China Environmental Resources Group Limited 中 國 環 境 資 源 集 團 有 限 公 司 (於開曼群島註冊成立之有限公司) 股份代號: 1130 2019-2020 中期報告 II ..... 0 & 01 中國環境資源集團有限公司 中期業績報告2019–2020 公司資料 核數師 | --- | --- | |---------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------| | | | | 執行董事 楊智恒先生 （主席兼行政總裁） | 中滙安達會計師事務所有限公司 | | 梁廣才先生 黃保強先生 鍾少樺先生 戚道斌先生 獨立非執行董事 黃貴生先生 王子敬先生 香志恒 ...

[Corporate Information](index=3&type=section&id=Corporate%20information) This section provides fundamental company details including board members, committees, company secretary, auditor, principal office address, share registrar, principal bankers, and stock code - This section provides fundamental company details, including board members, committees, company secretary, auditor, principal office address, share registrar, principal bankers, and stock code[3](index=3&type=chunk)[5](index=5&type=chunk) [Management's Report](index=5&type=section&id=Management's%20report) [Business and Operation Review](index=5&type=section&id=BUSINESS%20AND%20OPERATION%20REVIEW) The Group's diverse operations faced challenges in metal recycling and biological assets, while motor and accessories business grew, prompting exploration of new ventures like a Nepal hotel project - The Group's diversified businesses include metal recycling, motor and accessories, parking space leasing, money lending, golden flower tea products, securities investment, and green businesses[7](index=7&type=chunk) [Investment Properties](index=5&type=section&id=Investment%20Properties) The Group holds two investment properties; redevelopment of the Dongguan industrial property is delayed, while 95 Hong Kong parking spaces provide stable rental income of approximately **HK$3.89 million**, a slight increase year-on-year - Redevelopment plans for the industrial property in Dongguan are delayed due to new municipal highway planning[9](index=9&type=chunk) Investment Properties Rental Income | Property Location | Interest | Business Activity | FY2019 Rental Income (HK$) | FY2018 Rental Income (HK$) | | :--- | :--- | :--- | :--- | :--- | | Dongguan, China | 80% | None | - | - | | Hong Kong | 100% (95 parking spaces) | Leasing for income | Approx. 3,891,000 | Approx. 3,751,000 | [Biological Assets](index=6&type=section&id=Biological%20Assets) Due to environmental factors and cost control, the Group ceased forest maintenance, leading to a **HK$72.77 million** non-cash loss from the fair value decline of biological assets to **HK$263 million** - Due to water scarcity, soil degradation, and ecosystem damage, the growth and quantity of biological assets are affected, leading the Group to suspend forest planting maintenance since July 2018[21](index=21&type=chunk) Biological Assets Fair Value and Loss | Metric | June 30, 2019 | June 30, 2018 | | :--- | :--- | :--- | | Fair Value of Biological Assets | Approx. HK$262,989,000 | Approx. HK$348,933,000 | | Loss from Fair Value Change | Approx. HK$72,769,000 | Approx. HK$174,687,000 | [Plantation Sales Business](index=8&type=section&id=Plantation%20Sales%20Business) No revenue was generated from plantation sales, as professional reports indicate extremely high risks for commercial logging and replanting, pending future quota assessment - No revenue was generated from the plantation sales business for the year ended June 30, 2019[21](index=21&type=chunk) - A professional report indicates that commercial logging and replanting face extremely high risks, including water resources, natural disasters, complex logging permit application procedures, strict water usage controls, and market price fluctuations[23](index=23&type=chunk)[28](index=28&type=chunk) [Metal Recycle Business](index=11&type=section&id=Metal%20Recycle%20Business) Metal recycling revenue significantly declined by **75.1%** due to slower local infrastructure, rising costs, and stricter import regulations, prompting diversification to other Southeast Asian markets Metal Recycling Business Revenue | Business Segment | FY2019 Revenue (HK$) | FY2018 Revenue (HK$) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Metal Recycling | Approx. 46,001,000 | Approx. 184,570,000 | -75.1% | - The decline in business is primarily due to slower local infrastructure development leading to increased scrap material procurement costs, and stricter import policies for recycled materials in China and Vietnam[40](index=40&type=chunk)[41](index=41&type=chunk) [Motor and Motor Accessories Business](index=11&type=section&id=Motor%20and%20Motor%20Accessories%20Business) Motor and accessories revenue grew by **201.9%**, driven by stable accessories wholesale; the Group will now focus on this segment over luxury vehicle sales due to economic uncertainty Motor and Motor Accessories Business Revenue | Business Segment | FY2019 Revenue (HK$) | FY2018 Revenue (HK$) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Motor and Motor Accessories | Approx. 66,547,000 | Approx. 22,042,000 | +201.9% | - Due to economic uncertainty, the Group will slow down sales of supercars and motorcycles, focusing instead on the more stable accessories wholesale business[44](index=44&type=chunk)[46](index=46&type=chunk) [Money Lending Business](index=12&type=section&id=Money%20Lending%20Business) The money lending business remained stable, generating approximately **HK$2.89 million** in interest income with no bad debts, and an outstanding loan principal of **HK$23.09 million** Money Lending Business Metrics | Metric | June 30, 2019 | June 30, 2018 | | :--- | :--- | :--- | | Loan Interest Income (HK$) | Approx. 2,893,000 | Approx. 1,913,000 | | Loans Receivable Principal (HK$) | Approx. 23,092,000 | Approx. 24,843,000 | [Securities Trading and Investment Business](index=12&type=section&id=Securities%20Trading%20and%20Investment%20Business) Securities investment performed poorly due to market volatility, resulting in a **HK$7.25 million** net fair value loss, with the portfolio valued at **HK$4.88 million** Securities Trading and Investment Business Performance | Metric | FY2019 | FY2018 | | :--- | :--- | :--- | | Net Loss from Fair Value Change of Investments (HK$) | Approx. 7,247,000 | Approx. 164,000 | | Period-end Securities Investment Portfolio Size (HK$) | Approx. 4,883,000 | Approx. 1,098,000 | [Green Technology and Golden Flower Tea Products](index=13&type=section&id=Green%20Technology%20and%20Golden%20Flower%20Tea%20Products) Green technology generated no revenue, and golden flower tea products achieved only **HK$27,000** in sales due to low market acceptance and penetration - The green technology business generated no revenue this year[58](index=58&type=chunk) - Golden flower tea product sales revenue was approximately **HK$27,000**, with market penetration significantly lower than expected[61](index=61&type=chunk) [Prospects](index=13&type=section&id=Prospects) Management is cautious about Hong Kong's economic outlook due to multiple crises, prompting business diversification efforts, including a new hotel project in Kathmandu, Nepal - Management believes Hong Kong faces a dual blow from the US-China trade war and local socio-political crises, leading to a significant deterioration in the economic environment and severely impacting prospects[62](index=62&type=chunk)[68](index=68&type=chunk) - To address challenges and expand revenue streams, the Group has signed an agreement to operate a hotel in Kathmandu, Nepal, optimistic about the local tourism development prospects[68](index=68&type=chunk) [Financial Review](index=15&type=section&id=FINANCIAL%20REVIEW) FY2019 turnover decreased by **43.8%** to **HK$119 million**, and gross profit by **4.8%**; the annual loss narrowed to **HK$121 million**, primarily due to non-cash items like biological asset fair value changes Financial Performance Summary | Financial Metric | FY2019 (HK$) | FY2018 (HK$) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Turnover | Approx. 119,387,000 | Approx. 212,276,000 | -43.8% | | Gross Profit | Approx. 18,384,000 | Approx. 19,303,000 | -4.8% | | Annual Loss | Approx. 121,140,000 | Approx. 160,586,000 | Loss narrowed | | Basic Loss Per Share | 6 HK cents | 9 HK cents | - | | Total Assets | Approx. 785,764,000 | Approx. 919,834,000 | -14.6% | | Net Assets | Approx. 645,929,000 | Approx. 782,955,000 | -17.5% | - The decrease in turnover and gross profit is primarily attributed to reduced revenue from recycled material trading. The annual loss is mainly due to fair value changes in biological assets, impairment provisions for intangible assets, and provisions for trade receivables[71](index=71&type=chunk) [Significant Investments](index=17&type=section&id=Significant%20Investments) The Group's listed securities portfolio, valued at **HK$4.88 million** (0.73% of net assets), recorded a **HK$5.69 million** net unrealized loss for the year Directors' Long Positions in Company Shares (as of June 30, 2019) | Share Name | Stock Code | Market Value (HK$ Thousand) | Net Unrealized Loss (HK$ Thousand) | Percentage of Portfolio | | :--- | :--- | :--- | :--- | :--- | | China Fortunes Financial Group | 290 | 759 | (667) | 15.6% | | Ding Yi Group Investment | 508 | 592 | (544) | 12.1% | | Wai Chun Group Holdings | 1013 | 2,245 | 224 | 46.0% | | HANG SANG (SIU PO) | 3626 | 617 | (481) | 12.6% | | China Strategic Holdings | 8089 | 670 | (4,226) | 13.7% | | **Total** | | **4,883** | **(5,694)** | **100%** | [Other Matters](index=19&type=section&id=Other%20Matters) The Group had **53** employees, no recommended dividends, no currency hedging, and no significant contingent liabilities as of June 30, 2019 - The Board does not recommend any dividend for the year ended June 30, 2019[86](index=86&type=chunk) - As of June 30, 2019, the Group had **53** employees[84](index=84&type=chunk) [Biographical Details of Directors](index=20&type=section&id=Biographical%20details%20of%20directors) [Executive Directors](index=20&type=section&id=Executive%20Directors) This section details the biographies of five executive directors, including their age, education, professional qualifications, and other listed company appointments [Independent Non-Executive Directors](index=21&type=section&id=Independent%20Non-Executive%20Directors) This section details the biographies of three independent non-executive directors, covering their age, professional background, committee appointments, and relevant industry experience [Report of the Directors](index=23&type=section&id=Report%20of%20the%20directors) [Principal Activities and Business Review](index=23&type=section&id=Principal%20Activities%20and%20Business%20Review) The company primarily engaged in investment holding and diversified businesses; the Board does not recommend any dividend for the year ended June 30, 2019 - The Board does not recommend any dividend for the year ended June 30, 2019[114](index=114&type=chunk) [Share Capital and Reserves](index=24&type=section&id=Share%20Capital%20and%20Reserves) This section outlines changes in share capital and reserves, with distributable reserves of approximately **HK$312.1 million** as of June 30, 2019 - As of June 30, 2019, the company's distributable reserves were approximately **HK$312,105,000**[128](index=128&type=chunk) [Directors' and Shareholders' Interests](index=25&type=section&id=Directors'%20and%20Shareholders'%20Interests) This section discloses directors' and major shareholders' interests, with Chairman Mr. Yang Chi Hang holding **14.00%** and **125,614,085** share options unexercised Directors' Long Positions in Company Shares (as of June 30, 2019) | Director Name | Capacity | Total Interest (Shares) | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Yang Chi Hang | Beneficial Owner | 285,190,817 | 14.00% | | Mr. Chung Siu Wa | Beneficial Owner | 16,942,817 | 0.83% | | Mr. Chik To Bun | Beneficial Owner | 16,942,817 | 0.83% | | Mr. Wong Po Keung | Beneficial Owner | 16,942,817 | 0.83% | Major Shareholders' Long Positions in Company Shares (as of June 30, 2019) | Shareholder Name | Capacity | Total Interest (Shares) | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Chu Ying Man | Beneficial Owner | 135,000,000 | 6.63% | | Mr. Li Xiao Wu | Beneficial Owner | 117,138,000 | 5.75% | - As of June 30, 2019, under the 2015 Share Option Scheme, **125,614,085** share options remained unexercised, representing **6.17%** of the issued shares[150](index=150&type=chunk) [Continuing Connected Transactions](index=30&type=section&id=Continuing%20Connected%20Transactions) A continuing connected transaction involves leasing a property from a company indirectly owned by the Chairman's mother for **HK$176,295** monthly, confirmed compliant by auditors and independent directors - The Group's continuing connected transaction involves leasing a property from a company indirectly 50% owned by the Chairman's mother, with a monthly rent of **HK$176,295**[157](index=157&type=chunk) - The company's auditor and independent non-executive directors confirmed that the transaction was approved by the Board, complied with pricing policies and agreement terms, and did not exceed the annual cap[161](index=161&type=chunk)[162](index=162&type=chunk) [Other Statutory Disclosures](index=33&type=section&id=Other%20Statutory%20Disclosures) This section covers statutory disclosures, noting high customer and supplier concentration (top five customers **61.2%**, top five suppliers **60.9%**), and other policies - Customer concentration is high: the top five customers accounted for **61.2%** of total sales, with the largest customer representing **35.7%**[189](index=189&type=chunk) - Supplier concentration is high: the top five suppliers accounted for **60.9%** of total purchases, with the largest supplier representing **45.8%**[189](index=189&type=chunk) [Corporate Governance Report](index=37&type=section&id=Corporate%20governance%20report) [Corporate Governance Practices](index=37&type=section&id=Corporate%20Governance%20Practices) The company largely complied with the Corporate Governance Code, with deviations including the Chairman/CEO dual role and the Chairman's absence from the 2018 AGM - There is a deviation from the Corporate Governance Code: the roles of Chairman and Chief Executive are held by the same person, which the Board believes provides strong and consistent leadership[212](index=212&type=chunk) - Chairman Mr. Yang Chi Hang was unable to attend the Annual General Meeting held on November 12, 2018, due to business travel[212](index=212&type=chunk) [The Board and its Committees](index=37&type=section&id=The%20Board%20and%20its%20Committees) The Board, comprising five executive and three independent non-executive directors, oversees the Group through its Audit, Remuneration, Nomination, and Investment Committees - The Audit Committee, Remuneration Committee, and Nomination Committee are each composed of three independent non-executive directors, with Mr. Wong Tze King serving as Chairman[242](index=242&type=chunk)[252](index=252&type=chunk)[260](index=260&type=chunk) - The Investment Committee is composed of two executive directors, with Mr. Leung Kwong Choi serving as Chairman[276](index=276&type=chunk) [Risk Management and Internal Controls](index=49&type=section&id=Risk%20Management%20and%20Internal%20Controls) The Board maintained effective risk management and internal control systems, engaging an external firm for review of corporate governance and cash handling policies - The Board confirmed that for the financial year ended June 30, 2019, the company maintained effective risk management mechanisms and internal control systems[308](index=308&type=chunk) - The Group engaged an external professional consulting firm to conduct an internal control review, focusing on areas such as corporate governance and cash receipt handling policies[307](index=307&type=chunk) [Accountability, Audit, and Shareholder Relations](index=52&type=section&id=Accountability,%20Audit,%20and%20Shareholder%20Relations) The Board is responsible for financial reporting, with **HK$970,000** paid for audit services; clear procedures are in place for shareholder communication and engagement Auditor's Remuneration | Auditor's Remuneration | Amount (HK$) | | :--- | :--- | | Audit Services | 970,000 | | Interim Results Review Services | 210,000 | - The company has established clear procedures to safeguard shareholders' rights to convene extraordinary general meetings, raise inquiries with the Board, and make suggestions at general meetings[330](index=330&type=chunk)[331](index=331&type=chunk) [Independent Auditor's Report](index=56&type=section&id=Independent%20auditor's%20report) [Auditor's Opinion](index=56&type=section&id=Auditor's%20Opinion) The auditor issued an unqualified opinion, confirming the consolidated financial statements fairly present the Group's financial position, performance, and cash flows - The auditor issued a standard unqualified opinion on the financial statements, deeming them "true and fair"[342](index=342&type=chunk) [Key Audit Matters](index=56&type=section&id=Key%20Audit%20Matters) Key audit matters include fair value assessment of investment properties (**HK$277 million**) and biological assets (**HK$263 million**), and impairment testing of intangible assets (**HK$98.95 million**), all involving significant judgment - Key Audit Matter One: Fair value measurement of investment properties and biological assets, due to their material balances (investment properties approx. **HK$277 million**, biological assets approx. **HK$263 million**) and significant judgments and estimates involved[349](index=349&type=chunk) - Key Audit Matter Two: Impairment testing of intangible assets, due to their material balance (approx. **HK$98.95 million**) and significant judgments and estimates involved in the impairment test[352](index=352&type=chunk) [Consolidated Financial Statements](index=61&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=61&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Turnover decreased by **43.8%** to **HK$119 million**, with the annual loss narrowing to **HK$121 million** and total comprehensive loss at **HK$137 million** Consolidated Statement of Profit or Loss Summary (HK$ Thousand) | Item | FY2019 | FY2018 | | :--- | :--- | :--- | | Revenue | 119,387 | 212,276 | | Gross Profit | 18,384 | 19,303 | | Operating Loss | (138,382) | (204,513) | | Loss Before Tax | (139,131) | (205,061) | | Annual Loss | (121,140) | (160,586) | | Total Comprehensive Loss for the Year | (137,026) | (142,756) | [Consolidated Statement of Financial Position](index=63&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) Total assets decreased to **HK$786 million**, total liabilities were **HK$140 million**, and net assets decreased by **17.5%** to **HK$646 million** Consolidated Statement of Financial Position Summary (HK$ Thousand) | Item | June 30, 2019 | June 30, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 656,233 | 767,728 | | Current Assets | 129,531 | 152,106 | | **Total Assets** | **785,764** | **919,834** | | **Liabilities and Equity** | | | | Current Liabilities | 50,868 | 24,218 | | Non-current Liabilities | 88,967 | 112,661 | | **Total Liabilities** | **139,835** | **136,879** | | **Net Assets** | **645,929** | **782,955** | [Consolidated Statement of Changes in Equity](index=65&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity attributable to owners decreased to **HK$633 million**, primarily due to a **HK$138 million** total comprehensive loss for the year [Consolidated Statement of Cash Flows](index=66&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) Net cash outflow from operating activities was **HK$42.38 million**, with a net decrease in cash and cash equivalents of **HK$7.60 million**, ending at **HK$5.55 million** Consolidated Statement of Cash Flows Summary (HK$ Thousand) | Item | FY2019 | FY2018 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (42,377) | (74,838) | | Net Cash From Investing Activities | 12,779 | 20,794 | | Net Cash From Financing Activities | 22,000 | 54,133 | | Net Decrease in Cash and Cash Equivalents | (7,598) | 89 | | Cash and Cash Equivalents at Beginning of Year | 13,027 | 13,015 | | **Cash and Cash Equivalents at End of Year** | **5,551** | **13,027** | [Notes to the Consolidated Financial Statements](index=68&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section details accounting policies, estimates, segment information, and related party transactions, noting that motor and accessories was the only profitable segment - Segment information (Note 8) shows that the trading of recycled metals, property investment, golden flower tea products, securities investment, and plantation products segments all recorded losses, while the financial services segment recorded a profit[602](index=602&type=chunk) [Five-Year Financial Summary](index=145&type=section&id=Five-year%20financial%20summary) This section presents a five-year summary of the Group's key financial performance and position indicators, offering a historical perspective on revenue, profit/loss, assets, and liabilities Five-Year Financial Data Summary (HK$ Thousand) | Year Ended June 30 | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Results** | | | | | | | Turnover | 119,387 | 212,276 | 13,971 | 13,365 | 2,733 | | Loss Before Tax | (139,131) | (205,061) | (38,442) | (86,937) | (84,601) | | Annual Loss | (121,140) | (160,586) | (29,204) | (70,233) | (68,901) | | **Assets and Liabilities** | | | | | | | Non-current Assets | 656,233 | 767,728 | 882,423 | 835,087 | 801,026 | | Current Assets | 129,531 | 152,106 | 152,136 | 200,491 | 184,770 | | Net Assets | 645,929 | 782,955 | 832,651 | 854,020 | 776,034 |

Financial Performance - The company reported revenue of HKD 61,938,000 for the six months ended December 31, 2018, representing a 50.5% increase from HKD 41,190,000 in the same period of 2017[13]. - Gross profit for the period was HKD 7,444,000, up from HKD 5,375,000, indicating a gross margin improvement[13]. - The company incurred an operating loss of HKD 80,423,000, compared to a loss of HKD 37,327,000 in the previous year, reflecting increased operational expenses[13]. - The net loss for the period was HKD 68,327,000, which is a significant increase from HKD 32,066,000 in the prior year[13]. - The total comprehensive loss for the period amounted to HKD 84,494,000, compared to HKD 9,598,000 in the same period last year[14]. - Basic and diluted loss per share was HKD 3.36, compared to HKD 1.84 in the previous year, indicating a deterioration in earnings per share[14]. - The company reported other income of HKD 628,000, down from HKD 2,023,000 in the previous year, highlighting a decline in additional revenue sources[13]. - Administrative and operating expenses increased to HKD 32,604,000 from HKD 21,456,000, reflecting higher costs associated with operations[13]. - The company experienced a foreign exchange loss of HKD 16,167,000 during the period, compared to a gain of HKD 22,468,000 in the previous year[13]. - The group reported a total loss of HKD 68,327,000 for the six months ended December 31, 2018, compared to a loss of HKD 32,066,000 for the same period in 2017, indicating a significant increase in losses[47]. Assets and Liabilities - As of December 31, 2018, total assets amounted to HKD 794,023,000, a decrease from HKD 895,616,000 as of June 30, 2018, representing a decline of approximately 11.4%[16]. - The company's net cash and cash equivalents decreased to HKD 2,711,000 from HKD 13,027,000, indicating a reduction of about 79.1%[20]. - The total equity as of December 31, 2018, was HKD 698,461,000, down from HKD 782,955,000 as of June 30, 2018, reflecting a decrease of approximately 10.8%[17]. - The net cash used in operating activities for the six months ended December 31, 2018, was HKD (30,253,000), compared to HKD (26,153,000) for the same period in 2017, indicating a worsening cash flow situation[20]. - The company reported a decrease in total liabilities, with current liabilities at HKD 150,792,000, slightly down from HKD 152,106,000[16]. - The company's capital and reserves as of December 31, 2018, were HKD 686,350,000, down from HKD 770,542,000, indicating a decrease of approximately 10.9%[17]. - The company's cash flow from financing activities was HKD 17,000,000, a significant increase compared to HKD (30,468,000) in the previous year[20]. - The group's current assets were approximately HKD 150,792,000, while current liabilities were about HKD 51,471,000, resulting in a net current asset value of approximately HKD 99,321,000[94]. - The group's debt as of December 31, 2018, was approximately HKD 20,180,000, leading to an asset-liability ratio of 2.88%[94]. Revenue Segments - The total revenue from external customers for the six months ended December 31, 2018, was HKD 41,190,000, with the recycling metal segment contributing HKD 35,650,000[46]. - The automotive and automotive parts business recorded revenue of approximately HKD 24,288,000, significantly up from HKD 2,628,000 in the previous year[85]. - The metal recycling business generated revenue of approximately HKD 34,440,000, down from HKD 35,650,000 in the previous year[84]. - The parking rental segment reported rental income of approximately HKD 1,942,000, compared to HKD 1,879,000 in the previous year[86]. - The lending business generated interest income of approximately HKD 1,251,000, up from HKD 1,033,000 in the previous year, indicating stable development[88]. Accounting Policies and Financial Reporting - The company has not applied new accounting standards that have been issued but are not yet effective, and is currently assessing their potential impact[24]. - The company has changed its accounting policy for investment properties from a cost model to a fair value model, resulting in a net decrease in total comprehensive loss attributable to owners of the company by HKD 5,727,000[35]. - The basic and diluted loss per share was adjusted from (2.07) to (1.84) due to the accounting policy change[36]. - Fair value measurements are categorized into three levels based on the inputs used: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[36]. - The company recognizes revenue when control of the product or service is transferred to the customer, which may occur over time or at a point in time[32]. - Revenue is measured based on the consideration specified in contracts with customers, excluding amounts collected on behalf of third parties[31]. - The company assesses the credit risk of financial instruments at the reporting date to determine the expected credit loss provision[30]. - The company has implemented a policy to adjust the expected credit loss provision to reflect the required amount at the reporting date[31]. Shareholder Information and Corporate Governance - Major shareholders include individuals holding over 5% of the company's shares, with the largest being Mr. Yang Zhi Heng, holding 10.04%[108]. - The company has a stock option plan approved on November 11, 2015, allowing for the issuance of options for up to 169,713,811 shares, representing 10% of the issued shares as of the resolution date[110]. - As of December 31, 2018, a total of 125,614,085 stock options were unexercised, accounting for 6.17% of the company's issued shares[113]. - The company has complied with the corporate governance code, except for the separation of roles between the chairman and CEO, which is held by the same individual[116]. - The audit committee, consisting of three independent non-executive directors, reviewed the unaudited interim financial results for the six months ending December 31, 2018[119]. Future Outlook and Strategic Initiatives - The company has not provided specific guidance for future performance or strategic initiatives in the report[12]. - The group is exploring new opportunities in the green market, including environmental, agricultural, organic, and green technology sectors[77]. - The group is awaiting a final report on the feasibility of planting land in Xinjiang, which will inform further decisions[77]. - The company is actively seeking potential investment opportunities to diversify its business portfolio and expand revenue sources[92].