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].

Financial Performance - For the six months ended December 31, 2018, the turnover increased by 22.7% to HK$205,162,000 compared to HK$167,150,000 in the same period of 2017[2]. - The loss for the period was HK$47,907,000, representing a 73.6% increase from the loss of HK$27,598,000 in 2017[2]. - Basic loss per share increased by 82.8% to HK(4.26) cents from HK(2.33) cents in the previous year[2]. - Total comprehensive income for the period was a loss of HK$91,356,000, compared to a loss of HK$9,079,000 in the previous year[8]. - The total loss for the period was HK$47,907,000, compared to a loss of HK$27,598,000 in the same period last year, representing an increase of 73.8%[95]. - Loss attributable to the owners of the Company for the Period was approximately HK$48 million, representing an increase of 74% compared to the last corresponding period[184]. Revenue and Segment Performance - For the six months ended December 31, 2018, total revenue was HK$205,162,000, an increase of 22.7% compared to HK$167,150,000 for the same period in 2017[82]. - Revenue from heat supplying services was HK$124,392,000, a slight decrease of 1.1% from HK$126,731,000 in 2017[82]. - Sales of calcium carbide increased significantly to HK$66,594,000, up 88.7% from HK$35,280,000 in 2017[82]. - The beverage business generated revenue of HK$9,994,000, with no prior year comparison available[82]. - Segment profit for heat and power was HK$41,889,000, while calcium carbide reported a loss of HK$12,590,000[92]. - The heat and power division recorded revenue of HK$127 million from external customers, with income from residential users at approximately HK$115 million, a decrease of about 1% compared to the last corresponding period[192]. - The calcium carbide segment recorded revenue of HK$67 million from external customers, with a segment loss of approximately HK$13 million, a decrease of about 31% compared to the last corresponding period[197]. - The construction services division, acquired in January 2018, recorded revenue of HK$2 million and a segment loss of HK$2 million during the Period[199]. - The beverage division, acquired in October 2018, recorded revenue of HK$10 million and a segment loss of HK$2 million during the Period[200]. Assets and Liabilities - Non-current assets decreased to HK$2,719,372,000 from HK$2,819,057,000, indicating a reduction in long-term asset value[9]. - The company's total assets decreased to HK$3,101,839,000 from HK$3,176,789,000, reflecting a decline in overall asset base[9]. - Total equity as of December 31, 2018, decreased to HK$1,648,350, down from HK$1,676,915 as of June 30, 2018, representing a decline of approximately 1.7%[11]. - Total liabilities as of December 31, 2018, were HK$1,453,489, a decrease from HK$1,499,874 as of June 30, 2018, indicating a reduction of about 3.1%[11]. - The Group's financial assets and liabilities' carrying amounts approximate their fair values as of 31 December 2018[74]. Cash Flow and Financing Activities - Net cash used in operating activities for the six months ended December 31, 2018, was HK$80,315, compared to HK$58,533 for the same period in 2017, reflecting an increase in cash outflow of approximately 37.2%[16]. - Net cash generated from financing activities for the six months ended December 31, 2018, was HK$67,687, a decrease from HK$100,900 in the previous year, showing a decline of about 33%[16]. - Cash and cash equivalents at the end of the period were HK$71,212, an increase from HK$70,916 at the end of the previous year, showing a slight growth of about 0.4%[16]. - The company issued shares under a placement, raising HK$22,000 during the six months ended December 31, 2018[12]. - The carrying amount of bonds payable rose from HK$820,458,000 at the beginning of the period to HK$861,719,000 by December 31, 2018, indicating an increase of 5.0%[127]. - The total bank loans payable decreased from HK$97,775,000 on June 30, 2018, to HK$86,829,000 by December 31, 2018, a reduction of about 11.5%[133]. Accounting Policies and Standards - The Group adopted new and revised HKFRSs effective from July 1, 2018, which did not result in significant changes to accounting policies or financial statement presentation[28]. - HKFRS 15 was adopted, establishing a five-step model for revenue recognition, but it did not materially impact the Group's revenue recognition[24]. - HKFRS 9 was also adopted, introducing new requirements for classification and measurement of financial instruments, which resulted in adjustments to amounts recognized in financial statements[28]. - The adoption of new HKFRSs did not have a material impact on the amounts and disclosures reported in the interim financial statements[28]. - The Group's financial statements for the six months ended December 31, 2018, are unaudited and prepared in accordance with HKAS 34[18]. Legal and Contingent Liabilities - The Group has contingent liabilities amounting to approximately RMB42,700,000 related to a construction contract dispute[150]. - The Group's management has been seeking legal advice regarding the aforementioned dispute since December 2012[151]. - During the period, Mudanjiang BD Power was ordered by the Heilongjiang High Court to compensate approximately RMB 36,700,000 to the Plaintiff[153]. - The management has made sufficient provision for the legal action and believes a favorable settlement could be reached with the Plaintiff[154]. - The Company obtained a stay of execution of the Enforcement Order for 6 months, conditional upon paying a security sum of RMB 19,818,046[158]. Capital Expenditures and Commitments - Capital expenditure for the period was approximately HK$16.39 million, up from HK$10.11 million, reflecting a 62.0% increase[112]. - Capital commitments at the end of the reporting period include contracted but not provided for buildings and construction in progress amounting to HK$ 565,773,000[167].