Shanghai Realway Capital Assets Management : Interim Report 2020

CONTENTS

Corporate Information	2
Financial Summary	4
Management Discussion and Analysis	5
Corporate Governance and Other Information	25
Unaudited Interim Condensed Consolidated Statement of
Profit or Loss and Other Comprehensive Income	33
Unaudited Interim Condensed Consolidated Statement of
Financial Position	35
Unaudited Interim Condensed Consolidated Statement of
Changes in Equity	37
Unaudited Interim Condensed Consolidated Statement of
Cash Flows	38
Notes to the Interim Condensed Consolidated Financial Statements	40

Corporate Information

DIRECTORS	REGISTERED OFFICE
Executive Directors	Room 26G-3, No. 828-838 (even number)
Mr. ZHU Ping (朱平)	Zhang Yang Road
Mr. DUAN Kejian (段克儉)	China Pilot Free Trade Zone
Ms. SU Yi (蘇怡)	Shanghai
	PRC
Non-executive Directors	PRINCIPAL PLACE OF BUSINESS
Mr. CHENG Jun (成軍)
Mr. WANG Xuyang (王旭陽)	IN PRC
	5F, Block A, Yuehong Square
Independent non-executive	No. 88 Hongcao Road
Directors	Xuhui District
Mr. LIU Yunsheng (劉雲生)	Shanghai
Mr. SHANG Jian (尚健)	PRC, 200233
Ms. YANG Huifang (楊惠芳)	PRINCIPAL PLACE OF BUSINESS
SUPERVISORS	IN HONG KONG
Ms. CAI Luyi (蔡璐懿)	Unit 1305, 13/F
Mr. LU Xili (陸希立)	Office Plus@Sheung Wan
Ms. WANG Juanping (王娟萍)	93-103 Wing Lok Street, Sheung Wan
AUDIT COMMITTEE	Hong Kong
AUTHORISED
Ms. YANG Huifang (楊惠芳) (Chairman)
Mr. SHANG Jian (尚健)	REPRESENTATIVES
Mr. LIU Yunsheng (劉雲生)	Ms. SU Yi (蘇怡)
NOMINATION COMMITTEE	Ms. LAU Wai Yee (劉惠儀)
Mr. ZHU Ping (朱平) (Chairman)
Mr. SHANG Jian (尚健)
Mr. LIU Yunsheng (劉雲生)
REMUNERATION COMMITTEE
Mr. LIU Yunsheng (劉雲生) (Chairman)
Ms. SU Yi (蘇怡)
Ms. YANG Huifang (楊惠芳)
COMPANY SECRETARY
Ms. LAU Wai Yee (劉惠儀)

2	SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Corporate Information

LEGAL ADVISOR

(AS TO HONG KONG LAW)

Howse Williams

27/F Alexandra House

18 Chater Road

Central, Hong Kong

H SHARE REGISTRAR

Tricor Investor Services Limited

Level 54, Hopewell Centre

183 Queen's Road East

Hong Kong

AUDITOR

Ernst & Young

22/F, CITIC Tower

1 Tim Mei Avenue

Central, Hong Kong

PRINCIPAL BANKER

China Merchants Bank

Shanghai Gubei Branch

75 Shuicheng Nan Road

Changning District

Shanghai, PRC

STOCK CODE

1835

COMPANY'S WEBSITE

http://www.realwaycapital.com

Interim Report 2020

3

Financial Summary

	As at and for the
	six months ended		As at and for the year ended
	30 June			31 December
	2020	2019	2019	2018	2017	2016	2015
	(unaudited)	(unaudited)	(audited)	(audited)	(audited)	(audited)	(audited)
OPERATING RESULTS
Revenue (RMB'000)	50,068	56,419	125,234	157,417	130,875	83,422	34,869
Profit for the period/year
(RMB'000)	7,777	25,310	6,774	46,478	63,346	43,109	10,348
Net profit attributable to:
Owners of the parent
(RMB'000)	9,216	27,861	9,451	45,735	65,014	43,109	10,348

EARNINGS

Basic and diluted earnings

• per share attributable to
• ordinary equity holders of

the parent (RMB cents)	6.01	18.17	6.16	38.41	59.10	42.58	12.17
ASSETS, LIABILITIES
AND EQUITY
Total assets (RMB'000)	442,007	468,825	434,826	469,844	282,881	177,100	105,613
Total liabilities (RMB'000)	34,219	51,288	34,869	68,344	59,267	18,583	5,195
Total equity (RMB'000)	407,788	417,537	399,957	401,500	223,614	158,517	100,418
FINANCIAL RATIO
Current ratio	5.2times	3.9times	3.7times	4.6times	3.2times	6.2times	21.3times
Return on total assets(1)	3.5%	10.8%	1.6%	9.9%	22.4%	24.3%	9.8%
Return on equity(1)	3.8%	12.1%	1.7%	11.6%	28.3%	27.2%	10.3%
Net profit margin	15.5%	44.9%	5.4%	29.5%	48.4%	51.7%	29.7%

Notes:

1. Return on total assets and return on equity for the six months ended June 30 presented above have been annualized.

4	SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Management Discussion and Analysis

INDUSTRY REVIEW

At the beginning of 2020, under the effect of the sudden emergence of novel coronavirus pandemic (the "Pandemic"), the International Monetary Fund ("IMF") has reduced the 2020 global GDP growth forecast by 8.2 percentage point from 3.3% in January to -4.9%, representing the first negative quarterly growth since the establishment of accounting system for quarterly GDP in 1992. The impact on the economy in China is far beyond that of the global financial crisis in 2008, further damaging the weakened global economy and highlighting the structural contradiction. During the six months ended 30 June 2020 (the "Reporting Period"), the global supply chains were interrupted or even suspended, leading to severe shrinkage of international trade. The U.S. stocks significantly dropped and triggered the circuit breaker system for four times while the settlement price of international crude oil futures turned negative for the first time in history. Under these circumstances, financial risks and downturn of real economy combined to produce resonance.

In general, impact of the Pandemic on various industries has gradually penetrated to the midstream and upstream from the downstream. Tertiary industries such as catering, retailing, hotel, tourism, movie, education and transportation have been significantly affected by the Pandemic. The Pandemic also directly hits relevant real estate fields such as commercial complex, hotels and hostels, office buildings and infrastructure construction. As such, the investment funds providing financial services to real estates have been affected.

Under the theme of "houses are for living in, not for speculation (房住不炒)", the government maintains a generally tight policy on real estate market in China. With the spread of panic caused by the Pandemic, there has been huge pressure on project progress in respect of the collection and disposal of distressed assets or the operation and management of commercial real estate and the construction and sales of residential real estate in a short period of time. Accordingly, for the six months ended 30 June 2020, real estate funds industry faced double challenge: industry downturn and economic impact caused by the Pandemic.

Interim Report 2020

5

Management Discussion and Analysis

BUSINESS PERFORMANCE

Shanghai Realway Capital Assets Management Co., Ltd. (the "Company") and its subsidiaries (the "Group") is a private fund manager specialising in the management of real estate investment funds in the People's Republic of China (the "PRC"). The Group manages two broad types of funds, namely (i) fund(s) structured and managed for the purpose of directly investing in a specific real estate investment project ("Project Fund(s)"); and (ii) flexible fund(s) of funds structured and managed, or co-managed, by the Group which may invest in designated types of funds under the Group's portfolio instead of making direct investment into investment projects and are permitted to invest in multiple investment projects indirectly through a number of funds at the same time ("FOF(s)"). The Group's managed funds invest in three main categories of portfolio assets, namely commercial real estate projects, distressed assets projects, and urbanisation and redevelopment projects.

Despite the critical situation of the macroeconomy, the Group still recorded a growth in its assets under management. As at 30 June 2020, the Group's assets under management amounted to RMB5,231.4 million, which is higher than RMB4,894.1 million as at 31 December of 2019.

Set out below is a breakdown of the assets under management ("AUM") by type of fund as at the end of the Reporting Period:

	30 June 2020	31 December 2019
	Number of		Number of
	funds	AUM	funds	AUM
		RMB million		RMB million
Project Funds	15	5,173.4	14	4,819.3
FOFs	9	823.0	9	823.0
Less: FOFS investments in
Project Funds	-	(765.0)	-	(748.2)
Total	24	5,231.4	23	4,894.1

6	SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Management Discussion and Analysis

Set out below is a breakdown of project fund assets under management by portfolio asset type as at the end of the Reporting Period:

		30 June 2020		31 December 2019
	Number of			Number of
	projects	AUM	Proportion	projects	AUM	Proportion
		RMB million	%		RMB million	%
Commercial real estate
projects	6	1,743.2	33.7%	6	1,666.3	34.6%
Distressed assets projects	3	1,685.3	32.6%	3	1,965.3	40.8%
Urbanisation and
redevelopment projects	6	1,744.9	33.7%	5	1,187.7	24.6%
Total	15	5,173.4	100.0%	14	4,819.3	100.0%

Note: The amount which FOFs had invested in Project Funds was eliminated to avoid double counting

Under the difficult economic situation due to the Pandemic and the intensifying competition in the industry, the Group tackled new opportunities and challenges in a proactive manner during the six months ended 30 June 2020. The Group commenced and completed the following tasks:

1. During the Reporting Period, the Group completed the exit and payment of Xintian Impression Project* (新田印象項目) on schedule.
2. During the Reporting Period, the Group acquired one urbanisation and redevelopment project and one commercial real estate project. The urbanisation and redevelopment project is CIFI Wenzhou Project* (旭輝溫州項目), which is a construction and operation project cooperated by the Group and CIFI Holdings (Group) Co. Ltd.* (旭輝集團股份有 限公司) (a company with its shares listed on the main board of The Stock Exchange of Hong Kong Limited (the "Stock Exchange"), Stock Code: 884.HK) (one of the top 20 real estate enterprises in the PRC) in Wenzhou, the PRC with over 170,000 square meter saleable area. The commercial real estate project is Zhongnan Lishui Project* (中 南麗水項目) cooperated by the Group and Jiangsu Zhongnan Construction Group Co.,Ltd. (a company with its A shares listed on main board of the Shenzhen Stock Exchange, Stock Code: 000961.SZ).

Interim Report 2020

7

Management Discussion and Analysis

1. On 16 January 2020, Realway (Hong Kong) Assets Management Limited* (瑞威(香港)資 產管理有限公司), a wholly-owned subsidiary of the Company, obtained the licenses granted by Securities and Futures Commission (the "SFC") to carry out Type 4 (advising on securities) and Type 9 (asset management) regulated activities.
2. The Company initiated tasks on the H Share Full Circulation Programme during the Reporting Period and received an acceptance notice from the China Securities Regulatory Commission("CSRC") in respect of the Company's application to the CSRC regarding the implementation of the H share full circulation on 9 May 2020.

FUTURE OUTLOOK

To cope with the impact of global Pandemic on the economy, China reinforced its counter- cyclical adjustments to reduce cost and burdens for enterprises with difficulties and help them to recover through monetary policies with greater flexibility, proactive and effective financial policies. As the Pandemic in China is gradually under control, works and production have been resuming, leading to significant improvement in China's economy in the second quarter of 2020. China's economy will maintain steady recovery, its economic trend of second half of 2020 is expected to show a "V-shaped" trend, with performance far better than that of first half of 2020, and China will once again lead the recovery of the global economy. For business performance of the real estate industry in 2020, according to sales data projection monitored by the CRIC Research Centre (克而瑞研究中心), for the announced sales target in 2020 of 46 real estate enterprises, the completion rate of sales target in the first half of the year just reached 40%, which is unsatisfying as compared with the corresponding period last year. Nearly half of the real estate enterprises recorded a decrease in aggregate sales volume for the six months ended 30 June 2020 as compared with the corresponding period last year. In the first quarter of 2020, the overall results of the top 100 real estate enterprises in China recorded a year-on-year decrease of nearly 20.8%, the selling rate of the industry was under pressure in general. In the second quarter of 2020, because of the resumption of works and production, the sales gradually recovered with market activities rebounded. The overall results showed an increase of 9.6% as compared with the corresponding period last year. As the real estate industry is important in stabilising the economy, the industry is expected to maintain stable development under the counter-cyclical adjustment with supporting policies issued by various regions.

8	SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Management Discussion and Analysis

As a private fund manager specialising in the management of real estate investment funds in the PRC, the Group had foreseen that the outbreak of the Pandemic at the beginning of 2020 would pose significant liquidity risks to the industry. To cope with the impact of the Pandemic, the Group initiated comprehensive risk study and contingency plan, and communicated with the investors and business partners of respective projects on the situation in a timely manner. The Group will consistently act at our best and be well-prepared for handling the uncertainties in short-term market in a better and more comprehensive manner. The Group will actively deal with the possible adverse impact of the Pandemic on our business operations. We will also continue to adhere to our professionalism, enhance management and control in project investment and stick to the bottom line of every investment to protect the funds of our investors and strive to minimise the impact of the Pandemic.

Looking ahead, the Group will adjust its development strategies according to the macroeconomic situation and will focus on the following:

1. Strengthening the business of distressed assets

Currently, China's economy is under the three-phase superposition (三期疊加 ) stage of shifting period, transitional period and digestion period. Large amount of distressed assets will be induced in the future, with low-cost and quality investment opportunities emerged. The reverse cyclicality of distressed assets operation determines that the operation requires reserve of distressed assets during the economic downturn. The intensified changes and competition in the external environment and the industry environment objectively promote the professionalisation of distressed assets operation. The Group will continue to work hard in the field of distressed assets, discover suitable distressed assets products under the complex economic environment, and concentrate its team's own resource advantages, so as to further develop mergers and acquisitions of distressed assets, improve product disposal efficiency, and enhance core competitiveness and profitability.

Interim Report 2020

9

Management Discussion and Analysis

1. Cooperating with medium and large brands of real estate enterprises to promote urbanisation construction

Although "houses are for living in, not for speculation (房炒不住)" remains a major theme, the urbanisation construction is still accelerating. On 9 April 2020, the National Development and Reform Commission of the People's Republic of China issued the "Key Missions of New Urbanisation Construction and Integrated Development of Urban and Rural Areas 2020 (2020年新型城鎮化建設和城鄉融合發展重點任務)", suggesting new form of urbanisation construction to realise settlement in city of non-registered population of 0.1 billion. Under the major trend of urbanisation, the Group focused on urbanised roads in middle and large cities, participated in urbanisation construction and developed urban renewal projects in response to China's call for urbanisation construction. In leverage of its brand's creditability and the expansion of fundraising channels, the Group will join hands with the top 50 renowned property developers in China, to collaborate in equity investment projects and other tailor-made products in accordance with financing needs of renowned property developers, with a view to further explore and increase assets values of investment projects.

(iii) Formulating layouts for overseas business

In January 2020, Realway (Hong Kong) Assets Management Limited* ( 瑞威( 香港) 資產 管 理 有 限 公 司), a wholly-owned subsidiary of the Company, obtained the licenses granted by SFC to carry out Type 4 (advising on securities) and Type 9 (asset management) regulated activities in Hong Kong. The Group will be devoted to paving the way for connection between cross-border assets and capital, absorbing international capital for its real estate projects, so as to improve its existing investment portfolio. The Company intends to enhance the diversity of its product design by adding capital vitality to domestic assets in various categories and by introducing overseas investment funds into the domestic market through various structured designs.

10 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Management Discussion and Analysis

(iv) Optimising its shareholding structure

To increase liquidity of its shares and to optimise its shareholding structure, which conform to the Company's long-term development strategies and in the interests of shareholders of the Company (the "Shareholders"), during the Reporting Period, the Company duly commenced tasks in respect of the H Share Full Circulation Programme and to CSRC received an acceptance notice from the CSRC in respect of the Company's application regarding the implementation of the H share full circulation on 9 May 2020. The Company will continue to proceed with the application regarding the implementation of the H share full circulation and will make further announcement on the progress in compliance with the requirements under the Rules Governing the Listing of Securities on the Stock Exchange (the "Listing Rules") and applicable laws.

2020 is the final year for China to build a moderately prosperous society in an all-round way and the "13th Five-Year Plan". It is a decisive and critical year for achieving the first century- old goal. It is also the tenth anniversary of the establishment of the Company. As a real estate fund manager, the Company is required to make timely adjustments to adapt to regulatory requirements and product specification. In the next six months and beyond in the future, the Group will enhance its corporate governance level by improving its corporate governance structure, consolidate, refine and strengthen its existing business and explore positive interactions in domestic and overseas business areas, as well as highlight key risk management to improve the Company's risk management level and take advantage of the Company's professionalism in risk control, finance and taxation, and real estate finance in order to continue to create greater wealth for investors and Shareholders.

Interim Report 2020 11

Management Discussion and Analysis

FINANCIAL REVIEW

Revenue

The Group derived its revenue mainly from the fees charged on the Project Funds and FOFs established and managed by it. Such fees comprised of regular management fees, performance fees and one-off fund establishment fees. During the Reporting Period, the Group recognised revenue of approximately RMB50.1 million, representing a decrease of approximately RMB6.4 million or approximately 11.3% as compared with that of the corresponding period last year, which was mainly attributable to the aggregation and offsetting amongst the decrease of regular management fees and one-off fund establishment fees and the increase of performance fees.

Set out below is a breakdown of the revenue by income source during the indicated period:

	For the six months ended 30 June
				Rate of
	2020	2019	Change	change
	(unaudited)	(unaudited)
		(RMB'000, except percentages)
Project Funds
- Regular management fees	39,735	47,523	(7,788)	(16.4%)
- Performance fees	2,357	-	2,357	100.0%
- One-off fund establishment fees	2,511	3,540	(1,029)	(29.1%)
Sub-total	44,603	51,063	(6,460)	(12.7%)
FOFs
- Regular management fees	5,523	5,482	41	0.7%
- Performance fees	-	-	-	-
- One-off fund establishment fees	-	-	-	-
Sub-total	5,523	5,482	41	0.7%
Advisory fees	234	-	234	100%
Less: sales-related taxes	(292)	(126)	(166)	131.7%
Total	50,068	56,419	(6,351)	(11.3%)

12 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Management Discussion and Analysis

Regular management fees

Revenue of the Group generated from regular management fees during the Reporting Period was approximately RMB45.3 million, which accounted for approximately 90.4% of the Group's total revenue, representing a decrease of approximately RMB7.7 million or 14.6% as compared with that of the corresponding period in the previous year, which was mainly due to (i) to support the development of the Huaqiao Cheng Project* ( 華僑城項目) and to relieve the liquidity pressure of the project company in order to facilitate the smooth operation of Huaqiao Cheng Shopping Centre* ( 華僑城商業購物中心), the fund manager of Shanghai Shengyu Investment Limited Partnership* ( 上海晟羽投資合夥企業( 有限合夥)) ("Shanghai Shengyu"), a fund managed by the Group, has suspended charging regular management fees from Shanghai Shengyu incurred from 1 January 2020 to the exit from Huaqiao Cheng Project by Shanghai Shengyu upon liquidation of Shanghai Shengyu, resulting in a decrease of approximately RMB5.0 million in regular management fees from Huaqiao Cheng Project as compared with the corresponding period last year; (ii) the exit of the fund managed by the Group from Yuhang Xinhuayuan Project* (余杭馨華園項目) and Shenzhen Xinqiaowei Project* (深圳新喬圍項目), resulted in a decrease in regular management fees. Despite additional management scale of projects such as Fuzhou (福州), Xintian Impression (新田印象), Yan'an (延安) and Zhongnan Lishui (中南麗水) which resulted in an increase in regular management fees, after aggregation and offsetting, the Group recorded a decrease in regular management fees of approximately RMB2.7 million as compared with that of the corresponding period last year.

Performance fees

The Group recorded performance fees of approximately RMB2.4 million during the Reporting Period, mainly attributable to the performance fees received from the exit of the Group's managed funds from Xintian Impression (新田印象) project during the Reporting Period .

Interim Report 2020 13

Management Discussion and Analysis

One-off fund establishment fees

One-off fund establishment fees represent the fees charged by the Group in relation to the establishment of the funds and investors sourcing. Revenue of the Group generated from one- off fund establishment fees for the Reporting Period was approximately RMB2.5 million, representing a year-on-year decrease of approximately RMB1.0 million, which was mainly due to the decrease in the size of new funds established in the first half of 2020 as compared with that of the corresponding period in the previous year.

Other income and gains

Other income and gains of the Group increased from approximately RMB6.4 million in the first half of 2019 to approximately RMB7.5 million for the Reporting Period, representing an increase of approximately 17.5%. The increase was mainly due to the aggregated effect of increase of dividend income derived from investments in associates or joint ventures at fair value through profit or loss and decrease of government grants.

Set out below is a breakdown of other income and gains during the indicated period:

	For the six months ended 30 June
				Rate of
	2020	2019	Change	Change
	(unaudited)	(unaudited)
		(RMB'000, except percentages)
Dividend income from investments in
associates or a joint venture
at fair value through profit or loss	6,309	2,476	3,833	154.8%
Government grants	1,184	3,835	(2,651)	(69.1%)
Interest income	23	94	(71)	(75.5%)
Gain on disposal of a subsidiary	8	-	8	100.0%
TOTAL	7,524	6,405	1,119	17.5%

14 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Management Discussion and Analysis

Dividend income from investments in associates or a joint venture at fair value through profit or loss ("IAFV")

The Group's dividend income from IAFV increased from approximately RMB2.5 million for the six months ended 30 June 2019 to approximately RMB6.3 million for the Reporting Period, representing a year-on-year increase of approximately 154.8%. During the Reporting Period, dividend income recorded by the Group mainly included dividends of approximately RMB3.6 million from Huaqiao Cheng Project* (華僑城項目), approximately RMB2.1 million from Fuzhou Project* (福州項目) and approximately RMB0.5 million from Shenzhen Xinqiaowei Project* (深圳新喬圍項目) and Chengdu Project* (成都項目) from the Group's own fund investment.

Government Grants

Government grants mainly included income tax and value-added tax refunded by the government, recording a decrease from approximately RMB3.8 million for the six months ended 30 June 2019 to approximately RMB1.2 million for the Reporting Period, representing a year-on-year decrease of approximately 69.1%. The decrease was mainly due to decrease of income tax and value-added tax paid by the Company.

Administrative expenses

Administrative expenses of the Group for the Reporting Period were approximately RMB27.5 million, representing a decrease of approximately 29.9% as compared with approximately RMB39.2 million recorded during the corresponding period in the previous year. Such decrease was mainly due to:

1. The Group optimised deployment of staff and enhanced its human resources efficiency. For the Reporting Period, the number of staff decreased as compared with that of the corresponding period in the previous year. Also, due to the impact of the unexpected Pandemic, China reduced and exempted social insurance progressively and the management took initiatives to reduce their remuneration, resulting in a decrease of approximately RMB7.4 million in staff cost for the Reporting Period as compared with that of the corresponding period in the previous year.

Interim Report 2020 15

Management Discussion and Analysis

1. Due to the Pandemic, the frequency of travel by staff significantly decreased and the demand for advisory dropped resulting in a decrease in travel expenses and advisory fees of approximately RMB2.4 million for the first half of 2020 as compared with that of the corresponding period in the previous year.

Impairment losses on trade receivables

The Group recognised provision for impairment loss of receivables of approximately RMB8.0 million in the Reporting Period, of which provision for individually impaired trade receivables amounted to approximately RMB7.3 million and provision for collectively impaired trade receivables amounted to approximately RMB0.7 million.

The Group applies the IFRS 9 simplified approach to measure the provision for expected credit loss ("ECL"). According to the policy, the Group made collectively impaired trade receivables and individually impaired trade receivables by using (i) aging analysis; and (ii) special circumstances surrounding individual receivables, including but not limited to aging and financial position of the debtor, respectively as credit risk characteristics to determine each group of receivables.

During the Reporting Period, the Group conducted a comprehensive assessment on trade receivables, and considered the trade receivables in relation to management fees due from funds managed by the Group taking into account factors including the repayment history of the funds, aging, financial situation and macro-economic environment. In early 2020, the Pandemic in China has adversely affected the general economic environment. For the sake of prudence, the Group recognized provision for collectively impaired trade receivables of approximately RMB0.7 million based on an aging analysis on the balance of all receivables.

16 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Management Discussion and Analysis

Moreover, the Group also made assessment on individual projects including the Dongfang Baorui Distressed Assets Project* (東方保瑞不良資產項目) (the "Dongfang Baorui Project") which is an investment portfolio comprising a range of debt instruments secured by underlying assets including a commercial complex under construction, land parcels designated for commercial usage, land parcels designated for industrial usage, shops and factories, located in Jiangsu and Anhui provinces in the PRC. In December 2019, the general partner of the funds managed by the Group which invested in the Dongfang Baorui Project (the "GP of Dongfang Baorui") informed us that, the timing of realisation of distressed assets held by the funds had been delayed and there was less than 12 months of fund life under the relevant project fund investment agreement. The GP of Dongfang Baorui advised the Group as fund manager to prepare for the distribution process which would commence upon termination of the funds. As a result, the Group commenced internal discussions on the distribution process and was aware that: (i) the on-going negotiations between the funds and counterparties in relation to the sale and acquisition of part of the underlying assets had ceased during the second half of 2019 and certain counterparties were only willing to continue negotiations after the legal proceedings commenced by the funds to liquidate the distressed assets or obtain title to the underlying assets given as security had been completed which would take at least three years; and (ii) the funds had been affected by regulatory policies in real estate sector, financial leverage policies and the general economic downturn in the PRC since 2018, which had resulted in a low realisation rate of the funds' underlying assets and therefore a low level of distributable cash flow. The triggering events in December 2019 caused the management to consider the individual ECL of the trade receivables involved in the Dongfang Baorui Project. Therefore, the Board engaged an independent valuer to conduct a valuation in order to determine the individual ECL provision during the preparation of the 2019 financial statements. For the year ended 31 December 2019, the Group recognised a provision of approximately RMB15.4 million for individual impairment for the trade receivables in relation to the Dongfang Baorui Project based on an impairment rate of 30%.

Due to the Pandemic, no new potential purchaser of the underlying assets has been identified by funds investing in the Dongfang Baorui Project in the first half of 2020. As there were no material changes to the circumstances of the project in the first half of 2020, the Board considered that it is fair and reasonable to recognise a provision for individually impaired trade receivables of approximately RMB7.3 million in relation to the trade receivables due from the funds investing in Dongfang Baorui Project for the six months ended 30 June 2020 based on an impairment rate of 30%.

Interim Report 2020 17

Management Discussion and Analysis

The Board will continue to assess the recoverability of the trade receivables based on the macro-economy and the situation of the projects invested by the Group's managed funds to ensure that the impairment rate will be determined on a fair and reasonable basis so as to accurately reflect the financial situation and the asset value of the Group.

Increase/(decrease) in fair value of IAFV

As part of the Group's ordinary and usual course of business, the Group has been making investments in the funds structured and managed by it. Such investments were consistently recognised as investments in associates or a joint venture at fair value through profit or loss ("IAFV") in the Group's financial statements and will continue such accounting treatment in the future.

The Group, as an investment fund manager, measures the above investments in associate(s) or joint venture(s) at fair value through profit or loss in accordance with IFRS 9. Financial assets of distressed asset projects apply level 3 hierarchy of fair value assessment, which is based on valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

The valuation techniques and key inputs under such accounting policy are: discounted cash flow with future cash flows that are estimated based on expected recoverable amounts, discounted at rates that reflect management's best estimation of the expected risk level. It indicates the following relationship to fair value:

• the higher the recoverable amounts, the higher the fair value;
• the earlier the recovery date, the higher the fair value;
• the lower the discount rates, the higher the fair value

18 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Management Discussion and Analysis

Fair value of IAFV for the Reporting Period decreased by RMB6.4 million, which was mainly attributable to (i) the valuation of Huaqiao Cheng Project* (華僑城項目) and Zhongheng Project* (眾恒項目) under the commercial real estate projects did not increase, while there was an increase in fund operating costs due to the fund's term extension, resulting in a decrease of approximately RMB16.1 million of the fair value of IAFV as compared with that of the corresponding period in the previous year; and (ii) the consideration for exit from the Yuhang Xinhuayuan Project* (余杭馨華園項目) increased after hard negotiation by the project team, resulting in an increase of recoverable amount of the project, the fair value of IAFV of the Yuhang Xinhuayuan Project thus increased by RMB9.5 million as compared with that of the corresponding period last year.

Other expenses

Other expenses of the Group for the Reporting Period decreased by approximately RMB1.2 million as compared with that of the corresponding period in 2019, mainly due to the decrease of exchange loss.

Share of loss of associates

Loss of associates attributable to the Group during the Reporting Period increased by RMB2.5 million as compared with that of the corresponding period in 2019, mainly due to the investment in Guangrui Juyao (Qingdao) Wealth Asset Management Co., Ltd.* (光瑞聚耀(青 島)財富資產管理有限公司) by the Group during the Reporting Period, incurring loss of RMB2.3 million calculated in proportion using equity method.

Income tax expense

Income tax expense of the Group decreased from approximately RMB8.8 million for the six months ended 30 June 2019 to approximately RMB4.8 million for the Reporting Period, representing a decrease of approximately 45.9%, mainly due to the decrease in profit before tax.

Interim Report 2020 19

Management Discussion and Analysis

Total comprehensive income for the period

Profit for the period of the Group decreased from approximately RMB25.3 million for the six months ended 30 June 2019 to RMB7.8 million for the Reporting Period, and net profit margin decreased from approximately 44.9% for the six months ended 30 June 2019 to approximately 15.5% for the Reporting Period, mainly due to the combined effect of: (i) the decrease of regular management fees; (ii) the increase in loss allowance recognised for trade receivables; and (iii) the decrease in fair value of IAFV, partly offset by the decrease in administrative expenses and income tax expense recorded.

LIQUIDITY AND FINANCIAL RESOURCES

The Group regularly reviews the status of liquidity and actively manages liquidity and financial resources in light of changes in the economic environment and business development needs. As at 30 June 2020, the cash and cash equivalents of the Group was approximately RMB16.7 million (30 June 2019: RMB71.2 million).

GEARING RATIO

The gearing ratio of the Group as at 30 June 2020 was nil (30 June 2019: Nil) as the Group had no outstanding loans, borrowings or bank overdrafts as at 30 June 2020.

TREASURY POLICIES

The Group has adopted a prudent financial management approach towards its treasury policies and thus maintained a healthy liquidity position during the Reporting Period. The Group strives to minimise exposure to credit risk by strictly controlling outstanding receivables and setting up a credit control team. To manage liquidity risk, the Board closely monitors the Group's liquidity position to ensure that the liquidity structure of the Group's assets, liabilities and other commitments can meet its funding requirements from time to time.

PLEDGE OF ASSETS

As at 30 June 2020, the Group did not have any pledge on its assets.

20 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Management Discussion and Analysis

FOREIGN EXCHANGE RISK

The Group principally operates in the PRC with most of its businesses being denominated in Renminbi ("RMB"). The Group only bears the risk of fluctuations in the exchange rate of RMB against Hong Kong Dollar ("HKD"). The Group currently has no hedging of foreign exchange risk and we believe that the Group's foreign exchange risk is manageable and will closely monitor the relevant risks from time to time.

CAPITAL STRUCTURE

There has been no change in the capital structure of the Company since its listing on 13 November 2018.

COMMITMENTS

The Group did not have any significant commitments as at 30 June 2020 (30 June 2019: Nil).

MATERIAL ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

During the Reporting Period, the Group did not have any material acquisition or disposal of subsidiaries, associates or joint ventures.

CAPITAL EXPENDITURES

As at 30 June 2020, the Group did not have any significant capital expenditures.

CONTINGENT LIABILITIES

As at 30 June 2020, the Group did not have any contingent liabilities.

EMPLOYEES AND REMUNERATION POLICY

As at 30 June 2020, the Group employed a total of 120 employees (30 June 2019: 143 employees). The Group has adopted an employee compensation policy which takes into account factors such as external market competitiveness and internal fairness, and provides diversified training and individual development plans for its employees. The Group has a clear promotion policy that gives eligible employees career progression opportunities.

Interim Report 2020 21

Management Discussion and Analysis

SIGNIFICANT INVESTMENTS HELD

As at 30 June 2020, IAFV of the Group was approximately RMB247.7 million, representing a decrease of approximately RMB31.7 million as compared with that as at 31 December 2019, details of which are as follows:

Unrealised

gain/(loss) of

the relevant

Percentage of

Dividends

Percentage of

change in

Investment

shareholdings

received in

net assets of

fair value for

Fair value at

Type of

Type of

cost at

at 30 June

the Reporting

Fair value at

the Group at

the Reporting

31 December

Source of

Name of fund

fund

project invested

30 June 2020

2020

Period

30 June 2020

30 June 2020

Period

2019

fund

(RMB'000)

(RMB'000)

(RMB'000)

(RMB'000)

1

FOF IV (note 1)

FOF

Distressed assets

100,000

50.0%

-

115,803

28.4%

15,803

106,038

Internal

projects

resources

2

FOF IX (note 2)

FOF

Commercial real

48,000

80.0%

-

38,923

9.5%

(9,077)

46,899

Proceeds from

estate projects

the issue of

new shares in

initial public

offering of the

Company in

2018 (the

"Share

Offer")

3

FOF III (note 3)

FOF

Commercial real

30,000

10.0%

-

22,272

5.5%

(7,728)

32,624

Internal

estate projects

resources

and distressed

assets projects

4

FOF X (note 4)

FOF

Commercial real

28,000

100.0%

2,050

28,000

6.9%

-

28,842

Proceeds from

estate projects

the Share

Offer

5

FOF VIII (note 5)

FOF

Urbanisation and

20,000

14.4%

499

23,311

5.7%

3,311

23,478

Proceeds from

redevelopment

the Share

projects

Offer

6

Ningbo Meishan

Project Fund

Commercial real

18,120

85.5%

3,628

19,367

4.7%

1,247

36,280

Internal

Bonded Harbor

estate projects

resources

• Yujin Investment
• Management
• Partnership (Limited
• Partnership)*
• (寧波梅山保稅港區
• 裕瑾投資管理合夥
• 企業(有限合夥))

7	Shanghai Weiyu	Project Fund Distressed assets	-	-	-	-	-	-	5,196 Internal
	Investment	projects							resources

• Partnership (Limited
• Partnership)*
• (上海威鈺投資合夥
• 企業(有限合夥))

244,120	6,177	247,676	3,556	279,357

22 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Management Discussion and Analysis

Notes:

1. FOF IV represents Shanghai Weiyi Investment Limited Partnership* (上海威弋投資合夥企業(有限合 夥)), a FOF structured and co-managed by the Group in the form of limited liability partnership in September 2016.
2. FOF IX represents Hangzhou Fuyang Huirong Investment Management Partnership (Limited Partnership)* (杭州富陽匯嶸投資管理合夥企業(有限合夥)), a FOF set up in January 2019 and co- managed by the Group in the form of limited partnership.
3. FOF III represents Realway Development No. 3 Unit Trust Fund* (瑞威發展三號契約型私募基金), a FOF structured by the Group in the form of contract based fund in August 2016.
4. FOF X represents Hangzhou Fuyang Huiqin Investment Management Partnership (Limited Partnership)* (杭州富陽匯欽投資管理合夥企業(有限合夥)), a FOF set up in August 2019 and managed by the Group in the form of limited partnership.
5. FOF VIII represents Realway Development No. 5 Unit Trust Fund* (瑞威發展五號契約型私募基金), a FOF structured by the Group in the form of contract based fund in December 2017.

The Group will continue to jointly operate a diversified investment portfolio and closely monitor investment performance and market trends to adjust investment strategies.

Save as disclosed in this interim report, the Group did not hold any significant investments during the Reporting Period.

Interim Report 2020 23

Management Discussion and Analysis

ARBITRATION

On 10 February 2020, Hangzhou Fuyang Huiguan Investment Management Partnership (Limited Partnership)* (杭州富陽匯冠投資管理合夥企業(有限合夥)) ("Fuyang Huiguan Fund"), for which Shanghai Ruixiang Investment Management Co., Ltd* (上海瑞襄投資管理 有限公司) ("Shanghai Ruixiang"), a wholly-owned subsidiary of the Company, acts as a fund manager, filed an application to Shanghai International Economic and Trade Arbitration Commission (Shanghai International Arbitration Center) for arbitration against Shenzhen City Hai Shi Urban Renew Co. Ltd* (深圳市海石城市更新有限公司) ("Hai Shi Urban Renew") in respect of its default in payment of consideration for the transfer of equity interests in the Shenzhen Xinqiaowei Project* (深圳新喬圍項目), demanding Hai Shi Urban Renew to pay to Fuyang Huiguan Fund the outstanding equity transfer consideration, late payment penalty and related legal costs. The total amount sought in this arbitration tentatively amounted to RMB38,063,000. As at 17 March 2020 and 22 May 2020, Shenzhen Xinqiaowei Project* (深 圳新喬圍項目) received the outstanding equity transfer amount payable of RMB5,000,000 and RMB2,000,000 respectively from Hai Shi Urban Renew.

The investment size of FOF VIII, for which Shanghai Ruixiang, a wholly-owned subsidiary of the Company, acted as a fund manager, in Fuyang Huiguan Fund as at 30 June 2020 was RMB40.5 million, while the investment size of the Company in FOF VIII with its own fund as at 30 June 2020 was RMB20.0 million, accounting for 14.4% of the total assets of FOF VIII as at 30 June 2020.

Given the arbitration has not yet commenced, it is not possible to determine its impact on the current or subsequent profitability of the Company at this stage. Currently the businesses of the Group are in normal operation. Shanghai Ruixiang, the fund manager, has frozen the bank accounts and part of the assets of Hai Shi Urban Renew through judiciary security procedures. The Company will take all appropriate steps to safeguard its rights and interests.

24 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Corporate Governance and Other Information

Interim dividends

In order to retain resources for the business development of the Group, the Board did not recommend the declaration of interim dividend for the six months ended 30 June 2020 (for the six months ended 30 June 2019: Nil).

Corporate Governance Practices

The Company had adopted the Corporate Governance Code and Corporate Governance Report set out in Appendix 14 to the Listing Rules as its Corporate Governance Code. The Company had complied with the applicable code provisions in the Corporate Governance Code during the Reporting Period.

Compliance with the Model Code for Securities Transactions by Directors and Supervisors

The Company has adopted a code for securities transactions by Directors and a code for securities transactions by supervisors of the Company (the "Supervisors") as its own codes of conduct governing Directors' and Supervisors' dealings in the Company's securities (the "Securities Dealing Code") on terms no less exacting than the standards required by the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") as set out in Appendix 10 to the Listing Rules.

Specific enquiry has been made to all the Directors and Supervisors and they confirmed that they had complied with the relevant Securities Dealing Code throughout the Reporting Period.

The Company has also established written guidelines (the "Employees Written Guidelines") for securities transactions by employees who are likely to be in possession of unpublished inside information of the Group, which are no less exacting than those set out in the Model Code. No incident of non-compliance with the Employees Written Guidelines by the employees was noted by the Company during the Reporting Period.

Interim Report 2020 25

Corporate Governance and Other Information

Amendments to the Articles of Association

On 2 March 2020, the Board considered and passed resolutions in respect of the amendments to the Company's articles of association, which included:

1. change of the Company's registered residence;
2. comply with the Official Reply of the State Council on the Adjustment of the Notice Period for the General Meeting and Other Matters Applicable to the Overseas Listed Companies 《( 國務院關於調整適用在境外上市公司召開股東大會通知期限等事項規定 的批覆》); and
3. comply with the Guidelines on Application for "Full Circulation"of Domestic Unlisted Shares of H-share Companies (《H股公司境內未上市股申請「全流通」業務指引》) issued by the CSRC to the effect that subject to obtaining approvals from the regulatory authorities authorised by the CSRC and the Stock Exchange, the domestic unlisted shares of the Company can be converted into overseas listed shares and listed on the Stock Exchange.

The above resolutions were passed as special resolutions at the first extraordinary general meeting of the Company for the year 2020, the first domestic Shareholders' class meeting of the Company for the year 2020 and the first H Shareholders' class meeting of the Company for the year 2020 convened on 15 April 2020. The amended articles of association will become effective after obtaining approvals from the regulatory authorities authorised by the CSRC and the Stock Exchange to convert domestic shares into overseas listed shares and listed on the Stock Exchange. For details, please refer to the announcement and circular of the Company both dated 2 March 2020.

Save as the above mentioned, the Company did not make any other major changes in the Company's articles of association during the Reporting Period.

26 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Corporate Governance and Other Information

INTERESTS AND SHORT POSITIONS OF DIRECTORS, SUPERVISORS AND THE CHIEF EXECUTIVE IN THE SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY AND ITS ASSOCIATED CORPORATIONS

As at 30 June 2020, the interests or short positions of the Directors, Supervisors and the chief executive in the shares of the Company (the "Shares"), underlying Shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) ("SFO")) which will be required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO) or which will be required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which will be required, pursuant to the Model Code for Securities Transactions by Directors of the Listed Issuers as set out in Appendix 10 to the Listing Rules (the "Model Code") to be notified to the Company and the Stock Exchange are as follows:

					Approximate
				Approximate	percentage of
				percentage of	shareholdings
				shareholdings	in the total
				in the relevant	share capital
	Class of		Number of	class of	of the
Director	Shares held	Nature of interest	Shares (1)	Shares (2)	Company (3)
Mr. ZHU Ping	Domestic Shares	Interest in a controlled	115,000,000 (L)	100.0	75.0
(朱平) (4)		corporation
Notes:

1. (L) denotes a long position.
2. The calculation is based on the percentage of shareholdings in the Domestic Shares.
3. The calculation is based on the total number of 153,340,000 Shares in issue after the Share Offer.
4. Shanghai Shengxuan Investments Advisory Company Limited* (上海盛軒投資諮詢有限公司), a company wholly owned by Mr. Zhu Ping, is the general partner of Shanghai Weimian Investments Partnership (Limited Partnership)* (上海威冕投資合夥企業(有限合夥)), Shanghai Weihui Investments Partnership (Limited Partnership)* (上海威滙投資合夥企業(有限合夥)) and Shanghai Weiye Investments Partnership (Limited Partnership)* (上海威燁投資合夥企業(有限合夥)), and Shanghai Zunwei Industrial Development Co. Limited* (上海尊威實業發展有限公司) is indirectly wholly owned by Mr. Zhu Ping. Mr. Zhu Ping is therefore deemed to be interested in all the Domestic Shares held by all of the aforesaid entities.

Interim Report 2020 27

Corporate Governance and Other Information

INTERESTS AND SHORT POSITIONS OF THE SUBSTANTIAL SHAREHOLDERS AND OTHER PERSONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY

As at 30 June 2020, so far as the Directors, Supervisors and the chief executive of the Company are aware of, as indicated on the register of interests and/or short positions required to be maintained pursuant to Section 336 of the SFO, the substantial Shareholders and other persons (other than Directors, Supervisors and the chief executive of the Company) had the following interests and/or short positions in the Shares or underlying Shares of the Company:

						Approximate
					Approximate	percentage of
					percentage of	shareholdings
					shareholdings	in the total
					in the relevant	share capital
		Class of		Number of	class of	of the
Name of Shareholder	Shares held	Nature of interest	Shares (1)	Shares (2)	Company (3)
Mr. ZHU Ping (朱平)	Domestic Shares	Interest in a controlled	115,000,000 (L)	100.0	75.0
			corporation
Shanghai Shengxuan	Domestic Shares	Interest in a controlled	115,000,000 (L)	100.0	75.0
	Investments Advisory		corporation
	Company Limited
	(上海盛軒投資諮詢
	有限公司)
Shanghai Weimian	Domestic Shares	Beneficial owner	79,012,675 (L)	68.7	51.5

• Investments Partnership
• (Limited Partnership)
• (上海威冕投資合夥企業
• (有限合夥))

Shanghai Weiye

Domestic Shares Beneficial owner

15,000,000 (L)

13.0

9.8

• Investments Partnership
• (Limited Partnership)
• (上海威燁投資合夥企業
• (有限合夥))

Shanghai Weihui	Domestic Shares	Beneficial owner	13,875,000	(L)	12.1	9.0
	Investments Partnership
	(Limited Partnership)
	(上海威滙投資合夥企業
	(有限合夥))
Shanghai Zunwei Industrial	Domestic Shares	Beneficial owner	7,112,325	(L)	6.2	4.6

• Development Co. Limited
• (上海尊威實業發展
• 有限公司)

28 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Corporate Governance and Other Information

					Approximate
				Approximate	percentage of
				percentage of	shareholdings
				shareholdings	in the total
				in the relevant	share capital
	Class of		Number of	class of	of the
Name of Shareholder	Shares held	Nature of interest	Shares (1)	Shares (2)	Company (3)
Gao Yue	H Shares	Beneficial owner	3,985,600 (L)	10.4	2.6
Wang Youlin	H Shares	Beneficial owner	3,375,200 (L)	8.8	2.2
Great Rainbow Investment	H Shares	Beneficial owner	3,280,000 (L)	8.6	2.1

• Fund Series SPC
• (acting for and on
• behalf of Great Rainbow
• Series 1 SP)

Wu Jie(4)	H Shares	Interest in a controlled	3,280,000 (L)	8.6	2.1
				corporation
Yao Peifang(5)	H Shares	Interest in a controlled	3,280,000 (L)	8.6	2.1
				corporation
Wang Qiong	H Shares	Beneficial owner	2,392,800 (L)	6.2	1.6
Dai Yanmin	H Shares	Beneficial owner	2,360,800 (L)	6.2	1.5
Yin Bo	H Shares	Beneficial owner	2,010,000 (L)	5.2	1.3
Everbright Focused	H Shares	Beneficial owner	2,000,000 (L)	5.2	1.3
	Value Fund
China Everbright Fund	H Shares	Interest in a controlled	2,000,000 (L)	5.2	1.3
	Management Limited(6)			corporation
China Everbright Assets	H Shares	Interest in a controlled	2,000,000 (L)	5.2	1.3
	Management Holdings			corporation
	Limited(7)
China Everbright Limited(8)	H Shares	Interest in a controlled	2,000,000 (L)	5.2	1.3
				corporation
Honorich Holdings Limited(9)	H Shares	Interest in a controlled	2,000,000 (L)	5.2	1.3
				corporation
Datten Investments	H Shares	Interest in a controlled	2,000,000 (L)	5.2	1.3
	Limited(10)			corporation
China Everbright Holdings	H Shares	Interest in a controlled	2,000,000 (L)	5.2	1.3
	Company Limited(11)			corporation
China Everbright	H Shares	Interest in a controlled	2,000,000 (L)	5.2	1.3
	Group Ltd. (12)			corporation
Central Huijin Investment	H Shares	Interest in a controlled	2,000,000 (L)	5.2	1.3
	Ltd. (13)			corporation
Everbright Absolute	H Shares	Interest in a controlled	2,000,000 (L)	5.2	1.3
	Return Investment			corporation
	Holding Limited(14)
						Interim Report 2020	29

Corporate Governance and Other Information

Notes:

1. (L) denotes a long position.
2. The calculation is based on the percentage of shareholdings in the relevant class of Shares.
3. The calculation is based on the total number of 153,340,000 Shares in issue as at 30 June 2020.
4. Wu Jie is the management shareholder and director of Great Rainbow Investment Fund Series SPC and the investment manager of Great Rainbow Series 1 SP. By virtue of the SFO, Wu Jie is deemed to be interested in all the H Shares which Great Rainbow Investment Fund Series SPC (acting for and on behalf of Great Rainbow Series 1 SP) is interested in.
5. Yao Peifang is the management shareholder and director of Great Rainbow Investment Fund Series SPC. By virtue of the SFO, Yao Peifang is deemed to be interested in all the H Shares which Great Rainbow Investment Fund Series SPC (acting for and on behalf of Great Rainbow Series 1 SP) is interested in.
6. China Everbright Fund Management Limited is the general partner of Everbright Focused Value Fund. By virtue of the SFO, China Everbright Fund Management Limited is deemed to be interested in all the H Shares which Everbright Focused Value Fund is interested in.
7. China Everbright Fund Management Limited is a limited liability company incorporated in the Cayman Islands and is wholly-owned by China Everbright Assets Management Holdings Limited. By virtue of the SFO, China Everbright Assets Management Holdings Limited is deemed to be interested in all the H Shares which China Everbright Fund Management Limited is interested in.
8. China Everbright Assets Management Holdings Limited is a limited liability company incorporated in the Cayman Islands and is wholly-owned by China Everbright Limited. By virtue of the SFO, China Everbright Limited is deemed to be interested in all the H Shares which China Everbright Assets Management Holdings Limited is interested in.
9. China Everbright Limited is a limited liability company incorporated in Hong Kong and is owned as to 49.39% by Honorich Holdings Limited. By virtue of the SFO, Honorich Holdings Limited is deemed to be interested in all the H Shares which China Everbright Limited is interested in.
10. Honorich Holdings Limited is a limited liability company incorporated in the British Virgin Islands and is wholly-owned by Datten Investments Limited. By virtue of the SFO, Datten Investments Limited is deemed to be interested in all the H Shares which Honorich Holdings Limited is interested in.

30 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Corporate Governance and Other Information

1. Datten Investments Limited is a limited liability company incorporated in the British Virgin Islands and is wholly-owned by China Everbright Holdings Company Limited. By virtue of the SFO, China Everbright Holdings Company Limited is deemed to be interested in all the H Shares which Datten Investments Limited is interested in.
2. China Everbright Holdings Company Limited is a limited liability company incorporated in Hong Kong and is wholly-owned by China Everbright Group Ltd. By virtue of the SFO, China Everbright Group Ltd. is deemed to be interested in all the H Shares which China Everbright Holdings Company Limited is interested in.
3. China Everbright Group Ltd. is a limited company established in the PRC and is owned as to 55.67% by Central Huijin Investment Ltd. By virtue of the SFO, Central Huijin Investment Ltd. is deemed to be interested in all the H Shares which China Everbright Group Ltd. is interested in.
4. Everbright Focused Value Fund is under the control of Everbright Absolute Return Investment Holding Limited. By virtue of the SFO, Everbright Absolute Return Investment Holding Limited is deemed to be interested in all the H Shares which Everbright Focused Value Fund is interested in.

Share Option Scheme

As at 30 June 2020, the Company has not implemented any share option scheme.

Purchase, sale or redemption of listed securities of the Company

There had been no purchase, sale or redemption by the Company or any of its subsidiaries of any listed securities of the Company during the Reporting Period.

Competing Interests

The Directors are not aware of any business or interest of the Directors or the controlling Shareholder or any of their respective close associates (as defined in the Listing Rules) that compete or may compete with the business of the Group, or any other conflicts of interest which any such person has or may have with the Group during the Reporting Period.

Interim Report 2020 31

Corporate Governance and Other Information

Audit committee

The Board has established an audit committee which comprises three independent non- executive Directors. The audit committee has reviewed with the management, the accounting principles and practices adopted by the Group and discussed the audit, internal controls and financial reporting matters including a review of the unaudited interim results of the Group for the Reporting Period.

Audit or review of the financial results

The financial results for the Reporting Period have not been audited or reviewed by external auditor of the Company.

Publication of interim results and interim report

The interim results announcement is available on the website of the Stock Exchange (www.hkexnews.hk) and the website of the Company (www.realwaycapital.com). The interim report will be despatched to the Shareholders and posted on the websites of the Stock Exchange and the Company on or around 18 September 2020.

32 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Unaudited Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the six months ended 30 June 2020

			Six months ended 30 June
			2020	2019
		Notes	RMB'000	RMB'000
			(Unaudited)	(Unaudited)
REVENUE	5	50,068	56,419
Other income and gains	5	7,524	6,405
Administrative expenses		(27,509)	(39,233)
Impairment losses on trade receivables	9	(8,046)	-
(Decrease)/Increase in fair value of
investments in associates or a joint
venture at fair value through
	profit or loss	10	(6,381)	13,130
Other expenses		(9)	(1,213)
Finance costs		(55)	(194)
Share of losses of:
	Joint ventures		(552)	(1,176)
	Associates		(2,484)	-
PROFIT BEFORE TAX		12,556	34,138
Income tax expense	6	(4,779)	(8,828)
PROFIT FOR THE PERIOD		7,777	25,310
Attributable to:
Owners of the parent		9,216	27,861
	Non-controlling interests		(1,439)	(2,551)
			7,777	25,310

Interim Report 2020 33

Unaudited Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the six months ended 30 June 2020

			Six months ended 30 June
			2020	2019
		Notes	RMB'000	RMB'000
			(Unaudited)	(Unaudited)
EARNINGS PER SHARE ATTRIBUTABLE
	TO ORDINARY EQUITY HOLDERS
	OF THE PARENT
Basic and diluted
- For profit for the period (RMB cents)	7	6.01	18.17
PROFIT FOR THE PERIOD		7,777	25,310
OTHER COMPREHENSIVE INCOME

Other comprehensive income that may

• be reclassified to profit or loss in
• subsequent periods (net of tax): Exchange differences on translation of

	foreign operations	262	127
OTHER COMPREHENSIVE INCOME
FOR THE PERIOD, NET OF TAX	262	127
TOTAL COMPREHENSIVE INCOME
	FOR THE PERIOD	8,039	25,437
Attributable to:
Owners of the parent	9,478	27,988
	Non-controlling interests	(1,439)	(2,551)
		8,039	25,437

34 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Unaudited Interim Condensed Consolidated Statement of Financial Position

As at 30 June 2020

		As at	As at
		30 June	31 December
		2020	2019
	Notes	RMB'000	RMB'000
		(Unaudited)	(Audited)
NON-CURRENT ASSETS
Property, plant and equipment		1,410	2,395
Right-of-use assets		1,667	3,342
Other intangible assets		739	766
Investments in joint ventures		15,786	16,339
Investment in associates		7,802	8,287
Investments in associates or a joint
venture at fair value through
profit or loss ("IAFV")	10	228,309	274,161
Deferred tax assets		8,797	4,518
Total non-current assets		264,510	309,808
CURRENT ASSETS
Trade receivables	9	113,518	76,393
Prepayments, deposits and other
receivables		19,868	11,213
Loan receivables		7,960	9,819
Investments in associates or a joint
venture at fair value through
profit or loss ("IAFV")	10	19,367	5,196
Dividend receivable		101	101
Cash and cash equivalents	11	16,683	22,296
Total current assets		177,497	125,018

Interim Report 2020 35

Unaudited Interim Condensed Consolidated Statement of Financial Position

As at 30 June 2020

		As at	As at
		30 June	31 December
		2020	2019
	Notes	RMB'000	RMB'000
		(Unaudited)	(Audited)
CURRENT LIABILITIES
Other payables and accruals	12	13,502	14,097
Advances from funds managed		8,740	3,791
Lease liabilities		1,728	2,057
Tax payable		10,249	13,729
Total current liabilities		34,219	33,674
NET CURRENT ASSETS		143,278	91,344
TOTAL ASSETS LESS CURRENT
LIABILITIES		407,788	401,152
NON-CURRENT LIABILITIES
Lease liabilities		-	1,195
Total non-current liabilities		-	1,195
NET ASSETS		407,788	399,957
EQUITY
Equity attributable to owners
of the parent
Share capital		153,340	153,340
Reserves		254,695	245,425
		408,035	398,765
Non-controlling interests		(247)	1,192
TOTAL EQUITY		407,788	399,957

36 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Unaudited Interim Condensed Consolidated Statement of Changes in Equity

For the six months ended 30 June 2020

			Attributable to owners of the parent
				Share-
				based	Statutory	Exchange			Non-
		Share	Share	payment	surplus	fluctuation	Retained		controlling	Total
		capital	premium*	reserve*	serves*	reserve*	profits*	Total	interests	equity
		(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
As at 31 December 2018 and
1 January 2019	153,340	158,200	4,800	18,094	-	64,672	399,106	2,394	401,500
Profit for the period	-	-	-	-	-	27,861	27,861	(2,551)	25,310
Other comprehensive income	-	-	-	-	127	-	127	-	127
Total comprehensive income
for the period	-	-	-	-	127	27,861	27,988	(2,551)	25,437
Contribution from non-controlling
shareholder	-	-	-	-	-	-	-	600	600
Dividends (note 8)	-	-	-	-	-	(10,000)	(10,000)	-	(10,000)
As at 30 June 2019	153,340	158,200	4,800	18,094	127	82,533	417,094	443	417,537
As at 31 December 2019 and
1 January 2020	153,340	158,200	4,800	20,994	208	61,223	398,765	1,192	399,957
Profit for the period	-	-	-	-	-	9,216	9,216	(1,439)	7,777
Other comprehensive income	-	-	-	-	54	-	54	-	54
Total comprehensive income
for the period	-	-	-	-	54	9,216	9,270	(1,439)	7,831
As at 30 June 2020	153,340	158,200	4,800	20,994	262	70,439	408,035	(247)	407,788

• As at 30 June 2020, these reserve accounts comprised the total consolidated reserves of RMB254,695,000 (31 December 2019: RMB245,425,000) in the interim condensed consolidated statement of financial position.

Interim Report 2020 37

Unaudited Interim Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2020

			2020	2019
		Notes	RMB'000	RMB'000
			(Unaudited)	(Unaudited)
CASH FLOWS FROM OPERATING
	ACTIVITIES
Profit before tax:		12,556	34,138
Adjustments for:
	Finance costs		55	-
	Interest income	5	(23)	(94)
	Provision for bad debts	9	8,037	(98)

• Depreciation of property,
• plant and equipment and

	right-of-use assets		3,199	3,672
Amortisation of other intangible assets		47	39
Loss on disposal of property,
	plant and equipment		10	5
Share of losses of joint ventures
	and associates		3,036	1,176
	Dividend income from IAFV	5	(6,309)	(2,476)
	Exchange loss		-	1,311
Increase/(decrease) in fair value of
	IAFV	10	6,381	(13,130)
(Increase)/decrease in trade receivables		(45,171)	16,957
	Increase in prepayments,
	deposits and other receivables		(8,655)	(7,865)
	Increase/(decrease) in advances
	from funds managed		4,949	(3,332)
	Decrease in other
	payables and accruals		(6,163)	(15,846)
Cash generated from operations		(28,051)	14,457
Interest received		23	94
Taxes paid		(12,536)	(12,054)
Net cash flows from/(used in)
	operating activities		(40,564)	2,497

38 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Unaudited Interim Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2020

			2020	2019
		Notes	RMB'000	RMB'000
			(Unaudited)	(Unaudited)
CASH FLOWS FROM INVESTING
	ACTIVITIES
Increase/(decrease) in investments
	in IAFV	10	25,300	(93,000)
Dividend income from IAFV		6,177	2,766
Purchases of items of property,
	plant and equipment		(26)	(67)
Purchases of other intangible assets		(19)	-
Cash payments for establishment and
acquisition of interests a joint venture		(2,000)	(14,300)
Disposal of items of property,
	plant and equipment		9	-
Repayment of advances to a third party		2,000	20,000
Net cash flows from/(used in) investing
	activities		31,441	(84,601)
CASH FLOWS FROM FINANCING
	ACTIVITIES
Capital contribution from
	non-controlling shareholders		-	600
Advance from related parties		5,406	(741)
Payment of lease liabilities		(1,950)	(2,574)
Dividends paid	8	-	(10,000)
Net cash flows from/(used in) financing
	activities		3,456	(12,715)
NET DECREASE IN CASH AND
	CASH EQUIVALENTS		(5,667)	(94,819)
Cash and cash equivalents
at beginning of period		22,296	167,177
Effect of foreign exchange rate
	changes, net		54	(1,184)
CASH AND CASH EQUIVALENTS
	AT END OF PERIOD		16,683	71,174

ANALYSIS OF BALANCES OF

• CASH AND CASH EQUIVALENTS Cash and cash equivalents as stated in
• the consolidated statement of
• financial position and statement of

cash flows	16,683	71,174

Interim Report 2020 39

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

1. CORPORATE AND GROUP INFORMATION

The interim condensed consolidated financial statements of the Group for the six months ended 30 June 2020 were authorised for issue in accordance with a resolution of the Directors on 21 August 2020.

The Company is a limited liability company established in the PRC and its registered office is located at Room 26G-3, No. 828-838 (even number) Zhang Yang Road, Pilot Free Trade Zone, Shanghai, China.

During the Reporting Period, the Group was involved in the following principal activities:

• funds management
• investment management in relation to the establishment and structuring of the relevant funds and the sourcing of investors ("investment management")

In the opinion of the Directors, the holding company and the ultimate holding company of the Company is Shanghai Weimian Investments Partnership (Limited Partnership), which is established in the PRC.

2. BASIS OF PREPARATION

The interim condensed consolidated financial statements for the six months ended 30 June 2020 have been prepared in accordance with IAS 34 Interim Financial Reporting.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual consolidated financial statements as at 31 December 2019.

40 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

3. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2019, except for the adoption of new standards effective as of 1 January 2020. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

Several amendments and interpretations apply for the first time in 2020, but do not have an impact on the interim condensed consolidated financial statements of the Group.

Amendments to IFRS 3: Definition of a Business

The amendment to IFRS 3 clarifies that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. Furthermore, it clarified that a business can exist without including all of the inputs and processes needed to create outputs. These amendments had no impact on the consolidated financial statements of the Group, but may impact future periods should the Group enter into any business combinations.

Amendments to IFRS 7, IFRS 9 and IAS 39: Interest Rate Benchmark Reform

The amendments to IFRS 9 and IAS 39 Financial Instruments: Recognition and Measurement provide a number of reliefs, which apply to all hedging relationships that are directly affected by interest rate benchmark reform. A hedging relationship is affected if the reform gives rise to uncertainties about the timing and/or amount of benchmark-basedcash flows of the hedged item or the hedging instrument. These amendments had no impact on the consolidated financial statements of the Group as it does not have any interest rate hedge relationships.

Interim Report 2020 41

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

3. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

(Continued)

Amendments to IAS 1 and IAS 8: Definition of Material

The amendments provide a new definition of material that states "information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity".

The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. These amendments had no impact on the consolidated financial statements of, nor is there expected to be any future impact to the Group.

Conceptual Framework for Financial Reporting issued on 29 March 2018

The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the IASB in developing standards, to help preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to understand and interpret the standards.

The revised Conceptual Framework includes some new concepts, provides updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts.

These amendments had no impact on the consolidated financial statements of the Group.

42 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

4. OPERATING SEGMENT INFORMATION

The management monitors the operating results of the Group's business, which include management fee and consulting income, by project for the purpose of making decisions about resource allocation and performance assessment. As all projects have similar economic characteristics and the nature of management services and consulting services, the nature of the aforementioned business processes, the type or class of fund for the aforementioned business and the methods used to distribute the properties or to provide the services are similar for all projects, thus all projects have been aggregated as one reportable operating segment.

Geographical information

No geographical information is presented as the Group's revenue from the external funds is derived solely from its operation in Mainland China and no non-current assets of the Group are located outside Mainland China.

Information about major customer

Revenue from major customer contributing to 10% or more of the Group's revenue for the six months ended 30 June 2020 is set out below:

For the six months ended

30 June

20202019

RMB'000 RMB'000

(Unaudited) (Unaudited)

Customer A	11,995	11,929

Interim Report 2020 43

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

5. REVENUE, OTHER INCOME AND GAINS

An analysis of revenue is as follows:

For the six months ended

30 June

	2020	2019
	RMB'000	RMB'000
	(Unaudited)	(Unaudited)
Revenue from contracts with customers
Rendering of services	50,068	56,419

Revenue from contracts with customers

Disaggregated revenue information
	For the six months ended
	30	June
	2020		2019
	RMB'000		RMB'000
	(Unaudited)		(Unaudited)
Type of services
Rendering of funds management services	47,338		52,884
Rendering of fund establishment services	2,497		3,535
Rendering of consulting services	233		-
	50,068		56,419
Timing of revenue recognition
Services transferred over time	50,068		56,419

44 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

5. REVENUE, OTHER INCOME AND GAINS (Continued)

Revenue from contracts with customers (Continued)

An analysis of other income and gains is as follows:

	For the six months ended
	30	June
	2020		2019
	RMB'000		RMB'000
	(Unaudited)		(Unaudited)
Other income
Dividend income from IAFV	6,309		2,476
Interest income	23		94
	6,332		2,570
Gains
Government grants	1,184		3,835
Gain on disposal of items of property,
plant and equipment	8		-
	1,192		3,835
	7,524		6,405

Interim Report 2020 45

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

6. INCOME TAX

The Group is subject to income tax on an entity basis on profits arising in or derived from the tax jurisdictions in which members of the Group are domiciled and operate. Subsidiaries of the Group operating in Mainland China were subject to PRC corporate income tax rate at a rate of 25% for the period.

For the six months ended

30 June

	2020	2019
	RMB'000	RMB'000
	(Unaudited)	(Unaudited)
Current - Mainland China
charge for the period	9,057	6,121
Deferred tax	(4,278)	2,707
Total tax charge for the period	4,779	8,828

46 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

7. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT

The calculation of the basic earnings per share amounts is based on the profit for the period attributable to ordinary equity holders of the parent, and the weighted average number of ordinary shares as adjusted to reflect the rights issue during the interim year.

The Group had no potentially dilutive ordinary shares in issue during the period ended 30 June 2019 and 30 June 2020.

The calculations of basic and diluted earnings per share are based on:

	For the six months ended
	30	June
	2020			2019
	RMB'000			RMB'000
	(Unaudited)			(Unaudited)
Earnings
Profit attributable to ordinary equity
holders of the parent, used in the basic
earnings per share calculation	9,216			27,861
	Number of shares
Shares
Weighted average number of ordinary
shares in issue during the interim year
used in the basic earnings
per share calculation	153,340,000			153,340,000

Interim Report 2020 47

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

8. DIVIDENDS

The final dividends of RMB0.0652 per share, totaling RMB10,000,000 for the year of 2018 had been approved by the Company's shareholders at the annual general meeting on 24 May 2019 and had been fully settled by the Company in 2019.

No dividends have been proposed by the Directors for the Reporting Period.

9. TRADE RECEIVABLES

	30 June	31 December
	2020	2019
	RMB'000	RMB'000
	(Unaudited)	(Audited)
Trade receivables	141,332	96,161
Impairment	(27,814)	(19,768)
	113,518	76,393

The Group's contractual terms with its funds are mainly on credit. Trade receivables are settled based on the progress payment schedule stipulated in the contracts. The Group seeks to maintain strict control over its outstanding receivables and has a credit control team to minimise credit risk. Overdue balances are reviewed regularly by senior management. In view of the aforementioned, except for the individual provision made during the Reporting Period, there is no significant concentration of credit risk. The Group does not hold any collateral or other credit enhancements over its trade receivable balances. Trade receivables are non-interest-bearing.

As at 30 June 2020, included in the Group's trade receivables are amounts due from a joint venture and associates of RMB996,000 (2019: RMB1,998,000) and RMB18,901,000 (2019: RMB15,013,000), respectively, which are repayable on credit terms similar to those offered to the major customers of the Group.

48 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

9. TRADE RECEIVABLES (Continued)

An aging analysis of the trade receivables as at the end of the Reporting Period, based on the invoice date and net of loss allowance, is as follows:

	30 June	31 December
	2020	2019
	RMB'000	RMB'000
	(Unaudited)	(Audited)
Within 1 year	79,785	64,604
1 to 2 years	27,707	11,786
2 to 3 years	6,026	3
Total	113,518	76,393

The movements in the loss allowance for impairment of trade receivables for the six months ended 30 June 2020 are as follows:

	Individually	Collectively
	impaired	impaired	Total
	RMB'000	RMB'000	RMB'000
At beginning of the
Reporting Period	19,330	438	19,768
Impairment losses	7,356	690	8,046
At end of the Reporting Period	26,686	1,128	27,814

Interim Report 2020 49

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

10. INVESTMENTS IN ASSOCIATES OR A JOINT VENTURE AT FAIR VALUE THROUGH PROFIT OR LOSS ("IAFV")

	30 June	31 December
	2020	2019
	RMB'000	RMB'000
	(Unaudited)	(Audited)
Unlisted investments in associates or
a joint venture, at fair value	247,676	279,357

The Group, as an investment fund manager, measured the above investments in associates or a joint venture at fair value through profit or loss in accordance with IFRS 9 at 30 June 2020.

The movements in investments in associates or a joint venture at fair value through profit or loss for the six months ended 30 June 2020 are as follows:

		Increase/
		(decrease)
		in fair value
	Cost	of IAFV	Total
	RMB'000	RMB'000	RMB'000
At 1 January 2019	145,920	20,302	166,222
Movements	133,500	(10,365)	123,135
Exit and/or realisation	(10,000)	-	(10,000)
At 31 December 2019	269,420	9,937	279,357
Comprising:
Current portion	5,000	196	5,196
Non-current portion	264,420	9,741	274,161
At 1 January 2020	269,420	9,937	279,357
Movements	(20,300)	(6,381)	(26,681)
Exit and/or realisation	(5,000)	-	(5,000)
At 30 June 2020	244,120	3,556	247,676
Comprising:
Current portion	18,120	1,247	19,367
Non-current portion	226,000	2,309	228,309

50 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

11. CASH AND CASH EQUIVALENTS

	30 June	31 December
	2020	2019
	RMB'000	RMB'000
	(Unaudited)	(Audited)
Cash and bank balances	16,683	22,296

As at 30 June 2020, the cash and bank balances of the Group denominated in HKD amounted to RMB2,552,000 (31 December 2019: RMB3,162,000). The RMB is not freely convertible into other currencies, however, under Mainland China's Foreign Exchange Control Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations, the Group is permitted to exchange RMB for other currencies through banks authorised to conduct foreign exchange business.

Cash at banks earns interest at floating rates based on daily bank deposit rates.

12. OTHER PAYABLES AND ACCRUALS

	30 June	31 December
	2020	2019
	RMB'000	RMB'000
	(Unaudited)	(Audited)
Payroll and welfare payable	2,291	5,985
Taxes and surcharges	2,682	2,930
Accruals	477	1,684
Due to related parties (note 13)	7,984	2,577
Others	68	921
	13,502	14,097

Other payables are unsecured, non-interest-bearing and repayable on demand. The fair values of other payables at 30 June 2020 approximated to their corresponding carrying amounts.

Interim Report 2020 51

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

13. RELATED PARTY TRANSACTIONS

1. Significant related party transactions

The Group had the following transactions with related parties during the period:

	For the six months ended
	30	June
	2020		2019
	RMB'000		RMB'000
	(Unaudited)		(Unaudited)
Receiving service:
Joint ventures	-		114
Rendering funds management
service:
Associates	4,130		4,097
Joint ventures	941		936

1. Outstanding balances with related parties:

	30 June	31 December
	2020	2019
	RMB'000	RMB'000
	(Unaudited)	(Audited)
Trade receivables
Associates	18,901	15,013
Joint ventures	996	1,998
Prepayments, deposits and
other receivables
Associates	7,954	-
Joint ventures	817	1,002
Companies owned by a family member
of the controlling Shareholder	-	163
Other payables
Associates	5,281	-
Joint ventures	2,695	2,548
Companies owned by a family member
of the controlling Shareholder	8	29

52 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

14. INTERESTS IN STRUCTURED ENTITIES

1. Interests in consolidated structured entities

For those structured entities where the Group is involved as a manager, investment adviser or general partner, the Group assesses whether the combination of investments it held together with its remuneration creates exposure to variability of returns from the activities of those structured entities that is of such significance that indicates that the Group is a principal, the Group will consolidate certain structured entities.

No structured entity has been consolidated by the Group in the Reporting Period.

1. Interests in unconsolidated structured entities

The Group exercised power over the structured entities, mainly limited partnerships, by acting as manager or general partner during the period. In management's opinion, the variable returns that the Group is exposed to from these structured entities in which the Group has interests are not significant. The Group therefore did not consolidate these structured entities.

The Group classified the investments in unconsolidated limited partnerships or contract based funds managed by the Group as investments in associates or a joint venture at fair value through profit or loss. As at 30 June 2020 and 31 December 2019, the carrying amounts of the Group's investments in unconsolidated structured entities were RMB248 million and RMB279 million, respectively. The management fee arising from these unconsolidated structured entities amounted to RMB5 million and RMB10 million for the period ended 30 June 2020 and the year ended 31 December 2019, respectively.

Besides, the Group also acts as fund managers for some limited partnerships without any investment. The management fee arising from these unconsolidated limited partnerships amounted to RMB42 million and RMB102 million for the period ended 30 June 2020 and the year ended 31 December 2019, respectively.

Interim Report 2020 53

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

14. INTERESTS IN STRUCTURED ENTITIES (Continued)

1. Interests in unconsolidated structured entities (Continued)

The carrying amounts of interests in unconsolidated structured entities in the consolidated statement of financial position are approximately equal to the maximum exposure to the loss of interests held by the Group in the unconsolidated structured entities.

As at 30 June 2020, the Group managed funds with a total AUM of approximately RMB5,231 million (31 December 2019: RMB4,894 million).

15. FINANCIAL INSTRUMENTS BY CATEGORY

The carrying amounts of each of the categories of financial instruments as at the end of the Reporting Period are as follows:

Financial assets

	30 June	31 December
	2020	2019
	RMB'000	RMB'000
	(Unaudited)	(Audited)
Measured at amortised cost:
Trade receivables (note 9)	113,518	76,393
Financial assets included in prepayments,
deposits and other receivables	15,480	7,373
Loan receivables	7,960	9,819
Dividend receivable	101	101
Cash and cash equivalents (note 11)	16,683	22,296
	153,742	115,982

54 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

15. FINANCIAL INSTRUMENTS BY CATEGORY (Continued)

Financial liabilities

	30 June	31 December
	2020	2019
	RMB'000	RMB'000
	(Unaudited)	(Audited)
Other financial liabilities:
Financial liabilities included in other
payables and accruals (note 12)	7,984	3,498

Management has assessed that the fair values of cash and cash equivalents, trade receivables, financial assets included in prepayments, deposits and other receivables, financial liabilities included in other payables and accruals approximate to their carrying amounts largely due to the short term maturities of these instruments.

The Group's finance department headed by the chief financial officer is responsible for determining the policies and procedures for the fair value measurement of financial instruments. The finance manager reports directly to the chief financial officer and the audit committee. At each reporting date, the finance department analyses the movements in the values of financial instruments and determines the major inputs applied in the valuation. The valuation is reviewed and approved by the chief financial officer.

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Interim Report 2020 55

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

16. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS

Below is a summary of significant unobservable inputs to the valuation of financial instruments together with a quantitative sensitivity analysis as at 30 June 2020:

		Valuation	Significant	Relationship of
	Fair value	technique(s)	unobservable	unobservable inputs
Financial assets	hierarchy	and key input(s)	input(s)	and fair value
Investments in associates	Level 3	Calculated based on the	Net assets value of	The higher the net assets
or a joint venture at fair		net asset value of		underlying		value of underlying
value through profit or			underlying		investments		investments, the higher
loss:			investments				the fair value
- *Other real estate projects	Level 3	Discounted cash flow	Risk adjusted discount	The lower the risk adjusted
			model		rate amounts	discount rate, the higher
							the fair value

• These provide information about how underlying assets invested by the funds are measured at fair value.

The Group's investments in associates or a joint venture at fair value through profit or loss which were classified as financial assets at FVTPL under level 3 hierarchy amounted to RMB247,676,000 as at 30 June 2020 (31 December 2019: RMB279,357,000). The significant unobservable input is the net assets value of the underlying investments. A 5% increase/decrease in the net asset value of the underlying investments, holding all other variables constant, would increase/decrease the carrying amounts of these investments by RMB12,384,000 as at 30 June 2020 (31 December 2019: RMB13,968,000).

56 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

16. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS (Continued)

Fair value hierarchy

The following tables illustrate the fair value measurement hierarchy of the Group's financial instruments:

Assets measured at fair value:

As at 30 June 2020
	Fair value measurement using
	Quoted
	prices	Significant	Significant
	in active	observable	unobservable
	markets	inputs	inputs
	(Level 1)	(Level 2)	(Level 3)	Total
	RMB'000	RMB'000	RMB'000	RMB'000
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Investments in associates or
joint ventures at fair value
through profit or loss	-	-	247,676	247,676

Interim Report 2020 57

Notes to the Interim Condensed Consolidated Financial Statements

As at 30 June 2020

16. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS (Continued)

Fair value hierarchy (Continued)

As at 31 December 2019
	Fair value measurement using
	Quoted
	prices	Significant	Significant
	in active	observable	unobservable
	markets	inputs	inputs
	(Level 1)	(Level 2)	(Level 3)	Total
	RMB'000	RMB'000	RMB'000	RMB'000
	(audited)	(audited)	(audited)	(audited)
Investments in associates or
joint ventures at fair value
through profit or loss	-	-	279,357	279,357

During the Reporting Period, there were no transfers of fair value measurements between Level 1 and Level 2 and no transfers into or out of Level 3 for both financial assets and financial liabilities.

Refer to note 10 for the movements in fair value measurements within Level 3 during the six months ended 2020 and year ended 31 December 2019.

17. EVENTS AFTER THE REPORTING PERIOD

Pursuant to the resolution of the shareholders' meeting on 1 July 2020, Chongqing Realway Equity Investment Fund Management Co., Ltd. was liquidated as at 1 July 2020. However, the administrative process for the liquidation was still in progress.

Realway Capital Business Consultancy (Wuhan) Co., Ltd. has been deregistered as at 21 July 2020.

58 SHANGHAI REALWAY CAPITAL ASSETS MANAGEMENT CO., LTD.