Real Gold Mining : Interim Report 2017

DIRECTORS

Executive Directors

Mr. Lu Chunxiang# Mr. Li Feng^

Mr. Ren Yancheng~ (appointed with effect from 1 June 2018)

Mr. Zhang Yanchun~ (resigned with effect from 8 June 2018)

Mr. Sean Zhang* (resigned with effect from 18 April 2019) Mr. Wang Chunqi (resigned with effect from 18 April 2019) Mr. Shao Jiulin (resigned with effect from 18 April 2019)

Mr. Kirk Vincent Wiedemer

Mr. Guo Honggang (re-designated from independent non-executive director to executive director with effect from 18 April 2019)

AUDIT AND RISK MANAGEMENT COMMITTEE

Ms. Zhang Hui#

Ms. Wang Xu (appointed with effect from 24 November 2017)

Ms. Ge Huiyun (resigned with effect from 11 December 2017)

Mr. Liu Aiguo (appointed with effect from 18 April 2019) Mr. Guo Honggang (re-designated to executive director with

effect from 18 April 2019)

• Chairman

• Chief Financial Officer
  * Chief Executive Officer
  ~ Deputy Chief Executive Officer

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Mr. Liu Aiguo

Ms. Zhang Hui

Ms. Wang Xu (appointed with effect from 24 November 2017)

Ms. Ge Huiyun (resigned with effect from 11 December 2017)

Mr. Guo Honggang (re-designated to executive director with effect from 18 April 2019)

NOMINATION AND REMUNERATION COMMITTEE

Mr. Liu Aiguo#

Ms. Wang Xu (appointed with effect from 24 November 2017)

Ms. Ge Huiyun (resigned with effect from 11 December 2017)

Ms. Zhang Hui (appointed with effect from 18 April 2019) Mr. Guo Honggang (re-designated to executive director with

effect from 18 April 2019)

Ms. Lui Lai Chun

AUTHORIZED REPRESENTATIVES

Mr. Guo Honggang (appointed with effect from 18 April 2019)

Mr. Wang Chunqi (resigned with effect from 18 April 2019) Ms. Lui Lai Chun

AUDITORS

ZHONGHUI ANDA CPA Limited Certified Public Accountants Unit 701, 7/F., Citicorp Centre, 18 Whitfield Road, Causeway Bay, Hong Kong

LEGAL ADVISOR

As to Hong Kong law ReedSmith Richards Butler 20th Floor, Alexandra House, 18 Chater Road,

Central, Hong Kong

REGISTERED OFFICE

Cricket Square,

Hutchins Drive,

P.O. Box 2681,

Grand Cayman KY1-1111,

Cayman Islands

PRINCIPAL PLACE OF BUSINESS IN HONG KONG

Unit 502, 5/F.,

Bank of America Tower, 12 Harcourt Road, Central, Hong Kong

HEADQUARTERS OF THE COMPANY

4th Floor, Southern Block,

243 Dizhi Zonghe Building, No.75 Yulong Street, Xincheng District, Chifeng City, Inner Mongolia,

The People's Republic of China

PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE

Conyers Trust Company (Cayman) Limited

Cricket Square,

Hutchins Drive,

P.O. Box 2681,

Grand Cayman KY1-1111,

Cayman Islands

HONG KONG SHARE REGISTRAR AND TRANSFER OFFICE

Computershare Hong Kong Investor Services Limited

Shops 1712-1716,

17th Floor,

Hopewell Centre,

183 Queen's Road East,

Wanchai, Hong Kong

PRINCIPAL BANKERS

Bank of China (Hong Kong) Limited

Bank of China Tower Branch

China Guangfa Bank

Huizhou Branch

HengFeng Bank Co., Ltd.

Beijing Branch

Ping An Bank

Offshore Business Department

STOCK NAME

Real Gold Mining Limited

(RealGold Mining)

STOCK CODE

246

WEBSITE OF THE COMPANY

www.realgoldmining.com

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BUSINESS REVIEW

We specialize in the mining of gold and the processing of ore into concentrates containing gold and other minerals for subsequent sale. Real Gold Mining Limited (the "Company") and its subsidiaries (together the "Group") have two gold mines in the Chifeng Municipality, Inner Mongolia, namely, Shirengou Gold Mine and Nantaizi Gold Mine which are adjacent to each other and form one operating segment of the Group. The mining permit and the safety production permit for Shirengou Gold Mine are valid until August 2020 and February 2021, respectively. The mining permit, the exploration permit and the safety production permit for Nantaizi Gold Mine are valid until November 2019, June 2020 and February 2021, respectively. Production at Shirengou Gold Mine and Nantaizi Gold Mine has been suspended since mid 2016.

Luotuochang Gold Mine, another gold mine of the Group which is also located in the Chifeng Municipality, Inner Mongolia, was in operation until the former board of directors decided in July 2014 to suspend the mining activities there. The mining permit and the safety production permit for Luotuochang Gold Mine are valid until January 2020 and December 2020, respectively.

UPDATE ON THE ACTIVITIES AT THE OTHER GOLD MINES OF THE GROUP

As at the date of this interim report, the Group also owns Gaotaizi Gold Mine in Inner Mongolia and Yandan Gold Mine and two other smaller gold mines in Guangxi. None of these mines are currently in production.

The mining permit and safety production permit for Gaotaizi Gold Mine expired in February 2019 and March 2019, respectively and the Group has filed an application for the renewal of each of such permits in January 2019.

For the gold mines in Guangxi, the exploration permit for Yandan Gold Mine is valid until November 2020. The Group is in the process of renewing the exploration permit for each of Bayan Gold Mine and Yunpanshan Gold Mine which expired in January 2019. The Group has suspended its exploration activities at these gold mines.

THE STATUS OF CHINA GUANGFA BANK ACCOUNTS OF THE GROUP

As announced by the Company on 31 March 2017 that the Company was advised by China Guangfa Bank (Huizhou Branch) (the "Bank") that operations of bank accounts in the name of the Company and Rich Vision Holdings Limited ("Rich Vision"), a wholly owned subsidiary of the Company, were suspended because the Bank had received verbal notice from the local public security bureau that it was looking into whether the Company and the subsidiary were connected with Qiaoxing which was under investigation. Based on the records of the Group, as of 31 December 2016 those bank accounts had approximately RMB600 million cash deposits, in addition to approximately RMB200 million held with other banks.

IMPORTANT EVENT AFTER THE REPORTING PERIOD

For details of the important event affecting the Group which have occurred since the end of the Reporting Period, please refer to the paragraph headed "The status of changes of legal representatives of subsidiaries in the PRC" in the annual results announcement of the Company for the year ended 31 December 2017 published on 2 August 2019.

PROSPECTS

In view of the current situation of the Group, in particular the status of the mines owned by the Group, the Company is committed to identify suitable acquisition targets with sufficient level of operations or have assets of sufficient value to meet the requirements for continued listing of the shares under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules").

By leveraging on the experience of our management in mining operations and strong connections in the industry, we are confident that we can identify suitable acquisition targets in due course which can meet our requirements as well as the requirements of the regulators for the purpose of seeking resumption of trading in our shares so as to maximize the interests of both the Company and its shareholders as a whole.

We are committed to strengthening the corporate governance of the Group, and leading the Company out of the current difficulties and creating value for shareholders of the Company as a whole.

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FINANCIAL REVIEW

Revenue

The unaudited revenue of the Group significant decreased from approximately RMB228.2 million for the six months ended 30 June 2016 to nil for the same period in 2017. When the current Board took control of the management of the Group in late 2016, the operations, mining and exploration activities had been suspended.

Cost of sales

Cost of sales was nil for the six months ended 30 June 2017, significant decreased from approximately RMB257.8 million for the same period in 2016, mainly due to the suspension of the mining activities at Shirengou Gold Mine and Nantaizi Gold Mine since mid 2016.

Gross loss and gross margin

As a result of the foregoing, gross loss was nil (six months ended 30 June 2016: RMB29.6 million) and gross margin was nil (six

months ended 30 June 2016: -13.0%) for the six months ended 30 June 2017.

Other income

Other income decreased from approximately RMB61.8 million for the six months ended 30 June 2016 to approximately RMB0.3 million for the same period in 2017.

Other income for the six months ended 30 June 2017 consisted of bank interest income of approximately RMB0.3 million.

Other income for the six months ended 30 June 2016 consisted mainly of government subsidies of approximately RMB35.9 million, exchange gain of approximately RMB19.0 million, gain on lapsed share options of approximately RMB4.9 million and bank interest income of approximately RMB2.0 million.

Administrative expenses

Administrative expenses decreased from approximately RMB31.8 million for the six months ended 30 June 2016 to approximately RMB26.3 million for the same period in 2017.

The administrative expenses for the six months ended 30 June 2017 primarily consisted of salaries paid and payable to, and benefits for, our administrative and management staff of approximately RMB17.2 million (six months ended 30 June 2016: RMB12.8 million) and professional fees of approximately RMB3.5 million (six months ended 30 June 2016: RMB9.2 million).

Other expenses

Other expenses decreased from approximately RMB769.3 million for the six months ended 30 June 2016 to approximately RMB21.0 million for the same period in 2017.

Other expenses for the six months ended 30 June 2017 consisted of exchange loss of approximately RMB19.3 million and impairment losses on property, plant and equipment of approximately RMB1.7 million.

Other expenses for the six months ended 30 June 2016 primarily consisted of impairment losses on property, plant and equipment of approximately RMB150.1 million and impairment losses on exploration and evaluation assets of approximately RMB603.3 million.

Finance costs

Finance costs, represented interest expenses for the short-term borrowings, was approximately RMB1.7 million for the six months ended 30 June 2017 (six months ended 30 June 2016: RMB0.4 million).

Income tax expense

Tax expenses was nil for six months ended 30 June 2017 (six months ended 30 June 2016: approximately RMB25.8 million).

No provision for Hong Kong Profits Tax is required since the Company's income is derived from non-Hong Kong sources which is not subject to Hong Kong Profits Tax.

Loss and total comprehensive loss for the period attributable to owners

Loss and total comprehensive loss attributable to owners of the Company for the six months ended 30 June 2017 was approximately RMB48.2 million (six months ended 30 June 2016: RMB698.0 million).

Cash flows

The following table sets out certain information regarding our condensed consolidated statement of cash flows for the six- month periods ended 30 June 2017 and 2016:

Cash and cash equivalents decreased by approximately RMB26.3 million from approximately RMB674.1 million as at 31 December 2016 to approximately RMB647.8 million as at 30 June 2017.

Approximately RMB22.9 million was used in operating activities for the six months ended 30 June 2017. Net cash used in operating activities was the net cash flow relating to cash outflow in respect of loss before tax adjusted for items not involving movement of cash, and cash inflow in respect of the decrease in working capital under operating activities.

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Net cash used in financing activities amounted to approximately RMB1.6 million for the six months ended 30 June 2017, of which approximately RMB1.7 million related to the cash outflow in respect of the loan interest payment, partially being offset by the cash inflow of approximately RMB0.1 million related to the short-term borrowings.

Borrowings

As at 30 June 2017, the amount of short-term borrowings was approximately RMB14.0 million (31 December 2016: RMB13.9 million). Details of short-term borrowings and interest rate are set out in Note 12 to the condensed consolidated financial statements. Gearing, being total interest-bearing debt divided by total assets, was approximately 0.02 as at 30 June 2017 (31 December 2016: 0.02).

Pledge of assets

There were no significant charges on the assets of the Group as at 30 June 2017 and 31 December 2016.

Use of net proceeds from the Company's Initial Public Offering ("IPO")

The Company was listed on the Main Board of the Stock Exchange on 23 February 2009. The net proceeds from the Company's issue of new shares (after deducting relevant expenses) were approximately HKD569.3 million.

As at 30 June 2017, the net proceeds from IPO had been utilized in the following manner:

The unutilized balance is deposited in bank accounts at commercial banks in the PRC. The Group intends to utilize the net proceeds balance in the manner as set out above.

Capital expenditure

For the six months ended 30 June 2017, the Group invested approximately RMB1.7 million mainly in the construction of mining structures, property, plant and equipment at the mines for maintenance.

For the six months ended 30 June 2016, the Group invested approximately RMB26.4 million mainly in the construction of mining structures, property, plant and equipment at the mines in operation for maintenance, and the capital expenditure (including exploration expenditure) incurred for Gaotaizi Gold Mine amounted to approximately RMB3.4 million.

Contingent liabilities

The Group did not have any significant contingent liabilities as at 30 June 2017 and 31 December 2016.

Capital commitment

As at 30 June 2017, the Group did not have capital commitment of capital expenditure contracted for but not provided in the condensed consolidated financial statements (31 December 2016: nil).

Financial instruments

The Company did not have any hedging contracts or financial derivatives subsisting as at 30 June 2017 and 31 December 2016.

Segment analysis

Segment information is disclosed in Note 4 to the condensed consolidated financial statements set out in this interim report.

Employees and emoluments policy

As at 30 June 2017, the number of employees of the Group was 153 (31 December 2016: 395). For the six months ended 30 June 2017, the staff cost (including directors' remuneration in the form of salaries and other allowances but excluding subcontracting labour cost) was approximately RMB17.2 million (six months ended 30 June 2016: RMB12.8 million).

The Group's emolument policies (including the emolument policies for its directors) are formulated based on the performance of individual employee and on the basis of the salary trends in Hong Kong and the PRC, and will be reviewed regularly. Subject to the Group's profitability, the Group may also distribute discretionary bonus to its employees as an incentive for their contribution to the Group. The Group has adopted a share option scheme for its employees.

Share options

The Company has adopted a share option scheme on 30 January 2009 (the "Share Option Scheme"). There was no share options outstanding as at 30 June 2017 and 31 December 2016 and no option was issued by the Company. The Share Option Scheme lapsed on 23 February 2019. Therefore, no share is available for issue under the Share Option Scheme as at the date of this interim report.

Dividends

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FOREIGN EXCHANGE RISK

The Group is exposed to market risk arising from changes in foreign exchange rates. We conduct our operations in the PRC and Renminbi ("RMB") is the functional and presentation currency of the Company. During the six months ended 30 June 2017, the Group had bank balances that were denominated in foreign currencies which exposed the Group to foreign currency risks. The Group was mainly exposed to the fluctuation of Hong Kong dollars ("HKD"). The Group manages and monitors foreign exchange exposure to ensure appropriate measures are implemented in a timely and effective manner. No foreign currency hedging activity is currently undertaken by the Group.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

Neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of the Company's listed securities during the six months ended 30 June 2017.

DIRECTORS' AND CHIEF EXECUTIVE'S INTERESTS AND SHORT POSITION IN SHARES, UNDERLYING SHARES OR DEBENTURES OF THE COMPANY OR ITS ASSOCIATED CORPORATIONS

As at 30 June 2017, the directors and chief executive of the Company had the following interests and short positions in any shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (the "SFO")) which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO); or (b) to be and were entered into in the register that was required to be kept under Section 352 of the SFO; or (c) as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

Long positions in ordinary shares of the Company

Note: As at 30 June 2017, Mr. Zhang Yanchun controlled 50% of the voting right of Rosy China Enterprises Limited, which in turn controlled 100% of the voting right of Quanmin Investments Limited. Therefore, Mr. Zhang Yanchun is deemed, or taken to be, interested in the shares held by Rosy China Enterprises Limited for the purpose of the SFO.

Other than as disclosed above, as at 30 June 2017 so far as known to any directors or chief executive of the Company, neither the directors nor the chief executive, had any interests or short positions in any shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of SFO) which were required

1. to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO); or (b) to be and were entered into in the register that was required to be kept under Section 352 of the SFO; or (c) as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

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Equity derivative interests in ordinary shares of the Company

(included in long and short positions)

Notes:

1. As at 30 June 2017, Lead Honest Management Limited was 100% controlled by Tercel Holdings Limited, which in turn was ultimately controlled by Credit Suisse Trust Limited. Credit Suisse Trust Limited was a trustee of Tercel Trust, of which Mr. Wu Ruilin was the founder.
2. The 4,434,802 shares, representing 0.49% of the issued share capital of the Company, was also held by Citigroup Inc. as a "Lending Pool".
3. Citigroup Inc.'s interests were held by its wholly-owned (direct and indirect) subsidiaries.
4. As at 30 June 2017, Value Partners Limited was 100% controlled by Value Partners Hong Kong Limited, which in turn was 100% controlled by Value Partners Group Limited, which in turn was 21.80% controlled by Cheah Capital Management Limited, which in turn was 100% controlled by Cheah Company Limited, which in turn was 100% controlled by BNP Paribas Jersey Nominee Company Limited, which in turn was 100% controlled by BNP Paribas Jersey Trust Corporation Limited. BNP Paribas Jersey Trust Corporation Limited was the trustee of the C H Cheah Family Trust, of which Mr. Cheah Cheng Hye was the founder. Ms. To Hau Yin was the spouse of Mr. Cheah Cheng Hye.

CHANGES OF INFORMATION OF DIRECTORS

Set out below is the monthly emoluments of all those directors of the Company whose emoluments had been changed since last annual report and up to 30 June 2017:

In addition, as set out in page 10 of this interim report, as at 30 June 2017, Mr. Zhang Yanchun, an executive director of the Company was deemed to be interested in 226,250,667 shares in the Company through companies controlled by him.

MODEL CODE FOR SECURITIES TRANSACTIONS

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") as set out in Appendix 10 of the Listing Rules as its own code of conduct for dealing in securities of the Company by the directors. Having made specific enquiry to the directors of the Company who are in office as at the date of this interim report and was in office as at 30 June 2017, the Board confirmed that they have complied with the required standard of dealings as set out in the Model Code during the six months ended 30 June 2017.

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Gross loss

Other income

Administrative expenses

Other expenses

Loss from operations

Finance costs

Loss and total comprehensive loss for the period

Loss and total comprehensive loss for the period attributable to:

Owners of the Company

Non-controlling interests

Loss per share

-

-

-

271

(26,297)

(20,998)

(47,024)

(1,699)

(48,723)

-

(48,723)

(48,183)

(540)

(48,723)

(RMB5.30 cents)

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2. GOING CONCERN BASIS

The Group incurred a loss attributable to owners of the Company of approximately RMB48,183,000 for the six months ended 30 June 2017 and the issue on Guangfa bank accounts of the Group described in Note 11 amounting to approximately RMB456,493,000. These conditions indicate the existence of a material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern. Therefore, the Group may be unable to realize its assets and discharge its liabilities in the normal course of business.

These condensed consolidated financial statements have been prepared on a going concern basis, the validity of which depends upon the financial support of the shareholder, at a level sufficient to finance the working capital requirements of the Group. The shareholder has agreed to provide adequate funds for the Group to meet its liabilities as they fall due. The directors are therefore of the opinion that it is appropriate to prepare the condensed consolidated financial statements on a going concern basis. Should the Group be unable to continue as a going concern, adjustments would have to be made to the condensed consolidated financial statements to adjust the value of the Group's assets to their recoverable amounts, to provide for any further liabilities which might arise and to reclassify non-current assets and liabilities as current assets and liabilities respectively.

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3. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

In the interim period, the Group has adopted all the new and revised International Financial Reporting Standards ("IFRSs") issued by the International Accounting Standards Board that are relevant to its operations and effective for its accounting period beginning on 1 January 2017. The adoption of these new and revised IFRSs did not result in significant changes to the Group's accounting policies, presentation of the Group's condensed consolidated financial statements and amounts reported for the current period and prior periods.

The Group has not applied the new and revised IFRSs that have been issued but are not yet effective. The Group has already commenced an assessment of the impact of these new and revised IFRSs but is not yet in a position to state whether these new and revised IFRSs would have a material impact on its results of operations and financial position.

4. SEGMENT INFORMATION

The Group has 3 mines in Nantaizi, Shirengou and Luotuochang in Inner Mongolia, the PRC. The Group is organized based on the locations of its ore processing plants. The ore processing plant located at Nantaizi processes ore from the mines in Nantaizi and Shirengou. The ore processing plant located at Luotuochang only processes ore from the mine in Luotuochang. For management reporting purpose, the Group's executive directors, who are the chief operating decision maker ("CODM") reviewed the financial information of each ore processing plant for the purpose of resources allocation and performance evaluation. Hence, the processing activities at each of the ore processing plants in Nantaizi and Luotuochang represented as an operating segment.

The Group acquired certain subsidiaries engaged in exploration activities in Inner Mongolia and Guangxi, the PRC. The CODM also reviewed financial information of each subsidiary separately. Because all these subsidiaries carry out exploration activities, they are aggregated as one reportable segment of exploration of gold mines.

The Group's reportable segments are set out as follows:

1. Ore processing plant in Nantaizi - the mining and ore processing activities in respect of the mines in Nantaizi and Shirengou;
2. Ore processing plant in Luotuochang - the mining and ore processing activities in respect of the mine in Luotuochang;
3. Exploration of gold mines - the exploration activities in various places.

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5. LOSS BEFORE TAX

Included in the other income is an aggregate amount of nil (six months ended 30 June 2016: RMB35,893,000) representing tax concession granted by the PRC government to encourage the production and sale of gold concentrates. Under the tax concession, the Group is not required to pay to the government authority value-added tax which have been charged on the sale of gold concentrates.

6. INCOME TAX EXPENSE

For the six months ended 30 June 2017

RMB'000

(Unaudited)

No provision for Hong Kong Profits Tax is required since the Company's income is derived from overseas sources which is not liable to Hong Kong Profits Tax.

The applicable income tax rate for the subsidiaries of the Group in the PRC in the current period is 25% (six months ended 30 June 2016: 25%).

8. SUBSIDIARIES

The Board of the Company noted that Fubon Industrial (Huizhou) Co., Ltd ("Fubon"), a wholly-owned subsidiary of the Company, has been informed by the Huizhou Administration Bureau for Industry and Commerce on 4 August 2017 while attending to the change of legal representative of Fubon that all of the shares in Fubon were frozen by the Huizhou Public Security Bureau due to investigation by the Huizhou Public Security Bureau into financial fraud that might have been perpetrated by Mr. Wu Ruilin, the Company's former controlling shareholder who still retains 15.41% shareholding in the Company and Qiaoxing group of companies controlled by Mr. Wu Ruilin. On 17 August 2017, the Company's representatives attended Huizhou Administration Bureau for Industry and Commerce and Huizhou Public Security Bureau to make further enquiries. The Company made a request to the Huizhou Public Security Bureau for the formal document directing a freezing of Fubon's shares and Huizhou Public Security Bureau requested the Company to provide certain information to assist with its investigation. The freezing of all of the shares of Fubon is likely to impact the progress of effecting changes of legal representative and directors of Fubon and its subsidiary, namely Chifeng Fuqiao Mining Co., Ltd ("Fuqiao").

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Refer to the announcement of the Company on 29 March 2018, upon advice by its PRC legal advisers, the Group has submitted two civil writs of action against Guangfa Bank in respect of the Fixed Deposits and Rich Vision Fixed Deposits respectively at the People's Court of Yuexiu District in Guangzhou (the "Yuexiu Court"). The Yuexiu Court suggested the Group should commence civil proceedings against Guangfa Bank for reinstatement of accounts only. However, as the Group is unable to confirm the authenticity of any alleged pledge agreement(s) submitted by Guangfa Bank to the CBRC asserting the existence or validity of any pledge over the Fixed Deposits and Rich Vision Fixed Deposits with Guangfa Bank, the Group commenced civil proceedings against Guangfa Bank for infringement of rights as one of its causes of action. As at 29 March 2018, the Yuexiu Court has formally put on its records the Group's civil action in respect of the Fixed Deposits and Rich Vision Fixed Deposits.

Refer to the announcement of the Company on 12 June 2018, in relation to the two civil actions commenced by the Group against Guangfa Bank at the Yuexiu Court, Guangfa Bank filed an application to challenge jurisdiction, which was dismissed by the Yuexiu Court (the "Dismissal Ruling"). Guangfa Bank then indicated that it intends to appeal the Dismissal Ruling when the Dismissal Ruling was served on Guangfa Bank.

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For the six months ended 30 June 2017

RMB'000

(Unaudited)

The remuneration of directors and other members of key management during the Reporting Period is as follows:

The related party transactions with directors of the Group companies constitute exempt continuing connected transactions under Chapter 14A of the Listing Rules and are fully exempted from the requirements there under.