香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公佈全部或任何部分內容 而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 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） 截至二零二三年六月三十日止年度 之全年業績公佈 中國環境資源集團有限公司（「本公司」）董事會（「董事會」）公佈本公司及其附屬公司（統 稱「本集團」）截至二零二三年六月三十日止年度之年度經審核綜合業績，連同截至二零 二二年六月三十日止年度之比較數據。 ...

Financial Performance - The company reported revenue of HKD 42,787,000 for the six months ended December 31, 2022, an increase of 8.4% compared to HKD 39,460,000 in the same period last year[14]. - Gross profit decreased to HKD 6,991,000, down 29.3% from HKD 9,861,000 year-on-year[14]. - The company incurred a loss attributable to owners of HKD 2,849,000, an improvement from a loss of HKD 7,809,000 in the previous year[15]. - The total comprehensive loss for the period was HKD 13,367,000, compared to a gain of HKD 453,000 in the same period last year[15]. - Basic and diluted loss per share was HKD 0.14, unchanged from the previous year[15]. - The company recorded a net loss of HKD 2,031,000 before tax, significantly reduced from HKD 5,796,000 in the prior year[14]. - The group reported a total segment loss of HKD 1,091,000 for the six months ended December 31, 2022, compared to a profit of HKD 3,130,000 in the same period of 2021[38]. - The group incurred a total comprehensive loss of HKD 2,237,000 for the six months ended December 31, 2022, compared to a loss of HKD 6,414,000 in the same period of 2021[38]. - The total income tax expense for the six months ended December 31, 2022, was HKD 206,000, a decrease of 66.7% from HKD 618,000 in the previous year[7]. - The company did not declare an interim dividend for the six months ended December 31, 2022, consistent with the previous year[44]. Cash Flow and Liquidity - The company reported a net cash outflow from operating activities, indicating potential liquidity challenges[11]. - The net cash used in operating activities for the six months ended December 31, 2022, was HKD (2,170,000), an improvement from HKD (10,541,000) in the same period of the previous year[21]. - The company raised borrowings of HKD 6,772,000 during the financing activities in the six months ended December 31, 2022[21]. - The board has implemented measures to improve the group's liquidity and financial condition, ensuring the preparation of financial statements on a going concern basis[25]. - An executive director has committed to providing sufficient funds to ensure the group can meet its financial obligations and continue operations without significant reduction for the next 12 months from December 31, 2022[26]. - The group is continuing to implement measures aimed at improving operational cash flow, including cost-saving initiatives to maintain adequate cash flow[26]. Assets and Liabilities - The total liabilities as of December 31, 2022, were approximately HKD 3,184,000, raising concerns about the company's ability to continue as a going concern[11]. - As of December 31, 2022, total assets minus current liabilities amounted to HKD 651,768,000, a decrease from HKD 671,566,000 as of June 30, 2022[17]. - The company's total equity as of December 31, 2022, was HKD 523,102,000, down from HKD 536,469,000 as of June 30, 2022[18]. - Total non-current assets decreased to HKD 654,952,000 as of December 31, 2022, from HKD 673,988,000 as of June 30, 2022[17]. - The total liabilities decreased to HKD 128,666,000 as of December 31, 2022, from HKD 135,097,000 as of June 30, 2022[18]. - The total assets of the reporting segments as of December 31, 2022, amounted to HKD 729,773,000, compared to HKD 761,388,000 as of June 30, 2022[38]. Revenue Breakdown - Revenue from the sale of recycled metals was HKD 8,667,000, while the sale of automobiles and related parts generated HKD 31,136,000[37]. - The group recognized HKD 1,935,000 in revenue from biological assets during the reporting period[37]. - Revenue from hotel operations and food and beverage sales was HKD 577,000 for the reporting period[39]. - The group’s revenue from external customers in Hong Kong was HKD 36,162,000, while revenue from Macau and Taiwan was HKD 266,000 and HKD 71,000, respectively[39]. - The group recorded metal recycling business revenue of approximately HKD 8,667,000 for the six months ended December 31, 2022, compared to HKD 9,092,000 in the previous year, reflecting a decline[68]. - The automotive and automotive parts business generated revenue of approximately HKD 31,136,000 for the six months ended December 31, 2022, an increase from HKD 27,365,000 in the previous year, indicating stable growth[71]. - The group generated revenue of approximately HKD 577,000 from its hotel business for the six months ended December 31, 2022, compared to zero revenue in the same period of 2021[80]. Fair Value Measurements - As of December 31, 2022, the fair value measurement of biological assets was reported at HKD 259,760,000, while the fair value of investment properties in Hong Kong was HKD 191,900,000[31]. - The total fair value measurement for the group as of December 31, 2022, was HKD 541,356,000, compared to HKD 551,778,000 as of June 30, 2022[31]. - The fair value of the major personnel insurance contract increased from HKD 18,160,000 as of June 30, 2022, to HKD 18,468,000 as of December 31, 2022[32]. - The fair value of investment properties in China was reported at HKD 70,330,000 as of December 31, 2022, down from HKD 73,678,000 as of June 30, 2022[34]. - The valuation techniques and inputs used for fair value measurement have remained unchanged during the reporting periods[35]. Corporate Governance and Compliance - The company has complied with the corporate governance code as per the listing rules, except for the separation of roles between the Chairman and CEO[108]. - The company has established an audit committee to review and monitor its financial reporting procedures and internal controls[111]. - The company plans to hold its annual general meeting on April 3, 2023, at the Empire Hotel in Kowloon, Hong Kong[108]. - The company’s audit committee consists of three independent non-executive directors, ensuring compliance with the relevant regulations[111]. Market Conditions and Future Outlook - Hong Kong's GDP contracted by 3.5% in 2022, with significant year-on-year declines of 4.6% and 4.2% in the third and fourth quarters, respectively[83]. - The group anticipates partial economic recovery in Hong Kong in 2023, with China's economy expected to grow by approximately 5% due to the lifting of lockdown policies[83]. - The U.S. Federal Reserve raised the federal funds rate target range to 4.5% to 4.75% in February 2023, with expectations of further increases by the end of the year[83]. - The group is exploring new business opportunities and focusing on sustainable development in existing operations, including hotel business expansion in Nepal[65]. - The group is reallocating resources in the Chinese market to meet the demand for high-performance tires, which has been identified as a growth area[71]. - The group is facing challenges in sourcing scrap metal in Hong Kong due to increasing competition and the impact of COVID-19 on logistics and supply chains[68]. - The group is actively collecting data and assessing risks related to its operations in Xinjiang, particularly in light of the COVID-19 situation and government policies[65].

Financial Performance - The company reported total revenue of HKD 93,188,000 for the year ended June 30, 2022, an increase from HKD 77,878,000 in the previous year, representing a growth of approximately 19.6%[3] - Gross profit for the year was HKD 21,153,000, compared to HKD 19,867,000 in the prior year, indicating a year-on-year increase of about 6.5%[3] - The company incurred a net loss of HKD 19,527,000 for the year, a significant improvement from a net loss of HKD 48,942,000 in the previous year, reflecting a reduction of approximately 60%[3] - Total comprehensive loss for the year amounted to HKD 27,782,000, compared to HKD 18,029,000 in the previous year, indicating a decline in overall performance[3] - The company reported a basic loss per share of HKD 10 cents for the year, compared to HKD 46.1 cents in the previous year, showing an improvement in loss per share[5] - The company reported a loss of HKD 2,531,000 from the sale of camellia products, indicating challenges in this segment[33] - The company recognized a gain of HKD 3,754,000 from the fair value change of biological assets, contributing positively to the financial results[33] - The company reported a loss before tax for 2022 of HKD 19,486,000, a significant improvement from a loss of HKD 50,056,000 in 2021, representing a reduction of approximately 61%[47] - The income tax expense for 2022 was HKD 41,000, compared to a tax credit of HKD 1,114,000 in 2021, indicating a shift from a tax benefit to a tax expense[47] Revenue Breakdown - Revenue from metal trading was HKD 17,514,000, up from HKD 13,117,000, representing a growth of 33.5%[21] - Revenue from automotive and related parts trading increased to HKD 71,016,000 from HKD 58,495,000, reflecting a growth of 21.4%[21] - Customer contract revenue totaled HKD 88,530,000, compared to HKD 71,612,000 in the prior year, marking a growth of 23.5%[21] - Revenue from major customer A in the automotive segment was HKD 38,959,000, accounting for over 10% of the group's total revenue[38] Assets and Liabilities - Non-current assets totaled HKD 667,922,000 as of June 30, 2022, slightly down from HKD 669,382,000 in the previous year[7] - Current assets decreased to HKD 106,520,000 from HKD 130,268,000 year-on-year, representing a decline of approximately 18.2%[7] - The company's cash and cash equivalents significantly dropped to HKD 6,295,000 from HKD 19,005,000, a decrease of about 66.9%[7] - The total liabilities decreased to HKD 108,942,000 from HKD 125,289,000, indicating a reduction of approximately 13.0%[7] - The total assets as of June 30, 2022, amounted to HKD 755,321,000, slightly down from HKD 779,381,000 in the previous year[35] - Total liabilities increased to HKD 75,055,000 from HKD 66,686,000 year-over-year, reflecting a rise of 12.8%[35] - The total borrowings of the group as of June 30, 2022, were approximately HKD 68,215,000, a decrease from HKD 71,787,000 in 2021, maintaining an asset-liability ratio of approximately 12.8%[92] - The net asset value of the group as of June 30, 2022, was approximately HKD 531,919,000, down from HKD 559,701,000 in 2021[94] Cash Flow and Financing - The group has implemented measures to improve liquidity and cash flow, including cost-saving initiatives to maintain sufficient cash flow for operations[18] - An executive director has committed to providing sufficient funds to ensure the group can meet its financial obligations over the next 12 months[18] - The group anticipates sufficient cash resources to meet future operational funding and financing needs over the next 12 months[18] - The financing costs for the year were HKD 3,608,000, up from HKD 2,469,000 in the previous year, indicating increased borrowing costs[43] - The interest income from loans granted to corporate and individual clients was approximately HKD 329,000 for the year, a significant decrease from HKD 2,230,000 in the previous year[78] Operational Insights - The group operates seven reportable segments, including metal trading and automotive parts trading, each requiring different marketing strategies[31] - The company is exploring new business opportunities and focusing on sustainable development of existing operations[65] - The company is developing hotel operations in Nepal as part of its expansion strategy[64] - The company is closely monitoring the impact of new government plans in Dongguan on its industrial properties[68] Audit and Compliance - The Audit Committee, consisting of three independent non-executive directors, has reviewed the unaudited consolidated annual results for the year ended June 30, 2022[112] - Due to COVID-19 restrictions, the audit process for the financial statements for the year ended June 30, 2022, has been hindered, particularly affecting the valuation of biological assets[115] - The company is unable to complete the audit by September 30, 2022, and the financial data presented is uncertain and subject to adjustment[117] - The financial information disclosed is unaudited and has not been agreed upon by the auditors, thus investors should exercise caution when trading the company's securities[118] - The company has adopted the standards set out in Appendix 10 of the Listing Rules for directors' securities transactions, confirming compliance by all directors for the year ended June 30, 2022[110] Employee and Operational Costs - Employee costs, including directors' remuneration, totaled HKD 13,289,000 in 2022, a decrease from HKD 13,596,000 in 2021, reflecting a reduction of about 2%[48] - Operating administrative expenses rose to approximately HKD 41,408,000, compared to HKD 41,210,000 in 2021, with significant items including intangible asset amortization of HKD 5,151,000 and salaries and director remuneration of HKD 13,289,000[91] Dividends and Shareholder Returns - The company did not declare any dividends for the years ended June 30, 2022, and June 30, 2021[52] - No dividends were declared for the year ended June 30, 2022, consistent with 2021[103]

Financial Performance - For the six months ended December 31, 2021, the company reported revenue of HKD 39,460,000, an increase of 15.5% compared to HKD 34,151,000 for the same period in 2020[12] - Gross profit for the same period was HKD 9,861,000, reflecting a slight increase from HKD 9,408,000 year-over-year[12] - The company experienced a significant operating loss of HKD 4,017,000, an improvement from a loss of HKD 12,043,000 in the previous year[12] - The net loss for the period was HKD 6,414,000, compared to a net loss of HKD 12,913,000 in the prior year, indicating a reduction in losses[12] - Basic loss per share was HKD 0.38, an improvement from HKD 0.67 in the previous year[13] - Total comprehensive income for the period amounted to HKD 453,000, a significant decrease from HKD 13,849,000 in the prior year[12] - The company reported a consolidated loss of HKD 6,414,000 for the six months ended December 31, 2021, improving from a loss of HKD 12,913,000 in the previous year[35] - Other income increased to approximately HKD 4.2 million, primarily due to rent payment waivers related to COVID-19[84] - Loss for the period decreased to approximately HKD 6,414,000, compared to a loss of HKD 12,913,000 in the same period last year[84] Assets and Liabilities - As of December 31, 2021, the total assets amounted to HKD 699,255,000, an increase from HKD 674,361,000 as of June 30, 2021, reflecting a growth of approximately 3.5%[14] - The company's non-current liabilities increased to HKD 139,101,000 from HKD 114,660,000, representing a rise of about 21.3%[15] - The total liabilities as of December 31, 2021, were HKD 139,101,000, which includes lease liabilities of HKD 47,766,000[15] - The total equity as of December 31, 2021, was HKD 560,154,000, slightly up from HKD 559,701,000 as of June 30, 2021[15] - The group's total assets as of December 31, 2021, were approximately HKD 812,652,000, up from HKD 799,650,000 as of June 30, 2021[88] - Total borrowings amounted to approximately HKD 69,734,000, a decrease from HKD 71,787,000 as of June 30, 2021[88] - The asset-to-equity ratio was 12.4% as of December 31, 2021, compared to 12.8% as of June 30, 2021[88] Cash Flow - The net cash flow from operating activities for the six months ended December 31, 2021, was a negative HKD 10,541,000, compared to a positive HKD 5,005,000 in the same period of the previous year[18] - The cash and cash equivalents at the end of the period were HKD 3,763,000, an increase from HKD 3,130,000 at the end of the previous period[18] - The company reported a net cash outflow from financing activities of HKD 5,712,000 for the six months ended December 31, 2021, compared to HKD 921,000 in the previous year[18] Revenue Segments - The total revenue for the six months ended December 31, 2021, was HKD 29,715,000 from the sale of automotive and related parts, with HKD 9,092,000 from metal trading[37] - The reported segment profit for the six months ended December 31, 2021, was HKD 3,130,000, compared to a loss of HKD 6,665,000 in the same period of the previous year[35] - The automotive and automotive parts business generated revenue of approximately HKD 27,365,000 for the six months ended December 31, 2021, up from HKD 25,109,000 in 2020, indicating a growth of 8.9%[68] - The group recorded metal recycling business revenue of approximately HKD 9,092,000 for the six months ended December 31, 2021, compared to HKD 5,802,000 in 2020, representing a growth of 56.8%[66] - Parking space rental income increased to approximately HKD 2,080,000 for the six months ended December 31, 2021, compared to HKD 2,001,000 in 2020, reflecting a growth of 3.9%[69] Investments and Fair Value - The company reported a fair value loss on investment properties of HKD 19,091,000, compared to HKD 20,457,000 in the previous year[12] - The fair value of investment properties in Hong Kong was reported at HKD 191,900,000 as of December 31, 2021[26] - The company’s investment properties in China had a fair value of HKD 73,862,000 as of December 31, 2021[26] - The total fair value of biological assets was reported at HKD 273,399,000 as of December 31, 2021[26] - The fair value change of biological assets generated a profit of approximately HKD 3,756,000, compared to a loss of HKD 334,000 in the previous year[85] Corporate Governance and Compliance - The company has complied with the corporate governance code, except for the separation of roles between the chairman and the CEO, which are held by the same individual[108] - The company has adopted a standard code of conduct for securities trading by its directors, confirming compliance for the six months ending December 31, 2021[110] - An audit committee has been established in accordance with Listing Rule 3.21 to review and monitor the group's financial reporting procedures, internal controls, and risk management systems[111] - The audit committee consists of three independent non-executive directors, with Mr. Wang Zijing serving as the chairman[111] Future Outlook and Strategy - The company anticipates a significant economic downturn in Hong Kong during the first quarter of 2022 due to the impact of COVID-19[81] - The company plans to develop a detailed business plan for its hotel operations in Kathmandu, Nepal, expecting the tourism sector to recover in the second half of the year[82] - The company is adopting a wait-and-see approach regarding the expansion of its automotive parts sales business into China due to ongoing travel restrictions and supply chain issues[83] - The company will continue to implement cost control measures to reduce operating costs and recurring expenses amid the current crisis in Hong Kong[83] - The group is exploring new business opportunities and is committed to developing sustainable existing businesses[63]

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 2021 ¥ nound HITITI IIIIII HIIII Contents 目錄 2 Corporate Information 公司資料 4 Management Discussion and Analysis 管理層討論及分析 17 Biographical Details of Directors 董事簡歷 20 Report of the Directors 董事會報告書 36 Corporate Governance Report 企業管治報告 55 Independent Auditor's Report 獨立核數師報告 60 Consolidated Statement of Profit or Loss and Other Comprehensive Income 綜合損益及其他全面收益表 62 Consolidated Statement of Financial Position 綜合財務狀況 ...

[Company Information](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF) [Board of Directors and Committees](index=2&type=section&id=%E8%91%A3%E4%BA%8B%E4%BC%9A%E5%8F%8A%E5%A7%94%E5%91%98%E4%BC%9A) This section lists the members of the Board of Directors (including executive and independent non-executive directors) and the composition of key committees for China Environmental Resources Group Limited - Executive Directors include Mr. Yeung Chi Hang (Chairman and Chief Executive Officer), Mr. Leung Kwong Choi, Mr. Wong Po Keung, Mr. Chung Siu Wa, and Mr. Chik To Bun[2](index=2&type=chunk) - Independent Non-executive Directors include Mr. Wong Kwai Sang, Mr. Wong Tze King, and Mr. Heung Chi Hang[2](index=2&type=chunk) - Mr. Wong Tze King chairs the Audit, Remuneration, and Nomination Committees; Mr. Leung Kwong Choi chairs the Investment Committee[2](index=2&type=chunk) [Registration and Contact Information](index=2&type=section&id=%E6%B3%A8%E5%86%8C%E5%8F%8A%E8%81%94%E7%BB%9C%E4%BF%A1%E6%81%AF) This section provides the company's basic contact and registration information, including its registered office, Hong Kong head office, share registrars, principal bankers, stock codes, and website - The company's registered office is located in the Cayman Islands[2](index=2&type=chunk) - The Hong Kong head office and principal place of business is Unit 2608, 26/F, South Tower, Concordia Plaza, 1 Science Museum Road, Tsim Sha Tsui East, Kowloon[2](index=2&type=chunk) - The Hong Kong stock code is **1130**, and the Singapore trading code is **CHENV400:SP**[4](index=4&type=chunk) [Independent Review Report](index=5&type=section&id=%E7%8B%AC%E7%AB%8B%E5%AE%A1%E9%98%85%E6%8A%A5%E5%91%8A) [Independent Review Report](index=5&type=section&id=%E7%8B%AC%E7%AB%8B%E5%AE%A1%E9%98%85%E6%8A%A5%E5%91%8A) ZHONGHUI ANDA CPA Limited reviewed China Environmental Resources Group Limited's unaudited condensed consolidated interim financial statements for the six months ended December 31, 2020, concluding no material non-compliance with HKAS 34 - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[7](index=7&type=chunk) - The auditor found no matters leading them to believe that the interim financial statements were not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[8](index=8&type=chunk) - The independent auditor is ZHONGHUI ANDA CPA Limited[9](index=9&type=chunk) [Condensed Consolidated Financial Statements](index=7&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=7&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended December 31, 2020, group revenue decreased by 13.2% and gross profit by 7.1%, but loss for the period significantly narrowed by 43.4% due to reduced fair value losses and impairment provisions, with total comprehensive income turning positive Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Metric | Six Months Ended December 31, 2020 (HK$ thousand) | Six Months Ended December 31, 2019 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 34,151 | 39,363 | | Gross Profit | 9,408 | 10,128 | | Operating Loss | (12,043) | (21,999) | | Loss for the Period | (12,913) | (22,833) | | Total Comprehensive Income/(Loss) for the Period | 13,849 | (28,694) | | Loss for the Period Attributable to Owners of the Company | (13,626) | (23,333) | | Basic Loss Per Share (HK cents) | (0.67) | (1.15) | - Exchange differences on translation of overseas operations turned from a **HK$5,861 thousand loss in 2019** to a **HK$26,762 thousand gain in 2020**[12](index=12&type=chunk) [Condensed Consolidated Statement of Financial Position](index=9&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of December 31, 2020, the Group's total assets and net assets increased, driven by higher fair values of biological assets and investment properties, while net current assets slightly decreased Condensed Consolidated Statement of Financial Position Key Data | Metric | December 31, 2020 (HK$ thousand) | June 30, 2020 (HK$ thousand) | | :--- | :--- | :--- | | Non-current Assets | 669,338 | 641,280 | | Current Assets | 125,275 | 121,118 | | Current Liabilities | 82,424 | 73,436 | | Net Current Assets | 42,851 | 47,682 | | Net Assets | 591,581 | 577,732 | - Fair value of biological assets increased from **HK$248,759 thousand** as of June 30, 2020, to **HK$268,962 thousand** as of December 31, 2020[16](index=16&type=chunk) - Fair value of investment properties increased from **HK$259,002 thousand** as of June 30, 2020, to **HK$263,633 thousand** as of December 31, 2020[16](index=16&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=11&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%9D%83%E7%9B%8A%E5%8F%98%E5%8A%A8%E8%A1%A8) This section details changes in the Group's equity components for the six months ended December 31, 2020, including share capital, reserves, and accumulated losses, reflecting the impact of comprehensive income/loss on equity - This section primarily presents changes in equity components, including share capital, share premium account, statutory reserve, capital reserve, share-based payment reserve, exchange fluctuation reserve, accumulated losses, equity attributable to owners of the Company, and non-controlling interests[20](index=20&type=chunk) - Total comprehensive income for the period was **HK$13,849 thousand**, with **HK$12,395 thousand** attributable to owners of the Company and **HK$1,454 thousand** to non-controlling interests[13](index=13&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=12&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended December 31, 2020, operating cash flow shifted from net outflow to inflow, net cash used in investing activities decreased, and financing cash flow moved from net inflow to outflow, resulting in a positive cash and cash equivalents balance at period-end, indicating improved liquidity Condensed Consolidated Statement of Cash Flows Key Data | Metric | Six Months Ended December 31, 2020 (HK$ thousand) | Six Months Ended December 31, 2019 (HK$ thousand) | | :--- | :--- | :--- | | Net Cash From/(Used In) Operating Activities | 5,005 | (8,087) | | Net Cash Used In Investing Activities | (598) | (3,553) | | Net Cash (Used In)/From Financing Activities | (921) | 4,033 | | Net Increase/(Decrease) in Cash and Cash Equivalents | 3,486 | (7,607) | | Cash and Cash Equivalents at End of Period | 3,130 | (2,031) | - Cash and bank balances at period-end were **HK$7,851 thousand**, a significant increase from **HK$2,955 thousand** in the prior period[22](index=22&type=chunk) [Notes to the Condensed Financial Statements](index=13&type=section&id=%E7%AE%80%E6%98%8E%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) [General Information](index=13&type=section&id=%E4%B8%80%E8%88%AC%E8%B5%84%E6%96%99) This section outlines China Environmental Resources Group Limited's registration, listing, diverse principal activities including metal recycling, automotive, financial services, property leasing, Camellia Chrysantha products, securities investment, and green businesses, and the presentation currency of its financial statements - The Company is incorporated in the Cayman Islands, with shares listed on the Main Board of the Hong Kong Stock Exchange and the Singapore Exchange[24](index=24&type=chunk) - The Group's principal activities include trading of recycled metals, motor vehicles and related parts, parking space leasing, financial services, trading of Camellia Chrysantha products, securities trading and investment, and sales and distribution of plantation products, environmental systems, and planting materials[24](index=24&type=chunk) - The interim financial statements are presented in Hong Kong Dollars (HK$), which is the Group's presentation currency and the functional currency of the Company and its principal operating subsidiaries[24](index=24&type=chunk) [Accounting Policies and Basis of Preparation](index=13&type=section&id=%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E4%B8%8E%E7%BC%96%E5%88%B6%E5%9F%BA%E7%A1%80) This section details the Group's adoption of new and revised HKFRSs and the basis of interim financial statement preparation, emphasizing consistency with annual consolidated financial statements and the application of management judgments and estimates [Adoption of New and Revised Hong Kong Financial Reporting Standards](index=13&type=section&id=%E9%87%87%E7%BA%B3%E6%96%B0%E8%AE%A2%E5%8F%8A%E7%BB%8F%E4%BF%AE%E8%AE%A2%E9%A6%99%E6%B8%AF%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A%E5%87%86%E5%88%99) - The Group has adopted all new and revised Hong Kong Financial Reporting Standards, which did not result in significant changes to accounting policies, financial statement presentation, or reported amounts for the current and prior periods[25](index=25&type=chunk) [Basis of Preparation](index=14&type=section&id=%E7%BC%96%E5%88%B6%E5%9F%BA%E7%A1%80) - The interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' and the applicable disclosure requirements of Appendix 16 to the Listing Rules[26](index=26&type=chunk) - The accounting policies and methods of computation used in preparing the interim financial statements are consistent with those used in the 2020 annual report[27](index=27&type=chunk) [Fair Value Measurement](index=14&type=section&id=%E5%85%AC%E5%85%81%E5%80%BC%E8%AE%A1%E9%87%8F) This section discloses the Group's fair value measurement methods for assets and liabilities, categorized by fair value hierarchy (Level 1, 2, 3), with biological assets and investment properties primarily measured using Level 2 inputs Fair Value Hierarchy Disclosure (Recurring Fair Value Measurements) | Metric | December 31, 2020 (HK$ thousand) | June 30, 2020 (HK$ thousand) | | :--- | :--- | :--- | | **Level 1:** | | | | Investments at Fair Value Through Profit or Loss | 1,590 | 1,696 | | **Level 2:** | | | | Biological Assets | 268,962 | 248,759 | | Hong Kong Investment Properties | 190,000 | 190,000 | | China Investment Properties | 73,633 | 69,002 | | **Total (Recurring Fair Value Measurements)** | **534,185** | **509,457** | - Management is responsible for fair value measurements of assets and liabilities required for financial reporting, reporting valuation processes and results to the Board at least twice annually[32](index=32&type=chunk) [Revenue and Segment Information](index=17&type=section&id=%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E8%B5%84%E6%96%99) This section details the Group's revenue by business segment and geographical market, with primary revenue from metal recycling, motor vehicle and parts sales, loan interest, and parking space rentals, noting a significant narrowing of total reportable segment loss for the period - The Group's revenue primarily comprises sales of recycled metals, motor vehicles and related parts, loan interest income, parking space rental income, and sales of Camellia Chrysantha products[37](index=37&type=chunk) Total Reportable Segment Loss | Metric | Six Months Ended December 31, 2020 (HK$ thousand) | Six Months Ended December 31, 2019 (HK$ thousand) | | :--- | :--- | :--- | | Total Reportable Segment Loss | (6,665) | (16,115) | Disaggregation of Revenue from Contracts with Customers (by Geographical Market) | Geographical Market | Six Months Ended December 31, 2020 (HK$ thousand) | Six Months Ended December 31, 2019 (HK$ thousand) | | :--- | :--- | :--- | | China | 1,342 | 507 | | Hong Kong | 29,186 | 34,732 | | Macau and Others | 383 | 452 | | **Total** | **30,911** | **35,691** | [Finance Costs and Income Tax](index=20&type=section&id=%E8%B4%A2%E5%8A%A1%E6%88%90%E6%9C%AC%E4%B8%8E%E6%89%80%E5%BE%97%E7%A8%8E) This section discloses the Group's finance costs, primarily lease interest and bank loan/overdraft interest, and details income tax credit, with Hong Kong profits tax provided at 16.5% and no overseas tax provision for the period [Finance Costs](index=20&type=section&id=%E8%9E%8D%E8%B5%84%E6%88%90%E6%9C%AC) Finance Costs Details | Metric | Six Months Ended December 31, 2020 (HK$ thousand) | Six Months Ended December 31, 2019 (HK$ thousand) | | :--- | :--- | :--- | | Lease Interest | 541 | 431 | | Bank Loans and Overdraft Interest | 515 | 517 | | **Total** | **1,056** | **948** | [Income Tax Credit](index=20&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E6%8A%B5%E5%85%8D) Income Tax Credit Details | Metric | Six Months Ended December 31, 2020 (HK$ thousand) | Six Months Ended December 31, 2019 (HK$ thousand) | | :--- | :--- | :--- | | Current Tax - Hong Kong Profits Tax | 499 | 752 | | Deferred Tax | (685) | (866) | | **Income Tax Credit** | **(186)** | **(114)** | - Hong Kong profits tax is provided at **16.5%**, with no overseas tax provision for the period[50](index=50&type=chunk) [Loss Per Share and Dividends](index=21&type=section&id=%E6%AF%8F%E8%82%A1%E4%BA%8F%E6%8D%9F%E4%B8%8E%E8%82%A1%E6%81%AF) This section provides details on the Group's basic and diluted loss per share calculation, showing a significant year-on-year reduction in loss, and confirms the Board's decision not to declare an interim dividend [Loss Per Share](index=21&type=section&id=%E6%AF%8F%E8%82%A1%E4%BA%8F%E6%8D%9F) Loss Per Share | Metric | Six Months Ended December 31, 2020 (HK cents) | Six Months Ended December 31, 2019 (HK cents) | | :--- | :--- | :--- | | Basic Loss Per Share | (0.67) | (1.15) | | Diluted Loss Per Share | (0.67) | (1.15) | - Basic loss per share is calculated based on the loss attributable to owners of the Company of approximately **HK$13,626,000** and the weighted average of **2,036,538,114 ordinary shares** outstanding during the period[52](index=52&type=chunk) - All potential ordinary share effects for the six months ended December 31, 2020, and 2019 were anti-dilutive[52](index=52&type=chunk) [Interim Dividend](index=21&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) - The Board resolved not to declare an interim dividend for the six months ended December 31, 2020[52](index=52&type=chunk) [Notes to the Statement of Financial Position](index=21&type=section&id=%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8%E9%99%84%E6%B3%A8) This section provides detailed notes on property, plant and equipment, trade and other receivables, loans receivable, refundable pledged deposits, and trade and other payables, including changes, aging analysis, and impairment status [Property, Plant and Equipment](index=21&type=section&id=%E7%89%A9%E4%B8%9A%E3%80%81%E5%8E%82%E6%88%BF%E5%8F%8A%E8%AE%BE%E5%A4%87) - For the six months ended December 31, 2020, the Group purchased property, plant, and equipment of approximately **HK$598,000**, a significant decrease from **HK$4,071,000** in the prior period[52](index=52&type=chunk) [Trade and Other Receivables](index=21&type=section&id=%E5%BA%94%E6%94%B6%E8%B4%A6%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9) Trade and Other Receivables | Metric | December 31, 2020 (HK$ thousand) | June 30, 2020 (HK$ thousand) | | :--- | :--- | :--- | | Trade Receivables (net of provision) | 27,244 | 38,738 | | Prepayments, Deposits and Other Receivables (net of provision) | 29,709 | 28,121 | | **Total** | **56,953** | **66,859** | - The Group primarily transacts with customers on credit, with credit terms generally ranging from **30 to 90 days**[56](index=56&type=chunk) - Impairment provision for trade receivables remained unchanged at **HK$8,062 thousand** at period-end[55](index=55&type=chunk) [Loans Receivable](index=23&type=section&id=%E5%BA%94%E6%94%B6%E8%B4%B7%E6%AC%BE) Loans Receivable Details | Metric | December 31, 2020 (HK$ thousand) | June 30, 2020 (HK$ thousand) | | :--- | :--- | :--- | | Total Loans Receivable | 18,520 | 18,188 | | Analyzed as: Current Assets | 18,261 | 14,808 | | Non-current Assets | 259 | 3,380 | - Loans granted bear interest at annual rates ranging from **2% to 30%**, with loan periods typically between **6 and 39 months**[61](index=61&type=chunk) - Approximately **HK$1,000,000** of loans receivable are secured by watches owned by the borrowers[61](index=61&type=chunk) [Refundable Pledged Deposits](index=24&type=section&id=%E5%8F%AF%E9%80%80%E8%BF%98%E5%B7%B2%E6%8A%B5%E6%8A%BC%E6%8C%89%E9%87%91) - As of December 31, 2020, **HK$12,000,000** in deposits were overdue, stemming from a terminated hotel business acquisition in 2013[64](index=64&type=chunk)[62](index=62&type=chunk) - The Directors believe no impairment loss provision is required for this balance, as the collateral obtained from the vendor is sufficient to cover the outstanding amount[64](index=64&type=chunk) [Trade and Other Payables](index=25&type=section&id=%E5%BA%94%E4%BB%98%E8%B4%A6%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A1%B9) Trade and Other Payables | Metric | December 31, 2020 (HK$ thousand) | June 30, 2020 (HK$ thousand) | | :--- | :--- | :--- | | Trade Payables | 7,714 | 4,480 | | Other Payables and Accruals | 27,347 | 27,243 | | **Total** | **35,061** | **31,723** | - Trade payables (0 to 90 days) increased from **HK$4,371 thousand** as of June 30, 2020, to **HK$7,218 thousand** as of December 31, 2020[67](index=67&type=chunk) [Share-based Payments](index=26&type=section&id=%E4%BB%A5%E8%82%A1%E4%BB%BD%E4%B8%BA%E5%9F%BA%E7%A1%80%E7%9A%84%E4%BB%98%E6%AC%BE) This section details the 2015 Share Option Scheme's purpose, exercise price determination, grant limits, and validity period, noting no options were granted, exercised, cancelled, or lapsed for the six months ended December 31, 2020 - The Share Option Scheme aims to provide incentives, rewards, remuneration, and/or benefits to participants, fostering shared goals to improve business and enhance shareholder value[69](index=69&type=chunk) - The option exercise price is the highest of the closing price on the offer date, the average closing price for the five preceding trading days, and the nominal value of the shares[69](index=69&type=chunk) - The total number of shares that may be granted under the Share Option Scheme shall not exceed **10%** of the total issued shares on the date the scheme was approved[70](index=70&type=chunk) - For the six months ended December 31, 2020, no share options were granted, exercised, cancelled, or lapsed[119](index=119&type=chunk) - As of December 31, 2020, unexercised share options to subscribe for a total of **105,114,085 shares** of the Company represented **5.16%** of the Company's issued shares[119](index=119&type=chunk) [Related Party Transactions](index=28&type=section&id=%E5%85%B3%E8%BF%9E%E4%BA%BA%E5%A3%AB%E4%BA%A4%E6%98%93) This section discloses significant related party transactions during the period, including rent paid to a company indirectly owned by the Chairman and CEO's mother, and goods sold to a company where a subsidiary director's spouse is a director Related Party Transactions | Transaction Type | Six Months Ended December 31, 2020 (HK$ thousand) | Six Months Ended December 31, 2019 (HK$ thousand) | | :--- | :--- | :--- | | Rent Paid | 176 | 1,058 | | Sales to a Related Company | 15 | 5 | - Key management personnel remuneration (directors' emoluments) was **HK$2,421 thousand** (2019: **HK$2,376 thousand**)[74](index=74&type=chunk) [Management Discussion and Analysis](index=29&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) [Interim Dividend](index=29&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board decided not to declare an interim dividend for the six months ended December 31, 2020 - The Board resolved not to declare an interim dividend for the six months ended December 31, 2020[77](index=77&type=chunk) [Business and Operations Review](index=29&type=section&id=%E4%B8%9A%E5%8A%A1%E5%8F%8A%E8%90%A5%E8%BF%90%E5%9B%9E%E9%A1%B5) This section reviews the Group's business operations, including metal recycling, motor vehicles and parts, investment properties, money lending, securities trading and investment, green technology, Camellia Chrysantha products, and plantation sales, noting varying impacts from market conditions and the COVID-19 pandemic [Overall Business Overview](index=29&type=section&id=%E6%95%B4%E4%BD%93%E4%B8%9A%E5%8A%A1%E6%A6%82%E8%A7%88) - The Group currently engages in metal recycling, motor vehicle and parts, parking space leasing, money lending, Camellia Chrysantha product trading, and securities trading and investment businesses[78](index=78&type=chunk) - The Group is developing a hotel business in Nepal and holds logging rights for **30,000 mu** of plantation land in Xinjiang, with biological assets having a fair value of approximately **HK$268,962,000**[78](index=78&type=chunk) - Industrial land and buildings in Dongguan are valued at approximately **HK$73,633,000** at fair value, subject to new town planning and ongoing government negotiations[79](index=79&type=chunk) - Parking spaces in Kennedy Town, Hong Kong, maintained a value of approximately **HK$190,000,000**, contributing stable income[79](index=79&type=chunk) [Metal Recycling Business](index=30&type=section&id=%E9%87%91%E5%B1%9E%E5%9B%9E%E6%94%B6%E4%B8%9A%E5%8A%A1) - China's relaxation of import restrictions on high-grade scrap metal led to an increase in prices for quality scrap steel in Hong Kong[80](index=80&type=chunk) - The business faces challenges from reduced supply (fewer construction projects) and rising costs (Waste Electrical and Electronic Equipment Producer Responsibility Scheme)[80](index=80&type=chunk) - For the six months ended December 31, 2020, revenue from metal recycling business was approximately **HK$5,802,000** (2019: approximately **HK$6,617,000**)[80](index=80&type=chunk) [Motor Vehicle and Parts Business](index=30&type=section&id=%E6%B1%BD%E8%BD%A6%E5%8F%8A%E6%B1%BD%E8%BD%A6%E9%85%8D%E4%BB%B6%E4%B8%9A%E5%8A%A1) - Motor vehicle/motorcycle sales were severely impacted by social unrest in Hong Kong, the COVID-19 pandemic, and economic downturn, leading to slowdown and increased focus on inventory disposal[81](index=81&type=chunk) - Motor vehicle parts sales remained relatively stable, especially for 'Pirelli' tires, with Taiwan as a key market experiencing minor pandemic impact[81](index=81&type=chunk) - For the six months ended December 31, 2020, revenue from motor vehicle and parts business was approximately **HK$25,109,000** (2019: approximately **HK$28,930,000**)[81](index=81&type=chunk) [Investment Properties](index=31&type=section&id=%E6%8A%95%E8%B5%84%E7%89%A9%E4%B8%9A) - Industrial buildings in China are not engaged in business activities[82](index=82&type=chunk) - Parking spaces in Hong Kong continue to provide stable revenue and cash flow for the Group[82](index=82&type=chunk) - For the six months ended December 31, 2020, rental income was approximately **HK$2,001,000** (2019: approximately **HK$1,902,000**)[82](index=82&type=chunk) [Money Lending Business](index=31&type=section&id=%E5%80%9F%E8%B4%B7%E4%B8%9A%E5%8A%A1) - For the six months ended December 31, 2020, loan interest income was approximately **HK$1,239,000** (2019: approximately **HK$1,742,000**)[83](index=83&type=chunk) - As of December 31, 2020, the principal amount of outstanding loans receivable was approximately **HK$15,097,000**[83](index=83&type=chunk) - The Group recognized an impairment loss of approximately **HK$119,000** due to a borrower's default[83](index=83&type=chunk) [Securities Trading and Investment Business](index=31&type=section&id=%E8%AF%81%E5%88%B8%E4%B9%B0%E5%8D%96%E5%8F%8A%E6%8A%95%E8%B5%84%E4%B8%9A%E5%8A%A1) - With extreme market volatility and unrecovered stock market momentum, management adopted a more cautious investment approach[84](index=84&type=chunk) - For the six months ended December 31, 2020, a net fair value loss of approximately **HK$106,000** (2019: approximately **HK$244,000**) was recognized on investments at fair value through profit or loss[84](index=84&type=chunk) Major Investment Portfolio (December 31, 2020) | Share Name | Stock Code | Net Unrealized Loss (HK$ thousand) | Market Value (HK$ thousand) | Approx. % of Equity Investment | Approx. % of Net Assets | | :--- | :--- | :--- | :--- | :--- | :--- | | China Fortunes Financial Group Limited | 290 | (80.5) | 575 | 36.2 | 0.10 | | Ding Yi Group Investment Limited | 508 | 147.2 | 208 | 13.1 | 0.04 | | Wai Chun Group Holdings Limited | 1013 | (53.9) | 575 | 36.1 | 0.10 | | HANG SANG (SIU PO) | 3626 | (118.9) | 232 | 14.6 | 0.04 | | **Total** | | **(106.1)** | **1,590** | **100.0** | **0.28** | [Green Technology](index=33&type=section&id=%E7%BB%BF%E8%89%B2%E6%8A%80%E6%9C%AF) - For the six months ended December 31, 2020, no revenue was recorded from green technology[90](index=90&type=chunk) [Camellia Chrysantha Products](index=33&type=section&id=%E9%87%91%E8%8A%B1%E8%8C%B6%E4%BA%A7%E5%93%81) - For the six months ended December 31, 2020, no revenue was generated from the sale of Camellia Chrysantha products (2019: approximately **HK$144,000**)[90](index=90&type=chunk) [Plantation Sales Business](index=34&type=section&id=%E7%A7%8D%E6%A4%8D%E9%94%80%E5%94%AE%E4%B8%9A%E5%8A%A1) - The Group holds logging rights for trees on its plantation land, cautiously seeking the most appropriate use and awaiting felling quota information to assess economic returns[91](index=91&type=chunk) - For the six months ended December 31, 2020, no revenue was generated from the plantation sales business[91](index=91&type=chunk) [Prospects](index=34&type=section&id=%E5%89%8D%E6%99%AF%E5%B1%95%E6%9C%9B) This section outlines the Group's future plans and macroeconomic outlook, noting slow progress for the Nepal hotel business due to the pandemic and policy, termination of the China agricultural e-commerce platform due to underperformance and COVID-19, a global economy in post-pandemic stagnation with Hong Kong facing challenges but hopeful for recovery with vaccines, and the Group's commitment to cost control and conservative investment - The hotel development plan in Kathmandu, Nepal, remains incomplete and pending, affected by the COVID-19 pandemic and Nepal government's entry policies[92](index=92&type=chunk) - The Group's agricultural e-commerce platform business (VIE) in China has been terminated due to pandemic-related management access issues and significantly underperforming expectations[93](index=93&type=chunk) - The global economy remains in a stagnant phase due to the COVID-19 pandemic, with a challenging transition towards a 'new normal' expected by mid-next year[95](index=95&type=chunk) - Hong Kong's economy contracted by **6.1% in 2020**, the largest annual decline on record, but COVID-19 vaccine availability is expected to drive growth in 2021[97](index=97&type=chunk) - The Group will continue to implement cost control measures, reduce costs and recurring expenses, remain conservative on new investments, and focus more on improving existing businesses[97](index=97&type=chunk) [Financial Review](index=36&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%B5) This section reviews the Group's financial performance for the six months ended December 31, 2020, noting decreased turnover and gross profit primarily due to reduced motor vehicle and parts sales, but a significantly narrowed loss for the period, driven by reduced fair value losses, impairment provisions, and foreign exchange gains from overseas operations Financial Performance Key Data | Metric | Six Months Ended December 31, 2020 (HK$ thousand) | Six Months Ended December 31, 2019 (HK$ thousand) | | :--- | :--- | :--- | | Turnover | 34,151 | 39,363 | | Gross Profit | 9,408 | 10,128 | | Loss for the Period | 12,913 | 22,833 | | Basic and Diluted Loss Per Share (HK cents) | 0.67 | 1.15 | - The reduction in loss for the period was primarily due to decreased fair value losses on investment properties, lower impairment provisions for loans and receivables, and reduced losses from fair value changes of biological assets less costs to sell[98](index=98&type=chunk) - Exchange gains on translation of overseas operations amounted to approximately **HK$26,762,000** (2019: loss of approximately **HK$5,861,000**)[101](index=101&type=chunk) - Administrative expenses from operations decreased to approximately **HK$20,457,000** (2019: approximately **HK$21,829,000**)[100](index=100&type=chunk) [Liquidity and Financial Resources](index=37&type=section&id=%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E5%8F%8A%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%BA%90) This section outlines the Group's liquidity and financial resources, noting increased total assets and net assets, significantly higher cash and bank balances, and a stable gearing ratio as of December 31, 2020, with the Board confident in sufficient working capital Liquidity and Financial Resources Key Data | Metric | December 31, 2020 (HK$ thousand) | June 30, 2020 (HK$ thousand) | | :--- | :--- | :--- | | Total Assets | 794,613 | 762,398 | | Cash and Bank Balances | 7,851 | 2,951 | | Total Borrowings | 32,221 | 31,179 | | Gearing Ratio (%) | 5.4% | 5.4% | | Net Assets | 591,581 | 577,732 | - The Company's Directors believe the Group has sufficient working capital to fund its operations and the ability to meet its financial obligations as they fall due in the foreseeable future[102](index=102&type=chunk) [Capital Commitments and Fundraising](index=37&type=section&id=%E8%B5%84%E6%9C%AC%E6%89%BF%E6%8B%85%E5%8F%8A%E9%9B%86%E8%B5%84) This section confirms the Group had no significant capital commitments or fundraising activities during the reporting period [Capital Commitments](index=37&type=section&id=%E8%B5%84%E6%9C%AC%E6%89%BF%E6%8B%85) - As of December 31, 2020, there were no significant capital commitments[102](index=102&type=chunk) [Fundraising and Capital Expenditure](index=37&type=section&id=%E9%9B%86%E8%B5%84%E5%8F%8A%E8%B5%84%E6%9C%AC%E5%BC%80%E6%94%AF) - For the six months ended December 31, 2020, the Group had no fundraising activities[102](index=102&type=chunk) [Share Capital and Major Acquisitions/Disposals](index=37&type=section&id=%E8%82%A1%E6%9C%AC%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B4%AD%E5%87%BA%E5%94%AE) This section confirms the company's total issued share capital remained unchanged and no significant acquisitions or disposals of subsidiaries or associates occurred during the reporting period [Share Capital](index=37&type=section&id=%E8%82%A1%E6%9C%AC) - As of December 31, 2020, the Company's total issued share capital comprised **2,036,538,114 ordinary shares** of **HK$0.02** each[103](index=103&type=chunk) [Major Acquisitions and Disposals](index=38&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B4%AD%E5%8F%8A%E5%87%BA%E5%94%AE) - For the six months ended December 31, 2020, the Company did not undertake any major acquisitions or disposals of its subsidiaries or associates[104](index=104&type=chunk) [Employment and Remuneration Policy](index=38&type=section&id=%E5%83%87%E5%81%87%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) This section details the Group's employee count and remuneration policy, emphasizing performance-linked compensation, bonuses, and share option schemes for incentives - As of December 31, 2020, the Group employed **62 employees** (June 30, 2020: **46 employees**)[105](index=105&type=chunk) - The Group implements remuneration policies, bonus schemes, and share option plans to ensure employee compensation is performance-based[105](index=105&type=chunk) [Pledge of Assets and Risks](index=38&type=section&id=%E8%B5%84%E4%BA%A7%E6%8A%B5%E6%8A%BC%E5%8F%8A%E9%A3%8E%E9%99%A9) This section discloses the Group's asset pledges, specifically parking spaces as collateral for bank loans, and discusses foreign exchange fluctuation risks and contingent liabilities [Pledge of the Group's Assets](index=38&type=section&id=%E6%9C%AC%E9%9B%86%E5%9B%A2%E8%B5%84%E4%BA%A7%E6%8A%B5%E6%8A%BC) - Parking spaces with a total carrying amount of **HK$190,000,000** have been pledged to banks as collateral for bank loans granted to the Company[106](index=106&type=chunk) - An assignment of parking space rental income in favor of the bank has been executed[106](index=106&type=chunk) [Foreign Exchange Fluctuation Risk](index=38&type=section&id=%E6%B1%87%E7%8E%87%E6%B3%A2%E5%8A%A8%E9%A3%8E%E9%99%A9) - The Group conducts most of its business in GBP, EUR, RMB, USD, NPR, and HKD, exposing it to transactional currency risk[107](index=107&type=chunk) - The Group has minimal foreign currency risk as most business transactions are denominated in the respective functional currencies of the relevant group entities[107](index=107&type=chunk) - The Group does not have a foreign currency hedging policy but closely monitors its foreign currency risk and considers hedging instruments when appropriate[107](index=107&type=chunk) [Contingent Liabilities](index=38&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) - As of December 31, 2020, the Company's Directors were not aware of any significant contingent liabilities[108](index=108&type=chunk) [Directors' and Major Shareholders' Interests](index=39&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%82%A1%E4%B8%9C%E6%9D%83%E7%9B%8A) This section details the interests of the company's directors, chief executive, their associates, and major shareholders (non-directors or chief executive) in the company's shares, underlying shares, and debentures as of December 31, 2020 [Directors' and Chief Executive's Interests in Shares, Underlying Shares and Debentures](index=39&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E5%88%B8%E7%9A%84%E6%AC%8A%E7%9B%8A) Directors' and Chief Executive's Long Positions in Shares and Underlying Shares (December 31, 2020) | Director Name | Share Interest (shares) | Interest from Equity Derivatives (shares) | Total Interest (shares) | % of Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Yeung Chi Hang | 511,236,000 | 16,942,817 | 528,178,817 | 25.94% | | Mr. Chung Siu Wa | — | 16,942,817 | 16,942,817 | 0.83% | | Mr. Wong Po Keung | — | 16,942,817 | 16,942,817 | 0.83% | | Mr. Chik To Bun | — | 16,942,817 | 16,942,817 | 0.83% | | Mr. Leung Kwong Choi | — | 1,500,000 | 1,500,000 | 0.07% | | Mr. Wong Tze King | — | 1,000,000 | 1,000,000 | 0.05% | | Mr. Wong Kwai Sang | — | 1,000,000 | 1,000,000 | 0.05% | | Mr. Heung Chi Hang | — | 1,000,000 | 1,000,000 | 0.05% | [Major Shareholders' Interests in Shares, Underlying Shares and Debentures](index=40&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%96%BC%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E5%88%B8%E7%9A%84%E6%AC%8A%E7%9B%8A) Major Shareholders' Long Positions in Shares and Underlying Shares (December 31, 2020) | Shareholder Name | Share Interest (shares) | Interest from Equity Derivatives (shares) | Total Interest (shares) | % of Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Chu Ying Man | 135,000,000 | — | 135,000,000 | 6.63% | [Share Option Scheme](index=40&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) This section provides an update on the 2015 Share Option Scheme, including the refreshed scheme mandate limit, noting no options were granted, exercised, cancelled, or lapsed for the six months ended December 31, 2020, but a significant number remain unexercised - The Annual General Meeting on December 11, 2020, approved updating the scheme mandate limit under the 2015 Share Option Scheme, allowing subscription for up to **203,653,811 shares**, representing **10%** of the issued shares[117](index=117&type=chunk) - For the six months ended December 31, 2020, no share options were granted, exercised, cancelled, or lapsed[119](index=119&type=chunk) - As of December 31, 2020, unexercised share options to subscribe for a total of **105,114,085 shares** of the Company represented **5.16%** of the Company's issued shares as of the report date[119](index=119&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=42&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B3%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) This section confirms that neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period - For the six months ended December 31, 2020, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities on the Stock Exchange[120](index=120&type=chunk) [Corporate Governance](index=42&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB) This section outlines the company's corporate governance compliance, including adherence to the Corporate Governance Code (except for the combined Chairman and CEO roles), directors' securities transaction compliance, and the Audit Committee's composition and responsibilities [Corporate Governance](index=42&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB) - The Company complied with the code provisions of the Corporate Governance Code set out in Appendix 14 to the Listing Rules for the six months ended December 31, 2020[121](index=121&type=chunk) - The roles of Chairman and Chief Executive Officer are held by the same individual (Mr. Yeung Chi Hang), an arrangement the Board believes provides strong and consistent leadership for the Group[121](index=121&type=chunk) [Directors' Securities Transactions](index=43&type=section&id=%E8%91%A3%E4%BA%8B%E8%AF%81%E5%88%B8%E4%BA%A4%E6%98%93) - All Directors of the Company confirmed compliance with the standards set out in the Model Code for securities transactions by directors of listed issuers for the six months ended December 31, 2020[122](index=122&type=chunk) [Audit Committee](index=43&type=section&id=%E5%AE%A1%E6%A0%B8%E5%A7%94%E5%91%98%E4%BC%9A) - The Audit Committee comprises three independent non-executive Directors: Mr. Wong Tze King (Chairman), Mr. Wong Kwai Sang, and Mr. Heung Chi Hang[123](index=123&type=chunk) - The Audit Committee's responsibilities include reviewing and monitoring the Group's financial reporting process, internal controls, and risk management systems[123](index=123&type=chunk)

Business Operations - The Group is engaged in various businesses including metal recycling, motor accessories, car parking rental, money lending, and trading of golden flower tea products[10] - The Group is developing a hotel business in Nepal and an online trading platform in the PRC[10] - The Group is exploring new business opportunities for corporate development and is committed to sustainable business practices[10] - The Group maintains green businesses focused on research, development, and application of technologies for environmental, agricultural, organic, and green technology markets[10] - The Group's activities also extend to securities trading and investment business, contributing to its diversified portfolio[108] Financial Performance - The Group's financial statements for the year ended 30 June 2020 have been audited and presented in the annual report[9] - For the year ended June 30, 2020, the Group's turnover decreased by 36.8% to approximately HK$75,406,000 compared to HK$119,387,000 in 2019[58] - The Group's gross profit increased by 2.2% to approximately HK$18,786,000, up from approximately HK$18,384,000 in 2019[58] - The loss for the year decreased to approximately HK$55,774,000, compared to a loss of approximately HK$121,140,000 in the previous year[58] - Basic and diluted loss per share were HK3 cents, down from HK6 cents in 2019[59] Revenue and Income - Revenue from the metal recycling business was approximately HK$12,862,000 for the year ended June 30, 2020, a significant decrease from approximately HK$46,001,000 in 2019[28] - Revenue from the motor and motor accessories business was approximately HK$55,737,000 for the year ended June 30, 2020, down from approximately HK$66,547,000 in 2019[31] - Loan interest income from the money lending business was approximately HK$2,939,000 for the year ended June 30, 2020, compared to HK$2,893,000 in 2019, indicating stable development[38] - Revenue from the sale of golden flower tea was approximately HK$144,000 for the year ended June 30, 2020, an increase from HK$27,000 in 2019[47] - There was no revenue from the green technology segment for the year, consistent with 2019[42] Assets and Liabilities - As of June 30, 2020, total assets were approximately HK$762,398,000, down from approximately HK$785,764,000 in 2019[65] - The Group's total borrowings increased to approximately HK$31,179,000 from HK$22,000,000 in 2019[65] - The gearing ratio as of June 30, 2020, was 5.4%, up from 3.4% in 2019[65] - The net asset value of the Group as of June 30, 2020, was approximately HK$577,732,000, down from HK$645,929,000 in 2019[68] Environmental and Social Responsibility - The Group emphasizes environmental protection and sustainable development, implementing measures such as promoting energy saving and recycling initiatives[115][121] - The Group's commitment to environmental policies includes reducing disposable product usage and promoting awareness among employees[115][120] - The Group encourages energy-saving practices, such as turning off air conditioning and lighting when not in use, and using energy-efficient lighting in office areas[124] - The Group has implemented measures to promote recycling and reduce the use of disposable products in its operations[124] Share Capital and Ownership - As of June 30, 2020, the total issued share capital of the Company was 2,036,538,114 shares[154] - Mr. Yeung Chi Hang holds 448,364,000 shares and 16,942,817 underlying shares, totaling 465,306,817 shares, representing 22.85% of the issued share capital[155] - The Company has a share option scheme approved on November 11, 2015, allowing for the grant of options for up to 169,713,811 shares, which is 10% of the shares in issue at the time of the resolution[160] - As of June 30, 2020, options to subscribe for an aggregate of 105,114,085 shares were outstanding, representing 5.16% of the shares in issue[166] Governance and Compliance - The Group has complied with all relevant laws and regulations in Mainland China and Hong Kong that significantly impact its operations during the review period[119] - The auditor confirmed that the continuing connected transactions were approved by the Board and complied with the Group's pricing policies[173] - The company confirmed compliance with the disclosure requirements under Chapter 14A of the Listing Rules regarding related party transactions[181] - The company has taken out insurance against liabilities associated with defending proceedings against its directors[191] Market Conditions and Economic Impact - The COVID-19 pandemic has led to unprecedented uncertainty in the financial markets and has significantly impacted social lives globally, with over 31 million confirmed cases reported[49] - Hong Kong's economy contracted by 9% in Q2 2020, following a 9.1% contraction in Q1 2020[51] - The Hong Kong government downgraded its full-year economic forecast, expecting a contraction of between 6% and 8% in 2020, compared to a previous projection of 4% to 7%[51] - The group anticipates entering a "stall out phase" in global recovery, with significant risks including the U.S. presidential election and vaccine availability for COVID-19[49]

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].