[Company Information](index=3&type=section&id=公司資料) This section provides essential corporate details, including the composition of the Board of Directors, key appointments, stock information, and contact details [Company Basic Information](index=3&type=section&id=公司基本信息) This section lists the basic information of Integrated Waste Solutions Group Holdings Limited, including its board members, company secretary, auditor, and stock code - The Board of Directors comprises executive directors Mr. Lam King Sang (Chief Executive Officer) and Mr. Tam Shui Kin, non-executive directors Mr. Cheng Chi Ming (Chairman), Mr. Tsang On Yip, Mr. Lau Sai Cheong, Mr. Li Chi Huen, and independent non-executive directors Mr. Chow Siu Wing, Mr. Wong Man Chung, and Mr. Chan Ting Pong[3](index=3&type=chunk) - The Company Secretary is Ms. Ng Sum Yu, and the auditor is KPMG[3](index=3&type=chunk) - The company's stock code is **923**, and its Hong Kong share registrar is Tricor Investor Services Limited[3](index=3&type=chunk) [Chairman's Statement](index=4&type=section&id=主席報告) This statement reviews the financial year's performance amidst global and local economic challenges, outlines strategic business developments, and provides an outlook on future growth opportunities and risk management [Financial Year Review and Challenges](index=4&type=section&id=2.1%20財政年度回顧與挑戰) In this financial year, Integrated Waste Solutions Group Holdings Limited faced multiple adverse factors, leading to overall pressure on the recycling industry and negative impacts on all business segments - Global economic volatility and a challenging local business environment adversely affected the recycling industry[6](index=6&type=chunk) - The US-China trade war and low oil prices led to a decline in demand and prices for recycled plastics, prompting management to suspend the production of low-density polyethylene (LDPE) plastic pellets[6](index=6&type=chunk) - Local social unrest and the COVID-19 pandemic resulted in decreased demand for waste collection services and confidential material destruction services (CMDS)[6](index=6&type=chunk) [Business Development and Future Outlook](index=5&type=section&id=2.2%20業務發展與未來展望) Despite challenges, the Group continuously improved cost efficiency in existing businesses and successfully entered the hazardous waste treatment business in mainland China to diversify revenue streams - Enhanced cost efficiency in existing businesses and expanded waste electrical and electronic equipment (WEEE) logistics services, with WEEE treatment business remaining stable[8](index=8&type=chunk) - The joint venture for recycled engineering plastic pellets has commenced commercial operations, with plans to increase production capacity when the environment becomes clearer[8](index=8&type=chunk) - Completed the acquisition of a **40% interest in Dugong IWS HAZ Limited in January 2020**, marking entry into the hazardous waste treatment industry in mainland China[8](index=8&type=chunk) - The Group will continue to prudently monitor and manage risks, strengthen its foundation and capabilities, and seize investment opportunities with upside potential to diversify revenue streams[8](index=8&type=chunk) [Directors and Senior Management](index=6&type=section&id=董事及高級管理層) This section presents biographies of the executive, non-executive, and independent non-executive directors, highlighting their extensive professional experience and roles within the Group [Biographies of Executive Directors](index=6&type=section&id=3.1%20執行董事簡介) This section introduces the two executive directors of Integrated Waste Solutions Group, Mr. Lam King Sang and Mr. Tam Shui Kin, both seasoned professionals with extensive experience in their respective fields - Mr. Lam King Sang (aged 59) is an Executive Director, Chief Executive Officer, and Chairman of the Executive Committee, with over **20 years of experience** in infrastructure and water projects in mainland China[12](index=12&type=chunk) - Mr. Tam Shui Kin (aged 55) is an Executive Director, Chief Financial Officer, and member of the Executive Committee, with over **30 years of experience** in auditing, accounting, project finance, and financial management[13](index=13&type=chunk) [Biographies of Non-Executive Directors](index=7&type=section&id=3.2%20非執行董事簡介) This section introduces the four non-executive directors of Integrated Waste Solutions Group, each bringing diverse professional perspectives from their extensive experience in various fields - Mr. Cheng Chi Ming (aged 37) is the Chairman, Non-Executive Director, and member of the Audit Committee, serving as an Executive Director at NWS Holdings Limited and a Non-Executive Director in several listed companies[15](index=15&type=chunk) - Mr. Tsang On Yip (aged 48) is a Non-Executive Director, Chief Executive Officer and Director of Chow Tai Fook Enterprises Limited, with over **20 years of experience** in international capital markets[16](index=16&type=chunk) - Mr. Lau Sai Cheong (aged 63) is a Non-Executive Director, Director of Corporate Services at a subsidiary of NWS Holdings Limited, with over **30 years of experience** in engineering projects in Hong Kong, China, and Asia[20](index=20&type=chunk) - Mr. Li Chi Huen (aged 37) is a Non-Executive Director, Senior Vice President of Chow Tai Fook Enterprises Limited, responsible for global strategy and private equity investments, with over **ten years of experience** in corporate finance, investment, international capital markets, and asset management[21](index=21&type=chunk) [Biographies of Independent Non-Executive Directors](index=9&type=section&id=3.3%20獨立非執行董事簡介) This section introduces the three independent non-executive directors of Integrated Waste Solutions Group, each possessing profound professional knowledge and extensive experience in various fields, ensuring independent and professional corporate governance - Mr. Chow Siu Wing (aged 48) is an Independent Non-Executive Director and Chairman of the Nomination Committee, qualified as a solicitor of the High Court of Hong Kong[23](index=23&type=chunk) - Mr. Wong Man Chung (aged 55) is an Independent Non-Executive Director and Chairman of the Audit Committee, with over **30 years of experience** in auditing, taxation, corporate internal control, and governance, and serves as an independent non-executive director in several listed companies[23](index=23&type=chunk)[24](index=24&type=chunk) - Mr. Chan Ting Pong (aged 39) is an Independent Non-Executive Director and Chairman of the Remuneration Committee, currently the Chief Operating Officer of Inchcape Hong Kong Limited, with extensive experience in corporate strategy, business development, corporate finance, and crisis management[27](index=27&type=chunk)[28](index=28&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=管理層討論及分析) This section offers an in-depth review of the Group's business operations, market conditions, and financial performance, including an analysis of revenue, profitability, and liquidity, alongside ESG initiatives and future outlook [Company Profile and Market Review](index=11&type=section&id=4.1%20公司簡介與市場回顧) Integrated Waste Solutions Group is a leading solid waste solutions provider in Hong Kong, actively diversifying its operations despite a severe market environment this year due to various global and local challenges - The Group is a leading solid waste solutions provider in Hong Kong, offering waste collection, recycling, and treatment services[30](index=30&type=chunk) - Business diversification includes waste electrical and electronic equipment treatment (since 2017) and recycled engineering plastic pellet business (since 2018)[30](index=30&type=chunk) - Expanded into mainland China's hazardous waste treatment business in **January 2020** through investment, with treatment plants in Lianyungang, Jiangsu, and Kaifeng, Henan[31](index=31&type=chunk) - The market review indicates that the US-China trade war, plummeting oil prices, local social events, and the COVID-19 pandemic negatively impacted business, leading to fluctuations in demand and prices for recycled products[35](index=35&type=chunk) [Financial Review](index=12&type=section&id=4.2%20財務回顧) For the financial year ended March 31, 2020, the Group's loss attributable to equity holders increased, with total revenue significantly decreasing, primarily due to reduced sales of recycled paper and plastic pellets Key Financial Data for FY2020 (Compared to FY2019) | Metric | FY2020 (HKD thousands) | FY2019 (HKD thousands) | Change (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Loss attributable to equity holders of the Company | (77,589) | (51,524) | (26,065) | 50.6% | | Revenue | 104,295 | 196,340 | (92,045) | (46.9%) | | Gross Profit | 19,211 | 42,002 | (22,791) | (54.3%) | | Gross Profit Margin | 18.4% | 21.4% | - | -3.0pp | | Loss before interest, tax, depreciation, and amortization | (52,300) | (25,000) | (27,300) | 109.2% | | Sales of Recycled Paper | 66,599 | 158,864 | (92,265) | (58.1%) | | Sales of Recycled Plastic Pellets | 9,790 | 15,289 | (5,499) | (36.0%) | | CMDS Service Revenue | 19,169 | 20,134 | (965) | (4.8%) | | Logistics Service Revenue | 8,372 | 1,376 | 6,996 | 508.4% | | Bank Balances and Cash | 98,962 | 160,700 | (61,738) | (38.4%) | | Net Current Assets | 142,300 | 216,700 | (74,400) | (34.3%) | | Current Ratio | 7.1 | 10.7 | - | -3.6 | | Net Foreign Exchange Loss | (900) | (3,000) | 2,100 | (70.0%) | - Revenue from recycled paper decreased by **58.1%**, primarily due to escalating US-China trade tensions, tighter import quotas for waste paper in mainland China, and the COVID-19 pandemic, leading to a **27.8% decline in sales volume** and a **41.9% decrease in average selling price**[39](index=39&type=chunk) - The recycled plastic pellet project was affected by the US-China trade war and falling crude oil prices, leading to a contraction in demand for low-density polyethylene (LDPE) plastic pellets, with the Group suspending LDPE production and sales volume falling by **36.0%**[40](index=40&type=chunk) - The newly established joint venture for high-value recycled engineering plastic pellets is less affected by external factors, with relatively stable demand, and is expected to gradually recover and increase production capacity[43](index=43&type=chunk) - The joint venture with ALBA Group for waste electrical and electronic equipment treatment operated stably, with collection volume increasing by **55.6%**[43](index=43&type=chunk) - Completed the acquisition of a **40% interest in Dugong IWS HAZ Limited**, entering the hazardous waste treatment business in China, which is expected to make a positive contribution[44](index=44&type=chunk) [Environmental, Social and Governance (ESG)](index=16&type=section&id=4.3%20環境%E3%80%81社會及管治%EF%BC%88ESG%EF%BC%89) The Group is committed to environmental and social responsibility, integrating ESG matters into its operations and aligning with the United Nations Sustainable Development Goals - The Group is committed to environmental and social responsibility, integrating ESG matters into its operations and aligning with the United Nations Sustainable Development Goals[57](index=57&type=chunk) - Environmental policies include setting quantitative environmental monitoring targets, optimizing resource utilization, responsible waste disposal, and strict compliance with relevant environmental laws and regulations[59](index=59&type=chunk) - The solar panels at the Integrated Waste Solutions Complex generated **165,033 kWh of solar power** this year, and electric vehicles began trial use[59](index=59&type=chunk) - Regarding employees, the Group adheres to fair employment practices, prioritizes health and safety, and provides skills and knowledge training[63](index=63&type=chunk) - For customers, effective communication is maintained through daily contact and customer satisfaction surveys, with a complaint mechanism in place to handle grievances[64](index=64&type=chunk) - For suppliers, selection criteria are established to ensure compliance with ESG requirements, with annual sampling assessments conducted and environmentally friendly suppliers prioritized[65](index=65&type=chunk) - In the community, the Group supports the "Green Walkers Alliance" program to promote environmental habits and donates toilet paper to elderly homes to care for vulnerable groups[67](index=67&type=chunk) [Outlook](index=19&type=section&id=4.4%20展望) The Group anticipates continued challenges before the COVID-19 pandemic subsides and the global economy recovers, but will maintain operations with professionalism, prudently monitor and manage risks, and strictly control costs - Anticipates continued difficulties before the pandemic subsides and the economy recovers, and will continue to prudently monitor and manage risks, and strictly control costs[68](index=68&type=chunk) - Consolidate existing businesses, enhance logistics cost efficiency, maintain high-quality CMDS, and implement automation to increase production capacity[68](index=68&type=chunk) - Ensure smooth operation of joint venture projects, including recycled engineering plastic pellets and China's hazardous waste treatment business[68](index=68&type=chunk) - Actively consider new high-value business opportunities to diversify revenue streams and drive sustainable growth[68](index=68&type=chunk) [Report of the Directors](index=20&type=section&id=董事會報告) This report details the company's business review, financial performance, board composition, directors' interests, related party transactions, and other statutory disclosures [Business Review and Financial Performance](index=20&type=section&id=5.1%20業務審視與財務表現) This section outlines the company's principal business as investment holding, with subsidiaries primarily providing solid waste management services, and details the Group's financial performance and distributable reserves - The company's principal business is investment holding, with subsidiaries providing solid waste management services[71](index=71&type=chunk) - The Group recorded a loss this year, and the Board does not recommend the payment of any dividend (2019: HKD nil)[77](index=77&type=chunk) - The company's distributable reserves to shareholders amounted to approximately **HKD 1,090,466,000** (2019: HKD 1,095,411,000)[85](index=85&type=chunk) - The company will suspend share transfer registration from **August 21 to August 27, 2020**, to determine eligibility for attending and voting at the Annual General Meeting[86](index=86&type=chunk) [Board Members and Interests](index=22&type=section&id=5.2%20董事會成員與權益) This section lists the Board members as of the reporting date, explains directors' retirement and re-election arrangements, and details their interests in the company's shares and related shares - As of March 31, 2020, the Board of Directors included Mr. Lam King Sang, Mr. Tam Shui Kin (Executive Directors), Mr. Cheng Chi Ming (Chairman), Mr. Tsang On Yip, Mr. Lau Sai Cheong, Mr. Li Chi Huen (Non-Executive Directors), and Mr. Chow Siu Wing, Mr. Wong Man Chung, Mr. Chan Ting Pong (Independent Non-Executive Directors)[91](index=91&type=chunk) - Mr. Tam Shui Kin, Mr. Tsang On Yip, and Mr. Chow Siu Wing are subject to retirement by rotation and eligible for re-election at the 2020 Annual General Meeting[91](index=91&type=chunk) - Directors have entered into three-year service contracts with the company, terminable with three to six months' prior written notice[92](index=92&type=chunk) - The annual salaries of Executive Directors Mr. Lam King Sang and Mr. Tam Shui Kin were adjusted to **HKD 2,513,136**, with annual directors' fees of **HKD 360,000** each; the annual directors' fees for all directors were reduced by **3.33%** effective March 1, 2020[97](index=97&type=chunk) Directors' Long Positions in Shares and Underlying Shares of the Company (As of March 31, 2020) | Director Name | Capacity | Interest in Shares | Interest in Underlying Shares via Share Options | Approximate % of Shareholding | | :--- | :--- | :--- | :--- | :--- | | Lam King Sang | Personal | – | 15,000,000 | 0.31% | | Tam Shui Kin | Personal | – | 15,000,000 | 0.31% | | Cheng Chi Ming | Personal | – | 15,000,000 | 0.31% | | Tsang On Yip | Personal | – | 15,000,000 | 0.31% | | Lau Sai Cheong | Personal | – | 8,800,000 | 0.18% | | Chow Siu Wing | Personal | – | 8,800,000 | 0.18% | | Wong Man Chung | Personal | – | 8,800,000 | 0.18% | Major Shareholders' Long Positions in Shares and Underlying Shares of the Company (As of March 31, 2020) | Shareholder Name | Capacity | Number of Shares Held | % of Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Cheng Yu Tung Family (Holdings) Limited | Interest of Controlled Corporation | 2,742,514,028 (L) | 56.86% | | Cheng Yu Tung Family (Holdings II) Limited | Interest of Controlled Corporation | 2,742,514,028 (L) | 56.86% | | Chow Tai Fook Capital Limited | Interest of Controlled Corporation | 2,742,514,028 (L) | 56.86% | | Chow Tai Fook (Holding) Limited | Interest of Controlled Corporation | 2,742,514,028 (L) | 56.86% | | Chow Tai Fook Nominee Limited | Beneficial Owner / Interest of Controlled Corporation | 1,530,601,835 (L) / 732,550,000 (L) | 31.74% / 15.19% | | Victory Day Investments Limited | Interest of Controlled Corporation | 732,550,000 (L) | 15.19% | | Smart On Resources Ltd. | Beneficial Owner | 732,550,000 (L) | 15.19% | | Wai Chuen Limited | Beneficial Owner | 479,362,193 (L) | 9.94% | | Wealthy Link International Limited | Beneficial Owner | 785,100,000 (L) | 16.28% | | Mr. Leung Kai Kuen | Interest of Controlled Corporation | 785,100,000 (L) | 16.28% | [Connected Transactions and Financial Assistance](index=29&type=section&id=5.3%20關連交易與財務資助) This section discloses the Group's transactions with connected persons and details the financial assistance provided to associates, which exceeded the asset ratio stipulated by the Listing Rules - Transactions between the Group and ALBA IWS, Green Future, and DIHL are related party transactions but do not constitute connected transactions as defined in Chapter 14A of the Listing Rules[125](index=125&type=chunk) - As of March 31, 2020, the Group provided financial assistance totaling approximately **HKD 74,370,000** to associates, representing **8.34% of the Group's total assets**[128](index=128&type=chunk) - Financial assistance to ALBA IWS included a term loan of **HKD 19,980,000** (unsecured, **7% annual interest rate**) and accrued interest expenses of **HKD 2,420,000**[128](index=128&type=chunk) - Financial assistance to Green Future included two tranches of term loans totaling **HKD 27,000,000** (unsecured, HIBOR plus **4% annual interest rate**) and accrued interest expenses of **HKD 8,380,000**[129](index=129&type=chunk) - Shareholder loan to DIHL amounted to **RMB 14,400,000** (approximately **HKD 16,560,000**), unsecured, with a **5% annual interest rate**, repayable in installments[130](index=130&type=chunk) [Other Disclosures](index=32&type=section&id=5.4%20其他披露事項) This section discloses directors' interests in competing businesses, the proportion of major suppliers and customers, and confirms that the company's shares have sufficient public float - Mr. Cheng Chi Ming holds a directorship interest in NWS Holdings Limited's waste management business, which is considered to be in competition with the Group's business[131](index=131&type=chunk) Proportion of Major Suppliers and Customers (Percentage of Purchases/Sales During the Year) | Category | Proportion | | :--- | :--- | | Largest Supplier | 15% | | Top Five Suppliers Combined | 37% | | Largest Customer | 15% | | Top Five Customers Combined | 54% | - The Directors confirm that the company's shares have a sufficient public float of over **25%**[134](index=134&type=chunk) - The Audit Committee has reviewed the audited consolidated financial statements for the year ended March 31, 2020[138](index=138&type=chunk) - KPMG will retire and is eligible for re-appointment as auditor at the 2020 Annual General Meeting[139](index=139&type=chunk) [Corporate Governance Report](index=34&type=section&id=企業管治報告) This report outlines the company's commitment to high corporate governance standards, detailing the Board's structure, committee functions, director training, risk management, internal controls, dividend policy, and shareholder rights [Corporate Governance Framework and Board Operations](index=34&type=section&id=6.1%20企業管治框架與董事會運作) The company is committed to maintaining a high level of corporate governance and complying with the Corporate Governance Code, with the Board responsible for leading and managing the company and overseeing overall business and strategy - The company has complied with the Corporate Governance Code for the financial year ended March 31, 2020, except for Code Provision E.1.2 (Chairman's attendance at the Annual General Meeting)[141](index=141&type=chunk) - The Board is responsible for leading and managing the company, overseeing overall business, strategy, corporate governance, internal control, and risk management[142](index=142&type=chunk) - The Board comprises two executive directors, four non-executive directors, and three independent non-executive directors, meeting the requirements of the Listing Rules[147](index=147&type=chunk) - The roles of Chairman (Mr. Cheng Chi Ming) and Chief Executive Officer (Mr. Lam King Sang) are separated to ensure segregation of duties and a balance of power[149](index=149&type=chunk) Attendance at Board and Committee Meetings (FY2020) | Director Name | Board Meetings | Executive Committee Meetings | Audit Committee Meetings | Remuneration Committee Meetings | Nomination Committee Meetings | Annual General Meeting | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Lam King Sang | 4/4 | 12/12 | 0/0 | 0/0 | 0/0 | 1/1 | | Mr. Tam Shui Kin | 4/4 | 12/12 | 0/0 | 0/0 | 0/0 | 1/1 | | Mr. Cheng Chi Ming | 2/4 | 0/0 | 1/3 | 0/0 | 0/0 | 0/1 | | Mr. Tsang On Yip | 2/4 | 0/0 | 3/3 | 1/1 | 1/1 | 1/1 | | Mr. Lau Sai Cheong | 4/4 | 0/0 | 0/0 | 0/0 | 1/1 | 1/1 | | Mr. Li Chi Huen | 4/4 | 0/0 | 0/0 | 1/1 | 0/0 | 1/1 | | Mr. Chow Siu Wing | 3/4 | 0/0 | 3/3 | 1/1 | 1/1 | 1/1 | | Mr. Wong Man Chung | 4/4 | 0/0 | 3/3 | 1/1 | 1/1 | 1/1 | | Mr. Chan Ting Pong | 4/4 | 0/0 | 2/3 | 1/1 | 1/1 | 1/1 | [Functions of Board Committees](index=39&type=section&id=6.2%20董事會委員會職能) The Board has established an Executive Committee, Audit Committee, Remuneration Committee, and Nomination Committee, each with clear terms of reference to oversee specific areas and report to the Board - The Board has established an Executive Committee, Audit Committee, Remuneration Committee, and Nomination Committee, all with clear terms of reference and reporting to the Board[165](index=165&type=chunk) - The primary responsibilities of the Audit Committee include reviewing financial statements, examining the relationship with external auditors, and assessing financial reporting, risk management, and internal control systems[171](index=171&type=chunk) - The primary responsibilities of the Remuneration Committee include advising the Board on remuneration policies for directors and senior management, and reviewing and approving performance-based remuneration[176](index=176&type=chunk) - The primary responsibilities of the Nomination Committee include reviewing Board composition, establishing procedures for director nomination and appointment, identifying qualified individuals, and assessing the independence of independent non-executive directors[181](index=181&type=chunk) - The company has formulated a Board Diversity Policy, considering qualifications, experience, skills, quality, character, and potential contributions when evaluating director candidates, regardless of gender, age, or race[185](index=185&type=chunk) [Director Training and Responsibilities](index=44&type=section&id=6.3%20董事培訓與責任) All directors receive induction and continuous professional training to ensure a thorough understanding of the Group's business, operations, and regulatory responsibilities, supported by liability insurance and a diligent Company Secretary - All directors receive induction and continuous professional training, covering areas such as corporate strategy, laws and regulations, directors' duties, ESG codes, and financial reporting[190](index=190&type=chunk) - The company has purchased appropriate liability insurance for directors and officers, covering costs, losses, expenses, and liabilities arising from the performance of their duties[191](index=191&type=chunk) - The Company Secretary is a full-time employee, reporting to the Chairman and providing advice on governance matters, having received no less than **15 hours of relevant professional training**[192](index=192&type=chunk) - The company has adopted the Model Code for Securities Transactions by Directors as set out in Appendix 10 of the Listing Rules and confirms directors' compliance[193](index=193&type=chunk) - Directors are aware of their responsibility to prepare financial statements in accordance with statutory requirements and applicable accounting standards, and to disclose price-sensitive information in a timely and appropriate manner[195](index=195&type=chunk) [Risk Management and Internal Control](index=46&type=section&id=6.4%20風險管理與內部監控) The Board is responsible for assessing and determining the Group's risk appetite, and continuously reviewing and monitoring the effectiveness of risk management and internal control systems - The Board is responsible for assessing and determining the Group's risk appetite, and continuously reviewing and monitoring the effectiveness of risk management and internal control systems[198](index=198&type=chunk) - The Group's risk management process involves risk identification, risk assessment, and risk response, employing both top-down and bottom-up approaches[201](index=201&type=chunk) - Risks primarily involve five key areas: strategic risk, operational risk, market risk, financial risk, and legal risk[201](index=201&type=chunk) - The internal audit function independently evaluates the effectiveness of risk management activities and internal control systems, reporting to the Audit Committee[204](index=204&type=chunk) - The Board considers the risk management and internal control systems for the financial year ended March 31, 2020, to be effective and adequate[206](index=206&type=chunk) [Dividend Policy and Shareholder Rights](index=48&type=section&id=6.5%20股息政策與股東權利) The Board has adopted a dividend policy aimed at balancing shareholder returns with the reserves required for the Group's long-term development, considering various financial and strategic factors - The Board has adopted a dividend policy aimed at balancing profit distribution to shareholders with retaining sufficient reserves for working capital and future growth[207](index=207&type=chunk) - Dividend distribution will consider the Group's actual and expected financial performance, retained profits, liquidity, capital needs, business strategy, economic conditions, and other internal and external factors[208](index=208&type=chunk) - Shareholders holding not less than one-tenth of the paid-up capital carrying voting rights may, in accordance with the Articles of Association, submit a written request to the Board or Company Secretary to convene an extraordinary general meeting[212](index=212&type=chunk) - The company maintains its website www.iwsgh.com as a communication platform for shareholders and investors, and continuously strengthens investor communication and relations[216](index=216&type=chunk) [Independent Auditor's Report](index=51&type=section&id=獨立核數師報告) This report provides the auditor's opinion on the consolidated financial statements, highlights key audit matters, and clarifies the responsibilities of both directors and the auditor [Opinion and Basis for Opinion](index=51&type=section&id=7.1%20意見與審計基礎) KPMG expressed a true and fair view on the consolidated financial statements of Integrated Waste Solutions Group Holdings Limited for the year ended March 31, 2020, considering them properly prepared in accordance with International Financial Reporting Standards - The auditor believes that the consolidated financial statements present a true and fair view of the Group's financial position, performance, and cash flows in accordance with International Financial Reporting Standards, and have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance[218](index=218&type=chunk) - The audit was conducted in accordance with International Standards on Auditing and complied with the Code of Ethics for Professional Accountants, ensuring independence[219](index=219&type=chunk) [Key Audit Matter: Impairment Assessment of Property, Plant and Equipment and Right-of-Use Assets](index=52&type=section&id=7.2%20關鍵審計事項%EF%BC%9A物業%E3%80%81廠房及設備以及使用權資產的減值評估) The auditor identified the impairment assessment of property, plant and equipment and right-of-use assets as a key audit matter due to the significant judgments and estimates involved in management's preparation of discounted cash flow forecasts - The impairment assessment of property, plant and equipment and right-of-use assets is identified as a key audit matter due to significant judgments and estimates involved[224](index=224&type=chunk)[233](index=233&type=chunk) - Management is required to make significant judgments when preparing discounted cash flow forecasts, particularly regarding future revenue, cost of sales and services, other operating expenses, and discount rates[230](index=230&type=chunk) - The auditor assessed management's procedures for identifying impairment indicators, the methodology for discounted cash flow forecasts, and key assumptions, comparing them with the financial budgets approved by the Board[225](index=225&type=chunk) - The auditor engaged internal valuation specialists to assess the reasonableness of discount rates and performed sensitivity analysis on key assumptions to evaluate indications of management bias[230](index=230&type=chunk)[233](index=233&type=chunk) [Responsibilities of Directors and Auditor](index=55&type=section&id=7.3%20董事與核數師責任) Directors are responsible for the preparation of the consolidated financial statements and ensuring effective internal controls, while the auditor's responsibility is to obtain reasonable assurance about whether the financial statements are free from material misstatement - Directors are responsible for preparing consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards and the Hong Kong Companies Ordinance, and for internal controls[237](index=237&type=chunk) - Directors are responsible for assessing the Group's ability to continue as a going concern and disclosing related matters where applicable[237](index=237&type=chunk) - The auditor's objective is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error[240](index=240&type=chunk) - The auditor communicates with the Audit Committee regarding the planned scope and timing of the audit, significant audit findings, and any deficiencies in internal control[245](index=245&type=chunk) - The auditor provides the Audit Committee with a statement of independence and communicates all relationships and matters that may affect independence[245](index=245&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=58&type=section&id=綜合損益及其他全面收益表) This statement presents the Group's financial performance for the year, detailing revenue, costs, gross profit, operating loss, and total comprehensive income [Profit or Loss Statement Overview](index=58&type=section&id=8.1%20損益表概覽) For the year ended March 31, 2020, Integrated Waste Solutions Group's revenue significantly decreased, leading to a more than halved gross profit and an expanded operating loss Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the year ended March 31, 2020) | Metric | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 104,295 | 196,340 | | Cost of sales and services | (85,084) | (154,338) | | Gross profit | 19,211 | 42,002 | | Other income | 9,904 | 2,377 | | Net other losses | (942) | (3,349) | | Selling and distribution expenses | (22,827) | (26,914) | | Administrative and other operating expenses | (73,936) | (71,151) | | Impairment loss on property, plant and equipment | (16,866) | (3,276) | | Operating loss | (85,456) | (60,311) | | Finance income | 8,127 | 8,382 | | Finance costs | (189) | – | | Share of profit of an associate | 389 | – | | Share of (loss)/profit of joint ventures | (460) | 170 | | Loss before tax | (77,589) | (51,759) | | Income tax credit | – | 235 | | Loss for the year | (77,589) | (51,524) | | Basic and diluted loss per share | (1.6) Cents | (1.1) Cents | | Other comprehensive income for the year | 12 | – | | Total comprehensive income for the year | (77,577) | (51,524) | - The Group first applied IFRS 16 on **April 1, 2019**, and comparative information has not been restated[249](index=249&type=chunk) [Consolidated Statement of Financial Position](index=59&type=section&id=綜合財務狀況表) This statement provides a snapshot of the Group's financial position at year-end, including assets, liabilities, and equity [Financial Position Overview](index=59&type=section&id=9.1%20財務狀況概覽) As of March 31, 2020, Integrated Waste Solutions Group's total assets less current liabilities decreased, with non-current assets primarily comprising property, plant and equipment, right-of-use assets, and interests in associates and joint ventures Key Data from Consolidated Statement of Financial Position (As of March 31, 2020) | Metric | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 610,279 | 659,169 | | Right-of-use assets | 31,734 | – | | Land use rights | – | 30,802 | | Interests in an associate | 80,429 | – | | Interests in joint ventures | 3,795 | 39,075 | | **Current assets** | | | | Inventories | 2,012 | 5,341 | | Trade and bills receivables | 6,980 | 24,233 | | Other receivables, deposits and prepayments | 14,056 | 15,112 | | Amount due from an associate | 5,556 | – | | Amounts due from joint ventures | 38,278 | 33,683 | | Bank balances and cash | 98,962 | 160,665 | | **Current liabilities** | | | | Trade payables | 2,411 | 3,229 | | Other payables, accrued charges and contract liabilities | 19,351 | 19,078 | | Lease liabilities (current) | 1,740 | – | | **Non-current liabilities** | | | | Lease liabilities (non-current) | 369 | – | | **Total** | | | | Net current assets | 142,344 | 216,729 | | Total assets less current liabilities | 868,581 | 945,789 | | Net assets | 868,212 | 945,789 | | Share capital | 482,301 | 482,301 | | Reserves | 385,911 | 463,488 | | Total equity | 868,212 | 945,789 | - The Group first applied IFRS 16 on **April 1, 2019**, and comparative information has not been restated, leading to the recognition of right-of-use assets and lease liabilities[253](index=253&type=chunk)[263](index=263&type=chunk) [Consolidated Statement of Changes in Equity](index=61&type=section&id=綜合權益變動表) This statement details the movements in the Group's equity components over the year, including profit or loss, other comprehensive income, and share option adjustments [Overview of Changes in Equity](index=61&type=section&id=10.1%20權益變動概覽) For the year ended March 31, 2020, Integrated Waste Solutions Group's total equity decreased, primarily due to the annual loss and adjustments from the first-time application of IFRS 16 Key Data from Consolidated Statement of Changes in Equity (For the year ended March 31, 2020) | Metric | Share Capital (HKD thousands) | Share Premium (HKD thousands) | Capital Reserve (HKD thousands) | Share-based Capital Reserve (HKD thousands) | Exchange Reserve (HKD thousands) | Accumulated Losses (HKD thousands) | Total Equity (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at March 31, 2019 and April 1, 2019 | 482,301 | 3,092,937 | (964,044) | 5,951 | – | (1,671,356) | 945,789 | | Loss for the year | – | – | – | – | – | (77,589) | (77,589) | | Share of other comprehensive income - joint ventures and associates operating outside Hong Kong | – | – | – | – | 12 | – | 12 | | Lapsed share options | – | – | – | (123) | – | 123 | – | | Balance at March 31, 2020 | 482,301 | 3,092,937 | (964,044) | 5,828 | 12 | (1,748,822) | 868,212 | - The Group first applied IFRS 16 on **April 1, 2019**, and comparative information has not been restated[267](index=267&type=chunk) [Consolidated Statement of Cash Flows](index=62&type=section&id=綜合現金流量表) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities for the year, showing the net change in cash and cash equivalents [Cash Flow Overview](index=62&type=section&id=11.1%20現金流量概覽) For the year ended March 31, 2020, Integrated Waste Solutions Group's cash and cash equivalents saw a net decrease, with cash used in operating, investing, and financing activities Key Data from Consolidated Statement of Cash Flows (For the year ended March 31, 2020) | Metric | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | (14,082) | (19,668) | | Net cash used in investing activities | (45,849) | (38,690) | | Net cash (used in)/generated from financing activities | (1,772) | 152 | | Net decrease in cash and cash equivalents | (61,703) | (58,206) | | Cash and cash equivalents at beginning of year | 160,665 | 218,871 | | Cash and cash equivalents at end of year | 98,962 | 160,665 | | Payments for purchase of property, plant and equipment | (794) | (4,278) | | Investment in an associate | (69,000) | – | | Loans to an associate | (16,560) | – | | Loans to joint ventures | (15,000) | (38,732) | | Repayment of loans from joint ventures | 50,350 | 8,732 | | Interest received | 11,397 | 3,628 | | Capital portion of lease payments paid | (1,583) | – | | Interest portion of lease payments paid | (189) | – | - The Group first applied IFRS 16 on **April 1, 2019**, and comparative information has not been restated, leading to changes in the classification of lease-related cash flows[273](index=273&type=chunk) [Notes to the Financial Statements](index=63&type=section&id=財務報表附註) This section provides detailed explanations of the Group's significant accounting policies, financial risk management, critical accounting estimates, and disaggregated financial information for various accounts [Summary of Significant Accounting Policies](index=63&type=section&id=12.1%20重大會計政策概要) This section outlines the significant accounting policies followed by Integrated Waste Solutions Group in preparing its consolidated financial statements, including compliance, basis of preparation, and the impact of IFRS 16 - The financial statements are prepared in accordance with all applicable International Financial Reporting Standards (IFRS) and the disclosure requirements of the Hong Kong Companies Ordinance[281](index=281&type=chunk) - The Group first applied IFRS 16 "Leases" from **April 1, 2019**, adopting the modified retrospective approach, and comparative information has not been restated[287](index=287&type=chunk) - The application of IFRS 16 resulted in the recognition of right-of-use assets and lease liabilities, and the classification of lease payments into capital and interest components, impacting the statement of profit or loss and cash flow statement[294](index=294&type=chunk)[305](index=305&type=chunk) - Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, with depreciation calculated on a straight-line basis over their estimated useful lives[328](index=328&type=chunk) - Credit loss provisions are measured at lifetime expected credit losses, considering past experience, current conditions, and forecasts of future economic conditions[352](index=352&type=chunk) - Revenue is recognized based on the transfer of control of products or services to customers, at the amount of consideration expected to be received[403](index=403&type=chunk) [Financial Risk Management](index=88&type=section&id=12.2%20財務風險管理) This section describes the financial risks faced by the Group and its management policies, including currency risk, credit risk, and interest rate risk - The Group faces currency, credit, liquidity, and interest rate risks, and has established policies for continuous monitoring[428](index=428&type=chunk) - Major currency risks arise from sales, purchases, receivables, payables, and cash balances denominated in USD and RMB, with no foreign currency hedging policy currently in place[428](index=428&type=chunk)[432](index=432&type=chunk) - If the RMB depreciates/appreciates by **5%** against the HKD, the annual loss before tax would decrease/increase by approximately **HKD 2,147,000** respectively[433](index=433&type=chunk) - Credit risk primarily arises from trade receivables and bank balances, with the Group conducting credit assessments of customers and regularly reviewing receivables[434](index=434&type=chunk)[436](index=436&type=chunk) Credit Risk and Expected Credit Losses for Trade and Bills Receivables (As of March 31, 2020) | Ageing | Gross Carrying Amount (HKD thousands) | Provision on Individual Basis (HKD thousands) | Expected Credit Loss Rate | Expected Credit Loss (HKD thousands) | Trade and Bills Receivables after Loss Provision (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Current and within payment terms | 4,481 | – | 0.29% | (13) | 4,468 | | 1 – 30 Days | 1,777 | – | 0.73% | (13) | 1,764 | | 31 – 60 Days | 217 | – | 3.69% | (8) | 209 | | 61 – 90 Days | 160 | – | 10.00% | (16) | 144 | | 91 – 120 Days | 183 | – | 12.02% | (22) | 161 | | Over 120 Days | 4,039 | (3,767) | 13.97% | (38) | 234 | | **Total** | **10,857** | **(3,767)** | | **(110)** | **6,980** | - Interest rate risk primarily arises from bank deposits and loans to joint ventures, which the Group monitors on a dynamic basis[448](index=448&type=chunk) - The Group regards shareholders' equity as capital, aiming to safeguard going concern and generate returns for shareholders; as of March 31, 2020, the Group had no borrowings[449](index=449&type=chunk)[450](index=450&type=chunk) [Critical Accounting Estimates and Judgments](index=93&type=section&id=12.3%20重要會計估計及判斷) This section highlights that in preparing financial statements, management needs to make significant judgments and estimates regarding the estimated useful lives and residual values of property, plant and equipment, as well as impairment provisions for property, plant and equipment and right-of-use assets - The Group continuously assesses the estimated useful lives and residual values of property, plant and equipment to determine depreciation expense[455](index=455&type=chunk) - Impairment provisions for property, plant and equipment and right-of-use assets involve significant judgments, particularly in estimating future cash flows, revenue, and operating costs when assessing recoverable amounts[456](index=456&type=chunk) [Revenue and Segment Information](index=94&type=section&id=12.4%20收益及分部資料) The Group's operating segments include Confidential Material Destruction Services (CMDS), Logistics Services, Recycled Paper and Materials, and Household Paper Products, with total revenue significantly decreasing this year - The Group's operating segments include CMDS, Logistics Services, Recycled Paper and Materials, and Household Paper Products[458](index=458&type=chunk) Revenue by Major Product or Service Line (For the year ended March 31, 2020) | Product/Service | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Provision of confidential material destruction services | 19,169 | 20,134 | | Provision of logistics services | 8,372 | 1,376 | | Sales of recycled paper and materials | 76,719 | 174,813 | | Sales of household paper | 35 | 17 | | **Total** | **104,295** | **196,340** | Revenue by Geographical Market (For the year ended March 31, 2020) | Geographical Region | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Hong Kong | 57,698 | 95,294 | | Mainland China | 30,902 | 78,688 | | South Korea | 15,695 | 20,600 | | Others | – | 1,758 | | **Total** | **104,295** | **196,340** | - Revenue from two external customers accounted for over **10%** of the Group's total revenue, totaling approximately **HKD 31,109 thousand** (2019: HKD 55,116 thousand)[464](index=464&type=chunk) Reportable Segment Profit (For the year ended March 31, 2020) | Segment | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | CMDS | 11,515 | 12,987 | | Logistics Services | 5,634 | 3,191 | | Recycled Paper and Materials | 5,073 | 32,760 | | Household Paper Products | 2 | 2 | | **Total reportable segment profit** | **22,224** | **48,940** | | Reportable segment profit from external customers of the Group | 19,211 | 42,002 | [Other Income and Losses](index=98&type=section&id=12.5%20其他收入與虧損) This year, the Group's other income significantly increased, primarily from royalty and management fee income, while net other losses mainly comprised losses on disposal of property, plant and equipment and exchange losses Other Income (For the year ended March 31, 2020) | Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Royalty income | 8,400 | 1,400 | | Service income | 160 | 441 | | Management fee income | 488 | – | | Others | 856 | 536 | | **Total** | **9,904** | **2,377** | Net Other Losses (For the year ended March 31, 2020) | Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Net (loss)/gain on disposal of property, plant and equipment | (51) | 415 | | Write-off of property, plant and equipment | (2) | (770) | | Net exchange losses | (889) | (2,994) | | **Total** | **(942)** | **(3,349)** | [Analysis of Loss Before Tax](index=98&type=section&id=12.6%20除稅前虧損分析) This year's loss before tax was HKD 77,589 thousand, primarily influenced by increased staff costs, finance costs, and a significant rise in impairment losses on property, plant and equipment Key Deductions/Additions to Loss Before Tax (For the year ended March 31, 2020) | Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Staff costs (including directors' emoluments) | 58,780 | 62,932 | | Finance income | (8,127) | (8,382) | | Finance costs | 189 | – | | Cost of inventories sold | 71,652 | 142,068 | | Depreciation expense (owned property, plant and equipment) | 30,493 | 34,008 | | Depreciation expense (right-of-use assets) | 2,760 | – | | Impairment loss on property, plant and equipment | 16,866 | 3,276 | | Auditor's remuneration (audit services) | 2,010 | 2,110 | | Auditor's remuneration (other services) | 1,557 | 498 | - Total staff costs amounted to **HKD 58,780 thousand**, with **HKD 18,243 thousand** allocated to cost of sales and services, **HKD 14,787 thousand** to selling and distribution expenses, and **HKD 25,750 thousand** to administrative and other operating expenses[475](index=475&type=chunk) - Finance income primarily comprised interest income from bank deposits (**HKD 1,949 thousand**), interest income from loans to joint ventures (**HKD 6,142 thousand**), and interest income from loans to an associate (**HKD 36 thousand**)[476](index=476&type=chunk) [Income Tax](index=100&type=section&id=12.7%20所得稅) For the year ended March 31, 2020, the Group recognized no income tax credit, with Hong Kong subsidiaries making no provision for profits tax due to tax losses Income Tax Credit (For the year ended March 31, 2020) | Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Current tax - Hong Kong profits tax provision for the year | – | – | | Over-provision in prior years | – | (235) | | **Income tax credit** | **–** | **(235)** | Reconciliation of Income Tax Credit to Loss Before Tax (For the year ended March 31, 2020) | Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Loss before tax | (77,589) | (51,759) | | Tax at a rate of 16.5% | (12,802) | (8,540) | | Tax effect of non-taxable income | (2,958) | (891) | | Tax effect of non-deductible expenses | 5,782 | 1,154 | | Tax effect of unrecognised tax losses | 9,978 | 10,136 | | Tax effect of utilisation of previously unrecognised tax losses | – | (1,615) | | Over-provision in prior years | – | (235) | | Others | – | (244) | | **Income tax credit** | **–** | **(235)** | - The tax effect relating to components of other comprehensive income for the year was nil[480](index=480&type=chunk) [Emoluments of Directors and Highest Paid Individuals](index=101&type=section&id=12.8%20董事及最高薪人士之酬金) For the year ended March 31, 2020, total directors' emoluments amounted to HKD 9,528 thousand, with two executive directors receiving a significant portion, and total emoluments for the five highest-paid individuals were HKD 2,934 thousand Directors' Emoluments (For the year ended March 31, 2020) | Director Name | Fees (HKD thousands) | Salaries, allowances and benefits in kind (HKD thousands) | Discretionary bonuses (HKD thousands) | Retirement scheme contributions (HKD thousands) | Total (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Lam King Sang | 359 | 2,440 | 511 | 18 | 3,328 | | Mr. Tam Shui Kin | 359 | 2,440 | 511 | 18 | 3,328 | | Mr. Cheng Chi Ming | 718 | – | – | – | 718 | | Mr. Lau Sai Cheong | 359 | – | – | – | 359 | | Mr. Li Chi Huen | 359 | – | – | – | 359 | | Mr. Tsang On Yip | 359 | – | – | – | 359 | | Mr. Chow Siu Wing | 359 | – | – | – | 359 | | Mr. Chan Ting Pong | 359 | – | – | – | 359 | | Mr. Wong Man Chung | 359 | – | – | – | 359 | | **Total** | **3,590** | **4,880** | **1,022** | **36** | **9,528** | Emoluments of the Five Highest Paid Individuals (For the year ended March 31, 2020) | Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Salaries, allowances and benefits in kind | 2,521 | 2,452 | | Discretionary bonuses | 377 | 384 | | Retirement scheme contributions | 36 | 54 | | Share-based payments | – | 21 | | **Total** | **2,934** | **2,911** | - Two of the five highest-paid individuals were directors, whose emoluments are disclosed under directors' emoluments[494](index=494&type=chunk) [Loss Per Share](index=104&type=section&id=12.9%20每股虧損) For the year ended March 31, 2020, basic and diluted loss per share increased to 1.6 HK cents, calculated based on the loss attributable to equity holders and the weighted average number of ordinary shares Loss Per Share (For the year ended March 31, 2020) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Basic and diluted loss per share | (1.6) Cents | (1.1) Cents | | Loss attributable to equity holders of the Company | 77,589 HKD thousands | 51,524 HKD thousands | | Weighted average number of ordinary shares | 4,823,009 thousand shares | 4,823,009 thousand shares | - Unexercised share options had an anti-dilutive effect on basic loss per share, thus no diluted adjustment was made[501](index=501&type=chunk) [Property, Plant and Equipment and Right-of-Use Assets](index=105&type=section&id=12.10%20物業%E3%80%81廠房及設備以及使用權資產) As of March 31, 2020, the combined net book value of property, plant and equipment and right-of-use assets was HKD 642,013 thousand, with an impairment loss recognized primarily due to declining profitability in the recycled plastic pellet business Reconciliation of Net Book Value of Property, Plant and Equipment and Right-of-Use Assets (As of March 31, 2020) | Item | At April 1, 2019 (HKD thousands) | Additions (HKD thousands) | Disposals (HKD thousands) | Write-offs (HKD thousands) | Impairment (HKD thousands) | Depreciation (HKD thousands) | At March 31, 2020 (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Buildings on owned land | 608,594 | 97 | – | – | – | (21,545) | 587,146 | | Leasehold improvements | 2,627 | – | – | – | – | (781) | 1,846 | | Plant and machinery | 24,815 | – | – | – | (16,866) | (4,134) | 3,815 | | Furniture, fixtures and equipment | 6,588 | 289 | (22) | (2) | – | (1,996) | 4,857 | | Motor vehicles | 16,545 | 313 | (2,206) | – | – | (2,037) | 12,615 | | **Sub-total** | **659,169** | **699** | **(2,228)** | **(2)** | **(16,866)** | **(30,493)** | **610,279** | | Right-of-use assets | 34,494 | – | – | – | – | (2,760) | 31,734 | | **Total** | **693,663** | **699** | **(2,228)** | **(2)** | **(16,866)** | **(33,253)** | **642,013** | - An impairment loss of **HKD 16,866 thousand** on property, plant and equipment was recognized this year, primarily due to a decline in the profitability of the recycled plastic pellet business[508](index=508&type=chunk) Net Book Value of Right-of-Use Assets (Analyzed by Class of Underlying Asset, As of March 31, 2020) | Class of Asset | 2020 (HKD thousands) | At April 1, 2019 (HKD thousands) | | :--- | :--- | :--- | | Ownership interests in leasehold land held for own use | 29,711 | 30,802 | | Other properties held for own use | 2,023 | 3,692 | | **Total** | **31,734** | **34,494** | - The unexpired lease term for leasehold land use rights is **27 years**, while other property leases generally have terms of two to three years[515](index=515&type=chunk)[516](index=516&type=chunk) [Land Use Rights](index=109&type=section&id=12.11%20土地使用權) As of March 31, 2020, the Group no longer held land use rights, as they were reclassified to right-of-use assets upon the adoption of IFRS 16 on April 1, 2019 Movement in Land Use Rights (For the year ended March 31, 2020) | Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | At beginning of year | 30,802 | 31,892 | | Transferred to right-of-use assets | (30,802) | – | | Amortisation | – | (1,090) | | **At end of year** | **–** | **30,802** | - Upon adoption of IFRS 16, land use rights were reclassified to right-of-use assets[519](index=519&type=chunk) [Interests in an Associate](index=109&type=section&id=12.12%20於聯營公司之權益) As of March 31, 2020, the Group's total interests in an associate amounted to HKD 85,985 thousand, primarily from its investment in Dugong IWS HAZ Limited, which is engaged in hazardous waste treatment in China Interests in an Associate (As of March 31, 2020) | Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Share of net assets | 69,389 | – | | Loan to an associate | 16,560 | – | | Amount due from an associate | 36 | – | | **Total** | **85,985** | **–** | | Non-current portion | 80,429 | – | | Current portion | 5,556 | – | - The Group completed the acquisition of a **40%** equity interest in Dugong IWS HAZ Limited on **January 23, 2020**, for a total consideration of **HKD 69,000,000**[525](index=525&type=chunk)[529](index=529&type=chunk) - Dugong IWS HAZ Limited holds a **51%** equity interest in Lianyungang Greenrun Environmental Technology Co., Ltd. and Dagong Environmental Resources (Kaifeng) Co., Ltd., primarily providing hazardous waste treatment services[525](index=525&type=chunk) - The agreement includes a profit guarantee arrangement, where the vendor guarantees that Greenrun's total net income for the three years ending **December 31, 2021**, will not be less than **RMB 90,000,000**[529](index=529&type=chunk) - A shareholder loan of **RMB 14,400,000** (approximately **HKD 16,560,000**) was provided to Dugong IWS, unsecured, with a **5% annual interest rate**, repayable in installments[530](index=530&type=chunk) [Interests in Joint Ventures](index=113&type=section&id=12.13%20於合營公司之權益) As of March 31, 2020, the Group's total interests in joint ventures amounted to HKD 42,073 thousand, primarily comprising loans and receivables from several joint ventures, including ALBA IWS and Green Future Interests in Joint Ventures (As of March 31, 2020) | Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Share of net liabilities | (15,705) | (18,257) | | Loans to joint ventures | 46,982 | 85,332 | | Amounts due from joint ventures | 10,796 | 5,683 | | **Total** | **42,073** | **72,758** | | Non-current portion | 3,795 | 39,075 | | Current portion | 38,278 | 33,683 | - The Group has joint control over ALBA IWS (processing waste electrical and electronic products) and Green Future (manufacturing plastic products), thus accounting for its investments as joint ventures[537](index=537&type=chunk)[539](index=539&type=chunk) Summary of Financial Information for ALBA IWS (As of March 31, 2020) | Metric | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 276,189 | 209,129 | | Profit for the year | 61,368 | 7,119 | | Group's share of profit | 15,342 | 1,780 | | Carrying amount in consolidated financial statements | 6,393 | 44,668 | Summary of Financial Information for Green Future (As of March 31, 2020) | Metric | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 37,217 | – | | Loss for the year | (32,250) | (3,285) | | Group's share of loss | (15,802) | (1,610) | | Carrying amount in consolidated financial statements | 35,680 | 28,090 | [Inventories](index=117&type=section&id=12.14%20存貨) As of March 31, 2020, the Group's total inventories significantly decreased to HKD 2,012 thousand, primarily comprising raw materials and finished goods Inventories (As of March 31, 2020) | Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Raw materials | 19 | 2,377 | | Finished goods | 1,993 | 2,964 | | **Total** | **2,012** | **5,341** | - For the year ended March 31, 2020, the cost of inventories recognized as an expense and included in "cost of sales and services" was approximately **HKD 71,652 thousand**[547](index=547&type=chunk) [Trade and Bills Receivables](index=117&type=section&id=12.15%20應收貿易賬款及應收票據) As of March 31, 2020, net trade and bills receivables significantly decreased to HKD 6,980 thousand, with a notable portion of receivables over 120 days Net Trade and Bills Receivables (As of March 31, 2020) | Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Trade and bills receivables | 10,857 | 28,470 | | Less: Loss allowance | (3,877) | (4,237) | | **Net** | **6,980** | **24,233** | Ageing Analysis of Trade and Bills Receivables (As of March 31, 2020) | Ageing | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | 0 – 30 Days | 4,990 | 22,577 | | 31 – 60 Days | 1,419 | 1,462 | | 61 – 90 Days | 1 | 171 | | 91 – 120 Days | 196 | 28 | | Over 120 Days | 4,251 | 4,232 | | **Total** | **10,857** | **28,470** | | Less: Allowance for doubtful debts | (3,877) | (4,237) | | **Net** | **6,980** | **24,233** | - The average credit period for customers ranges from **10 to 90 days**, and trade and bills receivables are primarily denominated in HKD and USD[549](index=549&type=chunk)[550](index=550&type=chunk) [Cash and Cash Equivalents and Other Cash Flow Information](index=119&type=section&id=12.16%20現金及現金等價物及其他現金流量資料) As of March 31, 2020, the Group's total bank balances and cash amounted to HKD 98,962 thousand, primarily denominated in HKD, RMB, and USD, with cash used in operating activities mainly affected by loss before tax and changes in working capital Cash and Cash Equivalents (As of March 31, 2020) | Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Bank deposits | 69,107 | 112,053 | | Bank cash | 29,804 | 48,570 | | Cash on hand | 51 | 42 | | **Total** | **98,962** | **160,665** | Currency Denomination of Bank Balances and Cash (As of March 31, 2020) | Currency | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | HKD | 64,382 | 106,956 | | RMB | 26,334 | 42,709 | | USD | 8,229 | 10,983 | | EUR | 17 | 17 | | **Total** | **98,962** | **160,665** | Reconciliation of Loss Before Tax to Cash Used in Operations (For the year ended March 31, 2020) | Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Loss before tax | (77,589) | (51,759) | | Depreciation of property, plant and equipment | 30,493 | 34,008 | | Depreciation of right-of-use assets | 2,760 | – | | Impairment of property, plant and equipment | 16,866 | 3,276 | | Operating loss before working capital changes | (35,284) | (21,640) | | Changes in inventories | 3,329 | (842) | | Changes in trade and bills receivables | 17,253 | (2,755) | | **Cash used in operations** | **(14,082)** | **(22,879)** | - A shareholder loan of **HKD 3,000 thousand** provided to a joint venture was repaid by way of allotment of shares, with no cash flow impact on the Group[566](index=566&type=chunk) [Payables and Accrued Charges](index=122&type=section&id=12.17%20應付款項及應計費用) As of March 31, 2020, the Group's total payables and accrued charges slightly decreased to HKD 21,762 thousand, primarily denominated in HKD, with trade payables and other accrued expenses forming the main components Payables and Accrued Charges (As of March 31, 2020) | Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Trade payables | 2,411 | 3,229 | | Amounts due for construction work | 6,446 | 6,446 | | Accrued expenses | 7,169 | 6,812 | | Contract liabilities | 805 | 806 | | Salaries and wages payable | 680 | 953 | | Others | 4,251 | 4,061 | | **Total** | **21,762** | **22,307** | Ageing Analysis of Trade Payables (As of March 31, 2020) | Ageing | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Current | 1,558 | 2,231 | | 1 – 30 Days | 41 | 165 | | 31 – 60 Days | 33 | 30 | | 61 – 90 Days | 46 | 24 | | 91 – 120 Days | 16 | 4 | | Over 120 Days | 717 | 775 | | **Total** | **2,411** | **3,229** | - Payables and accrued charges are primarily denominated in HKD[569](index=569&type=chunk) [Lease Liabilities](index=124&type=section&id=12.18%20租賃負債) As of March 31, 2020, the present value of the Group's lease liabilities was HKD 2,109 thousand, with a portion repayable within one year, resulting from the first-time application of IFRS 16 Maturity Analysis of Lease Liabilities (As of March 31, 2020) | Period | Present Value of Minimum Lease Payments (HKD thousands) | Total Minimum Lease Payments (HKD thousands) | | :--- | :--- | :--- | | Within 1 year | 1,740 | 1,848 | | After 1 year but within 2 years | 369 | 388 | | **Total** | **2,109** | **2,236** | | Less: Total future finance charges | | (127) | | **Present value of lease liabilities** | | **2,109** | - The recognition of lease liabilities resulted from the first-time application of IFRS 16, re-recognizing properties previously classified as operating leases as lease liabilities[571](index=571&type=chunk) [Income Tax in Consolidated Statement of Financial Position](index=125&type=section&id=12.19%20於綜合財務狀況表內之所得稅) As of March 31, 2020, the Group's deferred tax assets and liabilities offset to zero, and no deferred tax assets were recognized for tax losses carried forward by certain subsidiaries Movement in Deferred Tax Assets and Liabilities (As of March 31, 2020) | Item | Future benefits of tax losses (HKD thousands) | Depreciation allowance in excess of related depreciation (HKD thousands) | Total (HKD thousands) | | :--- | :--- | :--- | :--- | | At March 31, 2019 and April 1, 2019 | 35,626 | (35,626) | – | | Credited/(charged) to profit or loss | 364 | (364) | – | | **At March 31

Integrated Waste Solutions Group Holdings Limited 綜合環保集團有限公司 (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立之有限公司) Stock code 股份代號：923 | --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|--------------------|-------|--------------------------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 目 錄 | | | | | | | 公司資料 | | | | 2 | | | | | 管理層討論及分析 | | | | 3 | | | | | 其他資料 | | | | 8 | | | | | | | 綜合損益及 ...

Integrated Waste Solutions Group Holdings Limited 綜合環保集團有限公司 (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立之有限公司) Stock code 股份代號：923 | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-----------------------------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 目 錄 | | | | | | | | 公司資料 | | 2 | | | | | | 主席報告 | | 3 | | | | | | 董事及高級管理層 | | 5 | | | | | | | | | | | | | | 管理層討論及分析 董事會報告 | | 10 19 | | | | ...