the HKFRS ). 2 中期 十六 公 34 中期 報告 中期 報告 報告 截至二零一七年三月三十一日止年 年 報 一 16 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

18 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September PRINCIPAL ACCOUNTING POLICIES 3 Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 March 2017, as described in those annual financial statements. 報 報 中 (a) Effect of adopting new standards and new amendments to existing standards (a) 有 The following new standards and new amendments to existing standards are mandatory for the financial period beginning on 1 April The adoption of these new standards and new amendments to existing standards does not have any significant impact to the results and financial position of the Group. 有 期 有 集團 Amendments to HKAS 7 Amendments to HKAS 12 Amendments to HKFRS 12 Disclosure initiative Recognition of deferred tax assets for unrealized losses Disclosure of interest in other entities 7 12 報告 12 (b) New amendments to existing standards and new standards that have been issued but are not effective for the financial period beginning on 1 April 2017 and have not been early adopted by the Group (b) 期 集團 有 Effective for annual periods beginning on or after Amendment to HKFRS 2 報告 2 Amendment to HKFRS 4 報告 4 Amendments to HKFRS 10 and HKAS 28 報告 Amendments to HKAS HKFRS 9 報告 9 HKFRS 15 報告 15 Classification and measurement of share-based payment transactions Applying HKFRS 9 Financial instruments with HKFRS 4 Insurance contracts 報告 4 報告 9 融 Sale or contribution of assets between an investor and its associate or joint venture 投 公司 公司 投 Transfers of investment property 投 Financial instruments 融 Revenue from contracts with customers 1 January January 2018 To be determined 1 January January January 2018 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 17

19 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September 2017 截至二零一七年九月三十日止六個月 3 PRINCIPAL ACCOUNTING POLICIES (Continued) 3 (b) (Continued) (b) Effective for annual periods beginning on or after HKFRS 16 報告 16 HK(IFRIC)-Int 22 報告 22 HK(IFRIC)-Int 23 報告 23 Leases Foreign currency transactions and advance consideration Uncertainty over income tax treatments 1 January 2019 二零一九年一月一日 1 January 2018 二零一 年一月一日 1 January 2019 二零一九年一月一日 The Group is assessing the impacts of these new standards and will apply them once they are effective. 4 ESTIMATES The preparation of financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing this condensed consolidated interim financial information, the significant judgements made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 March FINANCIAL RISK MANAGEMENT (a) Financial risk factors The Group s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The condensed consolidated interim financial information do not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the Group s annual financial statements as at 31 March There have been no changes in the risk management department since year end. 4 集團 報 有 中期 集團 截至二零一七年三月三十一日止年 報 5 財務 (a) 集團 公 中期 年 報 有 集團 二零一七年三月三十一日 年 報 一 年 日 18 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

20 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September FINANCIAL RISK MANAGEMENT (Continued) (b) Liquidity risk 5 財務 (b) The following table details Group s remaining contractual maturity for its non-derivative financial liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. 集團 融 期 集團 期 融 In addition, the following table details the Group s liquidity analysis for its derivative financial instruments. The table has been drawn up based on the undiscounted contractual net cash outflows on derivative instruments that settle on a net basis. 集團 融 Weighted average interest rate Within 1 year 1-2 years 2-5 years Over 5 years Total undiscounted cash flows Carrying amount % As at 30 September 2017 (unaudited) Trade payables (119,242) (119,242) (119,242) Other payables (83,970) (83,970) (83,970) Bank borrowings 2.22 to (3,994) (7,746) (11,620) (10,649) (34,009) (31,151) Bonds 5.07 to (29,724) (57,676) (542,000) (170,800) (800,200) (532,286) (236,930) (65,422) (553,620) (181,449) (1,037,421) (766,649) As at 31 March 2017 (audited) Trade payables (135,197) (135,197) (135,197) Other payables (63,242) (63,242) (63,242) Bonds 5.09 to (17,924) (35,128) (64,440) (561,800) (679,292) (439,227) Bank Borrowings 2.27 to (4,078) (3,944) (11,750) (16,643) (36,415) (32,818) (220,441) (39,072) (76,190) (578,443) (914,146) (670,484) Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 19

21 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September 2017 截至二零一七年九月三十日止六個月 5 FINANCIAL RISK MANAGEMENT (Continued) (c) Fair value estimation The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1). 5 財務 (c) 公 融 報 一 Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2). 一 報 二 Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3). The following table presents the Group s assets and liabilities that are measured at fair value at 30 September 2017 and 31 March 三 二零一七年九月三十日 二零一七年三月三十一日 公 集團 As at 30 September 2017 (unaudited) As at 31 March 2017 (audited) 二零一七年三月三十一日 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total 一 二 三 Assets Financial assets at fair value through profit or loss: 公 融 Investment funds 投 40,434 40,434 Held-for-trading investments: 投 Listed equity securities Available-for-sale investments: 投 Listed equity securities 18,134 18,134 23,112 23,112 Unlisted equity investment 投 6,129 6,129 6,129 6,129 Total 58,803 6,129 64,932 23,368 6,129 29, Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

22 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September FINANCIAL RISK MANAGEMENT (Continued) 5 財務 (c) Fair value estimation (Continued) (c) (i) During the six months ended 30 September 2017, there were no transfers between level 1, 2 and 3. (i) 期 (ii) There were no changes in valuation techniques during the period. (ii) 期 (iii) Valuation techniques used to derive Level 2 fair values: (iii) 公 The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value of an instrument are observable, the instrument is included in level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. 融 公 有 限 有 公 Level 2 trading derivatives foreign currency forward contracts are fair valued using discount cash flow, Black-Scholes option pricing model and Monte Carlo simulation by using observable exchange rate, currency volatility and yield curve. 期 期 公 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 21

23 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September 2017 截至二零一七年九月三十日止六個月 6 REVENUE AND SEGMENT INFORMATION The executive directors of the Company have been regarded as the Chief Operating Decision-Maker ( CODM ). The Group s operating segments, based on information reported to the CODM for the purpose of resource allocation and performance assessment, are as follows: Trading of commodities and chemical products ( Commodity trading ); Exploitation and sale of crude oil ( Crude oil ); 6 資料 公司 集團 有 Leasing of investment properties ( Property investment ); 投 投 Money lending, securities brokerage and asset management business ( Financial services ); and Others. 融 The Group also carries out business as insurance brokerage and service contract. The CODM, after reviewing for qualitative factors such as the business activities, economic and legal characteristics of the business and quantitative factors such as the financial performance of the business, has accordingly determined that the insurance brokerage and service contract did not qualify as reportable operating segments, and their financial information is included in Others. 集團 報 22 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

24 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September REVENUE AND SEGMENT INFORMATION (Continued) 6 資料 Certain operating segments with similar nature were re-grouped together and comparative figures have been re-classified to conform with presentation segment information adopted for the current reporting period. 報告期 The accounting policies of the operating segments are the same as the Group s accounting policies. Segment results represent the loss made or profit earned by each segment without allocation of incomes or expenses which are not recurring in nature and unrelated to the Group s operating performance, including bank interest income, central administration costs, directors emoluments, share of loss of an associate, changes in fair value of held-for-trading investments and financial assets at fair value through profit and loss, share-based payments in respect of consultation fees and finance costs. 集團 集團 中 公司 投 公 融 有 融 The CODM also reviews the earnings/loss before net finance income and costs, income tax expense, depreciation and amortisation, unallocated other income less expenses and non-controlling interests ( EBITDA or LBITDA ) of the Group. Accordingly, EBITDA or LBITDA is also presented. 集團 融 EBITDA LBITDAEBITDA LBITDA For the purposes of monitoring segment performances and allocating resources among segments, all assets are allocated to operating segments other than interest in an associate, financial assets at fair value through profit or loss, other financial assets, cash and bank balances and other corporate assets. 有 公司 公 融 融 公司 The CODM reviews the segment assets for the purposes of resource allocation and performance assessment, an analysis of the Group s liabilities is not regularly reviewed by the CODM and hence, the relevant information is not presented accordingly. 期 集團 有 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 23

25 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September 2017 截至二零一七年九月三十日止六個月 6 REVENUE AND SEGMENT INFORMATION (Continued) (a) Segment revenue and results 6 資料 (a) The following is an analysis of the Group s revenue and results by reportable operating segments: 集團 報 For the six months ended 30 September 2017 (unaudited) Commodity trading Crude oil Property investment Financial services Others Total Segment revenue 3,965,393 1,392 16,311 4,015 3,987,111 Segment EBITDA/(LBITDA) EBITDA/(LBITDA) 78,120 (1,491) , ,613 Segment depreciation and amortisation (760) (10,731) (1,121) (104) (2,106) (14,822) Segment results 77,360 (12,222) (292) 10,562 (1,617) 73,791 Unallocated expenses (18,650) Finance income 融 34 Finance costs 融 (25,103) Profit before income tax 30,072 For the six months ended 30 September 2016 (unaudited) 截至二零一六年九月三十日止六個月 Commodity trading Crude oil Property investment Financial services Others Total 投 融 Segment revenue 5,983,391 1,299 8, ,992,877 Segment EBITDA/(LBITDA) EBITDA/(LBITDA) 107,740 (1,076) 1,140 5, ,999 Segment depreciation and amortisation (769) (5,400) (1,227) (101) (2,049) (9,546) Segment results 106,971 (6,476) (87) 5,063 (2,018) 103,453 Unallocated expenses (34,127) Finance income 融 247 Finance costs 融 (18,642) Profit before income tax 50, Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

26 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September REVENUE AND SEGMENT INFORMATION (Continued) (b) Segment assets 6 資料 (b) The following is an analysis of the Group s assets by reportable operating segments: 集團 報 (Unaudited) (Audited) As at As at 30 September 31 March Segment assets Commodity trading 714, ,951 Crude oil 159, ,263 Property investment 投 105, ,894 Financial services 融 149, ,328 Others 18,447 19,635 Total segment assets 1,148,083 1,039,071 Unallocated 299, ,348 Total assets 1,447,878 1,432,419 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 25

27 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September 2017 截至二零一七年九月三十日止六個月 7 OTHER GAINS/(LOSSES), NET 7 (Unaudited) (Unaudited) Six months Six months ended ended 30 September 30 September 截至二零一六年九月三十日止六個月 Exchange gain/(loss), net 9,614 (741) Gain/(loss) from changes in fair value of held-for-trading 投 公 investments (21) 32 Gain from changes in fair value of financial assets at fair value 公 融 公 through profit or loss 1,684 Waiver of other payable 5,878 Loss on disposal of property, plant and equipment (77) 17,155 (786) 26 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

28 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September EXPENSES BY NATURE 8 (Unaudited) (Unaudited) Six months Six months ended ended 30 September 30 September Wages, salaries and other benefits (including directors emoluments) 16,264 23,499 Cost of inventories recognised in expenses 3,887,075 5,856,695 Depreciation of property, plant and equipment (Note 12) 12 8,488 7,828 Depreciation of investment 投 13 properties (Note 13) 1,116 1,227 Amortisation of intangible assets 5, Operating lease expenses 5,019 4,677 Legal and professional fees 4,738 2,825 Commission expenses 11,403 15,199 Others 9,065 10,098 Total cost of sales, selling and distribution costs and administrative expenses 3,949,125 5,922,765 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 27

29 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September 2017 截至二零一七年九月三十日止六個月 9 INCOME TAX EXPENSE 9 (Unaudited) (Unaudited) Six months Six months ended ended 30 September 30 September 截至二零一六年九月三十日止六個月 Hong Kong profits tax 1, Deferred income tax (182) (179) 1, Hong Kong profits tax is calculated at 16.5% (six months ended 30 September 2016: 16.5%) on the estimated assessable profit for the period. Taxation for overseas subsidiaries is charged at the appropriate current rates of taxation in the relevant jurisdiction of which the most significant jurisdictions are the PRC which has a corporate income tax rate of 25% (six months ended 30 September 2016: 25%) and Macau which has a complementary corporate tax rate of 12% (six months ended 30 September 2016: 12%). 期 16.5% 截至二零一六年九月三十日止六個月 16.5% 公司 司 中 司 中 中 25% 截至二零一六年九月三十日止六個月 25% 12% 截至二零一六年九月三十日止六個月 12% No current Macau complementary corporate tax and PRC corporate income tax have been provided for as the Group did not have any assessable profits in Macau nor in the PRC for the six months ended 30 September 2017 (six months ended 30 September 2016: Nil). 截至二零一七年九月三十日止六個月 集團 中 期 中 截至二零一六年九月三十日止六個月 28 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

30 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September EARNINGS PER SHARE Basic earnings per share attributable to the owners of the Company is calculated by dividing profit for the period attributable to owners of the Company by the weighted average number of shares in issue during the reporting period. 10 公司 有 公司 有 期 報告期 (Unaudited) (Unaudited) Six months Six months ended ended 30 September 30 September Profit for the period attributable to the owners of the Company () 公司 有 期 29,714 52,354 Weighted average number of ordinary shares in issue (shares in thousands) Effect of dilutive potential ordinary shares upon exercise of warrants (shares in thousands) 7,550,724 7,514,294 3,184 7,550,724 7,517,478 Basic earnings per share (HK cents) Diluted earnings per share (HK cents) The share options outstanding at 30 September 2017 and 30 September 2016 have no dilutive effect on basic earnings per share. Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 29

31 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September 2017 截至二零一七年九月三十日止六個月 11 DIVIDEND The Board of Directors does not recommend the payment of an interim dividend for the six months ended 30 September 2017 (six months ended 30 September 2016: Nil). 11 截至二零一七年九月三十日止六個月 中期 截至二零一六年九月三十日止六個月 12 PROPERTY, PLANT AND EQUIPMENT During the six months ended 30 September, the movements in the Group s property, plant and equipment are as follows: 12 截至九月三十日止六個月 集團 (Unaudited) (Unaudited) 二零一六年 Net book value at 1 April 月一日 83,266 87,298 Additions 321 3,682 Disposals (100) Depreciation (Note 8) 8 (8,488) (7,828) Exchange realignment 2,462 (2,052) Net book value at 30 September 九月三十日 77,561 81, INVESTMENT PROPERTIES During the six months ended 30 September, the movements in the Group s investment properties are as follows: 13 資 截至九月三十日止六個月 集團投 (Unaudited) (Unaudited) 二零一六年 Net book value at 1 April 月一日 106, ,349 Depreciation (Note 8) 8 (1,116) (1,227) Net book value at 30 September 九月三十日 105, , Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

32 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September INTEREST IN AN ASSOCIATE 14 (Unaudited) (Audited) 30 September 31 March Cost of investment in an associate 公司 投 Unlisted 75,592 75,592 Contributions to an unlisted associate 公司 9,327 9,327 Share of post-acquisition comprehensive losses (84,919) (84,919) 15 OTHER FINANCIAL ASSETS Other financial assets of the Group comprised of the followings: 15 資 集團 融 (Unaudited) (Audited) 30 September 31 March Held-for-trading investments: 有 投 Listed equity security in Hong Kong Available-for-sale investments: 投 Unlisted equity investment, at cost 投 12,837 12,837 Less: Provision for impairment (6,708) (6,708) 6,129 6,129 Listed equity security in Hong Kong (Note (a)) Less: amount shown under non-current assets (a) 28,446 23,112 34,810 29,497 (34,575) (29,241) Amount shown under current assets Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 31

33 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September 2017 截至二零一七年九月三十日止六個月 15 OTHER FINANCIAL ASSETS (Continued) 15 資 Note: (a) The listed equity security represents the Group s long-term investment of (a) 集團 集團 有限公 8.63% equity interest in Gold Tat Group International Ltd ( Gold Tat ). It is 司 8.63% 長期投 measured at fair value with reference to the bid prices on the Stock Exchange 二零一七年九月三十日 at 30 September 2017, the fair value of Gold Tat decreased by approximately 公 截至二零一七年九月三十日 HK$4,978,000 (30 September 2016: increase of HK$3,913,000) and the 止六個月 公 4,978,000 same amount was debited (30 September 2016: credited) to the investment 二零一六年九月三十日 3,913,000 revaluation reserve for the six months ended 30 September 投 二零一六年九 月三十日 16 TRADE RECEIVABLES 16 (Unaudited) (Audited) 30 September 31 March 二零一七年三月三十一日 Trade receivables 517, ,580 Less: Provision of impairment (10,555) (10,139) 506, ,441 (a) Before accepting any new customer, the Group uses an (a) 集團 internal credit assessment system to assess the potential customer s credit quality and defines credit limits by customer. The management considers adequate allowance 限 年 has been made at end of the year. Balances which are 期 neither past due nor impaired are all receivable from customers with good historical repayment records and good credit quality. (b) Trade receivables are due within 30 to 120 days from the (b) 日期 date of invoicing. 三十日至一 二十日 期 32 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

34 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September TRADE RECEIVABLES (Continued) 16 (c) Aging analysis of trade receivables based on invoice date net of impairment is as follows: (c) 期 (Unaudited) (Audited) 30 September 31 March Less than 1 month 83, ,332 1 month to 3 months 300,427 More than 3 months but less than 1 year 123, ,109 Trade receivables 506, , LOANS RECEIVABLE 17 (Unaudited) (Audited) 30 September 31 March Loans receivable 141, ,934 Less: Provision for impairment (4,809) (4,809) 137, ,125 Loans receivable to the extent of approximately HK$108,197,000 (31 March 2017: HK$104,860,000), which arise from the money lending business of providing short-term loans to independent third parties in Hong Kong, are denominated in HK$. 期 108,197, ,860,000 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 33

35 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September 2017 截至二零一七年九月三十日止六個月 17 LOANS RECEIVABLE (Continued) Loans receivable bear coupon interest rates ranging from 18.0% to 54.0% (31 March 2017: 17.0% to 36.1%) per annum and are repayable with fixed terms ranging from three to twelve months. The carrying amounts are determined using the expected future repayments discounted at effective interest rates ranging from 17.76% to 49.9% (31 March 2017: 15.16% to 36.05%) per annum. Certain loans receivable are secured by collaterals. The maximum exposure to credit at each of the reporting dates is the carrying value of the receivables mentioned above. Interest income of approximately HK$11,341,000 (30 September 2016: HK$8,026,000) has been recognised as revenue in the consolidated income statement for the six months ended 30 September As at 30 September 2017 and 31 March 2017, the maturity profile of the loans receivable based on the maturity date net of impairment is as follows: 17 年 18.0% 至 54.0% 二零一七年三月三十一日 17.0% 至 36.1% 期限 三至十二個月 期 年 17.76% 至 49.9% 二零一七年三月三十一日 15.16% 至 36.05% 報告日期 截至二零一七年九月三十日止六個月 11,341,000 二零一六年九月三十日 8,026,000 二零一七年九月三十日 二零一七年三月三十一日 期 期日 (Unaudited) (Audited) 30 September 31 March 二零一七年三月三十一日 Less than 1 month 一個月 9,100 1 month to 3 months 一個月至三個月 36,248 86,877 More than 3 months but 三個月 一年 less than 1 year 66,965 4,074 More than 1 year 一年 , ,051 As at 30 September 2017, loans receivable from money lending segment of approximately HK$4,809,000 (31 March 2017: HK$4,809,000) was impaired. The credit quality of loans receivable has been assessed by reference to historical information about counterparties credit history. As at 30 September 2017, included in loans receivable was advances to margin client in margin financing amounting to approximately HK$33,794,000 (31 March 2017: HK$17,074,000), which are bearing interest at commercial rates, secured by the underlying pledged securities and are repayable on demand. The carrying values of advances to margin clients in margin financing approximate to their fair values. No aging analysis is disclosed as, in the opinion of the directors, an aging analysis is not meaningful in view of the business of securities margin financing. 二零一七年九月三十日 4,809,000 二零一七年三月三十一日 4,809,000 有 二零一七年九月三十日 融 33,794,000 二零一七年三月三十一日 17,074,000 融 公 融 34 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

36 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September TRADE PAYABLES 18 (Unaudited) (Audited) 30 September 31 March Trade payables 119, ,005 Bills payables 3, , ,197 (a) As at 30 September 2017, included in the trade payables were amounts due to clearing houses of approximately HK$4,597,000 (31 March 2017: HK$2,186,000) and amounts due to securities brokerage clients of approximately HK$1,316,000 (31 March 2017: HK$6,596,000). (a) 4,597,000 2,186,000 1,316,000 6,596,000 (b) The majority of trade payables are either repayable within one year or on demand except where certain trade payables to securities brokerage clients represent margin deposits received from clients for their trading activities under normal course of business. Only the excess amounts over the required margin deposits stipulated are repayable on demand. (b) 中 (c) Trade payables to securities brokerage client also include those payables placed in trust and segregated accounts with authorised institutions of HK$7,911,000 (31 March 2017: HK$5,056,000). (c) 7,911,000 5,056,000 (d) No aging analysis is disclosed for amounts due to clearing house and securities brokerage clients as in the opinion of the directors, it does not give additional value in the view of these businesses. (d) (e) The following is an aging analysis of trade and bill payables excluding clearing house and securities brokerage clients presented based on the invoice date and date of the bills at end of the reporting period. (e) 報告期 期 期 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 35

37 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September 2017 截至二零一七年九月三十日止六個月 18 TRADE PAYABLES (Continued) Aging analysis of trade payables is as follows: 18 (Unaudited) (Audited) 30 September 31 March 二零一七年三月三十一日 Less than 1 month 一個月 46,848 66,043 1 month to 3 months 一個月至三個月 25,349 20,986 More than 3 months but 三個月 一年 less than 1 year 41,132 36, , ,223 Aging analysis of bills payables is as follows: (Unaudited) (Audited) 30 September 31 March 二零一七年三月三十一日 Less than 1 month 一個月 1 month to 3 months 一個月至三個月 More than 3 months but 三個月 一年 less than 1 year 3,192 3, Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

38 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September BANK BORROWINGS 19 (Unaudited) (Audited) 30 September 31 March Bank loans, secured 有 31,035 32,631 Bank loans, unsecured Carrying amount repayable 31,151 32,818 Within one year 3,365 3,367 Between one and two years 6,718 3,306 Between two and five years 10,655 10,299 Over five years 10,413 15,846 31,151 32,818 (a) Bank loans contained a repayment on demand clause which enables the bank to exercise at its sole discretion. Accordingly, the entire balance was classified under current liabilities as at 30 September (a) (b) As at 30 September 2017, the bank loans were interest bearing with variable rate at contractual interest of HIBOR plus certain basis points per annum. The effective interest rate for the period was ranged from 2.22% to 12.59%. The borrowings were repayable on monthly instalment basis up to maturity in accordance with the terms set out in the respective banking facility letters. (b) 期 2.22% 12.59% 期 期 (c) As at 30 September 2017, the Group pledged the following assets to secure the Group s bank borrowings and trading facilities: (c) 集團 集團 融 (1) Corporate guarantee executed by the Company for an unlimited amount (31 March 2017: same); and (1) 公司 限 公司 (2) Investment properties with a carrying value of HK$105,002,000 (31 March 2017: HK$106,118,000). (2) 105,002, ,118,000 投 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 37

39 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September 2017 截至二零一七年九月三十日止六個月 20 SHARE CAPITAL 20 Number of shares Issued and Authorised fully paid Ordinary shares of HK$0.01 each 0.01 Issued and Authorised fully paid At 1 April 2016 二零一六年 月一日 15,000,000 6,217, ,000 62,174 Placement of new shares 1,333,332 13,333 At 30 September 2016 二零一六年九月三十日 15,000,000 7,550, ,000 75,507 At 1 April 2017 and 30 September ,000,000 7,550, ,000 75, BONDS 21 (Unaudited) 30 September 2017 (Audited) 31 March 2017 二零一七年三月三十一日 Unsecured bonds 532, ,227 Less: current portion 期 (6,492) (1,004) 525, ,223 During the six months ended 30 September 2017, the Company issued bonds with aggregated amount of HK$104,500,000 to several independent third parties with coupon rates ranged from 5% to 6%, payable in 1 to 7 years from the respective issue dates. The amounts of the bonds repayable at their maturities are disclosed in Note 5(b). The carrying amounts of the bonds are determined using the expected future payments discounted at effective interest rates ranged from 5.07% to 19.60% (31 March 2017: 5.09% to 13.41%) prevailing at the respective dates of issuance. The fair values of the bonds as at 30 September 2017 amounted to approximately HK$530,359,000 (31 March 2017: HK$436,672,000). The fair values are determined based on cash flows discounted using a rate based on the effective market interest rates ranged from 5.19% to 19.78% per annum as at 30 September The carrying amounts of the Group s bonds are denominated in HK$. 截至二零一七年九月三十日止六個月 公司 三 104,500,000 5% 至 6% 日期 一至七年 期日 5(b) 有 日期 5.07% 至 19.60% 二零一七年三月三十一日 5.09% 至 13.41% 期 二零一七年九月三十日 公 530,359,000 二零一七年三月三十一日 436,672,000 公 二零一七年九月三十日 年 5.19% 至 19.78% 集團 38 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

40 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September SHARE-BASED PAYMENTS The Company has a share option scheme for eligible directors and employees of the Group. Details of the share options outstanding as at 30 September 2017 and 31 March 2017 are as follows: 22 公司有 集團 Date of grant Exercisable period Exercise price For the six months ended 30 September 2017 As at 1 April 2017 Granted Exercised Lapsed Forfeited As at 30 September Share options Executive directors 22 April October 2016 to 21 April 2018 Independent 22 April October 2016 non-executive to 21 April 2018 directors Employees 22 April October 2016 to 21 April 2018 HK$ , , HK$ ,500 10, HK$ ,300 (500) 72, ,800 (500) 213,300 Note: (a) During the period, no share options were exercised and granted. (a) 期 23 CAPITAL COMMITMENTS The Group does not have any capital commitments as at 30 September 2017 (31 March 2017: Nil). 23 資 集團 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 39

41 Notes to the Condensed Consolidated Interim Financial Information 簡明綜合中期財務資料附註 For the six months ended 30 September 2017 截至二零一七年九月三十日止六個月 24 RELATED PARTY TRANSACTIONS (a) Transactions with related parties 24 (a) Compensation of key management personnel: 報 All members of key management personnel are the directors and other members of key management of the Company. The remuneration of the directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends. Compensation of key management personnel for the reporting period is as follows: 有 公司 個 報告期 報 (Unaudited) (Unaudited) Six months Six months ended ended 30 September 30 September 截至二零一六年九月三十日止六個月 Salaries and short term employee benefits 期 6,833 5,227 Post-employment benefits ,923 5,272 (b) Balances with related parties (b) (Unaudited) (Audited) As at As at 30 September 31 March 二零一七年三月三十一日 Amounts due from related parties 26,610 Note: The balances at 31 March 2017 were unsecured, interest free and repayable within one year. 二零一七年三月三十一日 一年 40 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

42 Corporate Governance and Other Information 企業管治及其他資料 Directors and Chief Executive s Interests 及 At 30 September 2017, the interests of the directors and chief executive in the shares, underlying shares or debentures of the Company or any of its associated corporations (as defined in Part XV of the Securities and Futures Ordinance ( SFO )), as recorded in the register required to be kept under Section 352 of the SFO, or as notified to the Company and The Stock Exchange of Hong Kong Limited (the Stock Exchange ) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers ( Model Code ) contained in the Rules Governing the Listing of Securities on the Stock Exchange ( Listing Rules ) were as follows: 公司 團 期 期 XV 中 有 期 352 有限公司 公司 Name of Directors Capacity Nature of Interests Number of Shares Equity Derivative Total Interest (Note 3) 3 Total % of Issued Shares Mr. Li Zhenjun Interest of controlled Corporate Interest corporation (Notes 1 & 3) 團 團 1 3 2,000,000,000 2,005,000, % Beneficial Owner 有 Personal Interest (Notes 2 & 3) 2 3 5,000,000 Mr. Wong Beneficial Owner Personal Interest Kwok Leung (Notes 2 & 3) 有 ,285 50,000,000 50,116, % Mr. Poon Beneficial Owner Personal Interest Wai Kong (Notes 2 & 3) 有 2 3 7,900,000 25,000,000 32,900, % Mr. Chan Shu Kin Beneficial Owner Personal Interest (Notes 2 & 3) 有 ,500 3,500,000 3,561, % Mr. Cheung Beneficial Owner Personal Interest Kwan Hung (Notes 2 & 3) 有 ,000 3,500,000 3,734, % Mr. Chiu Wai Piu Beneficial Owner Personal Interest (Notes 2 & 3) 有 2 3 3,500,000 3,500, % Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 41

43 Corporate Governance and Other Information 企業管治及其他資料 Notes: 1. These shares are held by Tou Rong Chang Fu (HK) Holding Co., Limited. The issued share capital of Tou Rong Chang Fu (HK) Holding Co., Limited is owned as to 100% by 投融長富 融 集團有限公司 (Hangzhou Tou Rong Chang Fu Financial Services Group Limited*), a company established in the PRC with limited liability, which in turn is owned as to 90% by Mr. Li Zhenjun. 1. 投融長富 有限公司 有 投融長富 有限公司 中 有限公司 投融長富 融 集團有限公司 有 100% 投融長富 融 集團有限公司 有 90% 2. All interests in underlying shares of equity derivatives of the Company are interests in share options of the Company granted under the share options scheme, which may be exercised during the period from 22 October 2016 to 21 April 2018 at the exercise price of HK$0.193 per share. 2. 公司 有 公司 期 All interests in shares of the Company are long position. 3. 公司 有 * The English transliteration of the Chinese name in this report, where indicated, is included for information purpose only, and should not be regarded as the official English name of such Chinese name. * 報告 中 中 Save as disclosed above, as at 30 September 2017, none of the directors and chief executive of the Company had held any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (as defined in Part XV of the SFO) as recorded in the register required to be kept by the Company under Section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code. 公司 公司 團 期 XV 中 有 期 352 公司 公司 42 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

44 Corporate Governance and Other Information 企業管治及其他資料 Share Options Pursuant to the share option scheme adopted by the Company on 24 June 2013 (the Share Options Scheme ), employees, contracted celebrity, advisor, consultant, service provider, agent, customer, partner or joint venture partner of the Group (including any director of the Group) may be granted options to subscribe for the shares of the Company. Details of the share options outstanding as at 30 September 2017 were as follows: 公司 集團 集團 公司 Participants Date of grant Exercise price per share Granted during the period Number of options Exercised during the period Forfeited during the period Price of Company s shares For For Options Options granted exercised Exercise period As at 1 Apr 2017 As at 30 Sep 2017 HK$ HK$ HK$ (Note 1) (Note 2) 1 2 Executive Directors Mr. Li Zhenjun 22 April October 2016 to 21 April ,000 5,000 Mr. Wong Kwok Leung 22 April October 2016 to 21 April ,000 50,000 Mr. Poon Wai Kong 22 April October 2016 to 21 April ,000 25,000 Independent Non-executive Directors Mr. Chan Shu Kin 22 April October 2016 to 21 April ,500 3,500 Mr. Cheung Kwan Hung 22 April October 2016 to 21 April ,500 3,500 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 43

45 Corporate Governance and Other Information 企業管治及其他資料 Participants Date of grant Exercise price per share Granted during the period Number of options Exercised during the period Forfeited during the period Price of Company s shares For For Options Options granted exercised Exercise period As at 1 Apr 2017 As at 30 Sep 2017 HK$ HK$ HK$ (Note 1) (Note 2) 1 2 Mr. Chiu Wai Piu 22 April October 2016 to 21 April ,500 3,500 Employees In aggregate 22 April October 2016 to 21 April ,300 (500) 72,800 Other participants In aggregate 3 22 April October 2016 to 21 April ,000 50,000 3 Total 213,800 (500) 213,300 Notes: 1. The price of the Company s shares disclosed for options granted is the closing price of the shares immediately before the date on which the options were granted. 1. 公司 2. The price of the Company s shares disclosed for options exercised is the weighted average closing price of the shares immediately before the dates on which the options were exercised. 2. 公司 3. Mr. Poon Sum retired as executive director of the Company on 28 August 2017 and continues to act as director of certain subsidiaries of the Company. 3. 公司 公司 公司 Save as disclosed above, none of the directors, or their spouse or children under the age of 18, had been granted any right to subscribe for the equity or debt securities of the Company or any of its associated corporations, or had exercised any such right during the period. 期 公司 團 44 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

46 Corporate Governance and Other Information 企業管治及其他資料 Share Award Scheme On 16 October 2008, the Company adopted the share award scheme (the Share Award Scheme ) in which elected employees of the Group, including without limitation any Executive and Non-executive Director, officer, agent or consultant (with payroll) of the Group, are entitled to participate in the Share Award Scheme pursuant to the rules of the Share Award Scheme. The purposes and objectives of the Share Award Scheme are to recognise the contributions by certain employees and to provide them with incentives in order to retain them for the continual operation and development of the Group and to attract suitable personnel for further development of the Group. Subject to any early termination as may be determined by the Board, the Share Award Scheme shall be valid and effective for a term of 10 years commencing on the adoption date. The maximum number of shares which may be awarded to a selected employee under the Share Award Scheme shall not exceed 1% of the issued share capital of the Company as at the adoption date. The nominal value of the shares awarded by the Board under the Share Award Scheme shall not exceed 5% of the issued share capital of the Company as at the adoption date. 公司 集團 限 集團 有 集團 集團 限 有 公司 1% 公司 5% During the six months ended 30 September 2017, no share was purchased for the Share Award Scheme. There were no awarded shares granted, forfeited, vested or outstanding during the period. 期 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 45

47 Corporate Governance and Other Information 企業管治及其他資料 Substantial Shareholders Interests At 30 September 2017, the interests of the shareholders, not being a director or chief executive of the Company, in the shares and underlying shares of the Company as recorded in the register required to be kept under Section 336 of the SFO were as follows: 公司 公司 中 有 期 336 Name of Substantial Shareholders Capacity Nature of Interests Number of Shares Held Equity Derivative Total Interest Total % of Issued Shares Hangzhou Tou Rong Chang Fu Financial Services Group Limited 投融長富 融 集團有限公司 Interest of Controlled Corporation 團 Corporate Interest (Notes 1 & 2) 團 1 2 2,000,000,000 2,000,000, % Tou Rong Chang Fu (HK) Holding Co., Limited Beneficial Owner Corporate Interest (Notes 1 & 2) 投融長富 有限公司 有 團 1 2 2,000,000,000 2,000,000, % Notes: 1. The issued share capital of Tou Rong Chang Fu (HK) Holding Co., Limited is owned as to 100% by Hangzhou Tou Rong Chang Fu Financial Services Group Limited, a company established in the PRC with limited liability, which in turn is owned as to 90% by Mr. Li Zhenjun. 1. 投融長富 有限公司 中 有限公司 投融長富 融 集團有限公司 有 100% 投融長富 融 集團有限公司 有 90% 2. All interests in the shares of the Company are long position. 2. 公司 有 Save as disclosed above, there was no person known to the directors of the Company, other than a director of the Company, who as at 30 September 2017 had an interest or short position in the shares or underlying shares of the Company as recorded in the register kept under section 336 of the SFO. Directors Interest in Competing Business None of the Directors has an interest in a business which competes or may compete with the business of the Group. Management Contracts No contracts concerning the management and administration of the whole or any substantial part of the business of the Group were entered into or existed during the six months ended 30 September 公司 公司 公司 中 有 期 336 業 集團 中 有 管 集團 有 集團 46 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 Interim Report 2017 中期報告

48 Corporate Governance and Other Information 企業管治及其他資料 PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company s listed securities during the six months ended 30 September 公司 公司 公司 Corporate Governance The Group is committed to maintain good corporate governance standard and procedures. 企業管治 集團 The Company has adopted the Corporate Governance Code (the Code ) as set out in Appendix 14 of the Listing Rules as the corporate governance codes of the Company. 公司 公司 Throughout the six months ended 30 September 2017, the Company has complied with all the code provisions set out in the Code except for the following: 公司 Code provision A.4.1 requires that non-executive directors should be appointed for a specific term, subject to re-election. A.4.1 有 期 The Non-executive Directors (including the Independent Non-executive Directors) of the Company are not appointed for specific terms but are subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Company s Articles of Association. 公司 期 公司 公司 告 Audit Committee The Audit Committee comprises Mr. Chan Shu Kin, Mr. Cheung Kwan Hung and Mr. Chiu Wai Piu, the Independent Non-executive Directors of the Company. The objectives of the Audit Committee are to review and oversee the Group s financial reporting and risk management and internal control systems. 公司 集團 報 During the period under review, the Audit Committee has reviewed with the management the accounting principles and practices adopted by the Group and discussed internal controls, risk management and financial matters including the review of the unaudited interim report of the Group for the six months ended 30 September 期 集團 集團 中期報告 Interim Report 2017 中期報告 Tou Rong Chang Fu Group Limited 投融長富集團有限公司 47