Financial Performance - For the fiscal year ending June 30, 2024, the company reported a total revenue of HKD 31,562,000, a decrease from HKD 100,847,000 in the previous year, representing a decline of approximately 68.8%[2] - The gross profit for the fiscal year was HKD 11,147,000, compared to a gross loss of HKD 5,100,000 in the previous year, indicating a significant turnaround[2] - The company incurred an operating loss of HKD 77,731,000, slightly higher than the operating loss of HKD 72,607,000 in the previous year, reflecting ongoing challenges[2] - The net loss attributable to the company’s owners from continuing operations was HKD 162,501,000, compared to a loss of HKD 147,167,000 in the previous year, marking an increase in losses[3] - The group reported a loss of approximately HKD 170,219,000 for the year ending June 30, 2024[10] - The company reported a total loss of HKD 170,219,000 for the year ended June 30, 2024, compared to a loss of HKD 195,242,000 in 2023[22] - The company’s basic loss per share from continuing operations was HKD (22.57), compared to HKD (47.06) in the previous year, showing a reduction in loss per share[3] - Basic loss per share for continuing operations was approximately HKD 0.226, compared to HKD 0.187 in the previous year, indicating a 20.9% increase in loss per share[32] Assets and Liabilities - Total assets decreased to HKD 478,100,000 from HKD 666,629,000, a reduction of approximately 28.3% year-over-year[5] - The company’s total liabilities decreased to HKD 1,487,244,000 from HKD 1,614,348,000, a decline of about 7.9%[6] - The company’s equity attributable to owners decreased to HKD (1,008,984,000) from HKD (955,357,000), reflecting a worsening financial position[5] - As of June 30, 2024, the group's current liabilities and total liabilities were approximately HKD 1,004,115,000 and HKD 1,009,144,000, respectively, indicating significant uncertainty regarding the group's ability to continue as a going concern[10] - The current ratio and quick ratio remained at approximately 0.1, indicating liquidity challenges, while the debt-to-equity ratio was approximately 147%, reflecting a high level of debt[58] Cash Flow and Liquidity - The company reported cash and cash equivalents of HKD 30,705,000, a significant increase from HKD 2,898,000 in the previous year, indicating improved liquidity[5] - The company has received financial support letters from major shareholders, allowing for loan financing of up to approximately HKD 5 million and HKD 4 million, respectively, starting from June 30, 2024[12] - The group plans to consider equity fundraising activities to meet financial obligations and will implement cost-cutting measures to reduce administrative expenses and cash outflows over the next twelve months[12] - The board believes that the measures taken will provide sufficient working capital for the group's operations and financial obligations for the next twelve months[11] Revenue Breakdown - Revenue from calcium carbonate sales was zero in 2024, compared to HKD 84,224,000 in 2023, while agricultural chemicals sales increased to HKD 19,181,000 from HKD 2,808,000[19] - The total external customer revenue for the year ended June 30, 2024, was HKD 31,562,000, a significant decrease from HKD 104,613,000 in 2023[22] - The calcium carbide segment recorded external customer revenue of approximately HKD 12 million, down about 88% from HKD 98 million in the previous fiscal year, due to partial operational suspension since January 2023[50] - The agricultural chemicals segment generated revenue of approximately HKD 19 million, a significant increase of about 533% from HKD 3 million in the previous fiscal year, with a gross profit of approximately HKD 4 million[51] Operational Changes - The company has ceased operations in the energy and power segment, which previously reported revenue of HKD 3,766,000 in 2023[19] - The management has terminated the operations of the heat and power segment as of June 30, 2023, due to the takeover by authorities[52] - The group has decided to terminate the operations of the thermal and power division, with Mudanjiang Jari Thermal Power undergoing voluntary liquidation, expected to impact the financial statements post-liquidation[56] Share Issuance and Financing - The company has entered into a placement agreement to issue up to 600,000,000 shares at a placement price of HKD 0.1 per share, expecting net proceeds of approximately HKD 57.9 million by October 2024[11] - The company raised approximately HKD 22.4 million from the issuance of 280 million shares at HKD 0.1 per share to repay debts and support general working capital[62] - An additional HKD 27 million was raised from the issuance of 300 million shares at HKD 0.1 per share, allocated for debt repayment and general working capital[62] Legal and Compliance - The independent auditor's report states that no opinion is expressed on the consolidated financial statements due to insufficient evidence obtained[46] - The audit committee, consisting of three independent non-executive directors, has reviewed the consolidated financial performance for the year ending June 30, 2024, and confirmed compliance with applicable accounting standards and regulations[76] - The preliminary announcement of financial figures for the year ending June 30, 2024, has been agreed upon by the company's auditor, confirming consistency with the group's consolidated financial statements[77] Future Outlook - The company aims to achieve revenue of RMB 5 billion in the coming year, following the approval of a supplemental agreement with Zhongkuang Joint Holdings Group Limited[53] - The group has taken various measures to improve its liquidity and financial position to meet all financial obligations due within the next twelve months[47]

Financial Performance - For the six months ended December 31, 2023, the turnover from continuing operations was HK$24,733,000, a decrease of 73% compared to HK$92,217,000 in the same period of 2022[3]. - The loss for the period was HK$85,592,000, representing a 131% decline from a profit of HK$275,558,000 in the previous year[3]. - Basic loss per share was HK(15.85) cents, a significant drop from HK178.04 cents in the prior period[3]. - The gross profit from continuing operations was HK$7,357,000, compared to a gross loss of HK$2,267,000 in the same period last year[6]. - Total comprehensive income for the period was a loss of HK$65,147,000, down from a profit of HK$240,645,000 in the previous year[12]. - The Group reported a loss attributable to owners of approximately HK$84,614,000 for the six months ended 31 December 2023, compared to a profit of approximately HK$274,468,000 in the same period of 2022[83]. Revenue Breakdown - Revenue from sales of calcium carbide was HK$0, down from HK$83,898,000 in the previous year, indicating a complete cessation of this product line[54][67]. - Revenue from sales of lime powder was HK$5,569,000, a decline of 33.4% from HK$8,319,000 in the prior year[54][67]. - Revenue from agricultural chemical products was HK$19,164,000, with this segment newly introduced in the current reporting period[54][67]. - The heat and power segment has been classified as a discontinued operation following its takeover in August 2022, impacting overall revenue and segment reporting[57]. Expenses and Cost Management - Administrative expenses decreased to HK$32,173,000 from HK$52,036,000, reflecting a reduction of 38%[6]. - Selling and distribution expenses dropped to HK$Nil, down from approximately HK$7 million in the previous period due to the temporary suspension of calcium carbide sales[145]. - Other operating expenses were approximately HK$4 million, a decrease of approximately 43% compared to approximately HK$8 million in the previous period[151]. - Cost-cutting measures will be implemented to reduce administrative expenses and cash outflows over the next twelve months[39]. Assets and Liabilities - Non-current assets decreased from HK$620,935,000 as of June 30, 2023, to HK$606,922,000 as of December 31, 2023[16]. - Current assets increased significantly, with inventories rising from HK$2,125,000 to HK$10,948,000, reflecting a 416% increase[16]. - Total liabilities rose to HK$1,687,626,000 as of December 31, 2023, compared to HK$1,614,348,000 as of June 30, 2023[18]. - The company's equity attributable to owners decreased from HK$(955,357,000) to HK$(1,017,161,000), indicating a worsening financial position[16]. - The company reported a net current liabilities position of HK$(991,863,000) as of December 31, 2023, compared to HK$(794,788,000) as of June 30, 2023[18]. Cash Flow and Financing - For the six months ended December 31, 2023, the net cash generated from operating activities was HK$5,730,000, a decrease from HK$7,532,000 in the same period of 2022[24]. - The net cash used in investing activities was HK$1,840,000, compared to HK$3,272,000 in the previous year, indicating a reduction in investment outflows[24]. - The net cash used in financing activities was HK$5,928,000, significantly lower than HK$13,864,000 in the prior year, reflecting improved financing management[24]. - The Group's cash and cash equivalents at the end of the period were HK$1,142,000, down from HK$2,654,000 at the end of December 2022[24]. Share Capital and Debt - The issued share capital increased to HK$54,183,000 as of December 31, 2023, from HK$52,755,000 at the beginning of the period due to the conversion of convertible bonds[20]. - The carrying amount of bonds payable increased from HK$1,064,706,000 on June 30, 2023, to HK$1,113,326,000 on December 31, 2023, reflecting a growth of approximately 4.6%[114]. - Bank loans decreased from HK$19,682,000 on June 30, 2023, to HK$12,612,000 on December 31, 2023, indicating a reduction of approximately 35.8%[121]. Discontinued Operations - The company ceased to control Mudanjiang BD Power as of August 26, 2022, leading to its classification as a discontinued operation[131]. - The company has not reported any revenue from heat supplying services in the current period, compared to HK$3,766,000 in the previous year[54][67]. - The Group expects to write off a receivable of approximately HK$293 million from Mudanjiang Better Day Power Limited, which is undergoing voluntary liquidation[33]. Future Outlook and Plans - The Group plans to consider equity fundraising activities to meet financial obligations[39]. - The Group's financial statements are prepared on a going concern basis, contingent on the success of the aforementioned plans[39]. - The outcome of the voluntary liquidation process remains uncertain and cannot be reliably estimated as of the approval date of the financial statements[192].

香港交易及結算所有限公司以及香港聯合交易所有限公司對本公告之內容概 不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示 概 不 會 就 因 本 公 告全部或任何部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何 責 任。 （ 於開曼群島註冊成立並於百慕達存續之有限公司 ） （股份代號：362） 關 於(1)截至二零二三年六月三十日止年度之經審核業績 (2)延遲寄發二零二三年年報及 (3)恢復買賣之公告 業 績 中 國 天 化 工 集 團 有 限 公 司（「本公司」）董 事（「董 事」）會（「董事會」）欣 然 公 佈 本 公 司 及 其 附 屬 公 司（統 稱「本集團」）截 至 二 零 二 三 年 六 月 三 十 日 止 年 度（「本年度」） 之 經 審 核 綜 合 業 績 連 同 上 一 年 度 之 比 較 數 字。 – 1 – 經審核綜合損益表 截至二零二三年六月三十日止年度 | --- | --- | |-------|--------------| | | 二零二二年 | | 附 註 | 千港元 | | | （經 重 列） | 持續經營業務 | --- ...

Financial Performance - For the six months ended December 31, 2022, the turnover from continuing operations was HK$92,217,000, a decrease of 37% compared to HK$145,971,000 in 2021[3]. - The profit for the period surged to HK$275,558,000, representing a significant increase of 3,463% from HK$7,733,000 in the previous year[3]. - Basic earnings per share rose to HK182.45 cents, marking an increase of 2,379% from HK7.36 cents in 2021[3]. - The profit from operations for the period was HK$335,498,000, a substantial increase from HK$33,911,000 in the previous year[6]. - For the six months ended December 31, 2022, the company reported a profit attributable to owners of HK$240,645,000, a significant increase from HK$9,528,000 in the same period of 2021[14]. - The Group reported a net decrease in cash and cash equivalents of HK$9,604,000 for the six months ended December 31, 2022, compared to HK$39,441,000 in the prior year[24]. - The Group's profit for the period is approximately HK$274,468,000, a significant increase from HK$6,306,000 in the previous year, representing a growth of over 4,300%[78]. - Profit attributable to the owners of the Company increased to approximately HK$274 million, representing a 4,252% increase compared to approximately HK$6 million in the previous year, primarily due to the deconsolidation of Mudanjiang Better Day Power Limited[137]. Revenue and Sales - For the six months ended December 31, 2022, revenue from continuing operations was HK$92,217,000, a decrease from HK$145,971,000 in the same period of 2021, representing a decline of approximately 37%[52]. - Sales of calcium carbide amounted to HK$83,898,000, while sales of lime powder were HK$8,319,000 during the same period[52]. - Discontinued operations generated revenue of HK$3,766,000 from heat supplying services, down from HK$142,014,000 in the previous year[52]. - The Group's revenue for the six months ended 31 December 2022 was approximately HK$92 million, a decrease of approximately 37% compared to HK$146 million in the same period last year[136]. Expenses and Costs - The gross loss from continuing operations was HK$2,267,000, compared to a gross profit of HK$33,959,000 in the prior period[6]. - The administrative expenses increased significantly to HK$52,036,000 from HK$19,038,000 in the previous year[6]. - The Group's capital expenditure during the period was approximately HK$1,498,000, down from HK$1,925,000 in the previous year, reflecting a decrease of about 22%[86]. - The Group's staff costs (excluding directors' emoluments) decreased to HK$7,715,000 from HK$17,800,000, a reduction of approximately 57%[74]. Assets and Liabilities - The total assets as of December 31, 2022, amounted to HK$1,070,562,000, down from HK$1,238,247,000 as of June 30, 2022, indicating a decrease of approximately 13.6%[16]. - The company's non-current liabilities decreased to HK$922,960,000 from HK$946,575,000, reflecting a reduction of about 2.5%[18]. - Current assets saw a decline, with inventories dropping to HK$5,409,000 from HK$22,197,000, a decrease of approximately 75.6%[16]. - The total equity attributable to owners of the company was reported at HK$(601,523,000) as of December 31, 2022, compared to HK$(873,168,000) at the end of June 2022, showing an improvement in the deficit[16]. - The total amount of bonds payable as of December 31, 2022, was approximately HK$1,104 million, up from HK$1,066 million as of June 30, 2022[162]. Cash Flow and Financing - For the six months ended December 31, 2022, the net cash generated from operating activities was HK$7,532,000, compared to a net cash used of HK$20,540,000 in the same period of 2021[24]. - The Group's bank loans as of 31 December 2022 totaled HK$21,102,000, a decrease from HK$22,382,000 as of 30 June 2022[116]. - The repayment of convertible bonds amounted to HK$14,648,000 during the reporting period[22]. - The Group's issued and fully paid share capital as of December 31, 2022, was HK$15,073,000, significantly reduced from HK$266,056,000 as of June 30, 2022, due to share consolidation[97]. - The company plans to utilize the proceeds from share placements and rights issues primarily for debt repayment and general working capital[103]. Discontinued Operations - The company reported a loss from discontinued operations of HK$8,709,000, compared to a profit of HK$32,479,000 in 2021[8]. - The Group's discontinued operations included the Heat and power and Construction services segments, which were reported as terminated businesses[62]. - The Group's subsidiary, Heihe Longjiang Chemical Co., agreed to transfer land use rights in China for a total consideration of approximately RMB 156,440,000, including RMB 139,440,000 and compensation of RMB 17,000,000[35]. Strategic Initiatives - The Group plans to implement cost-cutting measures to reduce administrative expenses and cash outflows over the next twelve months[34]. - The Group aims to maintain an adequate level of cash and cash equivalents to address short-term funding needs[181]. - The Group has idle right-of-use assets and buildings with a total carrying amount of approximately HK$166 million, which could be disposed of to raise further financing[33]. Market and Operational Insights - The production line of coal-related chemicals in Heihe City was suspended for three months starting October 2022 due to COVID-19, contributing to the revenue decline[137]. - Longjiang Chemical has commenced calcium carbide production with a designed annual capacity of 100,000 tonnes, potentially reaching 130,000 tonnes under optimal conditions[191]. - The management expects profit margins for calcium carbide to reach record high figures despite rising production costs due to increased market prices of raw coal[191].

Financial Performance - The Group recorded a loss of approximately HK$1,074 million for the year, with a loss attributable to the owners of the Company of approximately HK$1,064 million, representing an increase of 136% compared to the previous financial year[12]. - Revenue for the year amounted to approximately HK$370 million, reflecting a 62% increase from approximately HK$229 million in the previous year, primarily driven by the calcium carbide segment[12][29]. - The increase in loss was primarily due to provisions for impairment of property, plant, and equipment, and right-of-use assets[12][17]. - The Group recorded a loss attributable to owners of approximately HK$1,064 million, representing an increase of 136% compared to HK$450 million in the previous financial year[33]. - The calcium carbide segment achieved a revenue of approximately HK$199 million, a significant increase of approximately 765% compared to HK$23 million in the previous financial year[37]. - The heat and power division reported a revenue of approximately HK$171 million, a decrease of approximately 14% compared to HK$198 million in the previous financial year[36]. - The heat and power division incurred a segment loss of approximately HK$819 million, an increase of approximately 1,022% compared to HK$73 million in the previous financial year[36]. - The Group's administrative expenses for the Year were approximately HK$126 million, representing an increase of approximately 19% compared to HK$106 million in the previous financial year[34]. - Other operating expenses decreased to approximately HK$65 million, a reduction of approximately 43% compared to HK$114 million in the previous financial year[32]. Operational Changes - The calcium carbide production division is on a recovery trend, with expectations of profitability as production volume increases[13]. - The management plans to deliver the operation of the heat and power division to the municipal government due to escalating coal prices causing significant operating losses[14]. - The construction services division was disposed of during the year to alleviate the Group's burden, influenced by COVID-19 and travel restrictions[15]. - Management is exploring the resumption of lower stream operations and the production lines for polyvinyl-chloride and vinyl acetate to improve profit margins[22][25]. - The Group has ceased operations in the heat and power segment due to escalating coal prices and is in discussions with the local government regarding the operation of Mudanjiang BD Power[45]. Financial Position - As of June 30, 2022, the Group's total assets were approximately HK$1,238 million, down from approximately HK$2,071 million in 2021[51]. - The Group's current liabilities were approximately HK$1,117 million, a decrease from approximately HK$1,284 million in 2021[51]. - The current ratio was approximately 0.1, down from approximately 0.3 in 2021, indicating a decline in liquidity[52]. - The gearing ratio increased to approximately 167% from approximately 96% in 2021, primarily due to asset impairment[52]. - Bank loans decreased to approximately HK$22 million from approximately HK$59 million in 2021, with HK$9 million due within 12 months[58]. - The total amount of bonds payable was approximately HK$1,066 million, slightly down from approximately HK$1,086 million in 2021[59]. - The rights issue completed on January 6, 2022, raised approximately HK$101.13 million, with HK$94.1 million used for debt repayment[60]. - The Group recorded a fair value gain on financial assets at fair value through profit or loss of approximately HK$2 million, compared to a loss of approximately HK$4 million in 2021[68]. - As of June 30, 2022, the Group's bank loans and other loans were secured by charges over certain property and equipment, totaling approximately HK$142 million[69]. - The Group's shareholders' equity showed a deficit of approximately HK$873 million, compared to a surplus of approximately HK$30 million in 2021[51]. Corporate Governance - The Group is committed to high standards of corporate governance to safeguard shareholder interests and enhance corporate value[98]. - The Board of Directors consists of seven members, including Ms. Chan Yuk Foebe as both Chairman and Chief Executive Officer, which deviates from the Corporate Governance Code[100]. - The independent non-executive Directors confirmed compliance with independence guidelines throughout the year, with three having the necessary professional qualifications in accounting and financial management[113]. - Appropriate liability insurance for Directors has been arranged to indemnify their liabilities arising from corporate activities, reviewed annually[114]. - Directors participated in training and briefings to develop their knowledge and skills regarding corporate governance practices and regulatory requirements[115]. - The Group's corporate governance practices complied with the Corporate Governance Code, except for the separation of the roles of Chairman and Chief Executive Officer[99]. - The Board held a total of 10 meetings during the year, with attendance rates for executive directors ranging from 0% to 100%[123]. - The Audit Committee met twice with the external auditor during the Year to discuss the scope of work, timetable, and auditors' fee[165]. - The Company has established three Board committees: the Remuneration Committee, the Audit Committee, and the Nomination Committee, each with defined written terms of reference[155]. - The Audit Committee confirmed the external auditors' independence and objectivity, evaluating the effectiveness of the internal control systems[165]. Human Resources - As of June 30, 2022, the Group had 496 full-time employees in the PRC and Hong Kong, emphasizing the importance of human resources for its success[94]. - The Group maintained competitive remuneration levels with discretionary bonuses based on merit, in line with industry practices[94]. - The remuneration band for senior management shows 8 individuals earning between HK$0 to HK$1,000,000[174]. - The Remuneration Committee met four times during the year to assess the performance of executive Directors[175]. Risk Management - The company plans to utilize hedging instruments to mitigate exchange rate risks as appropriate in response to currency market instability[81]. - The directors believe there is no significant exposure to foreign exchange fluctuations despite the devaluation of RMB during the year, with sufficient cash resources in Hong Kong dollars for repayment of borrowings[80]. - The Audit Committee reviewed the adequacy and quality of accounting and financial reporting staff, as well as risk management and internal control systems[165].

Financial Performance - Revenue for the six months ended December 31, 2021, was HK$299,235,000, representing a 34% increase compared to HK$223,050,000 in 2020[2] - Profit for the period was HK$7,733,000, a significant turnaround from a loss of HK$76,668,000 in the same period last year, marking a 110% improvement[2] - Basic earnings per share increased to HK0.37 cents from a loss of HK(5.29) cents, reflecting a 107% change[2] - Gross profit for the period was HK$83,997,000, up from HK$67,983,000, indicating a strong growth in profitability[5] - The company reported a total comprehensive income of HK$9,528,000 for the period, compared to a loss of HK$13,076,000 in the previous year[9] - The Group's profit attributable to owners for the period was approximately HK$6,306,000, a significant decrease from HK$72,805,000 in the previous year[69] Revenue Breakdown - Revenue from heat supplying services was HK$142,014,000, up from HK$132,723,000, reflecting a growth of 6.7%[47] - Revenue from electricity supplying services increased to HK$11,250,000 from HK$7,167,000, representing a growth of 57.5%[47] - The Group's sales of calcium carbide amounted to HK$145,971,000, with no sales recorded in the previous year[47] - The heat and power segment recorded revenue of approximately HK$153 million, a 9% increase from HK$140 million in the previous year, while segment profit decreased by approximately 27% to HK$32 million due to rising coal prices[129] - The calcium carbide segment saw a remarkable revenue increase of approximately 943% to HK$146 million from HK$14 million in the previous year, following the resumption of its production line[135] Assets and Liabilities - Total assets as of December 31, 2021, amounted to HK$2,092,217,000, compared to HK$2,071,353,000 as of June 30, 2021[11] - As of December 31, 2021, total liabilities amounted to HK$1,953,029,000, a decrease from HK$1,982,644,000 as of June 30, 2021, reflecting a reduction of approximately 1.5%[13] - The company's total equity increased to HK$139,188,000 from HK$88,709,000, representing a growth of approximately 57%[15] - Current liabilities decreased from HK$1,283,945,000 to HK$982,945,000, indicating a reduction of about 23.5%[13] - The company's total assets less current liabilities stood at HK$1,109,272,000, an increase from HK$787,408,000, reflecting a growth of approximately 40.9%[13] Cash Flow and Financing - For the six months ended December 31, 2021, the net cash used in operating activities was HK$20,540,000, a significant improvement from HK$62,025,000 in the same period of 2020, representing a reduction of approximately 66.9%[19] - The net cash used in investing activities decreased to HK$1,925,000 from HK$16,322,000, indicating a reduction of about 88.2% year-over-year[19] - The net cash generated from financing activities was negative at HK$16,976,000, compared to a positive cash flow of HK$104,274,000 in the previous year, reflecting a change of approximately 116.3%[19] - The repayment of convertible bonds during the period was HK$14,648,000, impacting the equity structure[15] - Share placing upon completion raised HK$40,951,000, contributing positively to the company's capital structure[15] Cost Management - The Company plans to implement cost-cutting measures to reduce administrative expenses and cash outflows over the next twelve months[30] - Selling and distribution costs decreased by approximately 11% to HK$16 million from HK$18 million in the previous year[121] - Administrative expenses were reduced by approximately 36% to HK$29 million from HK$45 million in the previous year due to cost-cutting measures[122] - Other operating expenses decreased by approximately 67% to HK$9 million from HK$27 million in the previous year, attributed to the resumption of operations of HLCCL[127] Shareholder and Equity Changes - The issued share capital increased from 1,603,707,319 shares as of June 30, 2021, to 1,773,707,319 shares as of December 31, 2021, reflecting an increase of approximately 10.6%[82] - The total number of options held by directors and employees as of December 31, 2021, was 103,500,000, with significant cancellations during the period[186] - On January 7, 2022, the Company completed a rights issue, issuing 886,853,659 new ordinary shares at a subscription price of HK$0.12 per share, raising approximately HK$101.13 million in net proceeds[29] Future Outlook and Strategic Plans - The management expects profit margins for calcium carbide to reach record highs despite rising raw coal prices, as the selling price increase has outpaced production cost increases[190] - The Group's management is actively negotiating to continue construction on a coal-powered electricity generating facility, which may impact future financial performance[112] - The company intends to utilize the proceeds from the convertible bonds and share placements for the development of new businesses and resumption of production[160] - The management will consider resuming downstream operations and production lines for polyvinyl chloride and vinyl acetate[190] Employee and Operational Changes - The group had 621 full-time employees as of December 31, 2021, down from 632 as of June 30, 2021, with competitive remuneration and additional employee benefits[180] - Mudanjiang Jinyang Municipal Engineering Company Limited suspended all construction services due to the pandemic, with an extended construction period agreed upon without additional costs to the Group[194] Risk Management - The Group has minimal foreign exchange exposure as most transactions are denominated in Hong Kong dollars and Renminbi, with no hedging instruments outstanding as of December 31, 2021[177] - The treasury policy aims to maintain adequate cash levels to meet short-term funding needs and to lower borrowing costs[179] - The company plans to utilize hedging instruments to mitigate exchange rate risks in response to currency market instability[178]

[FINANCIAL HIGHLIGHTS](index=2&type=section&id=FINANCIAL%20HIGHLIGHTS) [FINANCIAL HIGHLIGHTS](index=2&type=section&id=FINANCIAL%20HIGHLIGHTS) For the six months ended December 31, 2020, the company's turnover increased by 49% to HK$223 million, primarily due to new liquor sales, while loss for the period expanded by 52% to HK$78.42 million, resulting in a basic loss per share of 5.39 HK cents Six-Month Financial Highlights Ended December 31, 2020 | Metric | 2020 (HK$ Thousand) | 2019 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | **Turnover** | 223,050 | 149,647 | +49% | | **Loss for the period** | (78,417) | (51,448) | +52% | | **Basic loss per share** | (5.39) HK cents | (3.51) HK cents | +54% | | **Interim dividend per share** | – | – | – | [CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [CONDENSED CONSOLIDATED INCOME STATEMENT](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20INCOME%20STATEMENT) During the period, the company's revenue grew 49% to HK$223 million, but operating loss significantly widened from HK$1.01 million to HK$18.65 million due to increased sales, administrative, and finance costs, leading to a 52% increase in loss for the period to HK$78.42 million Key Data from Condensed Consolidated Income Statement (Six Months Ended December 31) | Item | 2020 (HK$ Thousand) | 2019 (HK$ Thousand) | | :--- | :--- | :--- | | **Revenue** | 223,050 | 149,647 | | **Gross profit** | 67,983 | 67,963 | | **Operating loss** | (18,651) | (1,013) | | **Finance costs** | (61,004) | (48,086) | | **Loss before tax** | (78,417) | (51,448) | | **Loss for the period** | (78,417) | (51,448) | | **Loss attributable to owners of the Company** | (74,286) | (46,768) | [CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20POSITION) As of December 31, 2020, the Group's total assets increased to HK$2.237 billion and total liabilities to HK$1.715 billion, with a net current liability of HK$203 million indicating short-term solvency pressure, while total equity rose to HK$522 million Key Financial Position Data | Item | Dec 31, 2020 (HK$ Thousand) | Jun 30, 2020 (HK$ Thousand) | | :--- | :--- | :--- | | **Total assets** | 2,236,534 | 1,996,824 | | **Total liabilities** | 1,714,801 | 1,567,539 | | **Total equity** | 521,733 | 429,285 | | **Net current liabilities** | (203,124) | (220,130) | [CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) Operating cash flow shifted from a net inflow of HK$28.56 million to a net outflow of HK$62.03 million, while financing activities generated a net cash inflow of HK$104 million, primarily from convertible bond issuance and option exercise, increasing period-end cash balance to HK$34.90 million Key Cash Flow Data (Six Months Ended December 31) | Item | 2020 (HK$ Thousand) | 2019 (HK$ Thousand) | | :--- | :--- | :--- | | **Net cash from operating activities** | (62,025) | 28,563 | | **Net cash from investing activities** | (16,322) | (11,261) | | **Net cash from financing activities** | 104,274 | (17,553) | | **Net increase in cash and cash equivalents** | 25,927 | (251) | | **Cash and cash equivalents at end of period** | 34,899 | 7,639 | [NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=11&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [1. BASIS OF PREPARATION AND ACCOUNTING POLICIES](index=11&type=section&id=1.%20BASIS%20OF%20PREPARATION%20AND%20ACCOUNTING%20POLICIES) Notes to the financial statements reveal significant uncertainties regarding the Group's going concern, with net current liabilities of HK$203 million and a loss of HK$78.42 million for the period, prompting management to plan asset sales and cost reductions - As of December 31, 2020, the Group had net current liabilities of approximately **HK$203 million** and a loss for the period of **HK$78.42 million**, indicating significant uncertainties that may cast substantial doubt on the Group's ability to continue as a going concern[24](index=24&type=chunk)[26](index=26&type=chunk) - To address liquidity risks, management plans to dispose of idle right-of-use assets in Mudanjiang City with a carrying value of approximately **HK$106 million** and a market valuation of approximately **HK$237 million**, and will implement cost reduction measures within the next twelve months[29](index=29&type=chunk) [4. REVENUE](index=16&type=section&id=4.%20REVENUE) Total revenue increased by 49% to HK$223 million, driven primarily by new liquor sales contributing HK$68.97 million, while core heat supply services revenue remained stable at HK$133 million Revenue Composition (Six Months Ended December 31) | Business Segment | 2020 (HK$ Thousand) | 2019 (HK$ Thousand) | | :--- | :--- | :--- | | **Heat supply services** | 132,723 | 135,843 | | **Electricity supply services** | 7,167 | 4,809 | | **Sales of lime powder** | 14,189 | 8,471 | | **Sales of liquor** | 68,971 | – | | **Total** | **223,050** | **149,647** | [5. SEGMENT INFORMATION](index=17&type=section&id=5.%20SEGMENT%20INFORMATION) The Group operates across six segments, with the Heat and Power segment contributing HK$43.24 million in profit and the new Beverage segment adding HK$4.29 million, despite a significant loss of HK$41.09 million from the Calcium Carbide segment impacting overall performance Segment Profit/(Loss) (Six Months Ended December 31, 2020) | Segment | Profit/(Loss) (HK$ Thousand) | | :--- | :--- | | **Heat and power** | 43,242 | | **Calcium carbide** | (41,093) | | **Beverage** | 4,286 | | **Other segments** | (2,183) | | **Unallocated** | (82,969) | | **Total** | **(78,417)** | [18. EVENTS AFTER THE REPORTING PERIOD](index=34&type=section&id=18.%20EVENTS%20AFTER%20THE%20REPORTING%20PERIOD) Post-reporting period, on February 2, 2021, the company's indirect wholly-owned subsidiary agreed to acquire Beijing Yaolai Longwei Liquor Co Ltd for HK$80 million to accelerate its expansion in the liquor business - On February 2, 2021, the company's indirect wholly-owned subsidiary entered into an agreement to acquire the entire equity interest in Beijing Yaolai Longwei Liquor Co Ltd for **HK$80 million**, payable by **HK$5 million** in cash and the issuance of a promissory note for **HK$75 million**[116](index=116&type=chunk)[117](index=117&type=chunk) [MANAGEMENT DISCUSSION AND ANALYSIS](index=35&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) [Business Review](index=35&type=section&id=Business%20Review) Despite a 49% increase in total revenue to HK$223 million, primarily from the new beverage business, the Group's coal-related chemical operations incurred approximately HK$76 million in losses due to underutilized capacity and increased idle costs from the COVID-19 pandemic, exacerbated by 65% and 21% rises in sales and administrative expenses respectively - Despite economic improvements, the Group was still affected by the pandemic, with underutilized capacity in the coal-related chemical products division leading to idle operating costs and a loss of approximately **HK$76 million**[120](index=120&type=chunk)[124](index=124&type=chunk) - Group revenue increased by **49%** to **HK$223 million**, primarily attributable to new revenue streams from the beverage business[121](index=121&type=chunk)[127](index=127&type=chunk) - Sales and distribution costs increased by **65%** due to the expansion of heat supply areas, while administrative expenses rose by **21%** due to share option expenses[122](index=122&type=chunk)[129](index=129&type=chunk) [Heat and power division](index=36&type=section&id=Heat%20and%20power%20division) The Heat and Power segment, a core business, maintained stable revenue at approximately HK$140 million, but segment profit decreased by 17% to HK$43 million due to higher maintenance costs, prompting management to focus on operational efficiency to improve profitability Heat and Power Segment Performance | Metric | 2020 H2 (HK$ Million) | 2019 H2 (HK$ Million) | Change | | :--- | :--- | :--- | :--- | | **Revenue from external customers** | 140 | 141 | -1% | | **Segment profit** | 43 | 52 | -17% | [Coal-related chemical production division](index=37&type=section&id=Coal-related%20chemical%20production%20division) This segment was severely impacted by the pandemic, with the Calcium Carbide division's revenue increasing to HK$14 million from lime powder sales, while the PVC and Vinyl Acetate divisions generated no revenue, leading to significant idle costs due to production halts - External customer revenue for the Calcium Carbide division was approximately **HK$14 million**, a **68%** increase year-on-year, primarily from the sale of lime powder, while the PVC and Vinyl Acetate divisions generated no revenue[138](index=138&type=chunk)[140](index=140&type=chunk) [Beverage division](index=38&type=section&id=Beverage%20division) The newly launched Beverage segment demonstrated strong performance, generating approximately HK$69 million in revenue and HK$4 million in segment profit during its brief operating period, indicating robust market demand and growth potential - The Group commenced its beverage business through liquor sales at the end of 2020, with this segment recording approximately **HK$69 million** in revenue and **HK$4 million** in profit during the reporting period[144](index=144&type=chunk)[147](index=147&type=chunk) [Capital Structure, Liquidity and Financial Resources](index=38&type=section&id=Capital%20Structure%2C%20Liquidity%20and%20Financial%20Resources) As of December 31, 2020, the Group's total assets were HK$2.237 billion and total liabilities HK$1.715 billion, with liquidity ratios of 0.6 (current) and 0.5 (quick) and a debt-to-asset ratio of 76.7%, indicating significant liquidity pressure, which the company addressed by issuing HK$100 million in convertible bonds, yielding HK$97.36 million for debt repayment, new business development, and working capital Key Financial Ratios | Ratio | Dec 31, 2020 | Jun 30, 2020 | | :--- | :--- | :--- | | **Current ratio** | 0.6 | 0.4 | | **Quick ratio** | 0.5 | 0.4 | | **Debt-to-asset ratio** | 76.7% | 78.5% | | **Debt-to-equity ratio** | 362.0% | 417.5% | - The company entered into an agreement on October 28, 2020, to issue zero-coupon convertible bonds with a principal amount of **HK$100 million**, yielding net proceeds of approximately **HK$97.36 million**[163](index=163&type=chunk)[164](index=164&type=chunk) - As of December 31, 2020, approximately **HK$84 million** of the bond proceeds had been utilized, with **HK$37 million** for settling liabilities, **HK$34 million** for the new beverage business, and **HK$13 million** for general working capital[173](index=173&type=chunk) [PROSPECT](index=47&type=section&id=PROSPECT) Looking ahead, the Group plans to expand its heat and power supply, convert its coal chemical plant to produce high-carbon ferromanganese (delayed by pandemic), and prioritize the beverage business through acquisitions to grow market share, while actively pursuing asset restructuring and non-core asset disposals to enhance shareholder value - The Heat and Power division will continue to be a growth driver for the Group, with management aiming to further expand residential heat supply areas[200](index=200&type=chunk)[202](index=202&type=chunk) - The Coal-related Chemical Products division plans to convert the plant and equipment of Heilongjiang Longjiang Chemical to produce high-carbon ferromanganese, though this plan has been delayed to 2021 due to the pandemic[201](index=201&type=chunk)[203](index=203&type=chunk) - The Beverage division will accelerate its development through the acquisition of Beijing Liquor to enhance its customer base and expansion capabilities in the Chinese liquor market[206](index=206&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) - The Group's strategy involves active asset restructuring, not excluding further acquisitions and disposals of non-core assets to create shareholder value[254](index=254&type=chunk)[258](index=258&type=chunk)

CORPORATE INFORMATION 公司資料 BOARD OF DIRECTORS Executive Directors 2020 Annual Report 年報 CONTENTS 目錄 | Corporate Information | 公司資料 | 2 | | --- | --- | --- | | Chairman's Statement | 主席報告 | 4 | | Management Discussion and Analysis | 管理層討論及分析 | 6 | | Corporate Governance Report | 企業管治報告 | 25 | | Biographical Details of Directors and Senior Management | 董事及高級管理人員簡介 | 42 | | Report of the Directors | 董事會報告 | 47 | | Independent Auditor's Report | 獨立核數師報告 | 66 | | Audited Financial Statements | 經審核財務報表 | | | Cons ...

Financial Performance - For the six months ended December 31, 2019, the turnover decreased by 23.3% to HK$149,647,000 compared to HK$195,168,000 in the same period of 2018[2]. - The loss for the period narrowed by 9.5% to HK$51,448,000 from HK$56,841,000 year-on-year[5]. - Basic loss per share improved by 30.5% to HK(3.51) cents from HK(5.05) cents in the previous year[7]. - Gross profit increased to HK$67,963,000, up from HK$60,701,000, reflecting a positive trend despite lower turnover[5]. - The total comprehensive income for the period was a loss of HK$89,418,000, compared to a loss of HK$91,356,000 for the same period in 2018, showing a slight improvement[16]. - For the six months ended December 31, 2019, the company reported a loss attributable to owners of approximately HK$46,768,000, a decrease from HK$57,394,000 in the same period of 2018, representing a reduction of about 18.4%[52][54]. Assets and Liabilities - Total assets as of December 31, 2019, were HK$2,211,834,000, a decrease from HK$2,266,842,000 as of June 30, 2019[10]. - The company's equity attributable to owners decreased to HK$712,679,000 from HK$801,122,000, indicating a reduction in shareholder value[10]. - Non-current assets decreased to HK$1,936,093,000 from HK$2,014,529,000, primarily due to a decline in fixed assets[10]. - As of December 31, 2019, total liabilities amounted to HK$1,444,881,000, an increase from HK$1,401,933,000 as of June 30, 2019, representing a growth of approximately 3.1%[12]. - The company's total equity decreased to HK$766,953,000 as of December 31, 2019, down from HK$864,909,000 at the beginning of the period, reflecting a decline of approximately 11.3%[14]. Cash Flow and Financing - For the six months ended December 31, 2019, the net cash generated from operating activities was HK$28,563,000, a significant recovery compared to a cash outflow of HK$80,315,000 in the same period of 2018[18]. - The net cash used in financing activities was HK$17,553,000, contrasting with a cash inflow of HK$67,687,000 in the same period of 2018[18]. - Cash and cash equivalents at the end of the period were HK$7,639,000, a decrease from HK$71,212,000 at the beginning of the period, indicating a cash reduction of approximately 89.3%[18]. - The company's bank loans decreased to HK$49,522,000 from HK$52,440,000, a reduction of about 5.5%[12]. - The bonds payable increased to HK$937,460,000 from HK$895,111,000, representing a rise of approximately 4.7%[12]. Revenue Segments - Heat supplying services generated revenue of HK$135,843,000, up from HK$124,392,000, reflecting an increase of 9.7%[35]. - Electricity supplying services revenue increased significantly to HK$4,809,000 from HK$2,521,000, representing a growth of 90.2%[35]. - The segment profit for the heat and power division was HK$51,839,000, while the calcium carbide division reported a loss of HK$24,678,000[41]. - The calcium carbide segment recorded revenue of approximately HK$8 million, a significant decrease of approximately 88% compared to the last corresponding period[162]. Employee and Operational Metrics - As of December 31, 2019, the Group had 682 full-time employees, an increase from 678 as of June 30, 2019[190]. - Staff costs (excluding Directors' emoluments) were reported at HK$17,177,000, slightly up from HK$17,083,000 in 2018, reflecting a marginal increase of about 0.55%[50]. - The company incurred factory overhead of HK$20,642,000 during the suspension of production, down from HK$23,314,000 in the previous year, a decrease of about 11.5%[50]. Strategic Acquisitions and Investments - The company entered into a memorandum of understanding on January 23, 2020, for a possible acquisition of My Cloud Technology (Shenzhen) Co. Ltd, which focuses on mobile internet integrated platform development[105]. - The management believes that the potential acquisition will create favorable business opportunities and enhance competitive advantages in the market[105]. - The total consideration for a previous acquisition of Xinyang Maojian International Holding Limited was HK$85,800,000, with 220,000,000 new shares issued at an issue price of HK$0.39 per share[111]. Legal and Compliance Matters - The Group has made sufficient provision for a legal action regarding a contract dispute, with a potential liability of approximately RMB42,700,000 plus interest[90]. - The management believes a favorable settlement could be reached regarding the legal dispute, which may allow part of the damages to be absorbed in construction costs[94].

Financial Performance - The Group recorded a loss of approximately HK$698 million for the year, with a loss attributable to the owners of the Company of approximately HK$667 million, representing an increase of 235% compared to the previous financial year [14]. - Revenue for the year amounted to approximately HK$323 million, a decrease of 12% compared to approximately HK$368 million in the previous financial year [26]. - The Group recorded a loss of approximately HK$698 million due to a one-off write-off of idle production lines in Mudanjiang, which had been inactive for several years [31]. - Loss attributable to shareholders was approximately HK$667 million, an increase of 235% from HK$199 million in the previous year [31]. - The heat and power division generated revenue of approximately HK$173 million, down 6% from HK$185 million in the previous year, with segment profit decreasing to approximately HK$20 million from HK$31 million [35]. - The calcium carbide segment recorded revenue of approximately HK$76 million, a slight increase of 1%, but incurred a segment loss of approximately HK$398 million, up 272% from HK$107 million [38]. - The PVC and VA segments reported losses of approximately HK$129 million and HK$58 million, representing increases of 486% and 87%, respectively, primarily due to the one-off write-off [39]. - The construction services division's revenue fell to approximately HK$74 million from HK$108 million, with segment profit dropping to approximately HK$3 million from HK$16 million [44]. Cost Management - Selling and distribution costs increased by approximately 11% to approximately HK$20 million, primarily due to expenditures on a newly set up fee collection station [28]. - Administrative expenses decreased by approximately 15% to approximately HK$163 million, as a one-off amortization of approximately HK$26 million from the previous year did not recur [29]. - Other operating expenses increased by approximately 25% to approximately HK$75 million, attributed to the suspension of Heihe Longjiang Chemical Limited since March 2019 [30]. Market Conditions - The industrial sector in the PRC experienced a sustained downturn due to the Sino-US trade war, impacting the Group's operations [15]. - The tea division suffered losses due to the impact of the Sino-US trade war on commodity products [56][61]. Strategic Initiatives - The Group is exploring opportunities to transform the Heihe plant into producing high carbon ferromanganese due to the low market price of calcium carbide [15]. - The management is actively seeking new business opportunities to diversify revenue sources and mitigate risks in light of the ongoing economic uncertainties [16]. - The Group aims to broaden its revenue sources and diversify business risks in the best interest of shareholders [16]. - Management is exploring opportunities to convert the facilities and equipment for calcium carbide production into high-carbon ferromanganese, with low conversion costs anticipated [52]. Financial Position - The total assets of the Group as of June 30, 2019, were approximately HK$2,266.8 million, down from approximately HK$3,176.8 million in 2018 [64][68]. - Current liabilities decreased to approximately HK$276.5 million in 2019 from approximately HK$386.3 million in 2018 [64][68]. - The Group's current ratio remained stable at approximately 0.9, while the gearing ratio increased to approximately 61.8% from 47.2% in the previous year [65][69]. - The Group's cash and cash equivalents dropped to approximately HK$7.2 million in 2019 from approximately HK$62.2 million in 2018 [65][69]. Corporate Governance - The Board of Directors consists of seven members, including Ms. Chan Yuk Foebe as both Chairman and Chief Executive Officer, which deviates from the Corporate Governance Code's recommendation for separation of these roles [119]. - The Board has a balanced composition with skills in management, accounting, finance, marketing, manufacturing, and procurement, ensuring effective oversight of the Group's strategic planning [120]. - All independent non-executive Directors confirmed compliance with independence guidelines throughout the year, with specific qualifications in accounting and financial management [122]. - The Group provides training and support for Directors to ensure they are aware of their responsibilities and the latest regulatory developments [128]. - The Board regularly reviews its structure and practices to ensure effective governance and compliance with corporate governance standards [115]. - The Group is committed to high standards of corporate governance to safeguard shareholder interests and enhance corporate value [113]. Board Committees and Meetings - The Audit Committee reviewed the audited financial statements for the year and the unaudited financial statements for the six months ended December 31, 2018 [167]. - The Audit Committee met twice with the external auditor during the year [168]. - The Remuneration Committee is responsible for advising on the remuneration policy and structure for all Directors and senior management, ensuring no Director decides their own remuneration [174]. - The Company has established three Board committees: the Remuneration Committee, the Audit Committee, and the Nomination Committee, each with defined written terms of reference [158]. - The Remuneration Committee met four times during the year to assess the performance of executive Directors [177]. - The Nomination Committee met four times during the year to review the structure, size, and composition of the Board [186]. Shareholder Matters - The company completed a subscription agreement for 220,000,000 new shares at a price of HK$0.315 per share, raising approximately HK$69.3 million in gross proceeds [73]. - The largest shareholder agreed to sell 146,000,000 shares, representing approximately 10.97% of the total issued shares, at a price of HK$0.915 per share [93]. - The completion of the sale and purchase agreement is conditional upon certain conditions being fulfilled by December 15, 2019 [94]. Risk Management - The Company has arranged appropriate liability insurance for Directors to indemnify them against liabilities arising from corporate activities [123]. - The Company ensures that all Board committees have sufficient resources to discharge their duties and can seek independent professional advice when necessary [159]. - The Company’s governance structure includes regular reviews of the internal controls of various corporate structures and business processes to ensure effective operations [167].