Exploration and Mining Activities - The company reported exploration expenses of approximately RMB 189,000 for the year ended December 31, 2021, compared to none in 2020[22]. - As of December 31, 2021, the controlled resources for Project No. 20 included 1,330,000 tons of nickel metal with a grade of 0.71% and 3,150 tons of copper metal with a grade of 0.24%[17]. - The total estimated resources for Project No. 20 amounted to 2,590,000 tons of nickel metal with a total of 18,090 tons and an average grade of 0.70%[17]. - The company holds mining licenses for Project No. 20 and the Baiganhu Project, with areas of 0.22 square kilometers and 0.96 square kilometers respectively[19]. - The Baiganhu Project has a controlled resource of 1,730,000 tons of zinc metal with a grade of 6.57% and 71,440 tons of lead metal with a grade of 4.13%[17]. - The company did not incur any capital expenditures related to mining activities for the years ended December 31, 2020, and December 31, 2021[21]. - The company has not conducted any ore production during the years ended December 31, 2020, and December 31, 2021[20]. - The company is evaluating the feasibility of production for two mining licenses, focusing on copper, nickel, lead, and zinc extraction[37]. - The company plans to seek potential partners for joint development of mining sites to maximize economic value[47]. - The company is committed to green development in the mining sector, ensuring compliance with stricter safety and environmental regulations implemented by the government[47]. Financial Performance - The company’s gross profit increased by approximately 154.8% to about RMB 107 million for the year, compared to RMB 4.2 million in the previous year[47]. - The total sales cost for the year was approximately RMB 1.46 billion, up from RMB 137 million in the previous year, reflecting a 9.7-fold increase primarily due to higher coal product sales[47]. - Administrative expenses for the year were approximately RMB 210 million, a decrease from RMB 244 million in the previous year[51]. - The financial services segment generated revenue of approximately RMB 57 million for the year, slightly up from RMB 56 million in the previous year[46]. - Total revenue for the year was approximately RMB 1,470.4 million, with an operating profit of RMB 2.43 million, resulting in an operating profit margin of 0.2%[58]. - Other income for the year was approximately RMB 0.2 million, primarily from rental income and interest income from financial assets measured at fair value through other comprehensive income[52]. - Other operating losses for the year amounted to approximately RMB 4.2 million, compared to other operating income of approximately RMB 12.4 million in the previous year[53]. - Financial income for the year was approximately RMB 0.3 million, down from RMB 0.8 million in the previous year[55]. - Income tax expense for the year was approximately RMB 2.7 million, compared to RMB 3.6 million in the previous year[56]. Coal Business Development - The coal business segment contributed approximately RMB 1.46 billion in revenue for the year, a significant increase from RMB 135.6 million in the previous year[36]. - The company acquired 95% of Shanxi Fanpo Clean Energy Technology Co., Ltd. in January 2022, expanding its upstream coal business and diversifying revenue sources[31][32]. - The company decided to terminate its engineering services division and sell one of its exploration permits to reallocate financial and management resources towards coal business opportunities[34]. - The company has established three indirect subsidiaries for coal trading, primarily serving local coal traders and energy companies[34]. - The company aims to enhance resource utilization efficiency and reduce coal pollution emissions through the construction of a coal washing plant by Shanxi Fanpo[32]. - The designed maximum processing capacity of the new coal washing plant under construction by Shanxi Fanpo is approximately 20,000 tons per day, aimed at improving coal utilization efficiency and reducing emissions[86]. - The implementation of the new pricing scheme is expected to benefit the company's coal business significantly[87]. - The company is focusing on expanding its coal business scope to mitigate adverse market conditions and improve overall operational performance[87]. Corporate Governance and Management - The company has a strong management team with diverse backgrounds in finance, investment, and engineering, enhancing its operational capabilities[102][100]. - The board includes independent directors with extensive experience in investment and financial consulting, contributing to strategic decision-making[105]. - The company is committed to maintaining high standards of corporate governance and transparency in its operations[105]. - The company has implemented sufficient internal controls as reviewed by the Audit Committee, ensuring compliance with financial reporting standards[192]. - The company’s governance practices are aligned with the code, ensuring that all directors commit sufficient time to board matters[190]. - The board consists of eight members, including four executive directors, one non-executive director, and three independent non-executive directors[174]. - The company has established an Audit Committee, which held 4 meetings during the year to review the effectiveness of audit procedures and financial reporting[191]. - The Remuneration Committee held 3 meetings during the year to review the compensation policies and structures for directors and senior management[196]. - The company’s independent non-executive directors serve a term of three years, with the possibility of renewal, while independent non-executive directors are limited to a maximum term of nine years[190]. Market Conditions and Economic Outlook - For the year ended December 31, 2021, China's GDP was approximately RMB 114,367 billion, representing a year-on-year growth of 8.1%[26]. - In 2021, the production of raw coal in China reached approximately 4.07 billion tons, an increase of 4.7% year-on-year, while coal imports rose by 6.6% to about 320 million tons[27]. - The CCI5500 coal price index recorded a year-on-year increase of 7.9%, peaking at RMB 2,350 per ton in October 2021, before declining to RMB 907 per ton by the end of the year[27]. - The National Development and Reform Commission announced a 31% increase in the benchmark price of coal from RMB 535 per ton to RMB 700 per ton, indicating a balanced supply-demand outlook for the coal market[87]. - Despite a record high GDP growth rate in the first quarter of 2021, signs of economic slowdown were observed in the second half of 2021[84]. - The impact of the COVID-19 pandemic on the global economy and the group's business remains uncertain and difficult to predict[83]. - The company is exploring the feasibility of resuming operations at its mines to capitalize on future economic growth opportunities in China[84]. Risks and Challenges - The company continues to face various risks, including commodity price volatility and regulatory changes in China, which could significantly impact its operations and financial performance[122][123]. - The company’s operations are significantly influenced by the political, economic, and legal developments in China, which pose inherent risks to its mining operations[122]. - The group recognized an expected credit loss of RMB 2.8 million for receivables, an increase from RMB 0.7 million in 2020[75]. - Total provision for trade receivables was approximately RMB 5.6 million, up from RMB 3.7 million in 2020[76]. Shareholder Information - As of December 31, 2021, the company's distributable reserves amounted to approximately RMB 209.9 million, with a share premium of about RMB 668.8 million and accumulated losses of approximately RMB 458.0 million[134]. - Sales to the top five customers accounted for 29.8% of total sales for the year, down from 78.2% in 2020, while sales to the largest customer represented 12.2% of total sales, down from 27.9% in 2020[138]. - Purchases from the top five suppliers constituted 96.5% of total purchases, an increase from 94.5% in 2020, with the largest supplier accounting for 64.2% of total purchases, up from 27.1% in 2020[138]. - The total number of shares available for issuance under the stock option plan is 162,000,000, which represents approximately 10% of the total issued shares as of the date of the annual general meeting approval[153]. - Tian Yuan International Limited holds 412,592,702 shares, representing 25.47% of the issued share capital[158]. - Guo Jianzhong holds 454,958,702 shares through controlled entities, representing 28.08% of the issued share capital[162]. - Affinitiv Mobile Ventures Ltd. holds 320,000,000 shares, accounting for 19.75% of the issued share capital[162]. - Legend Vantage Limited holds 147,000,000 shares, representing 9.07% of the issued share capital[164].

Financial Performance - The company reported revenue of RMB 457.893 million for the six months ended June 30, 2021, a significant increase from RMB 17.499 million in the same period of 2020, representing a growth of approximately 2,615%[11]. - Gross profit for the same period was RMB 5.507 million, compared to RMB 1.801 million in 2020, indicating a substantial improvement in profitability[11]. - The company incurred an operating loss of RMB 5.896 million for the six months ended June 30, 2021, an improvement from an operating loss of RMB 11.563 million in the prior year[11]. - The company reported a net loss of RMB 7.182 million for the period, compared to a net loss of RMB 11.185 million in the same period of 2020, showing a reduction in losses[11]. - The total comprehensive loss for the six months ended June 30, 2021, was RMB 6,719,000, a decrease from RMB 11,185,000 in the same period of 2020, representing a 40.5% improvement[12]. - The basic and diluted loss per share attributable to equity holders of the company was RMB (0.44), compared to RMB (0.69) in the previous year, indicating a 36.2% reduction in loss per share[12]. - The company reported a net loss attributable to equity holders of RMB 7,152,000 for the six months ended June 30, 2021, an improvement from a net loss of RMB 11,208,000 in the same period of 2020[63]. Revenue Sources - The group’s total revenue for the six months ended June 30, 2021, was RMB 457,893,000[44]. - Coal trading revenue accounted for RMB 455,104,000, compared to RMB 14,611,000 in the previous year, indicating a growth of approximately 3,109%[52]. - For the six months ended June 30, 2021, the Mining segment generated revenue of RMB 2,789,000, while the Trading segment generated RMB 455,104,000[44]. - The financial services segment generated interest income of RMB 2,789,000, slightly down from RMB 2,888,000 in the previous year[52]. Assets and Liabilities - Non-current assets increased to RMB 278,931,000 as of June 30, 2021, from RMB 258,994,000 as of December 31, 2020, reflecting a growth of 7.7%[13]. - Current assets decreased to RMB 196,973,000 from RMB 209,786,000, a decline of 6.1%[13]. - Total liabilities rose to RMB 73,006,000 from RMB 59,163,000, marking an increase of 23.3%[15]. - Cash and cash equivalents decreased to RMB 135,592,000 from RMB 169,139,000, a reduction of 19.8%[21]. - The total equity attributable to equity holders of the company decreased to RMB 402,898,000 from RMB 409,617,000, a decline of 1.8%[15]. Operational Activities - The company has not engaged in any mineral production activities during the reporting period, focusing instead on exploration and resource assessment[9]. - The company is in the process of renewing mining licenses for the 20th project and Baikan Lake project, with applications submitted to relevant government departments[8]. - The processing capacity of the two mineral processing plants is 1,500 tons per day, but no mining or processing activities were conducted during the reporting period[90]. Financial Risks and Governance - The group faces various financial risks, including market risk (foreign exchange, interest rate, and price risks), credit risk, and liquidity risk, with no use of derivatives for hedging or trading purposes[31]. - The financial statements were prepared in accordance with Hong Kong Financial Reporting Standards and the relevant disclosure requirements of the Hong Kong Stock Exchange[23]. - The company has established an Audit Committee to review and monitor financial reporting processes, internal controls, and risk management systems, consisting of three independent non-executive directors[139]. Share Capital and Management - The company has a total share capital of RMB 137,361,000 with a share premium of RMB 668,768,000 as of June 30, 2021[76]. - The total remuneration for key management personnel decreased from RMB 1,898,000 in 2020 to RMB 1,507,000 in 2021, reflecting a reduction of approximately 20.6%[80]. - The company appointed Mr. Ye Xin as an executive director on July 12, 2021, holding 35,000,000 shares, approximately 2.16% of the issued share capital[134]. Future Outlook and Strategy - The group anticipates 2021 to be a challenging year due to ongoing global pandemic impacts and economic uncertainties, particularly in the second half of the year[116]. - The board maintains a cautiously optimistic outlook for core businesses, including mining, financial services, and coal trading, while seeking collaboration opportunities for exploration permits[118]. - The company is exploring opportunities for cooperation in mining exploration to maximize the economic value of its resources[86]. - The group aims to explore potential acquisitions to capture market opportunities in China and diversify its revenue base[118].

Company Information [Board of Directors and Committee Composition](index=3&type=section&id=Board%20of%20Directors%20and%20Committee%20Composition) The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, with established audit, remuneration, and nomination committees to ensure robust corporate governance - The Board members include Ms. Wang Qian, Mr. Zhou Jianzhong (Executive Directors), Mr. Cao Ye (Non-Executive Director), and Ms. Xiang Siying (Chairperson), Ms. Huang Mei, Mr. Chan Ping Kuen (Independent Non-Executive Directors)[6](index=6&type=chunk) - The company has an Audit Committee (chaired by Ms. Huang Mei), a Remuneration Committee (chaired by Ms. Xiang Siying), and a Nomination Committee (chaired by Ms. Wang Qian)[6](index=6&type=chunk) [Company Basic Information](index=3&type=section&id=Company%20Basic%20Information) The company is registered in the Cayman Islands, with principal places of business in Hami, Xinjiang, China, and Hong Kong, listed under stock code 1303, and key information regarding legal advisors, auditors, and share registrars is disclosed - The company's registered office is in the Cayman Islands, with principal places of business in Hami City, Xinjiang, China, and Wan Chai, Hong Kong[6](index=6&type=chunk) - The company's stock code is 1303, and its independent auditor is ZHONGHUI ANDA CPA Limited[6](index=6&type=chunk)[8](index=8&type=chunk) Principal Subsidiaries of the Group [Group Company Structure](index=5&type=section&id=Group%20Company%20Structure) Huili Resources Group controls its principal subsidiaries through a multi-tiered equity structure, encompassing diversified businesses such as investment, commercial factoring, mineral resource development, financial leasing, engineering services, and trading - Huili Resources Group conducts investment holding through wholly-owned subsidiaries including Fulin Investment, Zhengyuan International, Jia Zhao Venture Capital Limited, and Runce Limited[11](index=11&type=chunk) - Core mineral resource development operations are managed by Hami Jin Hua Mineral Resources Development Co., Ltd. and Hami Jia Tai Mineral Resources Development Co., Ltd., operating a beneficiation plant and multiple mineral projects respectively[11](index=11&type=chunk) - The Group's business also includes commercial factoring, financial leasing, engineering services, and coal trading, carried out through Huili Investment (Group) Co., Ltd., Jiayi Financial Leasing Co., Ltd., Runxi Energy Technology Engineering Services (Shanghai) Co., Ltd., Changzhi Runce Trading Co., Ltd., Gujiao Runce Trading Co., Ltd., and Ningbo Runce Trading Co., Ltd.[11](index=11&type=chunk) Mine Information [Mineral Resources and Reserves](index=6&type=section&id=Mineral%20Resources%20and%20Reserves) As of December 31, 2020, the company's main mineral projects (Project No. 20, H-989 Project, Baiganhu Project) hold nickel, copper, zinc, and lead metal resources and reserves, with the Baiganhu Project having the largest zinc metal resources 2020 Mineral Resources Overview as of December 31 | Project Name | Category | Quantity (thousand tonnes) | Nickel Metal (tonnes) | Nickel Grade (%) | Copper Metal (tonnes) | Copper Grade (%) | | :----------- | :------- | :------------------------- | :-------------------- | :--------------- | :-------------------- | :--------------- | | Project No. 20 | Measured | 1,330 | 9,430 | 0.71 | 3,150 | - | | | Indicated | 1,260 | 8,660 | 0.69 | 3,160 | - | | | Inferred | 2,590 | 18,090 | 0.70 | 6,310 | - | | H-989 Project | Measured | 3,390 | 16,540 | 0.49 | 7,750 | - | | | Inferred | 2,370 | 12,100 | 0.51 | 4,390 | - | | Baiganhu Project | Indicated | 1,730 | - | - | - | - | | | Inferred | 2,150 | - | - | - | - | | Project Name | Category | Quantity (thousand tonnes) | Zinc Metal (tonnes) | Zinc Grade (%) | Lead Metal (tonnes) | Lead Grade (%) | | :----------- | :------- | :------------------------- | :------------------ | :------------- | :------------------ | :------------- | | Baiganhu Project | Indicated | 1,730 | 113,540 | 6.57 | 71,440 | - | | | Inferred | 2,150 | 137,910 | 6.42 | 85,140 | - | 2020 Ore Reserves Overview as of December 31 | Project Name | Category | Quantity (thousand tonnes) | Nickel Metal (tonnes) | Nickel Grade (%) | Copper Metal (tonnes) | Copper Grade (%) | | :----------- | :------- | :------------------------- | :-------------------- | :--------------- | :-------------------- | :--------------- | | Project No. 20 | Probable | 1,099 | 7,071 | 0.64 | 2,362 | - | | Project Name | Category | Quantity (thousand tonnes) | Zinc Metal (tonnes) | Zinc Grade (%) | Lead Metal (tonnes) | Lead Grade (%) | | :----------- | :------- | :------------------------- | :------------------ | :------------- | :------------------ | :------------- | | Baiganhu Project | Probable | 1,055 | 62,773 | 5.95 | 39,352 | - | [Exploration and Mining Licenses](index=7&type=section&id=Exploration%20and%20Mining%20Licenses) The company holds exploration licenses for Baiganhu Gold Mine, H-989 Project, and Huangshan Project, as well as mining licenses for Project No. 20 and Baiganhu Project, with some licenses currently undergoing renewal Exploration Licenses Overview | Project Name | Ore Type | Exploration Area (sq. km) | License Expiry Date (Year/Month) | | :----------- | :------- | :------------------------ | :------------------------------- | | Baiganhu Gold Mine Project | Gold | 0.64 | July 2018 (Note 1) | | H-989 Project | Copper-Nickel | 0.96 | July 2018 (Note 1) | | Huangshan Project | Copper-Nickel | 3.49 | March 2019 (Note 1) | Mining Licenses Overview | Project Name | Mining Ore Type | Mining Area (sq. km) | License Expiry Date (Year/Month) | | :----------- | :-------------- | :------------------- | :------------------------------- | | Project No. 20 | Copper-Nickel | 0.22 | October 2019 (Note 1) | | Baiganhu Project | Lead, Zinc | 0.96 | September 2021 | - Note 1 indicates that the Group is in the process of renewing these licenses, with renewal applications submitted to relevant government authorities[18](index=18&type=chunk) [Capital Expenditure and Exploration Expenses](index=7&type=section&id=Capital%20Expenditure%20and%20Exploration%20Expenses) For the year ended December 31, 2020, the Group did not engage in ore production, incurred no capital expenditure from development and mining activities, and did not deduct exploration expenses in the consolidated statement of comprehensive income - For the years ended December 31, 2019 and 2020, the Group did not conduct any ore production[19](index=19&type=chunk) - For the years ended December 31, 2019 and 2020, no capital expenditure was incurred from development and mining activities[20](index=20&type=chunk) - For the years ended December 31, 2019 and 2020, no exploration expenses were deducted in the consolidated statement of comprehensive income[21](index=21&type=chunk) Management Discussion and Analysis [Business Review](index=8&type=section&id=Business%20Review) The Group, primarily engaged in non-ferrous mineral mining and beneficiation, was impacted by the COVID-19 pandemic, leading to the suspension of mine activities; to optimize its business portfolio, the Group divested its entire equity in Shaanxi Jiahe and ceased engineering service activities, focusing resources on mining, financial services, and trading businesses - The Group is primarily involved in the mining and beneficiation of non-ferrous minerals (nickel, copper, zinc, lead, etc.), with main operations located in Xinjiang Uygur Autonomous Region, China[24](index=24&type=chunk) - Due to the COVID-19 pandemic, the Group was forced to suspend all activities and planned maintenance work in the first half of 2020, maintaining only minimum business operations[25](index=25&type=chunk) - To improve its business portfolio and risk management, the Group completed the disposal of its entire equity in Shaanxi Jiahe on March 23, 2020[26](index=26&type=chunk) - This year, the Group decided to cease activities in the engineering services segment, concentrating resources on mining, financial services, and trading businesses[27](index=27&type=chunk) [Mining Licenses](index=8&type=section&id=Mining%20Licenses) Hami Jinhua and Hami Jiatai hold mining licenses for Mine No. 20 and Baiganhu Mine, but Mine No. 20 requires a system upgrade to restart production; the Group is evaluating the feasibility of production and seeking cooperation - Hami Jinhua and Hami Jiatai hold two mining licenses for Mine No. 20 (producing copper and nickel ore) and Baiganhu Mine (producing lead and zinc ore)[28](index=28&type=chunk) - Mine No. 20 requires an upgrade of its hoisting system to comply with new safety production regulations before production can restart[28](index=28&type=chunk) - The Group is evaluating the feasibility of commencing production at Baiganhu Mine and seeking potential partners for joint mine development[28](index=28&type=chunk) [Exploration Licenses](index=9&type=section&id=Exploration%20Licenses) Hami Jiatai holds three exploration licenses for Baiganhu Gold Mine, Huangshan, and H-989, covering gold, nickel, and copper; the Group has conducted preliminary exploration and plans further exploration or cooperative development when market conditions permit - Hami Jiatai holds three exploration licenses for Baiganhu Gold Mine, Huangshan, and H-989, covering minerals including gold, nickel, and copper[31](index=31&type=chunk) - Hami Jiatai has conducted some exploration in the Baiganhu Gold Mine area and identified preliminary mineral types and deposits[31](index=31&type=chunk) - The Group plans to invest reasonable resources or collaborate with potential partners for further exploration to enrich its resource and reserve base[31](index=31&type=chunk) [Beneficiation Plants](index=9&type=section&id=Beneficiation%20Plants) Hami Jiatai and Hami Jinhua operate copper-nickel and lead-zinc beneficiation plants, respectively, each with a daily processing capacity of 1,500 tonnes; neither plant conducted mining or beneficiation operations this year - Hami Jiatai operates a copper-nickel ore beneficiation plant, and Hami Jinhua owns a lead-zinc beneficiation plant[32](index=32&type=chunk) - Each beneficiation plant has a processing capacity of 1,500 tonnes per day, used for separating and recovering nickel, copper, lead, and zinc concentrates[32](index=32&type=chunk) - This year, Hami Jiatai and Hami Jinhua did not conduct any mining or beneficiation operations[32](index=32&type=chunk) [Financial Services](index=9&type=section&id=Financial%20Services) Revenue from the financial services segment this year was approximately RMB5.6 million, a decrease from RMB6.4 million in 2019, primarily due to a reduction in average outstanding loans - This year, the financial services segment generated revenue of approximately **RMB5.6 million**[35](index=35&type=chunk) - In the same period of 2019, financial services revenue was **RMB6.4 million**, a year-on-year decrease of **RMB0.8 million**[35](index=35&type=chunk)[40](index=40&type=chunk) - The decrease in revenue was mainly due to a reduction in the average outstanding loans to the Group's borrowers this year[40](index=40&type=chunk) [Trading Business](index=9&type=section&id=Trading%20Business) The trading business segment contributed RMB135.6 million in revenue to the Group this year, a significant increase from RMB85.8 million in 2019, despite the impact of the COVID-19 pandemic and declining commodity demand - This year, the trading business segment contributed **RMB135.6 million** to the Group's revenue[37](index=37&type=chunk) - In the same period of 2019, trading business revenue was **RMB85.8 million**, a year-on-year increase of approximately **58%**[37](index=37&type=chunk)[40](index=40&type=chunk) - The trading business is primarily conducted through Changzhi Runce Trading Co., Ltd., Gujiao Runce Trading Co., Ltd., and Ningbo Runce Trading Co., Ltd., focusing on coal trading[36](index=36&type=chunk) - Business activities slowed due to nationwide lockdowns caused by the COVID-19 pandemic and a decline in commodity demand[36](index=36&type=chunk) [Performance Review](index=10&type=section&id=Performance%20Review) This year, the Group's revenue increased by 50.9% to RMB141.2 million, primarily driven by significant growth in coal trading; gross profit rose by 29.4% to RMB4.2 million, but operating loss expanded to RMB12.57 million, mainly due to increased administrative expenses, exchange losses, and expected credit losses on financial assets 2020 vs. 2019 Performance Comparison | Indicator | 2020 (RMB million) | 2019 (RMB million) | Year-on-Year Change (%) | | :-------- | :----------------- | :----------------- | :---------------------- | | Revenue | 141.2 | 93.6 | 50.9% | | Cost of Sales | 137.0 | 90.3 | 51.7% | | Gross Profit | 4.2 | 3.3 | 29.4% | | Administrative Expenses | 24.4 | 21.1 | 15.6% | | Other (Losses)/Gains - Net | (4.9) | 4.5 | - | | Other Operating Income | 12.4 | 6.4 | 93.8% | | Operating Loss | (12.57) | (6.9) | 82.2% | | Income Tax Expense | 3.6 | 10.3 | -65.1% | | Loss for the Year | (15.35) | (15.24) | 0.7% | - The increase in revenue was primarily due to an increase of **RMB49.8 million** from coal trading, offset by a decrease of **RMB0.8 million** in financial services segment revenue[40](index=40&type=chunk) - Other losses of approximately **RMB4.9 million** were mainly exchange losses on financial assets denominated in currencies other than RMB, compared to exchange gains of **RMB4.5 million** in 2019[42](index=42&type=chunk) - Other operating income of approximately **RMB12.4 million** was mainly due to a reversal of impairment loss on mining buildings and mining rights of approximately **RMB14.9 million** resulting from increased commodity prices, offset by expected credit losses on financial assets of approximately **RMB2.5 million**[43](index=43&type=chunk) - Income tax expense for the year was approximately **RMB3.6 million**, a significant decrease from **RMB10.3 million** in 2019, primarily representing tax provisions for China operations[48](index=48&type=chunk) [Operating Loss by Segment](index=11&type=section&id=Operating%20Loss%20by%20Segment) In 2020, the trading business segment shifted from profit to loss, while the mining and financial services segments continued to contribute to profit, but overall operating profit margin significantly declined 2020 vs. 2019 Operating Segment Performance Comparison | Segment | 2020 Operating Revenue (RMB thousand) | 2020 Operating Profit/(Loss) (RMB thousand) | 2020 Operating Profit/(Loss) Margin (%) | 2019 Operating Revenue (RMB thousand) | 2019 Operating Profit/(Loss) (RMB thousand) | 2019 Operating Profit/(Loss) Margin (%) | | :------ | :---------------------------------- | :---------------------------------------- | :-------------------------------------- | :---------------------------------- | :---------------------------------------- | :-------------------------------------- | | Coal Trading | 135,625 | (2,470) | (1.8)% | 85,823 | 585 | 0.7% | | Financial Services Interest Income | 5,591 | 3,928 | 70.3% | 6,369 | 6,258 | 98.3% | | Engineering Services | - | - | Not Applicable | 1,380 | (2,590) | (187.7%) | | Mining | - | 10,423 | Not Applicable | - | 22,039 | Not Applicable | | **Total** | **141,216** | **11,881** | **8.4%** | **93,572** | **26,292** | **28.1%** | - This year, the company decided to concentrate resources on mining, financial services, and trading businesses, and ceased activities in the engineering services segment[50](index=50&type=chunk) [Significant Acquisitions and Disposals](index=11&type=section&id=Significant%20Acquisitions%20and%20Disposals) This year, the Group completed the disposal of its entire equity in Shaanxi Jiahe on March 23, 2020, and Shaanxi Jiahe is no longer a subsidiary of the company - This year, the Group completed the disposal of its entire equity in Shaanxi Jiahe to an independent third party on March 23, 2020[52](index=52&type=chunk) - Apart from the Jiahe disposal, there were no other significant acquisitions or disposals this year[52](index=52&type=chunk) [Liquidity and Financial Review](index=11&type=section&id=Liquidity%20and%20Financial%20Review) As of December 31, 2020, the Group's current assets and cash balances both decreased, but the current ratio remained healthy, and there were no outstanding interest-bearing bank loans, indicating a stable financial position 2020 vs. 2019 Liquidity Indicators Comparison | Indicator | December 31, 2020 (RMB million) | December 31, 2019 (RMB million) | Change | | :-------- | :------------------------------ | :------------------------------ | :----- | | Current Assets | 209.8 | 340.6 | ↓ | | Current Liabilities | 31.0 | 43.8 | ↓ | | Current Ratio | 6.8 | 7.8 | ↓ | | Bank and Cash Balances | 169.1 | 218.2 | ↓ | | Gearing Ratio | 0% | 0% | - | - The Group primarily conducts its ongoing business transactions in RMB and HKD, and currently does not engage in foreign exchange hedging[56](index=56&type=chunk)[57](index=57&type=chunk) - As of December 31, 2020 and 2019, there were no outstanding interest-bearing bank loans or other borrowings[53](index=53&type=chunk) - Total staff costs (including directors' emoluments) for the year were approximately **RMB7.6 million**, a decrease from **RMB8.9 million** in 2019[61](index=61&type=chunk) [Future Outlook and Prospects](index=13&type=section&id=Future%20Outlook%20and%20Prospects) Facing uncertainties from the COVID-19 pandemic and Sino-US disputes, the Group will continue to monitor the pandemic's development, actively respond to its impacts, and study plans for restarting mine production; the Group will continuously strengthen business diversification by expanding its coal trading scope and exploring other quality projects to optimize its business structure for sustainable development - The COVID-19 pandemic has impacted the global business environment, but as of the reporting date, it has not caused significant financial difficulties for the Group[64](index=64&type=chunk) - The Group will continue to study the feasibility of restarting production at its mines and actively respond to external economic and business risks[64](index=64&type=chunk) - The financial services segment continues to provide a stable revenue source for the Group, demonstrating the effectiveness of its diversified business strategy[64](index=64&type=chunk) - The Group is actively exploring the potential to leverage its industry expertise and network by expanding the scope of its coal trading business to optimize its business structure and open up new profit growth points[65](index=65&type=chunk) - Looking ahead, the Group will continue to deepen its mining business while developing its trading and financial services businesses, and explore the possibility of developing other quality projects to achieve business diversification[65](index=65&type=chunk) [Material Events After Reporting Period](index=13&type=section&id=Material%20Events%20After%20Reporting%20Period) As of the reporting date, the COVID-19 pandemic has not caused significant financial difficulties for the Group, but its future development may impact financial performance to an extent that cannot yet be estimated - Since January 2020, the COVID-19 pandemic has impacted the global business environment[66](index=66&type=chunk) - As of the reporting date, COVID-19 has not caused significant financial difficulties for the Group[66](index=66&type=chunk) - Depending on the development and spread of the pandemic after the reporting date, further changes in the Group's economic conditions may impact its financial performance, the extent of which cannot be estimated as of the reporting date[66](index=66&type=chunk) Biographies of Directors and Senior Management [Executive Directors](index=14&type=section&id=Executive%20Directors) Ms. Wang Qian and Mr. Zhou Jianzhong serve as Executive Directors; Ms. Wang Qian has over 15 years of experience in finance, investment, and management, while Mr. Zhou Jianzhong has over 20 years of experience in construction and engineering management, responsible for the general operations of the mines in China - Ms. Wang Qian (45 years old) joined the Group in January 2016, possessing over 15 years of experience in finance, investment, and management, having served as a consultant at PwC, a senior manager at Goodyear, and president of Huaqin Investment[68](index=68&type=chunk) - Mr. Zhou Jianzhong (47 years old) joined the Group in May 2017, possessing over 20 years of experience in construction and engineering management, and currently serves as the legal representative of Hami Jinhua, Hami Jiatai, and Shaanxi Jiahe, responsible for the general operations of the mines in China[70](index=70&type=chunk) [Non-Executive Directors](index=15&type=section&id=Non-Executive%20Directors) Mr. Cao Ye serves as a Non-Executive Director, with extensive experience in investment and coal trading businesses, and currently holds the position of General Manager at Botong Energy Sales (Ningbo) Co., Ltd - Mr. Cao Ye (25 years old) was appointed as a Non-Executive Director on June 14, 2019, with experience in investment and coal trading businesses[74](index=74&type=chunk)[75](index=75&type=chunk) - Mr. Cao previously served as a partner at Beijing Zhenglve Caicheng Asset Management Co., Ltd. and Deputy General Manager at Shanxi Changsheng Xinlong Supply Chain Management Service Co., Ltd., and is currently the General Manager of Botong Energy Sales (Ningbo) Co., Ltd.[74](index=74&type=chunk) [Independent Non-Executive Directors](index=15&type=section&id=Independent%20Non-Executive%20Directors) Ms. Xiang Siying, Ms. Huang Mei, and Mr. Chan Ping Kuen serve as Independent Non-Executive Directors, each bringing rich professional backgrounds and experience in investment, banking, financial advisory, accounting, auditing, mining, and materials trading - Ms. Xiang Siying (58 years old) was appointed as an Independent Non-Executive Director on September 6, 2017, and as Chairperson of the Board on March 11, 2019, with extensive experience in investment, banking, and financial advisory[76](index=76&type=chunk)[77](index=77&type=chunk) - Ms. Huang Mei (41 years old) was appointed as an Independent Non-Executive Director on October 19, 2018, is a member of the Chinese Institute of Certified Public Accountants, and has over 15 years of experience in accounting, auditing, and corporate management[79](index=79&type=chunk)[80](index=80&type=chunk) - Mr. Chan Ping Kuen (35 years old) was appointed as an Independent Non-Executive Director on March 11, 2019, has over 10 years of experience in the mining and materials trading industry, and currently serves as the Head of Trading at Asia Energy Logistics Group Limited[81](index=81&type=chunk)[82](index=82&type=chunk) [Senior Management](index=16&type=section&id=Senior%20Management) Mr. Qiu Kangjun serves as the Company Secretary and Financial Controller, with over 10 years of experience in accounting, auditing, and corporate fields - Mr. Qiu Kangjun (35 years old) joined the Group on January 14, 2019, and was appointed as Company Secretary and Financial Controller on February 13, 2019[83](index=83&type=chunk) - Mr. Qiu holds a Bachelor's degree in Business Administration (Accounting) from The Chinese University of Hong Kong, is a Fellow of the Hong Kong Institute of Certified Public Accountants and a Fellow of The Chartered Governance Institute, with over 10 years of experience in accounting, auditing, and corporate fields[83](index=83&type=chunk) Directors' Report [Company Information](index=17&type=section&id=Company%20Information) Huili Resources (Group) Limited was incorporated in the Cayman Islands on February 19, 2010, and listed on the Main Board of the Hong Kong Stock Exchange on January 12, 2012 - The Company was incorporated in the Cayman Islands as an exempted company under the Companies Law on February 19, 2010[87](index=87&type=chunk) - The Company's shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on January 12, 2012[87](index=87&type=chunk) [Principal Activities](index=17&type=section&id=Principal%20Activities) The Company's principal activity is investment holding, with its subsidiaries primarily engaged in mining, beneficiation, and sale of non-ferrous metal products, trading of oil and gas exploration materials and coal, and financial services in China; this year, the Group decided to cease activities in the engineering services segment - The Company's principal activity is investment holding[88](index=88&type=chunk) - Its subsidiaries are primarily engaged in mining, beneficiation, and sale of gold, nickel, copper, lead, and zinc products, trading of oil and gas exploration materials and coal, and financial services in China[88](index=88&type=chunk) - During the year, the Group determined that concentrating resources on mining, financial services, and trading businesses was in the best interest of the Company, and decided to cease activities in the engineering services segment[89](index=89&type=chunk) [Business Review](index=17&type=section&id=Business%20Review) Details of the Group's business review, financial performance, and future development are provided in the "Management Discussion and Analysis" section - Details of the Group's business review, financial performance, and future development are set out in "Management Discussion and Analysis" on pages 7 to 12[91](index=91&type=chunk) [Directors' Opinion on Qualified Opinion](index=17&type=section&id=Directors'%20Opinion%20on%20Qualified%20Opinion) The Board noted the auditor's qualified opinion on the consolidated financial statements, primarily concerning the fair value loss on the disposal group classified as held for sale for Shaanxi Jiahe and the reversal of impairment loss on mining rights, due to the auditor's inability to obtain sufficient evidence - The Board noted that the auditor has issued a qualified opinion on the Company's consolidated financial statements for the year[92](index=92&type=chunk) - The qualified opinion matters relate to the fair value loss on the disposal group classified as held for sale for Shaanxi Jiahe Mining Development Co., Ltd. and the reversal of impairment loss on mining rights[92](index=92&type=chunk) - The auditor was unable to obtain sufficient and appropriate evidence to determine the amounts of the qualified opinion items[95](index=95&type=chunk) [Key Risks and Uncertainties](index=18&type=section&id=Key%20Risks%20and%20Uncertainties) The Group faces business, operational, and financial risks, including limited mine life, commodity price fluctuations, changes in China's political, economic, and legal policies, stricter environmental regulations, and market, credit, and liquidity risks - Certain projects of the Group have limited and relatively short estimated mine lives, and there are uncertainties in obtaining new mining projects[96](index=96&type=chunk) - Business and operating results are susceptible to commodity price fluctuations and economic cyclicality[96](index=96&type=chunk) - The Group's business, financial condition, operating results, and prospects are significantly affected by political, economic, and legal developments in China and changes in government policies[96](index=96&type=chunk) - The Group also faces market risks (including foreign exchange risk, interest rate risk), credit risk, and liquidity risk[96](index=96&type=chunk) [Environmental Policy and Performance](index=18&type=section&id=Environmental%20Policy%20and%20Performance) The Group is committed to sustainable development, complies with various environmental laws and regulations in China, and received no environmental claims or penalties this year; as of December 31, 2020, the provision for environmental costs was approximately RMB2.9 million - The Group is committed to the long-term sustainable development of its operations' environment and communities, complying with China's environmental laws and regulations[98](index=98&type=chunk) - This year, the Group complied in all material respects with all relevant Chinese laws and regulations concerning environmental protection and was not subject to any environmental claims, lawsuits, penalties, or administrative sanctions[101](index=101&type=chunk) - As of December 31, 2020, the provision for closure, reclamation, and environmental costs was approximately **RMB2.9 million** (2019: **RMB2.8 million**)[101](index=101&type=chunk) [Compliance with Relevant Laws and Regulations](index=19&type=section&id=Compliance%20with%20Relevant%20Laws%20and%20Regulations) The Group complied in all material respects with relevant laws and regulations in China, Hong Kong, and the Cayman Islands, as well as the Listing Rules; however, due to COVID-19 travel restrictions, the company failed to publish its 2019 audited annual results on time, constituting a breach of Listing Rule 13.49 - The Group has complied in all material respects with relevant laws and regulations that have a significant impact on the Group's business and operations during the year[102](index=102&type=chunk) - Due to travel restrictions caused by the COVID-19 pandemic, the Company was unable to publish its 2019 audited annual results on or before March 31, 2020, as required by the Listing Rules, constituting a breach of Listing Rule 13.49[103](index=103&type=chunk) - The Company published its preliminary results announcement on March 31, 2020, without auditor's agreement, and obtained auditor's agreement on April 9, 2020, in accordance with further guidance[103](index=103&type=chunk) [Results and Dividends](index=20&type=section&id=Results%20and%20Dividends) The Group recorded a loss for the year, and the Board does not recommend the payment of any dividends; as of December 31, 2020, the company's distributable reserves balance to shareholders was approximately RMB228.4 million - The Group's loss for the year is set out in the consolidated statement of comprehensive income[108](index=108&type=chunk) - The Directors do not recommend the payment of any dividend for the year[109](index=109&type=chunk) - As of December 31, 2020, the Company's distributable reserves balance to shareholders was approximately **RMB228.4 million**[110](index=110&type=chunk) [Share Capital](index=20&type=section&id=Share%20Capital) There was no change in the company's share capital during the year, and no pre-emptive rights provisions exist in the company's articles of association or Cayman Islands law - Details of changes in the Company's share capital are set out in Note 31 to the consolidated financial statements[112](index=112&type=chunk) - There was no change in the Company's share capital during the year[112](index=112&type=chunk) - There are no pre-emptive rights provisions in the Company's articles of association or the laws of the Cayman Islands that would require the Company to offer new shares pro rata to existing shareholders[113](index=113&type=chunk) [Major Customers and Suppliers](index=21&type=section&id=Major%20Customers%20and%20Suppliers) This year, sales to the Group's five largest customers accounted for 78.2% of total sales, with the largest customer accounting for 27.9%; purchases from the five largest suppliers accounted for 94.5% of total purchases, with the largest supplier accounting for 27.1% - For the year, sales to the Group's five largest customers accounted for **78.2%** of total sales (2019: **60.4%**)[117](index=117&type=chunk) - Sales to the largest customer accounted for **27.9%** of total sales (2019: **19.4%**)[117](index=117&type=chunk) - For the year, purchases from the Group's five largest suppliers and the largest supplier accounted for **94.5%** (2019: **100.0%**) and **27.1%** (2019: **33.3%**) of total purchases, respectively[117](index=117&type=chunk) [Directors](index=21&type=section&id=Directors) As of the reporting date, the Board of Directors includes Ms. Wang Qian, Mr. Zhou Jianzhong (Executive Directors), Mr. Cao Ye (Non-Executive Director), and Ms. Xiang Siying (Chairperson), Ms. Huang Mei, Mr. Chan Ping Kuen (Independent Non-Executive Directors); some directors will retire by rotation and are eligible for re-election - As of the reporting date, the Board of Directors includes Ms. Wang Qian, Mr. Zhou Jianzhong (Executive Directors), Mr. Cao Ye (Non-Executive Director), Ms. Xiang Siying (Chairperson), Ms. Huang Mei, and Mr. Chan Ping Kuen (Independent Non-Executive Directors)[118](index=118&type=chunk) - Mr. Zhou Jianzhong, Ms. Xiang Siying, and Mr. Chan Ping Kuen will retire by rotation and are eligible and willing to offer themselves for re-election at the upcoming Annual General Meeting[118](index=118&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures of the Company or its Associated Corporations](index=22&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares,%20and%20Debentures%20of%20the%20Company%20or%20its%20Associated%20Corporations) As of December 31, 2020, no director or chief executive of the Company had any disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations - As of December 31, 2020, no director or chief executive of the Company had, or was deemed to have, any interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations that were required to be notified to the Company and the Stock Exchange under Divisions 7 and 8 of Part XV of the Securities and Futures Ordinance[124](index=124&type=chunk) [Equity-Linked Agreements](index=22&type=section&id=Equity-Linked%20Agreements) The Company has an share option scheme designed to encourage eligible participants to enhance company and shareholder value; as of December 31, 2020, no share options were granted, exercised, lapsed, or outstanding - The Company has an share option scheme designed to encourage eligible participants to strive to enhance the overall value of the Company and its shareholders[126](index=126&type=chunk) - The share option scheme became effective on December 16, 2011, and will remain valid for 10 years (i.e., until December 15, 2021)[126](index=126&type=chunk) - As of December 31, 2020, no share options were granted, exercised, lapsed, or outstanding[61](index=61&type=chunk)[131](index=131&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares](index=24&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of December 31, 2020, Mr. Guo Jianzhong and his controlled entity, Tianyuan International Limited, collectively held 28.08% of the company's equity; China Huarong Asset Management Co., Ltd. and its affiliates collectively held 19.75%; and Legend Vantage Limited and its affiliates collectively held 11.64% 2020 Major Shareholder Holdings as of December 31 | Name/Entity | Nature of Interest | Total Interest in Shares (L) | Approximate Percentage of Company's Issued Share Capital | | :---------- | :----------------- | :--------------------------- | :--------------------------------------- | | Tianyuan International Limited | Beneficial Owner | 412,592,702 | 25.47% | | Mr. Guo Jianzhong | Controlled Corporation Interest and Beneficial Owner | 454,958,702 | 28.08% | | Affinitiv Mobile Ventures Ltd. | Beneficial Owner | 320,000,000 | 19.75% | | China Huarong Asset Management Co., Ltd. | Controlled Corporation Interest | 320,000,000 | 19.75% | | Legend Vantage Limited | Beneficial Owner | 188,638,883 | 11.64% | - Mr. Guo Jianzhong is the legal and beneficial owner of the entire issued share capital of Tianyuan International Limited and holds 42,366,000 shares[138](index=138&type=chunk) - Affinitiv Mobile Ventures Ltd. is wholly owned by China Huarong Overseas Investment Holding Co., Ltd., which is wholly owned by China Huarong Asset Management Co., Ltd.[139](index=139&type=chunk)[140](index=140&type=chunk) [Auditor](index=25&type=section&id=Auditor) This year, the company's auditor changed from BDO Limited to ZHONGHUI ANDA CPA Limited, with the latter retiring and being eligible for re-appointment - On June 19, 2020, BDO Limited resigned as the Company's auditor[146](index=146&type=chunk) - ZHONGHUI ANDA CPA Limited was appointed as the Company's auditor and has audited the consolidated financial statements for the year ended December 31, 2020[146](index=146&type=chunk) - ZHONGHUI ANDA CPA Limited will retire at the conclusion of the upcoming Annual General Meeting and is eligible and willing to offer itself for re-appointment[146](index=146&type=chunk) Corporate Governance Report [Board of Directors](index=27&type=section&id=Board%20of%20Directors) As of December 31, 2020, the Board comprised two executive directors, one non-executive director, and three independent non-executive directors, committed to maintaining high corporate governance standards and overseeing the Group's business, strategy, and financial performance; the roles of Board Chairman and Chief Executive Officer are separate, and non-executive directors serve a three-year term - As of December 31, 2020, the Board of Directors comprised six directors, including two executive directors, one non-executive director, and three independent non-executive directors[152](index=152&type=chunk) - The Board is primarily accountable to shareholders, responsible for leading and governing the Company and its subsidiaries, overseeing business, strategic direction, financial performance, and setting objectives and business development plans[152](index=152&type=chunk) - The Chairperson of the Board is Ms. Xiang Siying, and the company does not have a Chief Executive Officer position, with its functions performed by other executive directors and senior management, in compliance with code requirements[161](index=161&type=chunk) - Except for Ms. Huang Mei, who has no specific term, all other non-executive directors are appointed for a term of three years, and all directors are subject to retirement by rotation[162](index=162&type=chunk) [Directors' Attendance at Meetings](index=28&type=section&id=Directors'%20Attendance%20at%20Meetings) The Board regularly holds meetings to review the Group's financial and operating results and address significant matters, with good attendance by all directors ensuring effective corporate governance - The Board holds at least four regular meetings annually to review the Group's financial and operating results[156](index=156&type=chunk) Directors' Meeting Attendance (2020) | Director Name | Board Meetings | Audit Committee Meetings | Remuneration Committee Meetings | Nomination Committee Meetings | Investment Committee Meetings | Annual General Meeting | | :------------ | :------------- | :----------------------- | :------------------------------ | :---------------------------- | :---------------------------- | :--------------------- | | Ms. Wang Qian | 15/18 | Not Applicable | 1/1 | 1/1 | 1/1 | 1/1 | | Mr. Zhou Jianzhong | 18/18 | Not Applicable | Not Applicable | Not Applicable | Not Applicable | 1/1 | | Mr. Cao Ye | 15/18 | Not Applicable | Not Applicable | Not Applicable | Not Applicable | 1/1 | | Ms. Xiang Siying | 18/18 | 6/6 | 1/1 | 1/1 | 1/1 | 1/1 | | Ms. Huang Mei | 15/18 | 6/6 | 1/1 | 1/1 | 1/1 | 1/1 | | Mr. Chan Ping Kuen | 15/18 | 6/6 | Not Applicable | Not Applicable | Not Applicable | 1/1 | [Audit Committee](index=29&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, held six meetings this year to review financial results, accounting policies, internal controls, and risk management, and communicated with the auditor regarding the qualified opinion - The Audit Committee comprises three independent non-executive directors: Ms. Huang Mei (Chairperson), Ms. Xiang Siying, and Mr. Chan Ping Kuen[163](index=163&type=chunk) - This year, the Audit Committee held six meetings to review the Company's corporate governance policies, compliance with legal and regulatory requirements, financial reporting system, risk management, and internal control system[163](index=163&type=chunk)[166](index=166&type=chunk) - The Audit Committee met with the auditor regarding the qualified opinion (concerning the fair value loss on the disposal group for Shaanxi Jiahe and the reversal of impairment loss on mining rights) and agreed with the Board's opinion[168](index=168&type=chunk)[169](index=169&type=chunk) [Remuneration Committee](index=31&type=section&id=Remuneration%20Committee) The Remuneration Committee, comprising two independent non-executive directors and one executive director, held one meeting this year to review the Group's remuneration policy and the remuneration packages of directors and senior management - The Remuneration Committee comprises Ms. Xiang Siying (Chairperson), Ms. Huang Mei (Independent Non-Executive Director), and Ms. Wang Qian (Executive Director)[172](index=172&type=chunk) - This year, the Remuneration Committee held one meeting to review the Group's remuneration policy and structure, as well as the remuneration packages of directors and senior management[172](index=172&type=chunk) [Nomination Committee](index=31&type=section&id=Nomination%20Committee) The Nomination Committee, comprising one executive director and two independent non-executive directors, held one meeting this year to review the Board's structure, size, composition, and skills, and to assess the independence of independent non-executive directors - The Nomination Committee comprises Ms. Wang Qian (Chairperson), Ms. Xiang Siying, and Ms. Huang Mei[174](index=174&type=chunk) - This year, the Nomination Committee held one meeting to review capabilities and nominate candidates to fill casual vacancies on the Board for approval, and to review the Board's composition and Board diversity policy[174](index=174&type=chunk) - The primary responsibilities of the Nomination Committee include reviewing the Board's structure, identifying and nominating director candidates, assessing the independence of independent non-executive directors, and providing recommendations on director appointments[173](index=173&type=chunk) [Investment Committee](index=32&type=section&id=Investment%20Committee) The Investment Committee was established on June 26, 2020, comprising an independent non-executive director (Chairperson), an executive director, and an independent non-executive director, responsible for reviewing and evaluating investment projects and providing recommendations to the Board - The Investment Committee was established on June 26, 2020[176](index=176&type=chunk) - The Investment Committee comprises Ms. Xiang Siying (Chairperson), Ms. Wang Qian, and Ms. Huang Mei[176](index=176&type=chunk) - This year, the Investment Committee held one meeting to review the Group's investment strategy and certain investment opportunities[176](index=176&type=chunk) [Accountability and Audit](index=32&type=section&id=Accountability%20and%20Audit) The Board is responsible for preparing true and fair financial statements and ensuring effective internal controls; the auditor, ZHONGHUI ANDA CPA Limited, provides audit services, and its remuneration has been disclosed - Directors are responsible for preparing consolidated financial statements for each financial period that give a true and fair view of the state of affairs, results, and cash flows of the Group for that period[177](index=177&type=chunk) - The auditor, ZHONGHUI ANDA CPA Limited, received remuneration for services, with audit services costing **RMB978 thousand** and other non-audit services costing **RMB178 thousand**[180](index=180&type=chunk)[184](index=184&type=chunk) [Risk Management and Internal Control](index=33&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board is responsible for the Group's risk management and internal control systems, reviewing their effectiveness annually; the Group has established an internal compliance officer position and engaged legal and internal control consultants to strengthen risk management and compliance - The Board is responsible for the Company's risk management and internal control systems and for reviewing their effectiveness[185](index=185&type=chunk) - The Group has established an internal compliance officer position, held by the Company Secretary and Financial Controller, Mr. Qiu Kangjun, to assist the Board in ensuring operations comply with laws and regulations[188](index=188&type=chunk) - The Group engaged legal advisors in China, the Cayman Islands, and Hong Kong, as well as internal control consultants for annual reviews, to strengthen its risk management and internal control systems[190](index=190&type=chunk) - The internal control consultants' review found no significant internal control deficiencies, and all recommendations were properly followed up[190](index=190&type=chunk) [Directors' Training](index=34&type=section&id=Directors'%20Training) Newly appointed directors receive comprehensive induction training to ensure understanding of the Group's business and regulatory responsibilities; the Company Secretary regularly provides updates on Listing Rules, and directors are provided with materials and attend seminars to stay informed of the latest regulatory developments - Each newly appointed director received comprehensive, formal, and tailored induction training upon their initial appointment[191](index=191&type=chunk) - The Company Secretary provides updates on the Listing Rules from time to time, and directors are also provided with materials and attend seminars to understand the latest regulatory developments[191](index=191&type=chunk) [Board Diversity Policy](index=34&type=section&id=Board%20Diversity%20Policy) The Company has adopted a Board Diversity Policy, considering various factors such as gender, age, cultural and educational background, professional experience, skills, knowledge, and length of service to achieve Board diversity - The Company has adopted a Board Diversity Policy, aiming to achieve Board diversity by considering various factors, including but not limited to gender, age, cultural and educational background, race, professional experience, skills, knowledge, and other qualifications[192](index=192&type=chunk) - The Nomination Committee has considered measurable objectives across four key areas (gender, age, professional experience, and race) to implement the Board Diversity Policy[192](index=192&type=chunk) Board Diversity as of Reporting Date | Director Name | Age Group 25-35 | Age Group 35-45 | Age Group 45+ | Educational Background Science | Educational Background Accounting & Finance | Educational Background Other | Career Experience Science | Career Experience Accounting & Finance | Career Experience Management | | :------------ | :-------------- | :-------------- | :------------ | :--------------------- | :-------------------------- | :------------------- | :-------------------- | :-------------------------- | :------------------- | | Ms. Wang Qian | | ✓ | | | ✓ | | | ✓ | | | Mr. Zhou Jianzhong | | | ✓ | ✓ | | | ✓ | | | | Mr. Cao Ye | ✓ | | | | ✓ | | | ✓ | | | Ms. Xiang Siying | | | ✓ | | ✓ | | | ✓ | | | Ms. Huang Mei | | ✓ | | | ✓ | | | ✓ | | | Mr. Chan Ping Kuen | ✓ | | | | ✓ | | | | ✓ | [Dividend Policy](index=36&type=section&id=Dividend%20Policy) The Company has formulated a dividend payment policy, but the Board does not recommend the payment of any dividends for the current year - The Company has formulated a dividend payment policy, outlining the factors, frequency, and form for determining dividend payments[201](index=201&type=chunk) - The Board does not recommend the payment of any dividend for the current year (2019: nil)[202](index=202&type=chunk) [Company Secretary](index=36&type=section&id=Company%20Secretary) Mr. Qiu Kangjun served as the Company Secretary throughout the year and participated in no less than 15 hours of relevant professional training - Mr. Qiu served as the Company Secretary throughout the year and participated in no less than 15 hours of relevant professional training during the year[203](index=203&type=chunk) [Shareholders' Rights](index=37&type=section&id=Shareholders'%20Rights) The Board is committed to maintaining continuous communication with shareholders and encourages their attendance at general meetings; shareholders can make inquiries or request extraordinary general meetings through various channels - The Board is committed to maintaining continuous communication with shareholders and encourages shareholders to attend general meetings[208](index=208&type=chunk) - Shareholders can send written inquiries to the Company Secretary via email, fax, or mail[208](index=208&type=chunk) - Shareholders holding not less than one-tenth of the paid-up share capital can request the Board to convene an extraordinary general meeting[209](index=209&type=chunk) [Investor Relations](index=37&type=section&id=Investor%20Relations) The Company maintains a website (www.huili.hk) providing comprehensive information to facilitate effective communication with the public - The Company maintains a website (www.huili.hk) providing comprehensive information on its principal businesses, press releases, announcements, financial information, publications, annual and interim reports, and circulars to shareholders[210](index=210&type=chunk) Independent Auditor's Report [Qualified Opinion](index=38&type=section&id=Qualified%20Opinion) The auditor issued a qualified opinion on the consolidated financial statements, stating that, except for the possible effects of the matters described in the Basis for Qualified Opinion, the financial statements present fairly the Group's financial position, performance, and cash flows - The auditor has audited the consolidated financial statements of Huili Resources (Group) Limited and its subsidiaries[213](index=213&type=chunk) - The auditor believes that, except for the possible effects of the matters described in the Basis for Qualified Opinion, the consolidated financial statements present fairly, in all material respects, the Group's financial position, performance, and cash flows in accordance with Hong Kong Financial Reporting Standards[213](index=213&type=chunk) [Basis for Qualified Opinion](index=38&type=section&id=Basis%20for%20Qualified%20Opinion) The qualified opinion primarily stems from the auditor's inability to obtain sufficient evidence to determine the fair value loss on the disposal group classified as held for sale for Shaanxi Jiahe and the reversal of impairment loss on mining rights, which could significantly impact the 2019 financial performance and related disclosures - The qualified opinion matters relate to the fair value loss on the disposal group classified as held for sale for Shaanxi Jiahe Mining Development Co., Ltd. and the reversal of impairment loss on mining rights[214](index=214&type=chunk) - The auditor was unable to obtain sufficient and appropriate audit evidence to determine the amount of the aforementioned reversal of impairment loss on mining rights for Shaanxi Jiahe and the carrying amount of mining rights[214](index=214&type=chunk) - Any adjustments to the aforementioned figures might have a significant impact on the Group's financial performance for the year ended December 31, 2019, and the disclosures in the consolidated financial statements[214](index=214&type=chunk) [Key Audit Matters](index=39&type=section&id=Key%20Audit%20Matters) Key audit matters include the impairment testing of mining buildings and mining rights, as well as trade and bills receivables, loans receivable, and other receivables, all of which involve significant judgment, assumptions, and valuation - Impairment testing of mining buildings and mining rights is crucial to the audit due to their significant balances and the application of judgment, assumptions, and valuation[218](index=218&type=chunk) - Impairment testing of trade and bills receivables, loans receivable, and other receivables is also a key audit matter due to their significant balances and the involvement of judgment and valuation[220](index=220&type=chunk) - The auditor's audit procedures include assessing the accuracy, independence, and integrity of valuations, and reconciling key assumptions with supporting evidence[219](index=219&type=chunk)[223](index=223&type=chunk) [Other Information](index=40&type=section&id=Other%20Information) Directors are responsible for other information in the annual report, and the auditor's opinion on the consolidated financial statements does not cover other information; due to the matters described in the Basis for Qualified Opinion, the auditor cannot conclude whether other information contains a material misstatement - Directors are responsible for other information, which includes all information contained in the company's annual report, but excludes the consolidated financial statements and the auditor's report[224](index=224&type=chunk) - The auditor's opinion on the consolidated financial statements does not cover other information, and no form of assurance conclusion is expressed thereon[225](index=225&type=chunk) - Due to the inability to obtain sufficient evidence, the auditor cannot conclude whether other information related to the qualified opinion matters contains a material misstatement[225](index=225&type=chunk) [Directors' Responsibilities for the Consolidated Financial Statements](index=41&type=section&id=Directors'%20Responsibilities%20for%20the%20Consolidated%20Financial%20Statements) Directors are responsible for preparing true and fair consolidated financial statements in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance, and for internal controls to prevent material misstatement - Directors are responsible for preparing consolidated financial statements that give a true and fair view in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Hong Kong Companies Ordinance[228](index=228&type=chunk) - Directors are responsible for such internal control as they determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error[228](index=228&type=chunk) - Directors are responsible for assessing the Group's ability to continue as a going concern and for using the going concern basis of accounting[228](index=228&type=chunk) [Auditor's Responsibilities for the Audit of the Consolidated Financial Statements](index=41&type=section&id=Auditor's%20Responsibilities%20for%20the%20Audit%20of%20the%20Consolidated%20Financial%20Statements) The auditor's objective is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes an opinion - The auditor's objective is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error[229](index=229&type=chunk) - The auditor conducts the audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants and is independent of the Group[214](index=214&type=chunk)[229](index=229&type=chunk) Consolidated Statement of Comprehensive Income [Overview of 2020 Consolidated Comprehensive Income](index=42&type=section&id=Overview%20of%202020%20Consolidated%20Comprehensive%20Income) For the year ended December 31, 2020, the Group's revenue was RMB141,216 thousand, with a loss for the year of RMB15,351 thousand, of which RMB16,738 thousand was attributable to owners of the Company 2020 vs. 2019 Key Data from Consolidated Statement of Comprehensive Income | Indicator | 2020 (RMB thousand) | 2019 (RMB thousand) | | :-------- | :------------------ | :------------------ | | Revenue | 141,216 | 93,572 | | Cost of Sales | (136,967) | (90,289) | | Gross Profit | 4,249 | 3,283 | | Administrative Expenses | (24,367) | (21,088) | | Other Operating Income | 12,448 | 6,435 | | Other (Losses)/Gains - Net | (4,896) | 4,472 | | Operating Loss | (12,566) | (6,898) | | Finance Income - Net | 808 | 1,945 | | Loss Before Income Tax | (11,758) | (4,953) | | Income Tax Expense | (3,593) | (10,283) | | Loss for the Year | (15,351) | (15,236) | | Loss for the Year Attributable to Owners of the Company | (16,738) | (16,013) | | Loss for the Year Attributable to Non-Controlling Interests | 1,387 | 777 | | Total Comprehensive Loss for the Year | (15,697) | (15,236) | | Loss Per Share Attributable to Owners of the Company (RMB cents) | (1.0) | (1.0) | - Revenue for the year increased by **50.9%** to **RMB141,216 thousand**, primarily driven by growth in coal trading[40](index=40&type=chunk)[233](index=233&type=chunk) - Loss for the year remained largely stable at **RMB15,351 thousand**, while loss attributable to owners of the Company slightly increased[233](index=233&type=chunk) Consolidated Statement of Financial Position [Overview of 2020 Consolidated Financial Position](index=43&type=section&id=Overview%20of%202020%20Consolidated%20Financial%20Position) As of December 31, 2020, the Group's total assets were RMB468,780 thousand, a decrease from 2019; non-current assets increased, while current assets and liabilities both decreased, resulting in total equity of RMB409,617 thousand 2020 vs. 2019 Key Data from Consolidated Statement of Financial Position | Indicator | December 31, 2020 (RMB thousand) | December 31, 2019 (RMB thousand) | | :-------- | :------------------------------- | :------------------------------- | | **Assets** | | | | Total Non-Current Assets | 258,994 | 153,607 | | Total Current Assets | 209,786 | 340,563 | | **Total Assets** | **468,780** | **494,170** | | **Liabilities** | | | | Total Current Liabilities | 30,975 | 43,752 | | Total Non-Current Liabilities | 28,188 | 25,104 | | **Total Liabilities** | **59,163** | **68,856** | | **Equity** | | | | Capital and Reserves Attributable to Owners of the Company | 410,817 | 427,901 | | Non-Controlling Interests | (1,200) | (2,587) | | **Total Equity** | **409,617** | **425,314** | - Total non-current assets increased from **RMB153,607 thousand** in 2019 to **RMB258,994 thousand** in 2020, primarily due to an increase in loans receivable and financial assets at fair value through other comprehensive income[234](index=234&type=chunk) - Total current assets decreased from **RMB340,563 thousand** in 2019 to **R

Company Information Provides an overview of the company's governance structure, key personnel, independent advisors, and registration details [Board of Directors](index=2&type=section&id=Board%20of%20Directors) The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, supported by audit, remuneration, and nomination committees to ensure sound corporate governance - The Board of Directors includes **Ms. Wang Qian**, **Mr. Zhou Jianzhong** (Executive Directors), **Mr. Cao Ye** (Non-executive Director), and **Ms. Xiang Siying** (Chairperson), **Ms. Huang Mei**, **Mr. Chen Bingquan** (Independent Non-executive Directors)[2](index=2&type=chunk) - The Audit Committee is chaired by **Ms. Huang Mei**, the Remuneration Committee by **Ms. Xiang Siying**, and the Nomination Committee by **Ms. Wang Qian**[2](index=2&type=chunk) [Independent Auditor, Legal Advisors, and Registered Office](index=2&type=section&id=Independent%20Auditor%2C%20Legal%20Advisors%2C%20and%20Registered%20Office) The company's independent auditor is Zhonghui Ankuai CPAs, with legal advisors including Sidley Austin, Global Law Office, and Conyers Dill & Pearman, and main business locations in Xinjiang, China, and Hong Kong - The independent auditor is **Zhonghui Ankuai Certified Public Accountants Co., Ltd**[3](index=3&type=chunk) - Legal advisors include **Sidley Austin** (Hong Kong law), **Global Law Office** (PRC law), and **Conyers Dill & Pearman** (Cayman Islands law)[3](index=3&type=chunk) - Main business locations are in Hami City, Xinjiang Uygur Autonomous Region, China, and Harbour Centre, 25 Harbour Road, Wanchai, Hong Kong[3](index=3&type=chunk) [Share Registrar, Company Website, and Stock Code](index=3&type=section&id=Share%20Registrar%2C%20Company%20Website%2C%20and%20Stock%20Code) The company maintains share registrars in both the Cayman Islands and Hong Kong, with its official website and stock code publicly available - The Cayman Islands share registrar is **Codan Trust Company (Cayman) Limited**[6](index=6&type=chunk) - The Hong Kong share registrar is **Tricor Investor Services Limited**[6](index=6&type=chunk) - The company website is **www.huili.hk**, and the stock code is **1303**[6](index=6&type=chunk) Mine Information Details the company's mineral resources, ore reserves, and the status of its exploration and mining permits, along with capital and exploration expenditures [Mineral Resources](index=4&type=section&id=Mineral%20Resources) As of June 30, 2020, the company's primary mineral resources include lead, zinc, and copper, with significant zinc and lead at the Ziganghu project, and copper and lead at Projects No. 20 and H-989 Total Mineral Resources as of June 30, 2020 | Project Name | Category | Quantity (thousand tonnes) | Zinc Metal (tonnes) | Zinc Grade (%) | Copper Metal (tonnes) | Copper Grade (%) | | :----------- | :--- | :--------- | :--------- | :-------- | :--------- | :-------- | | Project No. 20 | Controlled | 1,330 | 9,430 | 0.71 | 3,150 | 0.24 | | | Inferred | 1,260 | 8,660 | 0.69 | 3,160 | 0.25 | | Project H-989 | Controlled | 3,390 | 16,540 | 0.49 | 7,750 | 0.23 | | | Inferred | 2,370 | 12,100 | 0.51 | 4,390 | 0.19 | | Ziganghu Project | Controlled | 1,730 | 113,540 | 6.57 | 71,440 | 4.13 | | | Inferred | 2,150 | 137,910 | 6.42 | 85,140 | 3.96 | - Total controlled mineral resources are **4,720 thousand tonnes**, containing **25,970 tonnes of zinc metal** (grade 0.55%) and **10,900 tonnes of copper metal** (grade 0.23%)[8](index=8&type=chunk) - Total inferred mineral resources are **3,630 thousand tonnes**, containing **20,760 tonnes of zinc metal** (grade 0.57%) and **7,550 tonnes of copper metal** (grade 0.21%)[8](index=8&type=chunk) [Ore Reserves](index=5&type=section&id=Ore%20Reserves) As of June 30, 2020, the company's ore reserves are primarily concentrated in Project No. 20 and Ziganghu Project, mainly in the probable category, containing zinc and copper metals Total Ore Reserves as of June 30, 2020 | Project Name | Category | Ore Quantity (thousand tonnes) | Zinc Metal (tonnes) | Zinc Grade (%) | Copper Metal (tonnes) | Copper Grade (%) | | :----------- | :--- | :------------- | :--------- | :-------- | :--------- | :-------- | | Project No. 20 | Probable | 1,099 | 7,071 | 0.64 | 2,362 | 0.21 | | Ziganghu Project | Probable | 1,055 | 62,773 | 5.95 | 39,352 | 3.73 | - The mineral resources and ore reserves report was prepared by **Mineng Mining Consulting Co., Ltd**, an independent technical consultant[11](index=11&type=chunk) [Exploration Permits](index=5&type=section&id=Exploration%20Permits) The company holds exploration permits for Baiganhu Gold Mine, Project H-989, and Huangshan Project, though some permits expired between 2018 and 2019 Exploration Permit Overview | Project Name | Exploration Ore Type | Exploration Area (square kilometers) | Permit Expiry Date | | :----------- | :----------- | :----------------- | :------------- | | Baiganhu Gold Mine Project | Gold | 0.64 | July 2018 | | Project H-989 | Copper, Lead | 0.96 | July 2018 | | Huangshan Project | Copper, Lead | 3.49 | March 2019 | - All listed exploration permits have **expired**, but the report does not state whether renewal applications have been submitted[12](index=12&type=chunk) [Mining Permits](index=6&type=section&id=Mining%20Permits) The company holds mining permits for Project No. 20 and Baiganhu Project, with Project No. 20 having expired in 2019 and Baiganhu Project expiring in September 2021, for which renewal applications are in progress Mining Permit Overview | Project Name | Mining Ore Type | Mining Area (square kilometers) | Permit Expiry Date | | :----------- | :----------- | :----------------- | :------------- | | Project No. 20 | Copper, Lead | 0.22 | October 2019 | | Baiganhu Project | Lead, Zinc | 0.96 | September 2021 | - The Group is in the process of **renewing expired permits**, with renewal applications submitted to relevant government authorities[15](index=15&type=chunk) [Capital Expenditure and Exploration Expenses](index=6&type=section&id=Capital%20Expenditure%20and%20Exploration%20Expenses) For the six months ended June 30, 2020, and 2019, the Group had no ore production, capital expenditure for development and mining activities, or exploration expenses - For the six months ended June 30, 2020, and 2019, the Group did not engage in any **ore production**[16](index=16&type=chunk) - During the same period, there was **no capital expenditure** for development and mining activities, nor were exploration expenses deducted from the interim condensed consolidated statement of comprehensive income[17](index=17&type=chunk)[18](index=18&type=chunk) Interim Condensed Consolidated Financial Statements Presents the company's financial performance, position, equity changes, and cash flows for the interim period, highlighting key financial metrics and trends [Interim Condensed Consolidated Statement of Comprehensive Income](index=7&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2020, revenue increased by 48.3% year-on-year to RMB 17,499 thousand, but gross profit decreased by 49.2% due to a significant rise in cost of sales, resulting in an operating loss of RMB 11,563 thousand and a net loss of RMB 11,185 thousand Key Data from Interim Condensed Consolidated Statement of Comprehensive Income | Indicator | June 30, 2020 (RMB thousand) | June 30, 2019 (RMB thousand) | Year-on-year Change | | :--- | :------------------------- | :------------------------- | :------- | | Revenue | 17,499 | 11,801 | +48.3% | | Cost of sales | (15,698) | (8,301) | +89.1% | | Gross profit | 1,801 | 3,500 | -48.5% | | Administrative expenses | (10,892) | (11,703) | -6.9% | | Other income | 3,891 | 2 | Significant increase | | Operating (loss)/profit | (11,563) | (8,155) | -41.8% | | Finance income — net | 556 | 843 | -34.0% | | (Loss)/profit before income tax expense | (11,007) | (7,312) | -50.5% | | Income tax expense | (178) | (761) | -76.6% | | (Loss)/profit and total comprehensive (expense)/income for the period | (11,185) | (8,073) | -38.6% | | (Loss)/profit attributable to owners of the Company | (11,208) | (8,096) | -38.4% | | Basic and diluted (loss)/earnings per share (RMB cents) | (0.69) | (0.50) | -38.0% | - The increase in revenue was primarily due to an increase of **RMB 6.3 million** in coal trading revenue, partially offset by a decrease of **RMB 0.6 million** in financial services segment revenue[148](index=148&type=chunk) - The decrease in gross profit was mainly due to a shift in business focus to **lower-margin coal trading**[148](index=148&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=8&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2020, the company's total assets were RMB 466,351 thousand, a 5.6% decrease from the end of 2019, with both current assets and liabilities declining, maintaining a healthy current ratio Key Data from Interim Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2020 (RMB thousand) | December 31, 2019 (RMB thousand) | Change Rate | | :--- | :------------------------- | :-------------------------- | :----- | | **Assets** | | | | | Total non-current assets | 227,549 | 153,607 | +48.1% | | Total current assets | 238,802 | 340,563 | -29.9% | | Total assets | 466,351 | 494,170 | -5.6% | | **Liabilities** | | | | | Total non-current liabilities | 24,452 | 25,104 | -2.6% | | Total current liabilities | 27,770 | 43,752 | -36.6% | | Total liabilities | 52,222 | 68,856 | -24.2% | | **Equity** | | | | | Total equity | 414,129 | 425,314 | -2.6% | - The increase in non-current assets was mainly due to an increase in **loans receivable**, while the decrease in current assets was primarily due to a decrease in **cash and cash equivalents**[25](index=25&type=chunk)[28](index=28&type=chunk) - The current ratio increased from **7.8** as of December 31, 2019, to **8.6** as of June 30, 2020, indicating good liquidity[160](index=160&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=10&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2020, equity attributable to owners of the company decreased from RMB 427,901 thousand at the beginning of the period to RMB 416,693 thousand, primarily due to the loss incurred during the period Interim Condensed Consolidated Statement of Changes in Equity | Indicator | January 1, 2020 (RMB thousand) | June 30, 2020 (RMB thousand) | January 1, 2019 (RMB thousand) | June 30, 2019 (RMB thousand) | | :--- | :------------------------ | :------------------------ | :------------------------ | :------------------------ | | Capital and reserves attributable to owners of the Company | 427,901 | 416,693 | 443,914 | 455,335 | | Non-controlling interests | (2,587) | (2,564) | (3,364) | (2,234) | | Total equity | 425,314 | 414,129 | 440,550 | 453,101 | - A **loss of RMB 11,208 thousand** for the period led to a decrease in equity attributable to owners of the Company[30](index=30&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=11&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2020, operating cash flow shifted from a net inflow to a net outflow of RMB 23,824 thousand, while net cash inflow from investing activities increased and net cash outflow from financing activities decreased, resulting in a period-end cash and cash equivalents balance of RMB 204,032 thousand Key Data from Interim Condensed Consolidated Statement of Cash Flows | Indicator | June 30, 2020 (RMB thousand) | June 30, 2019 (RMB thousand) | Change | | :--- | :------------------------- | :------------------------- | :--- | | Net cash (used in)/generated from operating activities | (23,824) | 24,982 | Shift from inflow to outflow | | Net cash generated from investing activities | 10,652 | 2,141 | +397.5% | | Net cash used in financing activities | (1,034) | (3,307) | -68.7% | | Net (decrease)/increase in cash and cash equivalents | (14,206) | 23,816 | Shift from increase to decrease | | Cash and cash equivalents at end of period | 204,032 | 191,392 | +6.6% | - The shift to negative operating cash flow primarily reflects the **operating loss** for the period and the impact of **expected credit losses on trade receivables**[23](index=23&type=chunk) - The increase in net cash inflow from investing activities partially offset the impact of cash outflow from operating activities[33](index=33&type=chunk) Notes to the Interim Condensed Consolidated Financial Information Provides detailed explanations and disclosures regarding the company's financial statements, including general information, accounting policies, risk management, and segment data [1 General Information](index=12&type=section&id=1%20General%20Information) Huili Resources (Holdings) Limited is incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange, primarily engaged in mining, beneficiation, and sales of non-ferrous metal products, financial services, and coal trading in China - The Company was incorporated in the Cayman Islands on **February 19, 2010**, and has been listed on the Main Board of the Hong Kong Stock Exchange since **January 12, 2012**[35](index=35&type=chunk) - The Group's principal activities include **mining, beneficiation, and sales of lead, copper, and zinc products**, **financial services**, and **coal trading**[35](index=35&type=chunk) [2 Basis of Preparation](index=12&type=section&id=2%20Basis%20of%20Preparation) The interim condensed consolidated financial statements are prepared in accordance with HKAS 34 and the Listing Rules, presented on a historical cost basis, and should be read in conjunction with the 2019 annual financial statements - The statements are prepared in accordance with **Hong Kong Accounting Standard 34** and the **Listing Rules** issued by the Hong Kong Institute of Certified Public Accountants[36](index=36&type=chunk) - The statements are prepared on a **historical cost basis** and should be read in conjunction with the **2019 annual financial statements**[39](index=39&type=chunk) [3 Changes in Accounting Policies](index=13&type=section&id=3%20Changes%20in%20Accounting%20Policies) The Group adopted several new and revised HKFRSs, including amendments to the definitions of "material" and "business" and interest rate benchmark reform, but these are not expected to have a significant impact on the current financial statements - The Group adopted **HKAS 1 and HKAS 8 (Amendments) "Definition of Material"**, **HKFRS 3 (Amendments) "Definition of a Business"**, and other new/revised HKFRSs[41](index=41&type=chunk) - The amendments redefine "material" to emphasize the impact of omitted, misstated, or obscured information on the decisions of primary users[43](index=43&type=chunk) - The Group's assessment indicates that these new standards and amendments are **not expected to have a significant impact** on its financial performance and position[46](index=46&type=chunk) [4 Estimates](index=16&type=section&id=4%20Estimates) The significant judgments, estimates, and assumptions made by management in preparing the financial statements are consistent with those applied in the 2019 annual financial statements, and actual results may differ from these estimates - The significant judgments and key sources of estimation uncertainty made by management in preparing the statements are the **same as those applied in the 2019 annual financial statements**[48](index=48&type=chunk) [5 Financial Risk Management](index=16&type=section&id=5%20Financial%20Risk%20Management) The Group is exposed to market risks (foreign currency and interest rate), credit risk, and liquidity risk, but has not used derivative instruments for hedging, with no changes in risk management policies since the end of 2019 and no financial assets or liabilities measured at fair value in the current period - The Group's operations are exposed to **market risk, credit risk, and liquidity risk**, and it has not historically used derivative instruments for hedging[49](index=49&type=chunk) - There have been **no changes** in risk management policies since December 31, 2019[50](index=50&type=chunk) - As of June 30, 2020, and December 31, 2019, the Group had **no financial assets or liabilities measured at fair value**[55](index=55&type=chunk) [6 Segment Information](index=18&type=section&id=6%20Segment%20Information) The Group's operating segments include mining, financial services, and trading businesses, with engineering services temporarily suspended and classified as "unallocated" in the first half of 2020, showing significant growth in trading revenue and a slight decrease in financial services revenue - The Group has three reportable segments: **mining, financial services, and trading business**; the engineering services segment's activities were suspended and classified as "unallocated"[56](index=56&type=chunk)[57](index=57&type=chunk) Segment Revenue Overview (RMB thousand) | Segment | June 30, 2020 | June 30, 2019 | Change | | :--- | :------------ | :------------ | :--- | | Mining | - | - | - | | Financial services interest income | 2,888 | 3,500 | -17.5% | | Coal trading | 14,611 | 8,301 | +76.0% | | Total | 17,499 | 11,801 | +48.3% | Segment Assets and Liabilities (RMB thousand) | Indicator | June 30, 2020 | December 31, 2019 | | :--- | :------------ | :------------- | | Segment assets | 466,351 | 494,170 | | Segment liabilities | 52,222 | 68,856 | - Revenue from **China accounted for 100%** of total revenue, and specific non-current assets are also primarily concentrated in China[74](index=74&type=chunk) [7 Other Income](index=24&type=section&id=7%20Other%20Income) For the six months ended June 30, 2020, other income significantly increased to RMB 3,891 thousand, primarily driven by exchange gains Other Income Overview (RMB thousand) | Item | June 30, 2020 | June 30, 2019 | | :--- | :------------ | :------------ | | Exchange gains | 3,624 | - | | Government grants | 267 | - | | Others | - | 2 | | Total | 3,891 | 2 | - Other income for the period primarily consisted of **exchange gains** from financial assets denominated in currencies other than RMB[150](index=150&type=chunk) [8 Finance Income – Net](index=25&type=section&id=8%20Finance%20Income%20%E2%80%93%20Net) For the six months ended June 30, 2020, net finance income was RMB 556 thousand, a decrease from RMB 843 thousand in the prior period, mainly due to lower interest income Finance Income – Net (RMB thousand) | Item | June 30, 2020 | June 30, 2019 | | :--- | :------------ | :------------ | | Interest income | 653 | 1,071 | | Interest expense | (97) | (228) | | Finance income — net | 556 | 843 | - Net finance income primarily refers to **interest income earned from the Group's bank cash** (net of interest expenses)[153](index=153&type=chunk) [9 (Loss)/Profit Before Income Tax Expense](index=25&type=section&id=9%20%28Loss%29%2FProfit%20Before%20Income%20Tax%20Expense) For the six months ended June 30, 2020, the loss before income tax expense was RMB 11,007 thousand, an increase from the prior period, primarily impacted by inventory costs, depreciation, and employee benefit expenses (Loss)/Profit Before Income Tax Expense Components (RMB thousand) | Item | June 30, 2020 | June 30, 2019 | | :--- | :------------ | :------------ | | Cost of inventories recognized as expense | 14,444 | 8,248 | | Depreciation — right-of-use assets | 966 | 1,083 | | Depreciation — owned assets | 1,193 | 1,641 | | Employee benefit expenses | 4,307 | 4,083 | - The expanded loss before income tax expense reflects the impact of **increased cost of sales and decreased gross profit**[23](index=23&type=chunk) [10 Income Tax Expense](index=26&type=section&id=10%20Income%20Tax%20Expense) For the six months ended June 30, 2020, income tax expense was RMB 178 thousand, a significant decrease from the prior period, mainly from tax provisions for China operations, with no provision for Hong Kong profits tax Income Tax Expense (RMB thousand) | Item | June 30, 2020 | June 30, 2019 | | :--- | :------------ | :------------ | | Current income tax | 178 | 761 | | Deferred income tax | - | (27) | | Income tax expense | 178 | 734 | - The Company is an **exempted company incorporated in the Cayman Islands** and is not subject to Cayman Islands taxation; British Virgin Islands subsidiaries are not subject to BVI taxation[81](index=81&type=chunk) - Hong Kong subsidiaries are subject to profits tax at a rate of **16.5%**, with eligible entities subject to a two-tiered profits tax rate (8.25% for the first HKD 2 million); PRC subsidiaries are subject to enterprise income tax at a rate of **25%**[81](index=81&type=chunk) [11 (Loss)/Earnings Per Share](index=27&type=section&id=11%20%28Loss%29%2FEarnings%20Per%20Share) For the six months ended June 30, 2020, basic and diluted loss per share was RMB 0.69 cents, a shift from profit to loss compared to the prior period, primarily due to the loss attributable to owners of the company (Loss)/Earnings Per Share (RMB cents) | Indicator | June 30, 2020 | June 30, 2019 | | :--- | :------------ | :------------ | | (Loss)/profit attributable to owners of the Company (RMB thousand) | (11,208) | 11,421 | | Weighted average number of ordinary shares in issue (thousand shares) | 1,620,000 | 1,620,000 | | Basic and diluted (loss)/earnings per share (RMB cents) | (0.69) | 0.71 | - As there were no potentially dilutive ordinary shares outstanding during the period, **diluted loss per share was equal to basic loss per share**[85](index=85&type=chunk) [12 Dividends](index=27&type=section&id=12%20Dividends) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2020, and 2019 - The Directors do not recommend the payment of any interim dividend for the period[86](index=86&type=chunk) [13 Property, Plant and Equipment](index=27&type=section&id=13%20Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2020, and 2019, the Group made no additions to property, plant and equipment, and no disposals in the first half of 2020 - For the six months ended June 30, 2020, and 2019, there were **no additions to property, plant and equipment**[87](index=87&type=chunk) - For the six months ended June 30, 2020, there were also **no disposals of property, plant and equipment** (RMB 1,299 thousand for the corresponding period in 2019)[87](index=87&type=chunk) [14 Trade and Bills Receivables](index=28&type=section&id=14%20Trade%20and%20Bills%20Receivables) As of June 30, 2020, net trade and bills receivables were RMB 3,981 thousand, a decrease from RMB 5,943 thousand at the end of 2019, primarily due to a reduction in trade receivables Net Trade and Bills Receivables (RMB thousand) | Item | June 30, 2020 | December 31, 2019 | | :--- | :------------ | :------------- | | Net trade receivables | 3,713 | 3,713 | | Net bills receivables | 268 | 268 | | Total net trade and bills receivables | 3,981 | 3,981 | - The carrying amount of trade receivables approximates their fair value, and the related balances are **denominated in RMB**[89](index=89&type=chunk) [15 Loans Receivable](index=29&type=section&id=15%20Loans%20Receivable) As of June 30, 2020, net loans receivable significantly increased to RMB 82,031 thousand from RMB 64,535 thousand at the end of 2019, mainly due to new loans provided to third parties and extensions of existing loan terms Net Loans Receivable (RMB thousand) | Item | June 30, 2020 | December 31, 2019 | | :--- | :------------ | :------------- | | Loans to third parties | 83,000 | 65,000 | | Less: Expected credit losses on loans receivable | (969) | (465) | | Net loans receivable | 82,031 | 64,535 | - The Group provided a loan of **RMB 65,000 thousand** to Beijing Liwo Technology Co., Ltd. in December 2019, and extended its term to December 2022 in February 2020[92](index=92&type=chunk) - In January 2020, the Group entered into two loan agreements with two independent third parties, each providing a loan of **RMB 6,000 thousand** for a term of 36 months at an annual interest rate of 7%[92](index=92&type=chunk) [16 Other Receivables and Prepayments](index=30&type=section&id=16%20Other%20Receivables%20and%20Prepayments) As of June 30, 2020, other receivables and prepayments totaled RMB 24,859 thousand, a decrease from RMB 36,178 thousand at the end of 2019. Among these, amounts due from Merit Progress, Shaanxi Jiahe, and Mr. Wei Xing have been fully impaired Other Receivables and Prepayments (RMB thousand) | Item | June 30, 2020 | December 31, 2019 | | :--- | :------------ | :------------- | | Amount due from Merit Progress | 22,807 | 22,349 | | Amount due from Shaanxi Jiahe | 32,480 | 32,480 | | Amount due from Mr. Wei Xing | 29,784 | 29,054 | | Subtotal of other receivables | 97,658 | 96,856 | | Less: Expected credit losses on other receivables | (94,426) | (93,227) | | Advances to suppliers | 21,627 | 32,549 | | Total | 24,859 | 36,178 | - The amount due from Merit Progress represents a deposit for the acquisition of China Green Energy Investment Limited, which has been **fully impaired** as the acquisition did not proceed and the exclusive negotiation period expired[97](index=97&type=chunk)[98](index=98&type=chunk) - Amounts due from Shaanxi Jiahe and Mr. Wei Xing have also been **fully impaired** due to disputes or overdue payments[98](index=98&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) [17 Trade Payables](index=32&type=section&id=17%20Trade%20Payables) As of June 30, 2020, trade payables significantly increased to RMB 5,821 thousand from RMB 1,803 thousand at the end of 2019, primarily concentrated in the 0 to 90-day aging category Trade Payables Aging Analysis (RMB thousand) | Aging | June 30, 2020 | December 31, 2019 | | :--- | :------------ | :------------- | | 0 to 90 days | 3,936 | - | | 91 to 180 days | - | - | | 181 to 365 days | - | - | | Over 365 days | 1,885 | 1,803 | | Total | 5,821 | 1,803 | - Due to the short-term nature of trade payables, their carrying amounts approximate their fair values, and the balances are **denominated in RMB**[105](index=105&type=chunk) [18 Other Payables and Accrued Charges](index=33&type=section&id=18%20Other%20Payables%20and%20Accrued%20Charges) As of June 30, 2020, other payables and accrued charges totaled RMB 15,428 thousand, a decrease from RMB 17,948 thousand at the end of 2019, mainly comprising salaries and welfare payable and accrued taxes Other Payables and Accrued Charges (RMB thousand) | Item | June 30, 2020 | December 31, 2019 | | :--- | :------------ | :------------- | | Other payables | 4,334 | 4,353 | | Salaries and welfare payable | 5,508 | 5,649 | | Accrued taxes (excluding income tax) | 5,586 | 7,946 | | Total | 15,428 | 17,948 | - Other payables primarily include **equipment purchase costs payable, service fees payable, and advances from third parties**[107](index=107&type=chunk) [19 Assets and Liabilities of Disposal Group Classified as Held for Sale](index=33&type=section&id=19%20Assets%20and%20Liabilities%20of%20Disposal%20Group%20Classified%20as%20Held%20for%20Sale) The Group entered into an agreement on December 24, 2019, to dispose of its entire equity interest in Shaanxi Jiahe, with the disposal group's assets and liabilities classified as held for sale as of December 31, 2019, and a fair value loss of RMB 9,191 thousand recognized - Hami Jiahe entered into a disposal agreement with an independent third-party buyer to dispose of Shaanxi Jiahe for a consideration of **RMB 10,000 thousand**[108](index=108&type=chunk) - Shaanxi Jiahe was classified as held for sale as of December 31, 2019, with the disposal expected to be completed within **12 months**[108](index=108&type=chunk) Assets and Liabilities of Disposal Group Classified as Held for Sale (December 31, 2019, RMB thousand) | Item | Amount | | :--- | :--- | | Assets of disposal group classified as held for sale | 15,669 | | Liabilities of disposal group classified as held for sale | 5,669 | - A fair value loss of **RMB 9,191 thousand** on the disposal group was recognized for the year ended December 31, 2019[111](index=111&type=chunk) [20 Share Capital and Share Premium](index=35&type=section&id=20%20Share%20Capital%20and%20Share%20Premium) As of June 30, 2020, the company's authorized share capital was 5,000,000,000 shares with a par value of HKD 0.1 each, with 1,620,000 thousand shares issued, resulting in share capital of RMB 137,361 thousand and share premium of RMB 668,768 thousand Share Capital and Share Premium (RMB thousand) | Item | June 30, 2020 | | :--- | :------------ | | Authorized shares (par value HKD 0.1 per share) | 5,000,000,000 | | Number of issued shares (thousand shares) | 1,620,000 | | Share capital | 137,361 | | Share premium | 668,768 | | Total | 806,129 | - Share capital and share premium have **remained unchanged** since January 1, 2019[115](index=115&type=chunk) [21 Disposal of Shaanxi Jiahe](index=36&type=section&id=21%20Disposal%20of%20Shaanxi%20Jiahe) The Group completed the change of shareholder registration for Shaanxi Jiahe on March 23, 2020, ceasing it to be a subsidiary, with a disposal consideration of RMB 10,000 thousand generating net cash inflow of RMB 9,608 thousand - The change of shareholder registration for Shaanxi Jiahe was completed on **March 23, 2020**, and it ceased to be a subsidiary of the Company[122](index=122&type=chunk) Net Cash Inflow from Disposal of Shaanxi Jiahe (RMB thousand) | Item | Amount | | :--- | :--- | | Cash consideration received | 10,000 | | Cash and cash equivalents disposed of | (392) | | Net cash inflow from disposal | 9,608 | - The net assets at the date of disposal were **negative RMB 8,634 thousand**[123](index=123&type=chunk) [22 Related Party Transactions](index=37&type=section&id=22%20Related%20Party%20Transactions) For the six months ended June 30, 2020, the main related party transaction was key management personnel compensation, totaling RMB 1,898 thousand, an increase from the prior period Key Management Personnel Compensation (RMB thousand) | Item | June 30, 2020 | June 30, 2019 | | :--- | :------------ | :------------ | | Basic salaries, allowances and other benefits | 1,867 | 1,223 | | Contributions to retirement benefit schemes | 31 | 18 | | Total | 1,898 | 1,241 | [23 Capital Commitments](index=37&type=section&id=23%20Capital%20Commitments) As of June 30, 2020, and December 31, 2019, the Group had no contracted capital expenditure - As of June 30, 2020, and December 31, 2019, there was **no contracted capital expenditure**[127](index=127&type=chunk) [24 Contingent Liabilities](index=38&type=section&id=24%20Contingent%20Liabilities) The Group faces environmental contingencies and risks of insufficient insurance coverage, with the ultimate cost of environmental liabilities highly uncertain and potential significant impact from stricter future environmental standards, and personal injury commercial insurance possibly inadequate for future losses - Environmental liabilities are highly uncertain, and future environmental legislation may have a **significant adverse impact** on the financial position or operating results[128](index=128&type=chunk) - The Group has purchased commercial personal injury insurance for underground employees, but it may be **insufficient to cover potential future losses**, which could have a significant adverse impact on operating results or financial position[129](index=129&type=chunk) [25 Events After the Reporting Period](index=39&type=section&id=25%20Events%20After%20the%20Reporting%20Period) The COVID-19 pandemic has impacted the global business environment since January 2020, but as of the report date, it has not caused significant financial difficulties for the Group, though future developments may affect financial performance to an unquantifiable extent - The outbreak of the **COVID-19 pandemic** has impacted the global business environment, but as of the date of this report, it has not caused significant financial difficulties for the Group[132](index=132&type=chunk) - The future development and spread of the pandemic may affect the Group's financial performance, the extent of which **cannot be estimated**[132](index=132&type=chunk) [26 Comparative Figures](index=39&type=section&id=26%20Comparative%20Figures) Certain comparative figures have been reclassified to conform to the current period's presentation - Certain comparative figures have been **reclassified** to conform to the current period's presentation[133](index=133&type=chunk) Management Discussion and Analysis Provides an overview of the Group's business operations, financial performance, liquidity, and future strategies, including responses to market challenges and business diversification efforts [Business Review](index=40&type=section&id=Business%20Review) The Group primarily engages in non-ferrous mineral mining and beneficiation, expanding into financial services and coal trading, with mining activities temporarily suspended due to COVID-19, but the Group optimized its business portfolio by disposing of Shaanxi Jiahe and actively seeks to restart mines and explore cooperation opportunities - The Group is primarily involved in **mining and beneficiation of non-ferrous metals** (lead, copper, zinc, lead) in Xinjiang, China[135](index=135&type=chunk) - Due to the **COVID-19 pandemic**, commodity market prices fell, forcing the Group to temporarily suspend mining activities and planned maintenance work[135](index=135&type=chunk) - The disposal of the entire equity interest in Shaanxi Jiahe was completed on **March 23, 2020**, to improve the business portfolio and reallocate resources[136](index=136&type=chunk) [Mining Permits](index=41&type=section&id=Mining%20Permits) Hami Jinhua and Hami Jiahe hold mining permits for Project No. 20 and Baiganhu Mine, with Project No. 20 requiring hoist system upgrades to restart production, and Baiganhu Mine's production feasibility being evaluated, while Shaanxi Jiahe's permit for Huangjinmei Project No. 1 Mine was transferred upon disposal - **Project No. 20**, which produces copper and lead ore, requires an **upgrade of its hoist system** to restart production[139](index=139&type=chunk) - **Baiganhu Mine**, which produces lead and zinc ore, is being evaluated for production feasibility, and the Group is seeking **cooperation partners**[139](index=139&type=chunk) - The mining permit for **Huangjinmei Project No. 1 Mine**, held by Shaanxi Jiahe, was transferred upon the completion of the Jiahe disposal[139](index=139&type=chunk) [Exploration Permits](index=41&type=section&id=Exploration%20Permits) Hami Jiahe holds three exploration permits for Baiganhu Gold Mine, Huangshan, and H-989, covering gold, lead, and copper, with preliminary exploration conducted and plans for further exploration with potential partners when market conditions allow - Hami Jiahe holds three exploration permits for **Baiganhu Gold Mine, Huangshan, and H-989**, covering gold, lead, and copper[140](index=140&type=chunk) - The Group has conducted **preliminary exploration** in the Baiganhu Gold Mine area and identified initial mineral types and deposits[140](index=140&type=chunk) - The Group plans to allocate reasonable resources and/or collaborate with potential partners for **further exploration** to enrich its resource and reserve base[140](index=140&type=chunk) [Beneficiation Plants](index=41&type=section&id=Beneficiation%20Plants) Hami Jiahe operates a copper-lead ore beneficiation plant, and Hami Jinhua owns a lead-zinc beneficiation plant, both with a processing capacity of 1,500 tonnes per day, neither of which conducted mining or beneficiation operations during the period - Hami Jiahe operates a **copper-lead ore beneficiation plant**, and Hami Jinhua owns a **lead-zinc beneficiation plant**[141](index=141&type=chunk) - Each beneficiation plant has a processing capacity of **1,500 tonnes per day** and employs a non-traditional flotation circuit[141](index=141&type=chunk) - During the period, neither Hami Jiahe nor Hami Jinhua conducted any **mining or beneficiation operations**[141](index=141&type=chunk) [Financial Services](index=42&type=section&id=Financial%20Services) The Group provided an RMB 65 million loan to a third party in December 2019, extended in February 2020, and three additional RMB 6 million loans to independent third parties during the period, generating approximately RMB 2.9 million in revenue from the financial services segment - In December 2019, a loan of **RMB 65 million** was provided to an independent third party at an annual interest rate of 7%, with the term extended to 31 months in February 2020[142](index=142&type=chunk) - During the period, three additional loans of **RMB 6 million each** were provided to three independent third parties, two for 36 months and one for 6 months, all at an annual interest rate of 7%[142](index=142&type=chunk) - The financial services segment generated revenue of approximately **RMB 2.9 million** during the period (2019: RMB 3.5 million)[143](index=143&type=chunk) [Trading Business](index=42&type=section&id=Trading%20Business) The Group conducts coal trading through its newly established indirect subsidiaries, Changzhi Runce and Gujiao Runce, with business activities slowed by COVID-19, but the trading business segment contributed RMB 14.6 million in revenue to the Group during the period - The Group conducts coal trading business through its indirect subsidiaries, **Changzhi Runce Trading Co., Ltd.** and **Gujiao Runce Trading Co., Ltd**[144](index=144&type=chunk) - Business activities slowed, and demand for commodities decreased due to the **COVID-19 pandemic**[144](index=144&type=chunk) - The trading business segment contributed **RMB 14.6 million** to the Group's revenue during the period (2019: RMB 8.3 million)[145](index=145&type=chunk) [Results Review](index=43&type=section&id=Results%20Review) Revenue increased by 48.3% year-on-year to RMB 17.5 million during the period, primarily driven by coal trading; however, a significant increase in cost of sales led to a 49.2% decrease in gross profit, with operating loss expanding but administrative and income tax expenses decreasing Revenue and Gross Profit Changes (RMB million) | Indicator | H1 2020 | H1 2019 | Year-on-year Change | | :--- | :----------- | :----------- | :------- | | Revenue | 17.5 | 11.8 | +48.3% | | Cost of sales | 15.7 | 8.3 | +89.2% | | Gross profit | 1.8 | 3.5 | -49.2% | - The increase in revenue was primarily due to an increase of **RMB 6.3 million** in coal trading revenue, partially offset by a decrease of **RMB 0.6 million** in financial services segment revenue[148](index=148&type=chunk) - The decrease in gross profit was mainly due to a shift in business focus to **lower-margin coal trading**[148](index=148&type=chunk) [Administrative Expenses](index=43&type=section&id=Administrative%20Expenses) Administrative expenses for the period were approximately RMB 10.9 million, a decrease from RMB 11.7 million in the prior period, mainly comprising depreciation, professional fees, staff costs, and office expenses - Administrative expenses for the period were approximately **RMB 10.9 million** (2019: RMB 11.7 million)[149](index=149&type=chunk) - These primarily included **depreciation expenses, professional fees, staff costs, and office expenses**[149](index=149&type=chunk) [Other Income](index=43&type=section&id=Other%20Income) Other income for the period was approximately RMB 3.9 million, primarily consisting of exchange gains from financial assets denominated in currencies other than RMB - Other income for the period was approximately **RMB 3.9 million**, primarily consisting of **exchange gains** from financial assets denominated in currencies other than RMB[150](index=150&type=chunk) [Finance Income – Net](index=44&type=section&id=Finance%20Income%20%E2%80%93%20Net) Net finance income for the period was approximately RMB 0.6 million, a decrease from RMB 0.8 million in the prior period, mainly representing interest income earned from the Group's bank cash - Net finance income for the period was approximately **RMB 0.6 million** (2019: RMB 0.8 million), primarily representing **interest income earned from the Group's bank cash** (net of interest expenses)[153](index=153&type=chunk) [Income Tax Expense](index=44&type=section&id=Income%20Tax%20Expense) Income tax expense for the period was approximately RMB 0.2 million, a decrease from RMB 0.7 million in the prior period, primarily representing tax provisions for China operations - Income tax expense for the period was approximately **RMB 0.2 million** (2019: RMB 0.7 million), primarily representing **tax provisions for China operations** during the period[154](index=154&type=chunk) - **No Hong Kong profits tax provision** was made for the period[154](index=154&type=chunk) [Operating Loss](index=44&type=section&id=Operating%20Loss) The operating loss for the period was RMB 5.2 million, with a loss margin of 29.7%, narrowing from RMB 8.155 million in the prior period, mainly due to increased revenue from trading business and contributions from financial services Segment Operating Results (RMB thousand) | Segment | H1 2020 Revenue | H1 2020 Segment Result | H1 2020 Operating (Loss)/Profit Margin (%) | | :--- | :--------------- | :------------------- | :------------------------------------ | | Coal Trading | 14,611 | (27) | (0.2%) | | Financial Services Interest Income | 2,888 | 1,451 | 50.2% | | Exploration | - | (2,092) | Not applicable | | Unallocated | - | (4,532) | Not applicable | | Total | 17,499 | (5,200) | (29.7%) | - The total operating loss narrowed from **RMB 8,155 thousand** in H1 2019 to **RMB 5,200 thousand** in H1 2020[156](index=156&type=chunk) [Material Investments Held](index=44&type=section&id=Material%20Investments%20Held) As of June 30, 2020, and 2019, the Group held no material investments - As of June 30, 2020, and 2019, the Group held **no material investments**[157](index=157&type=chunk) [Material Acquisitions and Disposals](index=45&type=section&id=Material%20Acquisitions%20and%20Disposals) The Group completed the disposal of its entire equity interest in Shaanxi Jiahe on March 23, 2020. Other than this, there were no other material acquisitions or disposals during the period - The Group completed the disposal of its entire equity interest in Shaanxi Jiahe to the buyer on **March 23, 2020**[159](index=159&type=chunk) - Other than the Jiahe disposal, there were **no other material acquisitions or disposals** during the period[159](index=159&type=chunk) [Liquidity and Financial Review](index=45&type=section&id=Liquidity%20and%20Financial%20Review) The Group funds its daily operations through internally generated cash flows. As of June 30, 2020, current assets were RMB 238.8 million and current liabilities were RMB 27.8 million, resulting in a healthy current ratio of 8.6 and period-end bank and cash balances of RMB 204.0 million Liquidity Overview (RMB million) | Indicator | June 30, 2020 | December 31, 2019 | | :--- | :------------ | :------------- | | Current assets | 238.8 | 340.6 | | Current liabilities | 27.8 | 43.8 | | Current ratio | 8.6 | 7.8 | - As of June 30, 2020, the Group's bank and cash balances were approximately **RMB 204.0 million**[161](index=161&type=chunk) - There were **no outstanding interest-bearing bank loans or other borrowings**[161](index=161&type=chunk) [Foreign Exchange Risk](index=45&type=section&id=Foreign%20Exchange%20Risk) The Group's operations are primarily conducted in RMB and have not experienced significant difficulties due to exchange rate fluctuations, with no current hedging activities, but management continues to monitor the situation - The Group's operations are primarily conducted in **RMB** and have not experienced significant difficulties due to exchange rate fluctuations[163](index=163&type=chunk) - The Group currently does not engage in **hedging activities** for foreign exchange risk, but management will continue to monitor the situation[163](index=163&type=chunk) [Gearing Ratio](index=46&type=section&id=Gearing%20Ratio) As of June 30, 2020, and December 31, 2019, the Group's gearing ratio was 0%, indicating no net debt - As of June 30, 2020, the gearing ratio was **0%** (December 31, 2019: 0%)[164](index=164&type=chunk) - The gearing ratio is calculated as **net debt divided by total capital**, where net debt is total borrowings less cash and cash equivalents[164](index=164&type=chunk) [Pledge of the Company's Assets, Commitments and Contingent Liabilities](index=46&type=section&id=Pledge%20of%20the%20Company%27s%20Assets%2C%20Commitments%20and%20Contingent%20Liabilities) As of June 30, 2020, and December 31, 2019, the Group had no other contracted capital expenditure, commitments, or pledges of assets, but may face contingent liabilities from new environmental regulations and insufficient employee accident insurance in the future - The Group had **no other contracted capital expenditure, commitments, or pledges of the Company's assets**[165](index=165&type=chunk) - The Group may face additional costs and liabilities from new environmental laws and regulations, as well as the impact of **insufficient insurance coverage** for future employee accidents[165](index=165&type=chunk) [Dividends](index=46&type=section&id=Dividends) The directors do not recommend the payment of any interim dividend for the period - The directors do not recommend the payment of any interim dividend for the period (June 30, 2019: nil)[166](index=166&type=chunk) [Human Resources and Share Option Scheme](index=47&type=section&id=Human%20Resources%20and%20Share%20Option%20Scheme) As of June 30, 2020, the Group employed 33 staff with total staff costs of approximately RMB 4.3 million, providing compensation based on job nature, performance, and tenure, with no outstanding share options during the period - As of June 30, 2020, the Group employed **33 staff** (December 31, 2019: 32 staff)[169](index=169&type=chunk) - Total staff costs (including directors' emoluments) for the period were approximately **RMB 4.3 million** (prior period: RMB 4.1 million)[169](index=169&type=chunk) - There were **no outstanding share options** issued or unexercised during the period and as of June 30, 2020, and December 31, 2019[169](index=169&type=chunk) [Future Outlook and Prospects](index=47&type=section&id=Future%20Outlook%20and%20Prospects) The COVID-19 pandemic, Sino-US disputes, and economic slowdown create uncertainty for commodity markets, prompting the Group to monitor the pandemic, study mine restart plans, and mitigate risks by diversifying businesses (trading and financial services) and exploring new projects to optimize its business structure and seek new profit growth - The **COVID-19 pandemic, Sino-US disputes, and slowing economic growth** create uncertainty for the commodity market outlook[170](index=170&type=chunk) - The Group will study feasible mine restart plans and mitigate business risks through **business diversification** (trading and financial services)[170](index=170&type=chunk) - In the future, the Group will continue to deepen its mining business while developing trading and financial services, and explore other quality projects or opportunities to achieve **business diversification**[171](index=171&type=chunk) [Events After the Reporting Period](index=48&type=section&id=Events%20After%20the%20Reporting%20Period) The COVID-19 pandemic has impacted the global business environment since January 2020, but as of the report date, it has not caused significant financial difficulties for the Group, though future developments may affect financial performance to an unquantifiable extent - The outbreak of the **COVID-19 pandemic** has impacted the global business environment, but as of the date of this report, it has not caused significant financial difficulties for the Group[172](index=172&type=chunk) - The future development and spread of the pandemic may affect the Group's economic condition and financial performance, the extent of which **cannot be estimated**[172](index=172&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares and Underlying Shares](index=48&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2020, no directors or chief executive of the company held any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or its associated corporations - As of June 30, 2020, no directors or chief executive of the Company held any interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations that were required to be notified to the Company and the Stock Exchange[173](index=173&type=chunk) [Interests of Substantial Shareholders and Other Persons](index=49&type=section&id=Interests%20of%20Substantial%20Shareholders%20and%20Other%20Persons) As of June 30, 2020, Mr. Guo Jianzhong and his controlled entity, Tianyuan International Limited, were the largest shareholders, collectively holding 28.08% equity, while China Huarong Asset Management Co., Ltd. and its associates held 19.75%, and Legend Vantage Limited and its associates held 11.64% Substantial Shareholder Holdings Overview (June 30, 2020) | Name | Nature of Interest | Total Interest in Shares | Approximate Percentage of the Company's Issued Share Capital | | :--- | :------- | :------------- | :--------------------------- | | Tianyuan International Limited | Beneficial owner | 412,592,702 | 25.47% | | Mr. Guo Jianzhong | Interest in controlled corporation and beneficial owner | 454,958,702 | 28.08% | | Affinitiv Mobile Ventures Ltd. | Beneficial owner | 320,000,000 | 19.75% | | China Huarong Asset Management Co., Ltd. | Interest in controlled corporation | 320,000,000 | 19.75% | | Legend Vantage Limited | Beneficial owner | 188,638,883 | 11.64% | - **Mr. Guo Jianzhong** is the legal and beneficial owner of the entire issued share capital of Tianyuan International Limited and directly holds a portion of the shares[178](index=178&type=chunk) - **Affinitiv Mobile Ventures Ltd.** is indirectly wholly-owned by China Huarong Asset Management Co., Ltd. and its associates[180](index=180&type=chunk) [Purchase, Redemption or Sale of Securities](index=51&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20Securities) Neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities during the period - Neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities during the period[185](index=185&type=chunk) [Disclosure Pursuant to Rule 13.20 of the Listing Rules](index=51&type=section&id=Disclosure%20Pursuant%20to%20Rule%2013.20%20of%20the%20Listing%20Rules) The RMB 65 million loan provided by the Group to Beijing Liwo constitutes a continuing disclosure obligation under Listing Rule 13.20, as its principal amount exceeds 8% of the assets defined in Listing Rule 14.07(1), and is secured by Beijing Liwo's property - The **RMB 65 million loan** provided by the Group to Beijing Liwo constitutes a general disclosure obligation as its principal amount exceeds 8% of the assets as defined in Rule 14.07(1) of the Listing Rules[186](index=186&type=chunk) - The loan is secured by Beijing Liwo's property located in Beijing, China, with outstanding and accrued loan balances and interest of **RMB 65 million** and **RMB 2.6 million**, respectively[186](index=186&type=chunk) [Non-Compliance with Financial Reporting Requirements of Listing Rules](index=52&type=section&id=Non-Compliance%20with%20Financial%20Reporting%20Requirements%20of%20Listing%20Rules) Due to COVID-19 travel restrictions, the company failed to publish its 2019 annual audited results on time, violating Listing Rule 13.49, but issued a preliminary results announcement on March 31, 2020, and obtained auditor's agreement on April 9, 2020, in accordance with HKEX guidance - Due to **COVID-19 travel restrictions**, the Company failed to publish its 2019 annual audited results on time, violating **Listing Rule 13.49**[188](index=188&type=chunk) - In accordance with HKEX guidance, the Company published a preliminary results announcement on **March 31, 2020**, and obtained auditor's agreement on **April 9, 2020**[188](index=188&type=chunk) [Compliance with Corporate Governance Code](index=52&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company is committed to maintaining high standards of corporate governance and has complied with the Corporate Governance Code in Appendix 14 of the Listing Rules, except for the non-separation of Chairman and Chief Executive roles and the absence of specific terms for some non-executive directors - The Company has taken appropriate steps to comply with the Corporate Governance Code, except for the **non-separation of the roles of Chairman and Chief Executive**[189](index=189&type=chunk) - Except for Mr. Chen Bingquan and Mr. Cao Ye who have three-year terms, all other non-executive directors are appointed without specific terms but are subject to **retirement by rotation** in accordance with the Company's Articles of Association[189](index=189&type=chunk) [Standard Code for Securities Transactions by Directors](index=53&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Model Code set out in Appendix 10 of the Listing Rules, and all directors have confirmed compliance with the code throughout the period - The Company has adopted the **Model Code** set out in Appendix 10 of the Listing Rules, and all directors have confirmed compliance with the code throughout the period[192](index=192&type=chunk) [Review by Audit Committee](index=53&type=section&id=Review%20by%20Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, has reviewed the interim results for the period - The Audit Committee, composed of **three independent non-executive directors**, aims to review and monitor the Group's financial reporting process, internal controls, and risk management systems[193](index=193&type=chunk) - The Audit Committee has **reviewed the interim results** for the period[193](index=193&type=chunk) [Publication of Interim Results and Interim Report](index=53&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) The interim results announcement and this interim report have been published on the HKEX website and the company's website - The interim results announcement and this interim report are available on the **HKEX website** (www.hkexnews.hk) and the **Company's website** (www.huili.hk) for viewing[194](index=194&type=chunk)

[Corporate Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Board of Directors Composition](index=3&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83) The Board comprises executive, non-executive, and independent non-executive directors, with several appointments and resignations during the reporting period - The Board of Directors underwent several changes during the reporting period, including the resignation of Executive Directors Liu Huijie, Li Xiaobin, and Jia Dai, and the appointment of Zhou Jianzhong; the appointment of Non-executive Director Cao Ye; and the appointment of Independent Non-executive Director Chen Bingquan, the resignation of Cao Shiping, and the appointment of Xiang Siying as Chairlady[3](index=3&type=chunk) [Audit Committee](index=3&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee consists of independent non-executive directors Huang Mei (Chairlady), Xiang Siying, and Chen Bingquan, with former member Cao Shiping having resigned - The Audit Committee comprises Ms Huang Mei (Chairlady), Ms Xiang Siying, and Mr Chen Bingquan (appointed on 11 March 2019), with Mr Cao Shiping resigning on the same day[3](index=3&type=chunk) [Remuneration Committee](index=3&type=section&id=%E8%96%AA%E9%85%AC%E5%A7%94%E5%93%A1%E6%9C%83) The Remuneration Committee is composed of Xiang Siying (Chairlady), Wang Qian, and Huang Mei - The Remuneration Committee is composed of Ms Xiang Siying (Chairlady), Ms Wang Qian, and Ms Huang Mei[3](index=3&type=chunk) [Nomination Committee](index=3&type=section&id=%E6%8F%90%E5%90%8D%E5%A7%94%E5%93%A1%E6%9C%83) The Nomination Committee is composed of Wang Qian (Chairlady), Xiang Siying, and Huang Mei - The Nomination Committee is composed of Ms Wang Qian (Chairlady), Ms Xiang Siying, and Ms Huang Mei[3](index=3&type=chunk) [Independent Auditor](index=3&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB) The company's independent auditor is BDO Limited - The independent auditor is BDO Limited[3](index=3&type=chunk) [Registered Office and Principal Place of Business](index=3&type=section&id=%E8%A8%BB%E5%86%8A%E8%BE%A6%E4%BA%8B%E8%99%95%E5%8F%8A%E4%B8%BB%E8%A6%81%E7%87%9F%E6%A5%AD%E5%9C%B0%E9%BB%9E) The company's registered office is in the Cayman Islands, with principal places of business in Xinjiang, China, and Hong Kong - The registered office is located in the Cayman Islands, with principal places of business in Hami City, Xinjiang Uygur Autonomous Region, China, and Room 2805, 28/F, Harbour Centre, 25 Harbour Road, Wanchai, Hong Kong[3](index=3&type=chunk) [Share Registrar](index=4&type=section&id=%E8%82%A1%E4%BB%BD%E9%81%8E%E6%88%B6%E7%99%BB%E8%A8%98%E8%99%95) The company maintains share registrars in both the Cayman Islands and Hong Kong, with the latter being Tricor Investor Services Limited - The share registrar in Hong Kong is Tricor Investor Services Limited[5](index=5&type=chunk) [Principal Subsidiaries of the Group](index=5&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E4%B9%8B%E4%B8%BB%E8%A6%81%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8) [Subsidiary Structure](index=5&type=section&id=%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E6%9E%B6%E6%A7%8B) The company holds entities in mineral resource development, trading, financial leasing, and engineering services in China through multi-layered investment holding companies - Huili Resources (Group) Limited indirectly holds key operating entities such as Hami Jiatia Mineral Resources Development Co, Ltd (90,9%) and Hami Jinhua Mineral Resources Development Co, Ltd through companies including Jiazhao Venture, Runce, Zhengyuan International, and Fulin Investment[7](index=7&type=chunk) - Shaanxi Jiahe Mining Development Co, Ltd was sold in March 2020[8](index=8&type=chunk) [Mine Information](index=6&type=section&id=%E7%A4%A6%E5%B1%B1%E8%B3%87%E6%96%99) [Mineral Resources](index=6&type=section&id=%E7%A4%A6%E7%94%A2%E8%B3%87%E6%BA%90) As of December 31, 2019, the company's main mineral resources include nickel-copper ore from Project 20 and Project H-989, and zinc-lead ore from the Baiganhu Project Mineral Resources Overview as of December 31, 2019 | Project Name | Category | Quantity (thousand tonnes) | Nickel Metal (tonnes) | Nickel Grade (%) | Copper Metal (tonnes) | Copper Grade (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Project 20 | Indicated | 1,330 | 9,430 | 0.71 | 3,150 | 0.24 | | | Inferred | 1,260 | 8,660 | 0.69 | 3,160 | 0.25 | | Project H-989 | Indicated | 3,390 | 16,540 | 0.49 | 7,750 | 0.23 | | | Inferred | 2,370 | 12,100 | 0.51 | 4,390 | 0.19 | | **Total** | **Indicated** | **4,720** | **25,970** | **0.55** | **10,900** | **0.23** | | | **Inferred** | **3,630** | **20,760** | **0.57** | **7,550** | **0.21** | | | **Total** | **8,350** | **46,730** | **0.56** | **18,450** | **0.22** | | Project Name | Category | Quantity (thousand tonnes) | Zinc Metal (tonnes) | Zinc Grade (%) | Lead Metal (tonnes) | Lead Grade (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Baiganhu Project | Indicated | 1,730 | 113,540 | 6.57 | 71,440 | 4.13 | | | Inferred | 2,150 | 137,910 | 6.42 | 85,140 | 3.96 | | **Total** | **Total** | **3,880** | **251,450** | **6.49** | **156,580** | **4.03** | | Project Name | Category | Quantity (thousand tonnes) | Gold Grade (g/t) | Gold Metal (tonnes) | | :--- | :--- | :--- | :--- | :--- | | Huangjinmei Project | Indicated | 430 | 3.61 | 1.5 | | | Inferred | 716 | 3.63 | 2.7 | | **Total** | **Total** | **1,146** | **3.62** | **4.2** | - The Huangjinmei Project (held by Shaanxi Jiahe Mining Development Co, Ltd) was sold in March 2020[14](index=14&type=chunk) [Ore Reserves](index=7&type=section&id=%E7%A4%A6%E7%9F%B3%E5%84%B2%E9%87%8F) As of December 31, 2019, probable reserves included 1,099 thousand tonnes of nickel-copper ore at Project 20 and 1,055 thousand tonnes of zinc-lead ore at the Baiganhu Project Ore Reserves Overview as of December 31, 2019 | Project Name | Category | Quantity (thousand tonnes) | Nickel Metal (tonnes) | Nickel Grade (%) | Copper Metal (tonnes) | Copper Grade (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Project 20 | Probable | 1,099 | 7,071 | 0.64 | 2,362 | 0.21 | | Project Name | Category | Quantity (thousand tonnes) | Zinc Metal (tonnes) | Zinc Grade (%) | Lead Metal (tonnes) | Lead Grade (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Baiganhu Project | Probable | 1,055 | 62,773 | 5.95 | 39,352 | 3.73 | [Exploration Permits](index=7&type=section&id=%E5%8B%98%E6%8E%A2%E8%A8%B1%E5%8F%AF%E8%AD%89) The company holds exploration permits for the Baiganhu Gold Mine, Project H-989, and the Huangshan Project, with some permits expired and renewal applications pending Exploration Permits Overview | Project Name | Exploration Ore Type | Exploration Area (sq. km.) | Permit Expiry Date (Year/Month) | | :--- | :--- | :--- | :--- | | Baiganhu Gold Mine Project | Gold | 0.64 | July 2018 | | H–989 Project | Copper, Nickel | 0.96 | July 2018 | | Huangshan Project | Copper, Nickel | 3.49 | March 2019 | - The Group is in the process of renewing these permits, and renewal applications have been submitted to the relevant government authorities[17](index=17&type=chunk) [Mining Permits](index=8&type=section&id=%E6%8E%A1%E7%A4%A6%E8%A8%B1%E5%8F%AF%E8%AD%89) The company holds mining permits for Project 20 (copper, nickel) and the Baiganhu Project (lead, zinc), with the Project 20 permit expired and renewal pending Mining Permits Overview | Project Name | Mining Ore Type | Mining Area (sq. km.) | Permit Expiry Date (Year/Month) | | :--- | :--- | :--- | :--- | | Project 20 | Copper, Nickel | 0.22 | October 2019 | | Baiganhu Project | Lead, Zinc | 0.96 | September 2021 | | Huangjinmei Project | Gold | 0.12 | February 2021 | - The Group is in the process of renewing the permit for Project 20, and the renewal application has been submitted to the relevant government authorities[17](index=17&type=chunk) - The Huangjinmei Project was sold in March 2020[18](index=18&type=chunk) [Capital and Exploration Expenditure](index=8&type=section&id=%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF%E5%8F%8A%E5%8B%98%E6%8E%A2%E9%96%8B%E6%94%AF) For the years ended December 31, 2018 and 2019, the Group did not engage in any ore production and incurred no capital or exploration expenditure - For the years ended December 31, 2018 and 2019, the Group did not engage in any ore production[19](index=19&type=chunk) - For the years ended December 31, 2018 and 2019, no capital expenditure was incurred for development and mining activities[20](index=20&type=chunk) - For the years ended December 31, 2018 and 2019, no exploration expenditure was charged to the consolidated statement of comprehensive income[21](index=21&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Business Review](index=9&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group primarily engages in non-ferrous mineral mining and processing, but suspended mining activities in 2019 due to commodity price volatility and sold Shaanxi Jiahe - The Group is principally engaged in the mining and ore processing of non-ferrous minerals (nickel, copper, zinc, lead and gold)[23](index=23&type=chunk) - As commodity prices have not yet stabilized at a level high enough to make the business segment profitable, the Group continued to suspend mining activities and planned maintenance work during the year to extend the service life of the mines and reduce operating losses[24](index=24&type=chunk) - The Group entered into an agreement on December 24, 2019 to dispose of its entire equity interest in Shaanxi Jiahe, which was completed on March 23, 2020, to improve its business portfolio and risk management[25](index=25&type=chunk) [Mining Permits](index=10&type=section&id=%E6%8E%A1%E7%A4%A6%E8%A8%B1%E5%8F%AF%E8%AD%89) Hami Jinhua and Hami Jiatia hold mining permits for Mine 20 (copper-nickel) and Baiganhu Mine (lead-zinc), with Mine 20 requiring a hoisting system upgrade to resume production - Hami Jinhua and Hami Jiatia hold two mining permits for Mine 20 and Baiganhu Mine, with Mine 20 producing copper and nickel ore and Baiganhu Mine producing lead and zinc ore[28](index=28&type=chunk) - Mine 20 requires an upgrade of its hoisting system before production can be resumed[28](index=28&type=chunk) - The mining permit for the Huangjinmei Project was transferred upon the disposal of Shaanxi Jiahe[28](index=28&type=chunk) [Exploration Permits](index=10&type=section&id=%E5%8B%98%E6%8E%A2%E8%A8%B1%E5%8F%AF%E8%AD%89) Hami Jiatia holds three exploration permits for gold, nickel, and copper, with plans for further exploration when market conditions allow - Hami Jiatia holds three exploration permits in Xinjiang for the Baiganhu Gold Mine, Huangshan, and H–989, covering gold, nickel, and copper[29](index=29&type=chunk) - The Group will devote reasonable resources and/or cooperate with potential partners to carry out further exploration to enrich its resource and reserve base[29](index=29&type=chunk) - The exploration right for the Huangjinmei Project was transferred upon the disposal of Shaanxi Jiahe[29](index=29&type=chunk) [Ore Processing Plants](index=10&type=section&id=%E9%81%B8%E7%A4%A6%E5%BB%A0) Hami Jiatia and Hami Jinhua operate copper-nickel and lead-zinc ore processing plants, respectively, each with a capacity of 1,500 tonnes per day, though both were inactive this year - Hami Jiatia operates a copper-nickel ore processing plant, and Hami Jinhua owns a lead-zinc ore processing plant, each with a processing capacity of 1,500 tonnes per day[30](index=30&type=chunk) - During the year, neither Hami Jiatia nor Hami Jinhua conducted any mining and ore processing business[30](index=30&type=chunk) [Financial Services](index=10&type=section&id=%E8%B2%A1%E5%8B%99%E6%9C%8D%E5%8B%99) The Group's financial services segment generated revenue of approximately RMB 6,4 million in 2019, and three new loans totaling RMB 18 million were provided after the reporting period - The financial services segment generated revenue of approximately **RMB 6,4 million** for the year (2018: RMB 6,6 million)[31](index=31&type=chunk) - Subsequent to the year-end and up to the date of this report, the Group entered into three separate loan agreements with three different independent third parties to provide three loans of **RMB 6 million each** at an annual interest rate of 7%[31](index=31&type=chunk) - Loan II (RMB 65 million) was approved for a 31-month extension on February 28, 2020[31](index=31&type=chunk) [Engineering Services](index=11&type=section&id=%E5%B7%A5%E7%A8%8B%E6%9C%8D%E5%8B%99) The Group provides oil, gas, and coal-bed methane engineering services in Shanxi Province but has decided to temporarily suspend this segment to focus on the coal trading business - The Group, through Yonghe County Changshi Engineering Services Co, Ltd, provides oil, natural gas, and coal-bed methane engineering services, as well as pre-drilling engineering services in Shanxi Province, China[33](index=33&type=chunk) - The Group has decided to temporarily suspend this segment to concentrate its resources on the coal trading business[33](index=33&type=chunk) [Trading Business](index=11&type=section&id=%E8%B2%BF%E6%98%93%E6%A5%AD%E5%8B%99) During the year, the Group launched a coal trading business through two newly established subsidiaries, which contributed RMB 85,8 million in revenue - During the year, the Group commenced a coal trading business through two newly established indirect subsidiaries, Changzhi Runce Trading Co, Ltd and Gujiao Runce Trading Co, Ltd[34](index=34&type=chunk) - This segment contributed **RMB 85,8 million** to the Group's revenue for the year[34](index=34&type=chunk) [Update on Shaanxi Jiahe](index=11&type=section&id=%E6%9C%89%E9%97%9C%E9%99%9D%E8%A5%BF%E4%BD%B3%E5%90%88%E7%9A%84%E6%9C%80%E6%96%B0%E8%B3%87%E6%96%99) The equity of Shaanxi Jiahe was transferred back to Hami Jiatia in May 2018, and the Group subsequently entered into an agreement to sell its entire stake, completing the transaction in March 2020 - The equity interest in Shaanxi Jiahe was transferred back to Hami Jiatia on May 22, 2018[35](index=35&type=chunk) - The Group entered into an agreement with an independent third party for the disposal of Jiahe on December 24, 2019, which has been completed as of the date of this report[36](index=36&type=chunk) - The non-operating receivables and payables of Shaanxi Jiahe were fully recovered and settled through an offsetting arrangement in April 2019[36](index=36&type=chunk) [Performance Review](index=12&type=section&id=%E6%A5%AD%E7%B8%BE%E5%9B%9E%E9%A1%A7) Revenue nearly tripled to RMB 93,6 million due to the new coal trading business, while gross profit decreased by 63% as the business focus shifted to lower-margin trading Performance Comparison for 2019 and 2018 | Metric | 2019 (RMB million) | 2018 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 93.6 | 32.8 | +185% | | Cost of Sales | 90.3 | 24.0 | +276% | | Gross Profit | 3.3 | 8.8 | -63% | | Administrative Expenses | 21.1 | 28.3 | -25.5% | | Other Income — Net | 4.5 | 14.4 | -68.8% | | Other Operating Income/(Losses) | 4.5 | (27.4) | From Loss to Gain | | Finance Income — Net | 1.9 | 1.3 | +46.2% | | Income Tax (Expense)/Credit | (10.3) | 4.7 | From Credit to Expense | | Operating Loss | (6.9) | (49.5) | -86.1% | - The increase in revenue was mainly due to the revenue of approximately **RMB 85,8 million** generated from the new coal trading business segment during the year[38](index=38&type=chunk) - The decrease in gross profit was mainly due to the Group's business focus shifting to the lower-margin coal trading business during the year[38](index=38&type=chunk) [Operating Loss by Segment](index=13&type=section&id=%E7%B6%93%E7%87%9F%E8%99%A7%E6%90%8D) In 2019, the coal trading business contributed RMB 85,8 million in revenue, while the mining segment recorded an operating profit of RMB 22,0 million despite having no revenue Segment Operating Performance Comparison for 2019 and 2018 | Segment | 2019 Revenue (RMB thousand) | 2019 Segment Results (RMB thousand) | 2019 Operating Margin (%) | 2018 Revenue (RMB thousand) | 2018 Segment Results (RMB thousand) | 2018 Operating Margin (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Coal Trading | 85,823 | 585 | 0.7% | – | – | N/A | | Financial Services Interest Income | 6,369 | 6,258 | 98.3% | 6,636 | 3,589 | 54.1% | | Engineering and Other Related Services | 1,380 | (2,590) | (187.7%) | 26,140 | 329 | 1.3% | | Mining | – | 22,039 | N/A | 52 | (51,170) | (98,403.8%) | | **Total** | **93,572** | **26,292** | **28.1%** | **32,828** | **(47,252)** | **(143.9%)** | [Liquidity and Financial Review](index=13&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group had total current assets of RMB 340,6 million, current liabilities of RMB 43,8 million, a current ratio of 7,8, and no outstanding interest-bearing bank loans Liquidity Metrics Comparison for 2019 and 2018 | Metric | 2019 (RMB million) | 2018 (RMB million) | | :--- | :--- | :--- | | Current Assets | 340.6 | 351.8 | | Current Liabilities | 43.8 | 58.9 | | Current Ratio | 7.8 | 6.0 | | Bank and Cash Balances | 218.2 | 167.9 | | Restricted Cash Deposits | 0.2 | 2.7 | | Outstanding Interest-bearing Bank Loans | 0 | 2.2 | - The Group primarily conducts its continuing business transactions in RMB and HKD and has not entered into any forward currency contracts for hedging purposes[51](index=51&type=chunk) [Foreign Exchange Risk](index=14&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group's business is mainly conducted in RMB and has not experienced significant difficulties due to exchange rate fluctuations, thus no hedging activities are currently undertaken - The Group's business is primarily conducted in RMB and has not experienced any material difficulties in its operations and liquidity due to exchange rate fluctuations[53](index=53&type=chunk) - The Group believes that the costs associated with hedging arrangements would outweigh their benefits, and therefore, no hedging activities for foreign exchange risk are currently undertaken[53](index=53&type=chunk) [Gearing Ratio](index=14&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) As of December 31, 2019, the Group's gearing ratio was 0%, consistent with 2018 - As at 31 December 2019, the gearing ratio was **0%** (2018: 0%)[54](index=54&type=chunk) [Pledge of Assets, Commitments and Contingent Liabilities of the Company](index=14&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC%E3%80%81%E6%89%BF%E6%93%94%E5%8F%8A%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of December 31, 2019, the Group had no contracted capital expenditures or pledged assets, but faces potential contingent liabilities from new environmental laws and insufficient employee insurance - As at 31 December 2019 and 2018, the Group had no contracted capital expenditures[55](index=55&type=chunk) - As at 31 December 2019 and 2018, the Company had no pledge of assets[56](index=56&type=chunk) - The Group may face contingent liabilities from new environmental laws and regulations in the future, as well as the impact of insufficient insurance coverage for future employee accidents[56](index=56&type=chunk) [Human Resources and Share Option Scheme](index=14&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90%E5%8F%8A%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) As of December 31, 2019, the Group employed 32 staff with total employee costs of RMB 8,9 million, and no share options were granted, exercised, or outstanding during the year - As at 31 December 2019, the Group employed **32 employees** (2018: 39)[58](index=58&type=chunk) - Total staff costs (including directors' remuneration) for the year were approximately **RMB 8,9 million** (2018: RMB 9,6 million)[58](index=58&type=chunk) - As at 31 December 2019, there were no share options granted, exercised, lapsed or outstanding[58](index=58&type=chunk) [Future Prospects and Outlook](index=15&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B%E5%8F%8A%E5%89%8D%E6%99%AF) The Group will continue to study mine restart plans and develop its new coal trading business while actively exploring business diversification and potential acquisitions to mitigate risks - The Group will continue to study the feasibility of restarting production at its mines and will devote reasonable resources to its existing business segments, especially the new coal trading business[60](index=60&type=chunk) - The Group will continue to seek other opportunities to diversify its business (including business segments and geographical regions) to reduce business risks arising from commodity market fluctuations[60](index=60&type=chunk) - The Company will make its best efforts to operate more actively and explore potential acquisition opportunities to capture market opportunities in China and other countries[60](index=60&type=chunk) [Significant Events After the Reporting Period](index=15&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E9%87%8D%E5%A4%A7%E4%BA%8B%E4%BB%B6) Post-reporting period, the Group provided three new loans, extended a loan to Beijing Fengwo, completed the sale of Shaanxi Jiahe, and is monitoring the impact of COVID-19 - In January 2020, the Group entered into three loan agreements with independent third parties to provide loans totaling **RMB 18 million** at an annual interest rate of 7%[61](index=61&type=chunk) - On February 28, 2020, Loan II (RMB 65 million) was approved for a 31-month extension[62](index=62&type=chunk) - On March 23, 2020, the disposal of Shaanxi Jiahe was completed[63](index=63&type=chunk) - The outbreak of the Novel Coronavirus (COVID-19) has affected the global business environment, and the Group will continue to monitor its impact on its financial position and operating results[63](index=63&type=chunk) [Biographies of Directors and Senior Management](index=16&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E5%B1%A4%E4%B9%8B%E5%B1%A5%E6%AD%B7) [Executive Directors](index=16&type=section&id=%E5%9F%B7%E8%A1%8C%E8%91%A3%E4%BA%8B) Ms Wang Qian has over 15 years of experience in finance and investment, while Mr Zhou Jianzhong has over 20 years of experience in construction and engineering management - Ms Wang Qian has over 15 years of experience in finance, investment, and management, and was appointed as an Executive Director on January 26, 2016[65](index=65&type=chunk)[66](index=66&type=chunk) - Mr Zhou Jianzhong has over 20 years of experience in construction and engineering management and was appointed as an Executive Director on March 11, 2019, responsible for the general operations of the mines in China[67](index=67&type=chunk)[68](index=68&type=chunk) [Non-executive Director](index=17&type=section&id=%E9%9D%9E%E5%9F%B7%E8%A1%8C%E8%91%A3%E4%BA%8B) Mr Cao Ye has extensive experience in investment and coal trading and was appointed as a Non-executive Director on June 14, 2019 - Mr Cao Ye has extensive experience in investment and the coal trading business and was appointed as a Non-executive Director on June 14, 2019[70](index=70&type=chunk)[71](index=71&type=chunk) [Independent Non-executive Directors](index=17&type=section&id=%E7%8D%A8%E7%AB%8B%E9%9D%9E%E5%9F%B7%E8%A1%8C%E8%91%A3%E4%BA%8B) The independent non-executive directors bring extensive experience in investment, finance, accounting, and the mining industry - Ms Xiang Siying has extensive experience in investment, banking, and financial advisory and was appointed as Chairlady of the Board on March 11, 2019[72](index=72&type=chunk)[73](index=73&type=chunk) - Ms Huang Mei has over 15 years of experience in accounting, auditing, and corporate management and was appointed as an Independent Non-executive Director on October 19, 2018[75](index=75&type=chunk)[76](index=76&type=chunk) - Mr Chen Bingquan has over 10 years of experience in the mining and materials trading industry and was appointed as an Independent Non-executive Director on March 11, 2019[77](index=77&type=chunk)[78](index=78&type=chunk) [Senior Management](index=18&type=section&id=%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E5%B1%A4) Mr Huang Kenian serves as Vice President, responsible for direct investment and corporate finance, while Mr Yau Hong Kuen is the Company Secretary and Chief Financial Officer - Mr Huang Kenian is the Vice President of the Company, responsible for direct investment and corporate finance, with over 20 years of experience[79](index=79&type=chunk) - Mr Yau Hong Kuen was appointed as the Company Secretary and Chief Financial Officer on February 13, 2019, and has over 10 years of experience in accounting, auditing, and corporate fields[81](index=81&type=chunk) [Report of the Directors](index=20&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%A0%B1%E5%91%8A) [Corporate Information](index=20&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) Huili Resources (Group) Limited was incorporated in the Cayman Islands in February 2010 and listed on the Main Board of the Hong Kong Stock Exchange in January 2012 - The Company was incorporated in the Cayman Islands as an exempted company with limited liability under the Companies Law of the Cayman Islands on February 19, 2010[83](index=83&type=chunk) - The Company's shares were listed on the Main Board of the Stock Exchange on January 12, 2012[83](index=83&type=chunk) [Principal Activities](index=20&type=section&id=%E4%B8%BB%E8%A6%81%E6%A5%AD%E5%8B%99) The Company is an investment holding company whose subsidiaries are engaged in mining, mineral processing, trading, and financial services in China, with coal trading added this year - The Company's principal activity is investment holding, Its subsidiaries are principally engaged in the mining, processing and sale of gold, nickel, copper, lead and zinc products, trading of oil and gas exploration materials and coal, and financial services in the PRC[84](index=84&type=chunk) - Apart from the commencement of the coal trading business, there were no significant changes in the nature of the Group's principal activities during the year[84](index=84&type=chunk) [Directors' Opinion on the Qualified Opinion](index=20&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%B0%8D%E4%BF%9D%E7%95%99%E6%84%8F%E8%A6%8B%E4%B9%8B%E6%84%8F%E8%A6%8B) The Board notes the auditor's qualified opinion on assumptions used for the 2018 mining rights valuation and believes it will not carry forward to 2020 as Shaanxi Jiahe has been sold - The auditor has issued a qualified opinion on the Company's consolidated financial statements for the year, primarily related to the assumptions used in assessing the carrying amount of mining rights as at 31 December 2018[86](index=86&type=chunk) - As the disposal of Shaanxi Jiahe was completed on 23 March 2020, the Board considers that the assumption is no longer applicable as at 31 December 2019[86](index=86&type=chunk) - The Board is of the view that, except for the comparability of the figures for the year ending 31 December 2020 and the related figures, any resulting audit qualification is not expected to be carried forward to the year ending 31 December 2020[89](index=89&type=chunk) [Principal Risks and Uncertainties](index=21&type=section&id=%E4%B8%BB%E8%A6%81%E9%A2%A8%E9%9A%AA%E5%8F%8A%E4%B8%8D%E6%98%8E%E6%9C%97%E5%9B%A0%E7%B4%A0) The Group faces business risks from finite mine life and price volatility, operational risks from policy changes in China, and various financial risks - Business risks include limited mine life of projects, uncertainties in new mining projects, commodity price volatility, and the cyclical nature of the economy[90](index=90&type=chunk) - Operational risks include political, economic, and legal developments in China, changes in government policies, stricter environmental regulations, and uncertainty in the renewal of mining and exploration permits[90](index=90&type=chunk) - Financial risks include market risk (foreign exchange risk, interest rate risk), credit risk, and liquidity risk[90](index=90&type=chunk) [Environmental Policies and Performance](index=22&type=section&id=%E7%92%B0%E5%A2%83%E6%94%BF%E7%AD%96%E5%8F%8A%E8%A1%A8%E7%8F%BE) The Group complies with all relevant environmental laws in China, faced no environmental claims or penalties this year, and has a provision of RMB 2,8 million for environmental costs - The Group has complied in all material respects with all relevant PRC laws and regulations regarding environmental protection and was not subject to any environmental claims, lawsuits, penalties or administrative sanctions during the year[93](index=93&type=chunk) - As at 31 December 2019, the provision for closure, reclamation and environmental costs was approximately **RMB 2,8 million** (2018: RMB 5,3 million)[93](index=93&type=chunk) [Compliance with Relevant Laws and Regulations](index=22&type=section&id=%E9%81%B5%E5%AE%88%E7%9B%B8%E9%97%9C%E6%B3%95%E5%BE%8B%E5%8F%8A%E6%B3%95%E8%A6%8F) The Group has complied in all material respects with the relevant laws and regulations that have a significant impact on its business and operations during the year - The Group has complied in all material respects with the relevant laws and regulations that have a significant impact on the Group's business and operations during the year[94](index=94&type=chunk) - The Group did not have any material breach of or non-compliance with applicable laws and regulations during the year[94](index=94&type=chunk) [Results and Dividends](index=23&type=section&id=%E6%A5%AD%E7%B8%BE%E5%8F%8A%E8%82%A1%E6%81%AF) The Group recorded a loss for the year, and the Directors do not recommend the payment of any dividend - The Directors do not recommend the payment of any dividend for the year[100](index=100&type=chunk) [Distributable Reserves](index=23&type=section&id=%E5%8F%AF%E4%BE%9B%E5%88%86%E6%B4%BE%E5%84%B2%E5%82%99) As of December 31, 2019, the Company's reserves available for distribution to shareholders amounted to approximately RMB 261,6 million - As at 31 December 2019, the Company's reserves available for distribution to shareholders amounted to approximately **RMB 261,6 million**, representing the share premium of approximately RMB 668,8 million less accumulated losses of approximately RMB 407,2 million[101](index=101&type=chunk) [Major Customers and Suppliers](index=24&type=section&id=%E4%B8%BB%E8%A6%81%E5%AE%A2%E6%88%B6%E5%8F%8A%E4%BE%9B%E6%87%89%E5%95%86) Sales to the top five customers accounted for 60,4% of total sales, while purchases from the top five suppliers, primarily for the new coal trading business, accounted for 100% Sales/Purchases Percentage from Major Customers and Suppliers in 2019 | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Sales to top five customers as % of total sales | 60.4% | 97.6% | | Sales to largest customer as % of total sales | 19.4% | 41.4% | | Purchases from top five suppliers as % of total purchases | 100.0% | 96.6% | | Purchases from largest supplier as % of total purchases | 33.3% | 31.1% | - The data for major customers and suppliers in 2019 primarily came from the Group's newly commenced coal trading business[108](index=108&type=chunk) [Changes and Re-election of Directors](index=24&type=section&id=%E8%91%A3%E4%BA%8B) The Board saw multiple changes, including resignations and new appointments, with Ms Wang Qian, Mr Cao Ye, and Ms Huang Mei retiring by rotation and being eligible for re-election - The Board of Directors underwent several changes during the year, including the resignation of Executive Directors Liu Huijie, Li Xiaobin, and Jia Dai, and the appointment of Zhou Jianzhong; the appointment of Non-executive Director Cao Ye; and the appointment of Independent Non-executive Director Chen Bingquan, the resignation of Cao Shiping, and the appointment of Xiang Siying as Chairlady[109](index=109&type=chunk) - Ms Wang Qian, Mr Cao Ye and Ms Huang Mei will retire by rotation and, being eligible, offer themselves for re-election at the forthcoming annual general meeting[109](index=109&type=chunk) [Equity-Linked Agreements (Share Option Scheme)](index=26&type=section&id=%E6%AC%8A%E7%9B%8A%E6%8E%9B%E9%89%A4%E5%8D%94%E8%AD%B0) The Company has a share option scheme to incentivize participants, effective for 10 years from December 2011, with no options granted or outstanding in 2019 - The Company has a share option scheme to incentivise eligible participants to contribute to the overall value of the Company and its shareholders[119](index=119&type=chunk) - The Share Option Scheme became effective on 16 December 2011 and will remain in force for a period of 10 years[119](index=119&type=chunk) - The maximum number of shares that may be issued under the Share Option Scheme shall not exceed **10% of the issued shares**, and the maximum number of shares granted to any one participant in any 12-month period shall not exceed 1%[119](index=119&type=chunk)[120](index=120&type=chunk) - The Company did not grant any share options under the Share Option Scheme during the year, and there were no outstanding share options as at 31 December 2019[121](index=121&type=chunk) [Persons with Disclosable Interests in Shares and Underlying Shares](index=27&type=section&id=%E6%96%BC%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B8%AD%E6%93%81%E6%9C%89%E6%A0%B9%E6%93%9A%E8%AD%89%E5%88%B8%E5%8F%8A%E6%9C%9F%E8%B2%A8%E6%A2%9D%E4%BE%8B%E7%AC%ACXV%E9%83%A8%E7%AC%AC2%E5%8F%8A3%E5%88%86%E9%83%A8%E9%A0%88%E4%BA%88%E6%8A%AB%E9%9C%B2%E6%AC%8A%E7%9B%8A%E4%B9%8B%E4%BA%BA%E5%A3%AB) As of December 31, 2019, major shareholders included Mr Guo Jianzhong (28,08%), China Huarong Asset Management Co, Ltd (19,75%), and Mr Li Guangrong and associates (11,64%) Major Shareholders' Holdings as of December 31, 2019 | Name | Nature of Interest | Total Interest in Shares (L) | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Tian Yuan International Limited | Beneficial Owner | 412,592,702 | 25.47% | | Mr Guo Jianzhong | Interest of Controlled Corporation & Beneficial Owner | 454,958,702 | 28.08% | | Affinitiv Mobile Ventures Ltd. | Beneficial Owner | 320,000,000 | 19.75% | | China Huarong Asset Management Co., Ltd. | Interest of Controlled Corporation | 320,000,000 | 19.75% | | China Huarong Overseas Investment Holdings Co., Limited | Interest of Controlled Corporation | 320,000,000 | 19.75% | | Ministry of Finance of the PRC | Interest of Controlled Corporation | 320,000,000 | 19.75% | | Sun Shaojie | Interest of Controlled Corporation | 320,000,000 | 19.75% | | Huarong Zhiyuan Investment & Management Co., Ltd. | Interest of Controlled Corporation | 320,000,000 | 19.75% | | Huarong Overseas Chinese Asset Management Co., Ltd. | Interest of Controlled Corporation | 320,000,000 | 19.75% | | Guangdong Jinfeng Group Co., Ltd. | Interest of Controlled Corporation | 320,000,000 | 19.75% | | Legend Vantage Limited | Beneficial Owner | 188,638,883 | 11.64% | | Mr Li Guangrong | Interest of Controlled Corporation | 188,638,883 | 11.64% | | Ms Gao Miaomiao | Interest of Controlled Corporation | 188,638,883 | 11.64% | [Sufficient Public Float](index=29&type=section&id=%E5%85%85%E8%B6%B3%E5%85%AC%E7%9C%BE%E6%8C%81%E8%82%A1%E9%87%8F) Based on available information, at least 25% of the Company's total issued share capital is held by the public - At least **25%** of the Company's total issued share capital is held by the public[131](index=131&type=chunk) [Auditor](index=29&type=section&id=%E6%A0%B8%E6%95%B8%E5%B8%AB) BDO Limited was appointed as the Company's auditor effective January 30, 2019, and will be proposed for re-appointment at the upcoming annual general meeting - BDO Limited has been appointed as the auditor of the Company since the conclusion of the annual general meeting on 30 January 2019[133](index=133&type=chunk) [Corporate Governance Report](index=30&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) [Introduction](index=30&type=section&id=%E7%B7%92%E8%A8%80) The Company is committed to maintaining high standards of corporate governance and has complied with the Corporate Governance Code, with deviations from provisions A,2,1, A,4,1, and A,6,7 - The Company is committed to maintaining high standards of corporate governance and has adopted and complied with the provisions of the Corporate Governance Code as set out in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, with the exception of code provisions A,2,1, A,4,1 and A,6,7[134](index=134&type=chunk) [Directors' Securities Transactions](index=30&type=section&id=%E8%91%A3%E4%BA%8B%E7%9A%84%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93) The Company has adopted the Model Code for Securities Transactions by Directors, and all Directors have confirmed their compliance with the code during the year - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules, and upon specific enquiry of all Directors, the Directors have confirmed that they have complied with the required standard set out in the Model Code during the year[135](index=135&type=chunk) [Board of Directors](index=30&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83) As of December 31, 2019, the Board consisted of six directors, responsible for leading the Group, setting strategy, and overseeing senior management performance - As at 31 December 2019, the Board comprised six Directors, including two executive Directors, one non-executive Director and three independent non-executive Directors[137](index=137&type=chunk) - The Board is primarily accountable to the shareholders and is responsible for leading and governing the Company and its subsidiaries, including overseeing the Group's business, strategic direction, financial performance, setting objectives and business development plans, and monitoring the performance of senior management[137](index=137&type=chunk) - During the year, the Company considered all independent non-executive Directors (namely Ms Xiang Siying, Ms Huang Mei and Mr Chen Bingquan) to be independent of the Company[138](index=138&type=chunk) [Directors' Attendance at Meetings](index=31&type=section&id=%E8%91%A3%E4%BA%8B%E5%87%BA%E5%B8%AD%E6%9C%83%E8%AD%B0) The Board holds at least four regular meetings annually; some independent non-executive directors were unable to attend the AGM in 2019 due to other business commitments - The Board holds at least four regular meetings a year[142](index=142&type=chunk) - Mr Cao Shiping and Ms Xiang Siying (both independent non-executive Directors) were absent from the Company's annual general meeting on 30 January 2019 due to other business commitments[142](index=142&type=chunk) Attendance at Board and Committee Meetings in 2019 | Director's Name | Board Meetings | Audit Committee Meetings | Remuneration Committee Meetings | Nomination Committee Meetings | General Meetings | | :--- | :--- | :--- | :--- | :--- | :--- | | Ms Wang Qian | 22/23 | N/A | 4/4 | 4/4 | 2/2 | | Mr Zhou Jianzhong | 21/21 | N/A | N/A | N/A | 1/1 | | Mr Liu Huijie | 10/10 | N/A | N/A | N/A | 1/2 | | Mr Li Xiaobin | 1/1 | N/A | N/A | N/A | 1/1 | | Ms Jia Dai | 1/1 | N/A | N/A | N/A | 1/1 | | Mr Cao Ye | 12/13 | N/A | N/A | N/A | N/A | | Ms Xiang Siying | 23/23 | 3/3 | 4/4 | 4/4 | 1/2 | | Ms Huang Mei | 22/23 | 3/3 | 4/4 | 4/4 | 2/2 | | Mr Chen Bingquan | 20/21 | 2/2 | N/A | N/A | 1/1 | | Mr Cao Shiping | 1/1 | 1/1 | N/A | N/A | 0/1 | [Roles and Responsibilities of Chairman and Chief Executive Officer](index=32&type=section&id=%E4%B8%BB%E5%B8%AD%E5%8F%8A%E8%A1%8C%E6%94%BF%E7%B8%BD%E8%A3%81%E4%B9%8B%E8%A7%92%E8%89%B2%E5%8F%8A%E8%81%B7%E8%B2%AC) The roles of Chairman and CEO are separate; following Mr Li Xiaobin's resignation, independent non-executive director Ms Xiang Siying was appointed as Chairlady - Code provision A,2,1 stipulates that the roles of chairman and chief executive officer should be separate and should not be performed by the same individual[145](index=145&type=chunk) - On 11 March 2019, Mr Li Xiaobin resigned as an executive Director and the Chairman, and Ms Xiang Siying, an independent non-executive Director, was subsequently appointed as the Chairlady of the Company[145](index=145&type=chunk) [Term of Non-executive Directors](index=32&type=section&id=%E9%9D%9E%E5%9F%B7%E8%A1%8C%E8%91%A3%E4%BA%8B%E7%9A%84%E4%BB%BB%E6%9C%9F) All non-executive directors, except for Ms Huang Mei, have a three-year term and are subject to retirement by rotation in accordance with the Company's articles - With the exception of Ms Huang Mei who does not have a specific term of appointment, all other non-executive Directors are appointed for a term of three years[146](index=146&type=chunk) - All Directors (including non-executive Directors) are subject to retirement by rotation in accordance with the Company's articles of association[146](index=146&type=chunk) [Senior Management Remuneration](index=32&type=section&id=%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E5%B1%A4%E8%96%AA%E9%85%AC) During the year, three members of senior management had remuneration falling within the band of not more than HK$1,000,000 Senior Management Remuneration Bands for 2019 | Remuneration Band | Number of Individuals | | :--- | :--- | | Not more than HK$1,000,000 (equivalent to not more than RMB 881,135) | 3 | [Audit Committee](index=32&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising three independent non-executive directors, met three times during the year to review financial results, internal controls, and auditor independence - The Audit Committee comprises three independent non-executive Directors, namely Ms Huang Mei (Chairlady), Ms Xiang Siying and Mr Chen Bingquan[147](index=147&type=chunk) - The Audit Committee meets at least twice a year to review the annual and interim results reports and other information to be reported to shareholders, and to review the effectiveness and objectivity of the audit process[147](index=147&type=chunk) - During the year, the Audit Committee held three meetings[147](index=147&type=chunk) - The Audit Committee has reviewed the Group's audited results for the year and recommended their adoption by the Board[150](index=150&type=chunk) [Audit Committee's Opinion on the Qualified Opinion](index=33&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83%E5%B0%8D%E4%BF%9D%E7%95%99%E6%84%8F%E8%A6%8B%E4%B9%8B%E6%84%8F%E8%A6%8B) The Audit Committee concurs with the Board's view on the auditor's qualified opinion and believes the matter will not carry forward to 2020, except for comparability purposes - The Audit Committee concurs with the opinion on the assumptions and qualified opinion discussed in the Report of the Directors[151](index=151&type=chunk) - The Audit Committee considers the measures sufficient to address the matters that may give rise to the qualified opinion and that, except for the comparability of the figures for the year ending 31 December 2020 and the related figures, any resulting audit qualification is not expected to be carried forward to the year ending 31 December 2020[151](index=151&type=chunk) [Remuneration Committee](index=34&type=section&id=%E8%96%AA%E9%85%AC%E5%A7%94%E5%93%A1%E6%9C%83) The Remuneration Committee, comprising two independent non-executive directors and one executive director, is responsible for the Group's remuneration policy and structure - The Remuneration Committee currently comprises two independent non-executive Directors, Ms Xiang Siying (Chairlady) and Ms Huang Mei, and one executive Director, Ms Wang Qian[153](index=153&type=chunk) - The duties of the Remuneration Committee include considering and making recommendations to the Board on the Group's remuneration policy and structure, and reviewing and determining the remuneration packages of the Directors and senior management[153](index=153&type=chunk) - During the year, the Remuneration Committee held four meetings[153](index=153&type=chunk) [Nomination Committee](index=34&type=section&id=%E6%8F%90%E5%90%8D%E5%A7%94%E5%93%A1%E6%9C%83) The Nomination Committee, comprising one executive director and two independent non-executive directors, reviews the Board's structure and nominates candidates for directorship - The Nomination Committee currently comprises one executive Director, Ms Wang Qian (Chairlady), and two independent non-executive Directors, Ms Xiang Siying and Ms Huang Mei[155](index=155&type=chunk) - Its principal duties include reviewing the structure, size, composition and skills of the Board at least annually and making recommendations; identifying and nominating candidates to fill casual vacancies on the Board; assessing the independence of independent non-executive Directors; and making recommendations to the Board on matters relating to the appointment and re-appointment of Directors and succession planning for Directors, in particular the Chairman and the Chief Executive Officer[154](index=154&type=chunk) - During the year, the Nomination Committee held four meetings[155](index=155&type=chunk) [Accountability and Audit](index=35&type=section&id=%E5%95%8F%E8%B2%AC%E5%8F%8A%E5%AF%A9%E6%A0%B8) The Directors are responsible for preparing true and fair financial statements, with auditor's remuneration for the year including RMB 1,260 thousand for audit services - The Directors are responsible for preparing consolidated financial statements for each financial period which give a true and fair view of the state of affairs and of the results and cash flows of the Group for that period[159](index=159&type=chunk) Auditor's Remuneration | Service Category | Amount (RMB thousand) | | :--- | :--- | | Audit Services | 1,260 | | Other Non-audit Services | 200 | [Risk Management and Internal Control](index=35&type=section&id=%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86%E5%8F%8A%E5%85%A7%E9%83%A8%E7%9B%A3%E6%8E%A7) The Board is responsible for the Company's risk management and internal control systems and has implemented measures including an internal compliance officer and annual reviews - The Board is responsible for the Company's risk management and internal control systems and for reviewing their effectiveness[164](index=164&type=chunk) - The Group has established an internal compliance officer position, engaged legal advisers in the PRC, the Cayman Islands and Hong Kong, and engaged an internal control consultant to conduct an annual review[169](index=169&type=chunk) - The results of the internal control consultant's review revealed no material internal control deficiencies[169](index=169&type=chunk) [Directors' Training](index=37&type=section&id=%E8%91%A3%E4%BA%8B%E5%9F%B9%E8%A8%93) Newly appointed directors receive comprehensive induction training, and all directors are provided with continuous professional development and regulatory updates - Each newly appointed Director receives a comprehensive, formal and tailored induction on first appointment[171](index=171&type=chunk) - The Company Secretary provides regular updates on the Listing Rules, and Directors are provided with materials and attend seminars to keep abreast of the latest regulatory developments[171](index=171&type=chunk) [Board Diversity Policy](index=37&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E6%88%90%E5%93%A1%E5%A4%9A%E5%85%83%E5%8C%96%E6%94%BF%E7%AD%96) The Company has adopted a board diversity policy that considers factors such as gender, age, cultural background, professional experience, and skills to achieve board diversity - The Company has adopted a board diversity policy which aims to achieve diversity on the Board by taking into account a number of factors, including but not limited to gender, age, cultural and educational background, ethnicity, professional experience, skills, knowledge and other qualities[172](index=172&type=chunk) [Dividend Policy](index=37&type=section&id=%E8%82%A1%E6%81%AF%E6%94%BF%E7%AD%96) The Company has established a dividend policy, but the Board does not recommend the payment of any dividend for the current year - The Company has established a dividend policy setting out the factors for determining the payment of dividends by the Company, the long-term profitability and expected cash inflows and outflows of the Company, the frequency and form of dividend payments[174](index=174&type=chunk) - The Board does not recommend the payment of any dividend for the year (2018: Nil)[175](index=175&type=chunk) [Company Secretary](index=37&type=section&id=%E5%85%AC%E5%8F%B8%E7%A7%98%E6%9B%B8) Mr Yau Hong Kuen was appointed as Company Secretary on February 13, 2019, and has undertaken no less than 15 hours of relevant professional training during the year - Mr Yau Hong Kuen was appointed as the Company Secretary on 13 February 2019[176](index=176&type=chunk) - During the year, Mr Yau has undertaken no less than 15 hours of relevant professional training[176](index=176&type=chunk) [Shareholders' Rights](index=38&type=section&id=%E8%82%A1%E6%9D%B1%E6%AC%8A%E7%9B%8A) The Board is committed to maintaining ongoing communication with shareholders and encourages their attendance at general meetings - The Board is committed to maintaining ongoing communication with shareholders, and the Company encourages shareholders to attend general meetings[179](index=179&type=chunk) - Shareholders may make written enquiries to the Company by email to enquiry@huili,hk, by fax to (852) 2840 0470 or by post to Room 2805, 28/F, Harbour Centre, 25 Harbour Road, Wanchai, Hong Kong, for the attention of the Company Secretary[179](index=179&type=chunk) [Independent Auditor's Report](index=39&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%A0%B1%E5%91%8A) [Qualified Opinion](index=39&type=section&id=%E4%BF%9D%E7%95%99%E6%84%8F%E8%A6%8B) The auditor has issued a qualified opinion on the consolidated financial statements for the year ended December 31, 2019, concerning the validity of assumptions used in the 2018 mining rights valuation - The auditor has audited the consolidated financial statements of the Group for the year ended 31 December 2019 and has issued a qualified opinion[185](index=185&type=chunk) - The qualified opinion relates primarily to the validity of the assumptions used in assessing the carrying amount of the mining rights as at 31 December 2018[185](index=185&type=chunk) [Basis for Qualified Opinion](index=39&type=section&id=%E4%BF%9D%E7%95%99%E6%84%8F%E8%A6%8B%E4%B9%8B%E5%9F%BA%E7%A4%8E) The qualified opinion stems from the inability to obtain sufficient evidence regarding the 2018 valuation assumptions for Shaanxi Jiahe's assets, impacting goodwill and subsequent impairment reversals - The auditor was unable to satisfy themselves that the impairment provision for the amount due from Xiaoyi Dajieshan at the acquisition date (May 2018) was not materially misstated and whether any additional provision or reversal of provision was necessary for the year ended 31 December 2018, due to the inability to obtain relevant documents and explanations to support the assumptions used in estimating the fair value of the 100% equity interest[187](index=187&type=chunk) - The auditor was unable to satisfy themselves that the fair values of the mining rights and other receivables at the acquisition date were not materially misstated and that the goodwill arising from the acquisition was appropriately presented[187](index=187&type=chunk)[189](index=189&type=chunk) - Due to the scope limitation, the auditor was unable to satisfy themselves that the impairment losses on other receivables and goodwill recognised for the year ended 31 December 2018 were not materially misstated and that the carrying amount and impairment provision for the mining rights were fairly presented[189](index=189&type=chunk) - The above audit limitations remained unresolved in the audit of the 2019 consolidated financial statements, affecting the assessment of the reversal of impairment loss on mining rights and the fair value loss on the disposal group in 2019, and resulting in a limitation on the audit work on the comparability of the current period's figures and the corresponding figures[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) [Key Audit Matters](index=41&type=section&id=%E9%97%9C%E9%8D%B5%E5%AF%A9%E8%A8%88%E4%BA%8B%E9%A0%85) Key audit matters include the impairment of mining rights and buildings due to significant management judgment, and provisions for receivables due to estimation uncertainty - Impairment of mining rights and mining buildings was considered a key audit matter due to the significant management judgement involved in key assumptions such as pre-tax discount rates, estimated metal prices, production lines and inflation rates[197](index=197&type=chunk)[199](index=199&type=chunk) - Impairment provision for trade receivables, loans receivable and other receivables was considered a key audit matter because the estimation of expected credit losses involves significant inherent uncertainty and judgement by management, including identifying risks of significant deterioration in credit quality and the assumptions used in the expected credit loss model[200](index=200&type=chunk)[201](index=201&type=chunk) [Directors' Responsibilities for the Consolidated Financial Statements](index=43&type=section&id=%E8%91%A3%E4%BA%8B%E5%B0%B1%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%A0%88%E6%89%BF%E6%93%94%E7%9A%84%E8%B2%AC%E4%BB%BB) The Directors are responsible for preparing true and fair consolidated financial statements in accordance with HKFRSs and the Hong Kong Companies Ordinance - The Directors are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Hong Kong Companies Ordinance[204](index=204&type=chunk) - The Directors are responsible for such internal control as they determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error[204](index=204&type=chunk) [Auditor's Responsibilities for the Audit of the Consolidated Financial Statements](index=44&type=section&id=%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%B0%B1%E5%AF%A9%E8%A8%88%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E6%89%BF%E6%93%94%E7%9A%84%E8%B2%AC%E4%BB%BB) The auditor's objective is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement and to issue an opinion - The auditor's objective is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion[207](index=207&type=chunk) - The auditor exercises professional judgement and maintains professional scepticism, identifies and assesses the risks of material misstatement, understands internal control, and evaluates the appropriateness of accounting policies and the going concern basis[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) - The auditor communicates with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control[213](index=213&type=chunk) [Consolidated Statement of Comprehensive Income](index=46&type=section&id=%E5%90%88%E4%BD%B5%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) [Loss and Total Comprehensive Loss for the Year](index=46&type=section&id=%E5%B9%B4%E5%85%A7%E8%99%A7%E6%90%8D%E5%8F%8A%E5%85%A8%E9%9D%A2%E8%99%A7%E6%90%8D%E7%B8%BD%E9%A1%8D) For the year ended December 31, 2019, the Group recorded a total comprehensive loss of RMB 15,236 thousand, a significant reduction from RMB 43,530 thousand in 2018 Key Data from the Consolidated Statement of Comprehensive Income | Metric | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 93,572 | 32,828 | | Cost of sales | (90,289) | (24,012) | | Gross profit | 3,283 | 8,816 | | Administrative expenses | (21,088) | (28,306) | | Expected credit losses on financial assets | (25,595) | (16,955) | | Reversal of expected credit losses on financial assets | 27,532 | – | | Other operating income/(losses) | 4,498 | (27,386) | | Other income — net | 4,472 | 14,350 | | Operating loss | (6,898) | (49,481) | | Finance income — net | 1,945 | 1,256 | | Loss before income tax | (4,953) | (48,225) | | Income tax (expense)/credit | (10,283) | 4,695 | | Loss and total comprehensive loss for the year | (15,236) | (43,530) | | Loss for the year attributable to equity holders of the Company | (16,013) | (41,269) | | Loss for the year attributable to non-controlling interests | 777 | (2,261) | [Consolidated Statement of Financial Position](index=47&type=section&id=%E5%90%88%E4%BD%B5%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) [Total Assets](index=47&type=section&id=%E8%B3%87%E7%94%A2%E7%B8%BD%E5%80%BC) As of December 31, 2019, the Group's total assets were RMB 494,170 thousand, a decrease from RMB 522,964 thousand in 2018 Key Asset Data from the Consolidated Statement of Financial Position | Metric | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Property, plant and equipment | 51,611 | 68,171 | | Mining and exploration rights | 90,752 | 88,867 | | Right-of-use assets | 10,997 | – | | Land use rights | – | 8,613 | | Total non-current assets | 153,607 | 171,127 | | Trade and bills receivables | 5,943 | 11,358 | | Loans receivable | 64,535 | 98,856 | | Other receivables and prepayments | 36,178 | 68,381 | | Cash and cash equivalents | 218,238 | 167,923 | | Assets of a disposal group classified as held for sale | 15,669 | – | | Total current assets | 340,563 | 351,837 | | **Total assets** | **494,170** | **522,964** | [Total Liabilities](index=47&type=section&id=%E8%B2%A0%E5%82%B5%E7%B8%BD%E5%80%BC) As of December 31, 2019, the Group's total liabilities were RMB 68,856 thousand, a decrease from RMB 82,223 thousand in 2018 Key Liability Data from the Consolidated Statement of Financial Position | Metric | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Trade payables | 1,803 | 7,610 | | Other payables and accrued charges | 17,948 | 43,890 | | Contract liabilities | 11,654 | – | | Lease liabilities | 2,075 | – | | Borrowings | – | 2,200 | | Total current liabilities | 43,752 | 58,924 | | Provision for closure, reclamation and environmental costs | 2,770 | 5,307 | | Deferred tax liabilities | 21,626 | 17,992 | | Total non-current liabilities | 25,104 | 23,299 | | **Total liabilities** | **68,856** | **82,223** | [Total Equity](index=48&type=section&id=%E7%B8%BD%E6%AC%8A%E7%9B%8A) As of December 31, 2019, the Group's total equity was RMB 425,314 thousand, a decrease from RMB 440,741 thousand in 2018 Key Equity Data from the Consolidated Statement of Financial Position | Metric | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Share capital | 137,361 | 137,361 | | Share premium | 668,768 | 668,768 | | Other reserves | (11,291) | (12,168) | | Accumulated losses | (366,937) | (349,856) | | Non-controlling interests | (2,587) | (3,364) | | **Total equity** | **425,314** | **440,741** | [Consolidated Statement of Changes in Equity](index=49&type=section&id=%E5%90%88%E4%BD%B5%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) [Changes in Equity](index=49&type=section&id=%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95) For the year ended December 31, 2019, total equity attributable to owners of the Company decreased to RMB 427,901 thousand, mainly due to the loss for the year Overview of Consolidated Changes in Equity for 2019 | Metric | Share Capital (RMB thousand) | Share Premium (RMB thousand) | Other Reserves (RMB thousand) | Statutory Reserve (RMB thousand) | Accumulated Losses (RMB thousand) | Total attributable to equity holders of the Company (RMB thousand) | Non-controlling Interests (RMB thousand) | Total Equity (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | At 1 January 2019 (restated) | 137,361 | 668,768 | (12,168) | – | (350,047) | 443,914 | (3,364) | 440,550 | | (Loss)/profit for the year | – | – | – | – | (16,013) | (16,013) | 777 | (15,236) | | Appropriation to statutory reserve | – | – | – | 877 | (877) | – | – | – | | At 31 December 2019 | 137,361 | 668,768 | (12,168) | 877 | (366,937) | 427,901 | (2,587) | 425,314 | - The initial application of HKFRS 16 had an impact of **RMB 191 thousand** on accumulated losses[223](index=223&type=chunk) [Consolidated Statement of Cash Flows](index=50&type=section&id=%E5%90%88%E4%BD%B5%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) [Net Cash from Operating Activities](index=50&type=section&id=%E7%B6%93%E7%87%9F%E6%B4%BB%E5%8B%95%E6%89%80%E5%BE%97%E7%8F%BE%E9%87%91%E6%B7%A8%E9%A1%8D) For the year ended December 31, 2019, net cash from operating activities was RMB 16,313 thousand, a significant decrease from RMB 103,270 thousand in 2018 Net Cash from Operating Activities | Metric | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Loss before income tax | (4,953) | (48,225) | | Cash used in operations before working capital changes | (4,969) | (1,574) | | Cash generated from operations | 18,300 | 103,535 | | Income tax paid | (1,892) | (265) | | Interest paid | (95) | – | | **Net cash from operating activities** | **16,313** | **103,270** | [Net Cash from Investing Activities](index=50&type=section&id=%E6%8A%95%E8%B3%87%E6%B4%BB%E5%8B%95%E6%89%80%E5%BE%97%E7%8F%BE%E9%87%91%E6%B7%A8%E9%A1%8D) For the year ended December 31, 2019, net cash from investing activities was RMB 3,116 thousand, an increase from RMB 585 thousand in 2018 Net Cash from Investing Activities | Metric | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Purchase of property, plant and equipment | (361) | (2,865) | | Proceeds from disposal of property, plant and equipment | 1,097 | 1,904 | | Interest received | 2,380 | 1,544 | | **Net cash from investing activities** | **3,116** | **585** | [Net Cash from Financing Activities](index=51&type=section&id=%E8%9E%8D%E8%B3%87%E6%B4%BB%E5%8B%95%E6%89%80%E5%BE%97%E7%8F%BE%E9%87%91%E6%B7%A8%E9%A1%8D) For the year ended December 31, 2019, net cash from financing activities was RMB 30,662 thousand, a significant increase from RMB 1,025 thousand in 2018 Net Cash from Financing Activities | Metric | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Loans to third parties | (65,000) | (100,000) | | Repayment from third parties | 100,000 | 100,000 | | Repayment of borrowings | (2,200) | – | | Principal portion of lease liabilities repaid | (2,007) | – | | Interest paid | (131) | (175) | | **Net cash from financing activities** | **30,662** | **1,025** | [Net Increase in Cash and Cash Equivalents](index=51&type=section&id=%E7%8F%BE%E9%87%91%E5%8F%8A%E7%8F%BE%E9%87%91%E7%AD%89%E5%83%B9%E7%89%A9%E5%A2%9E%E5%8A%A0%E6%B7%A8%E9%A1%8D) For the year ended December 31, 2019, the net increase in cash and cash equivalents was RMB 50,091 thousand, resulting in a year-end balance of RMB 218,630 thousand Change in Cash and Cash Equivalents | Metric | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Net increase in cash and cash equivalents | 50,091 | 104,880 | | Cash and cash equivalents at beginning of financial year | 167,923 | 54,410 | | Exchange difference on cash and cash equivalents | 616 | 8,633 | | **Cash and cash equivalents at end of financial year** | **218,630** | **167,923** | [Notes to the Consolidated Financial Statements](index=52&type=section&id=%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [1. General Information](index=52&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) The Group is primarily engaged in mining, mineral processing, financial services, engineering services, and coal trading in China, having commenced the coal trading business in 2019 - The Company was incorporated in the Cayman Islands on 19 February 2010 under the Companies Law of the Cayman Islands and was listed on the Main Board of The Stock Exchange of Hong

Company Overview [Company Information](index=2&type=section&id=Company%20Information) This section outlines basic information about Huili Resources (Group) Limited, including board members, authorized representatives, auditors, and stock details - The company is incorporated in the Cayman Islands, listed on the Main Board of the Hong Kong Stock Exchange, with principal places of business in Hong Kong and Xinjiang, China[27](index=27&type=chunk) - The Board of Directors includes executive, non-executive, and independent non-executive directors, with Ms. Xiang Siying serving as Chairperson[2](index=2&type=chunk) - The independent auditor is BDO Limited, Hong Kong, and the company's stock code is 1303, with its website at www.huili.hk[2](index=2&type=chunk)[3](index=3&type=chunk) [Mine Information](index=4&type=section&id=Mine%20Information) This section provides mineral resources and ore reserves data for the company's key mining projects as of June 30, 2019, along with details on exploration and mining permits 2019 Mineral Resources Overview as of June 30 | Project Name | Category | Quantity (thousand tons) | Copper Metal (tons) | Copper Grade (%) | Lead Metal (tons) | Lead Grade (%) | Zinc Metal (tons) | Zinc Grade (%) | Gold Metal (tons) | Gold Grade (grams/ton) | | :----------- | :------- | :----------------------- | :------------------ | :--------------- | :---------------- | :--------------- | :---------------- | :--------------- | :---------------- | :--------------------- | | Project 20 | Measured | 1,330 | 9,430 | 0.71 | 3,150 | 0.24 | - | - | - | - | | | Inferred | 1,260 | 8,660 | 0.69 | 3,160 | 0.25 | - | - | - | - | | H-989 Project| Measured | 3,390 | 16,540 | 0.49 | 7,750 | 0.23 | - | - | - | - | | | Inferred | 2,370 | 12,100 | 0.51 | 4,390 | 0.19 | - | - | - | - | | Ziganhu Project| Measured | 1,730 | - | - | 71,440 | 4.13 | 113,540 | 6.57 | - | - | | | Inferred | 2,150 | - | - | 85,140 | 3.96 | 137,910 | 6.42 | - | - | | Huangjinmei Project| Measured | 430 | - | - | - | - | - | - | 1.5 | 3.61 | | | Inferred | 716 | - | - | - | - | - | - | 2.7 | 3.63 | 2019 Ore Reserves Overview as of June 30 | Project Name | Reserve Category | Ore Quantity (thousand tons) | Copper Metal (tons) | Copper Grade (%) | Lead Metal (tons) | Lead Grade (%) | Zinc Metal (tons) | Zinc Grade (%) | | :----------- | :--------------- | :--------------------------- | :------------------ | :--------------- | :---------------- | :--------------- | :---------------- | :--------------- | | Project 20 | Probable | 1,099 | 7,071 | 0.64 | 2,362 | 0.21 | - | - | | Ziganhu Project| Probable | 1,055 | - | - | 39,352 | 3.73 | 62,773 | 5.95 | - Exploration permits include the Ziganhu Gold Mine Project, H-989 Project, and Huangshan Project, with some permits expired in 2018 and currently under renewal; mining permits include Project 20, Baiganhu Project, and Huangjinmei Project, with Project 20's permit expiring in October 2019 and a renewal application submitted[8](index=8&type=chunk)[10](index=10&type=chunk) - For the six months ended June 30, 2019 and 2018, the Group incurred no capital expenditures on ore production, development, or mining activities, nor did it deduct exploration expenses[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk) Financial Statements [Interim Condensed Consolidated Statement of Comprehensive Income](index=7&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This section presents the consolidated comprehensive income for the six months ended June 30, 2019, showing a turnaround from loss to profit, primarily due to a significant increase in other income Key Data from Interim Condensed Consolidated Statement of Comprehensive Income (Six Months Ended June 30) | Indicator | 2019 (RMB thousands) | 2018 (RMB thousands) | YoY Change (%) | | :-------- | :------------------- | :------------------- | :------------- | | Revenue | 11,801 | 14,610 | -19.23 | | Cost of sales | (8,255) | (10,333) | -20.11 | | Gross profit | 3,546 | 4,277 | -17.10 | | Administrative expenses | (11,703) | (10,752) | 8.84 | | Other income - net | 20,599 | 1,762 | 1069.18 | | Operating profit/(loss) | 12,442 | (4,816) | 358.38 | | Finance income - net | 843 | 431 | 95.59 | | Profit/(loss) before income tax expense | 13,285 | (4,385) | 403.08 | | Income tax expense | (734) | (718) | 2.23 | | Profit/(loss) and total comprehensive income for the period | 12,551 | (5,103) | 346.00 | | Profit/(loss) attributable to owners of the Company | 11,421 | (4,904) | 332.90 | | Basic and diluted earnings/(loss) per share (RMB cents) | 0.71 | (0.30) | 336.67 | - Revenue for the period decreased by **19.23% year-on-year to RMB 11.8 million**, primarily due to a reduction in selling and marketing costs[14](index=14&type=chunk) - The company successfully turned a loss into a profit, with **profit and total comprehensive income for the period at RMB 12.55 million**, compared to a loss of RMB 5.10 million in the prior period, mainly driven by a significant increase in net other income[14](index=14&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=8&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section presents the consolidated statement of financial position as of June 30, 2019, reflecting minor changes in asset structure and a significant reduction in liabilities Key Data from Interim Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2019 (RMB thousands) | December 31, 2018 (RMB thousands) | Change (%) | | :-------- | :---------------------------- | :-------------------------------- | :--------- | | **Assets** | | | | | Total non-current assets | 171,875 | 171,127 | 0.44 | | Total current assets | 337,907 | 351,837 | -3.96 | | Total assets | 509,782 | 522,964 | -2.52 | | **Liabilities** | | | | | Total non-current liabilities | 25,057 | 23,299 | 7.55 | | Total current liabilities | 31,510 | 58,924 | -46.53 | | Total liabilities | 56,567 | 82,223 | -31.19 | | **Equity** | | | | | Total equity | 453,215 | 440,741 | 2.83 | - Total assets slightly decreased by **2.52% to RMB 509.78 million**, primarily due to a reduction in current assets[15](index=15&type=chunk) - Total current liabilities significantly decreased by **46.53% to RMB 31.51 million**, leading to a **31.19% reduction in total liabilities to RMB 56.57 million**[19](index=19&type=chunk) - Total equity increased by **2.83% to RMB 453.22 million**, reflecting the accumulation of profit during the period[19](index=19&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=10&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section presents the consolidated statement of changes in equity for the six months ended June 30, 2019, primarily reflecting the contribution of profit to equity and the initial application impact of HKFRS 16 Changes in Equity Attributable to Owners of the Company (Six Months Ended June 30) | Indicator | January 1, 2019 (Restated) (RMB thousands) | Profit for the Period (RMB thousands) | June 30, 2019 (RMB thousands) | | :-------- | :----------------------------------------- | :-------------------- | :---------------------------- | | Share capital | 137,361 | - | 137,361 | | Share premium | 668,768 | - | 668,768 | | Other reserves | 221 | - | 221 | | Accumulated losses | (349,933) | 11,421 | (338,512) | | Total equity attributable to owners of the Company | 444,028 | 11,421 | 455,449 | | Non-controlling interests | (3,364) | 1,130 | (2,234) | | Total equity | 440,664 | 12,551 | 453,215 | - As of June 30, 2019, equity attributable to owners of the Company increased from approximately **RMB 444.03 million** at the beginning of the year to approximately **RMB 455.45 million**, primarily due to a **profit of RMB 11.42 million** recorded during the period[23](index=23&type=chunk) - The initial application of HKFRS 16 resulted in an adjustment of **RMB 77 thousand** to accumulated losses at the beginning of the period, with a corresponding reduction in total equity[23](index=23&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=11&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section presents the consolidated statement of cash flows for the six months ended June 30, 2019, showing a significant improvement in operating cash flow and a substantial increase in cash and cash equivalents at period-end Key Data from Interim Condensed Consolidated Statement of Cash Flows (Six Months Ended June 30) | Indicator | 2019 (RMB thousands) | 2018 (RMB thousands) | YoY Change (%) | | :-------- | :------------------- | :------------------- | :------------- | | Net cash from/(used in) operating activities | 24,982 | (1,413) | 1867.52 | | Net cash from investing activities | 2,141 | 83,447 | -97.43 | | Net cash used in financing activities | (3,307) | - | Not Applicable | | Net increase in cash and cash equivalents | 23,816 | 82,034 | -70.97 | | Cash and cash equivalents at beginning of period | 167,923 | 54,410 | 208.62 | | Cash and cash equivalents at end of period | 191,392 | 137,209 | 39.49 | - Net cash from operating activities turned from a **net outflow of RMB 1.41 million** in the prior period to a **net inflow of RMB 24.98 million**, indicating a significant improvement in operating performance[26](index=26&type=chunk) - Net cash from investing activities significantly decreased by **97.43% to RMB 2.14 million**, primarily due to substantial cash inflows from investing activities in the prior period[26](index=26&type=chunk) - Cash and cash equivalents at the end of the period increased by **39.49% to RMB 191.39 million**[26](index=26&type=chunk) Notes to the Interim Condensed Consolidated Financial Information [General Information and Basis of Preparation](index=12&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) This section provides the company's basic information, the basis for preparing the interim condensed consolidated financial statements, and their relationship to the annual financial statements - Huili Resources (Group) Limited is incorporated in the Cayman Islands, primarily engaged in mining, mineral processing, sales of gold, silver, copper, lead, and zinc products, financial services, engineering and other related services, and coal trading in China[27](index=27&type=chunk) - The interim condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, and should be read in conjunction with the 2018 annual consolidated financial statements[28](index=28&type=chunk) [Changes in Accounting Policies](index=13&type=section&id=Changes%20in%20Accounting%20Policies) This section details the Group's first-time adoption of new and revised Hong Kong Financial Reporting Standards, particularly the impact of HKFRS 16 "Leases" on the financial statements - The Group first adopted new and revised standards, including HKFRS 16 "Leases," and other standards had no significant financial impact on the interim condensed consolidated financial statements apart from HKFRS 16[32](index=32&type=chunk)[33](index=33&type=chunk) [Impact of Adopting HKFRS 16](index=14&type=section&id=Impact%20of%20Adopting%20HKFRS%2016) The adoption of HKFRS 16 significantly changed lease accounting, leading to the recognition of right-of-use assets and lease liabilities on the statement of financial position - HKFRS 16 requires lessees to recognize most leases on the statement of financial position as right-of-use assets and lease liabilities[35](index=35&type=chunk) - The Group applied HKFRS 16 using the cumulative effect method and recognized an adjustment to accumulated losses at the date of initial application[35](index=35&type=chunk) Impact of Adopting HKFRS 16 on the Statement of Financial Position as of January 1, 2019 | Indicator | Increase/(Decrease) (RMB thousands) | | :-------- | :-------------------------------- | | Right-of-use assets | 13,167 | | Land use rights | (8,613) | | Increase in total assets | 4,554 | | Lease liabilities | 4,631 | | Increase in total liabilities | 4,631 | | Accumulated losses | (77) | | Decrease in total equity | (77) | [New Definition and Accounting for Leases](index=17&type=section&id=New%20Definition%20and%20Accounting%20for%20Leases) This section explains the new definition of a lease under HKFRS 16 and the accounting treatment for right-of-use assets and lease liabilities as a lessee - Under HKFRS 16, a lease is defined as a contract or part of a contract that conveys the right to use an asset for a period of time in exchange for consideration[43](index=43&type=chunk) - The Group has elected not to separate non-lease components, accounting for all lease components and associated non-lease components as a single lease component[43](index=43&type=chunk) - All leases are capitalized on the statement of financial position as right-of-use assets and lease liabilities, except for low-value assets and short-term leases, which the Group has elected not to capitalize[44](index=44&type=chunk) - Right-of-use assets are recognized at cost, including the initial measurement of lease liabilities, lease payments, initial direct costs, and estimated dismantling and removal costs; lease liabilities are recognized at the present value of lease payments[47](index=47&type=chunk)[48](index=48&type=chunk) [Transition Arrangements](index=19&type=section&id=Transition%20Arrangements) This section describes the transition methods and practical expedients adopted by the Group upon initial application of HKFRS 16 - The Group applied HKFRS 16 using the cumulative effect method, with the cumulative effect recognized as an adjustment to accumulated losses at the date of initial application (January 1, 2019)[50](index=50&type=chunk) - The Group has elected to apply the exemption for leases with a term ending within 12 months from the date of initial application and has removed initial direct costs when measuring right-of-use assets[51](index=51&type=chunk) [Estimates and Financial Risk Management](index=20&type=section&id=Estimates%20and%20Financial%20Risk%20Management) This section describes the significant judgments and estimates made by management in preparing the financial statements, as well as the financial risks faced by the Group and its management strategies - The significant judgments and estimates made by management in preparing the interim condensed consolidated financial statements are the same as those applied in the 2018 annual financial statements[52](index=52&type=chunk) - The Group's business is exposed to market risk (including foreign exchange risk and interest rate risk), credit risk, and liquidity risk, but has not historically used derivative instruments for hedging or trading purposes[53](index=53&type=chunk) - There have been no changes in risk management policies since December 31, 2018; fair value estimates are categorized into three levels, and the Group had no financial assets or liabilities measured at fair value (other than financial assets at fair value through other comprehensive income) as of June 30, 2019, and December 31, 2018[54](index=54&type=chunk)[58](index=58&type=chunk) [Segment Information](index=21&type=section&id=Segment%20Information) This section provides operating segment information for the Group, categorized by business type and geography, including revenue, profit, assets, and liabilities for mining, financial services, engineering services, and trading businesses - The Group has four reportable segments: mining, financial services, engineering services, and trading business (newly added in 2019)[59](index=59&type=chunk)[60](index=60&type=chunk) [Reportable Segment Results](index=23&type=section&id=Reportable%20Segment%20Results) This section presents the performance of each reportable segment in terms of revenue, operating profit, finance income/costs, income tax expense, assets, and liabilities Reportable Segment Revenue (Six Months Ended June 30) | Segment | 2019 (RMB thousands) | 2018 (RMB thousands) | | :------ | :------------------- | :------------------- | | Financial services | 3,500 | 3,345 | | Engineering services | - | 11,265 | | Trading business | 8,301 | - | | Total | 11,801 | 14,610 | Reportable Segment Operating Profit/(Loss) (Six Months Ended June 30) | Segment | 2019 (RMB thousands) | 2018 (RMB thousands) | | :------ | :------------------- | :------------------- | | Mining | 21,154 | (3,901) | | Financial services | 2,997 | 1,732 | | Engineering services | (4,036) | (3,954) | | Trading business | 151 | - | | Unallocated | (7,668) | 1,307 | | Total | 12,442 | (4,816) | - In the first half of 2019, trading business contributed **RMB 8.3 million** in revenue, financial services revenue grew steadily to **RMB 3.5 million**, while engineering services revenue was zero (compared to RMB 11.27 million in the prior period)[63](index=63&type=chunk) - The mining segment achieved an operating profit of **RMB 21.15 million**, a significant improvement from a loss of **RMB 3.90 million** in the prior period[63](index=63&type=chunk) [Revenue Disaggregation and Geographical Information](index=25&type=section&id=Revenue%20Disaggregation%20and%20Geographical%20Information) This section disaggregates revenue by major geographical markets, principal product and service lines, and timing of revenue recognition, and provides geographical information based on customer location - All of the Group's revenue is derived from mainland China[69](index=69&type=chunk)[77](index=77&type=chunk)[82](index=82&type=chunk) - In the first half of 2019, revenue from major products and services came from financial services (**RMB 3.5 million**) and coal trading (**RMB 8.3 million**)[69](index=69&type=chunk) - As of June 30, 2019, specific non-current assets in mainland China amounted to **RMB 161.77 million**, and in Hong Kong to **RMB 4.63 million**[82](index=82&type=chunk) [Other Income and Finance Income](index=27&type=section&id=Other%20Income%20and%20Finance%20Income) This section details the composition and changes in the Group's net other income and net finance income Other Income — Net (Six Months Ended June 30) | Item | 2019 (RMB thousands) | 2018 (RMB thousands) | | :--- | :------------------- | :------------------- | | Exchange gain | - | 1,585 | | Expected credit loss on trade receivables | (2,490) | - | | Expected credit loss on loans and other receivables | (1,553) | - | | Reversal of impairment loss on other receivables | 24,640 | - | | Others | 2 | 177 | | Total | 20,599 | 1,762 | - Net other income significantly increased to **RMB 20.60 million** in the first half of 2019 (2018: RMB 1.76 million), primarily due to a **reversal of impairment loss on other receivables of RMB 24.64 million**[83](index=83&type=chunk) Finance Income — Net (Six Months Ended June 30) | Item | 2019 (RMB thousands) | 2018 (RMB thousands) | | :--- | :------------------- | :------------------- | | Interest income from bank deposits | 1,071 | 595 | | Interest expense | (228) | (164) | | Finance income — net | 843 | 431 | - Net finance income increased by **95.59% to RMB 0.84 million** (2018: RMB 0.43 million), mainly from interest income on bank deposits[86](index=86&type=chunk) [Income Tax Expense and Earnings Per Share](index=29&type=section&id=Income%20Tax%20Expense%20and%20Earnings%20Per%20Share) This section presents the composition of the Group's income tax expense, applicable tax rates, and the calculation of basic and diluted earnings per share Income Tax Expense (Six Months Ended June 30) | Item | 2019 (RMB thousands) | 2018 (RMB thousands) | | :--- | :------------------- | :------------------- | | Current income tax | 761 | 745 | | Deferred income tax | (27) | (27) | | Income tax expense | 734 | 718 | - Income tax expense remained relatively stable compared to the prior period, at approximately **RMB 0.73 million**, primarily from taxes paid by PRC subsidiaries at a **25% corporate income tax rate**[91](index=91&type=chunk)[92](index=92&type=chunk) Earnings/(Loss) Per Share (Six Months Ended June 30) | Indicator | 2019 (Unaudited) | 2018 (Unaudited) | | :-------- | :--------------- | :--------------- | | Profit/(loss) attributable to owners of the Company (RMB thousands) | 11,421 | (4,904) | | Adjusted weighted average number of ordinary shares in issue (thousands) | 1,620,000 | 1,620,000 | | Basic and diluted earnings/(loss) per share (RMB cents) | 0.71 | (0.30) | - Basic and diluted earnings per share were **RMB 0.71 cents**, compared to a loss per share of **RMB 0.30 cents** in the prior period, reflecting a significant improvement in the company's profitability[97](index=97&type=chunk) [Dividends and Property, Plant and Equipment](index=31&type=section&id=Dividends%20and%20Property,%20Plant%20and%20Equipment) This section states that the Board does not recommend an interim dividend and reports on changes in property, plant and equipment - The directors do not recommend the payment of an interim dividend for the six months ended June 30, 2019 and 2018[98](index=98&type=chunk) - There were no additions to property, plant and equipment during the period, but approximately **RMB 1.299 million** of property, plant and equipment were disposed of[99](index=99&type=chunk) [Receivables and Prepayments](index=32&type=section&id=Receivables%20and%20Prepayments) This section provides a detailed analysis of the Group's trade receivables, loans receivable, other receivables, and prepayments, including their composition, aging, and impairment provisions [Trade Receivables](index=32&type=section&id=Trade%20Receivables) This section presents the aging analysis and expected credit loss provision for trade receivables Trade Receivables (RMB thousands) | Indicator | June 30, 2019 | December 31, 2018 | | :-------- | :------------ | :---------------- | | Third parties | - | 11,516 | | Less: Expected credit loss | - | (158) | | Total | - | 11,358 | - As of June 30, 2019, trade receivables were **zero**, compared to **RMB 11.36 million** as of December 31, 2018, indicating that trade receivables have been fully collected or settled[101](index=101&type=chunk) [Loans Receivable](index=33&type=section&id=Loans%20Receivable) This section describes the loans provided by the Group to third parties and their expected credit loss provisions Loans Receivable (RMB thousands) | Indicator | June 30, 2019 | December 31, 2018 | | :-------- | :------------ | :---------------- | | Loan to a third party | 100,000 | 100,000 | | Less: Expected credit loss on loans receivable | (1,169) | (1,144) | | Total | 98,831 | 98,856 | - The Group provided a **RMB 100 million** loan to Shenzhen Danfeng Bailu Hotel Apartment Co., Ltd. at an annual interest rate of **7%**, extended to September 11, 2019[102](index=102&type=chunk) [Other Receivables and Prepayments](index=34&type=section&id=Other%20Receivables%20and%20Prepayments) This section details the composition of other receivables and prepayments, including amounts due from Zhonghai Wobang, Merit Progress, Shaanxi Jiatai, Mr. Wei Xing, and Shaanxi Garner, along with related impairment provisions Other Receivables and Prepayments (RMB thousands) | Item | June 30, 2019 | December 31, 2018 | | :--- | :------------ | :---------------- | | Subtotal of other receivables | 67,181 | 159,200 | | Less: Impairment provision | (92,019) | (92,019) | | Advances to suppliers | 1,200 | 1,200 | | Total | 44,665 | 68,381 | - As of June 30, 2019, total other receivables and prepayments amounted to **RMB 44.67 million**, a decrease from **RMB 68.38 million** as of December 31, 2018[103](index=103&type=chunk) - Impairment provisions primarily target amounts due from Shaanxi Jiatai (**RMB 32.48 million**) and Mr. Wei Xing (**RMB 28.48 million**), both fully provided due to disputes with counterparties[116](index=116&type=chunk) - Amounts due from Merit Progress Investments Limited have been partially recovered, with the remaining **RMB 21.96 million** expected to be settled by the end of December 2019, secured by share pledges and personal guarantees[109](index=109&type=chunk) [Payables and Borrowings](index=37&type=section&id=Payables%20and%20Borrowings) This section analyzes the Group's trade payables, other payables and accruals, and the composition and changes in borrowings [Trade Payables](index=37&type=section&id=Trade%20Payables) This section presents the aging analysis of trade payables Trade Payables (RMB thousands) | Indicator | June 30, 2019 | December 31, 2018 | | :-------- | :------------ | :---------------- | | Third parties | 3,318 | 7,610 | - As of June 30, 2019, trade payables amounted to **RMB 3.32 million**, a decrease from **RMB 7.61 million** as of December 31, 2018[118](index=118&type=chunk) [Other Payables and Accruals](index=38&type=section&id=Other%20Payables%20and%20Accruals) This section details the composition of other payables and accruals, including salaries and welfare payable, accrued taxes, and others Other Payables and Accruals (RMB thousands) | Item | June 30, 2019 | December 31, 2018 | | :--- | :------------ | :---------------- | | Other payables | 5,958 | 30,196 | | Salaries and welfare payable | 5,286 | 5,805 | | Accrued taxes (excluding income tax) | 7,560 | 7,889 | | Total | 18,804 | 43,890 | - As of June 30, 2019, total other payables and accruals amounted to **RMB 18.80 million**, a significant decrease from **RMB 43.89 million** as of December 31, 2018[119](index=119&type=chunk) - The decrease in other payables was primarily due to a significant reduction in amounts payable to Mr. Wei Xing and Beijing Jiatai[119](index=119&type=chunk) [Borrowings](index=39&type=section&id=Borrowings) This section describes the Group's borrowing situation Borrowings (RMB thousands) | Item | June 30, 2019 | December 31, 2018 | | :--- | :------------ | :---------------- | | Loans from Dongzheng and other village committees | - | 2,200 | - As of June 30, 2019, the Group had no outstanding borrowings, compared to **RMB 2.2 million** in unsecured loans from Dongzheng and other village committees as of December 31, 2018[123](index=123&type=chunk) [Share Capital and Business Combination](index=39&type=section&id=Share%20Capital%20and%20Business%20Combination) This section presents the company's share capital structure and provides information on the 2018 business combination Share Capital and Share Premium (RMB thousands) | Indicator | Number of Shares (thousands) | Share Capital | Share Premium | Total | | :-------- | :--------------------------- | :------------ | :------------ | :------ | | As of June 30, 2019 | 1,620,000 | 137,361 | 668,768 | 806,129 | - As of June 30, 2019, the number of issued shares was **1,620,000 thousand**, with total share capital and share premium amounting to **RMB 806.13 million**[124](index=124&type=chunk) - On May 22, 2018, Shaanxi Jiahe became an indirectly 95%-owned subsidiary of the Company, with a total acquisition consideration of **RMB 13.16 million** and goodwill recognized at **RMB 1.12 million**[125](index=125&type=chunk)[126](index=126&type=chunk) [Related Party Transactions and Commitments](index=41&type=section&id=Related%20Party%20Transactions%20and%20Commitments) This section discloses the Group's related party transactions, as well as capital commitments and irrevocable operating lease commitments as of the end of the reporting period [Related Party Transactions](index=41&type=section&id=Related%20Party%20Transactions) This section lists the compensation of key management personnel Key Management Personnel Compensation (Six Months Ended June 30) | Item | 2019 (RMB thousands) | 2018 (RMB thousands) | | :--- | :------------------- | :------------------- | | Basic salaries, allowances and other benefits | 1,223 | 2,226 | | Contributions to retirement benefit schemes | 18 | 8 | | Total | 1,241 | 2,234 | - Total key management personnel compensation for the first half of 2019 was approximately **RMB 1.24 million**, a decrease from **RMB 2.23 million** in the prior period[129](index=129&type=chunk) [Commitments](index=42&type=section&id=Commitments) This section describes the Group's capital commitments and irrevocable operating lease commitments - As of June 30, 2019, and December 31, 2018, the Group had no contracted capital expenditures[130](index=130&type=chunk) - Due to the application of HKFRS 16, future lease payments have been recognized as lease liabilities since January 1, 2019, and are no longer presented as operating lease commitments[131](index=131&type=chunk) Irrevocable Operating Lease Minimum Rent Receivable (RMB thousands) | Period | June 30, 2019 | December 31, 2018 | | :----- | :------------ | :---------------- | | Within one year | 1,267 | 1,267 | | After one year but not more than five years | 3,000 | 3,600 | | Total | 4,267 | 4,867 | [Comparative Figures](index=43&type=section&id=Comparative%20Figures) This section states that certain comparative figures have been reclassified to conform to the current period's presentation - Certain comparative figures have been reclassified to conform to the current period's presentation; accumulated losses and non-controlling interests as of January 1, 2018, have also been restated to conform to the audited results for the year ended December 31, 2018[135](index=135&type=chunk) Management Discussion and Analysis [Business Review](index=44&type=section&id=Business%20Review) This section reviews the Group's various businesses, including mining, financial services, engineering services, and the newly launched coal trading business, and provides an update on Shaanxi Jiahe - The Group is primarily involved in the mining and beneficiation of non-ferrous minerals, including copper, silver, zinc, and lead in Xinjiang, and gold in Shaanxi Province[136](index=136&type=chunk) - Due to volatile commodity prices not yet stabilizing at profitable highs, the Group continued to suspend mining activities and planned maintenance work during the period to extend mine service life and reduce operating losses[137](index=137&type=chunk) [Mining Business](index=45&type=section&id=Mining%20Business) This section details the Group's mining permits, exploration permits, and the operational status of its beneficiation plants - Project 20 mine requires an upgrade of its hoisting system to comply with new safety production regulations, while the Baiganhu mine's feasibility for production is being assessed; the Huangjinmei Project will engage a mining construction company or seek potential partners for development when appropriate[138](index=138&type=chunk) - Hami Jiahe holds three exploration permits for the Baiganhu Gold Mine, Huangshan, and H-989 projects, and has conducted preliminary exploration on the Baiganhu Gold Mine; the Group will invest reasonable resources for further exploration[139](index=139&type=chunk) - The beneficiation plants of Hami Jiahe and Hami Jinhua both have a processing capacity of **1,500 tons per day**, but no mining or beneficiation activities were conducted during the period[140](index=140&type=chunk) [Financial Services](index=45&type=section&id=Financial%20Services) This section introduces the Group's financial services business and its revenue contribution - Financial services are conducted by Jia Yi, a wholly-owned subsidiary, providing a **RMB 100 million** loan to an independent third party at an annual interest rate of **7%**, generating approximately **RMB 3.5 million** in revenue during the period (2018: RMB 3.3 million)[141](index=141&type=chunk) [Engineering Services](index=46&type=section&id=Engineering%20Services) This section describes the scope of the Group's engineering services business - Engineering services are carried out by Changshi, a wholly-owned subsidiary in Shanxi Province, China, primarily engaged in oil, natural gas, coalbed methane engineering services, pre-drilling engineering services, and trading of oil and gas exploration materials[142](index=142&type=chunk) [Trading Business](index=46&type=section&id=Trading%20Business) This section introduces the Group's newly launched coal trading business and its initial results - The coal trading business, launched through the newly established wholly-owned subsidiary Changzhi Runce, contributed **RMB 8.3 million** in revenue during the period[143](index=143&type=chunk) - After the reporting period, purchase orders for approximately **78,100 tons of coal** were received, with a contract value of approximately **RMB 32.8 million**[143](index=143&type=chunk) [Shaanxi Jiahe Update](index=46&type=section&id=Shaanxi%20Jiahe%20Update) This section provides an update on Shaanxi Jiahe after the equity transfer back, including asset protection measures and potential disposal matters - All equity interest in Shaanxi Jiahe was transferred back to Hami Jiahe on May 22, 2018, making it an indirectly 95%-owned subsidiary of the Company[144](index=144&type=chunk) - The Company is actively taking measures to protect Shaanxi Jiahe's assets, including resolving exploration right transfer issues, developing the Huangjinmei Project, and considering potential disposal offers[147](index=147&type=chunk) - The Company is in preliminary discussions with potential buyers regarding a possible disposal of Shaanxi Jiahe, but no binding terms or agreements have been entered into, and shareholders and potential investors are advised to exercise caution[146](index=146&type=chunk) [Results Review](index=48&type=section&id=Results%20Review) This section provides a detailed analysis of the Group's revenue, gross profit, selling and marketing costs, administrative expenses, other income, finance income, and income tax expense, along with their reasons for change [Revenue and Gross Profit Analysis](index=48&type=section&id=Revenue%20and%20Gross%20Profit%20Analysis) This section analyzes the revenue and gross profit contributions from each of the Group's business segments Revenue and Gross Profit (Six Months Ended June 30) | Segment | 2019 Revenue (RMB millions) | 2019 Cost of Sales (RMB millions) | 2019 Gross Margin | 2018 Revenue (RMB millions) | 2018 Cost of Sales (RMB millions) | 2018 Gross Margin | | :------ | :-------------------------- | :-------------------------------- | :---------------- | :-------------------------- | :-------------------------------- | :---------------- | | Coal trading | 8.3 | 8.3 | 0% | - | - | Not Applicable | | Financial services interest income | 3.5 | - | 100% | 3.3 | - | 100% | | Trading of oil and gas exploration materials | - | - | Not Applicable | 11.3 | 9.0 | 20% | | Mining | - | - | Not Applicable | - | 1.3 | Not Applicable | | Total | 11.8 | 8.3 | | 14.6 | 10.3 | | - Revenue for the period was approximately **RMB 11.8 million**, a year-on-year decrease of approximately **19%**, mainly due to the cessation of the oil and gas exploration materials trading business, but the new coal trading business contributed **RMB 8.3 million** in revenue[148](index=148&type=chunk)[150](index=150&type=chunk) - The gross margin for financial services interest income remained at **100%**, while the gross margin for coal trading business was **0%**[150](index=150&type=chunk) - The Group continued to suspend production plans for Project 20, Baiganhu, and Huangjinmei projects, awaiting commodity price stabilization[152](index=152&type=chunk) [Expenses and Other Income Analysis](index=49&type=section&id=Expenses%20and%20Other%20Income%20Analysis) This section analyzes the changes in selling and marketing costs, administrative expenses, net other income, and net finance income - There were no selling and marketing costs during the period; administrative expenses were approximately **RMB 11.7 million** (2018: RMB 10.8 million), mainly comprising depreciation, professional fees, staff costs, and office expenses[153](index=153&type=chunk) - Net other income was approximately **RMB 20.6 million**, primarily due to the reversal of impairment losses on other receivables from prior years[154](index=154&type=chunk) - Net finance income was approximately **RMB 0.8 million** (2018: RMB 0.4 million), mainly representing interest income (net of interest expenses)[155](index=155&type=chunk) [Income Tax Expense](index=49&type=section&id=Income%20Tax%20Expense) This section describes the composition of income tax expense - Income tax expense was approximately **RMB 0.7 million**, remaining relatively unchanged compared to the prior period, mainly comprising tax provisions for PRC operations and deferred tax, with no Hong Kong profits tax provision made during the period[156](index=156&type=chunk) [Investments and Liquidity](index=49&type=section&id=Investments%20and%20Liquidity) This section outlines the Group's significant investments, acquisition and disposal activities, liquidity position, gearing ratio, and pledged assets [Significant Investments and Acquisitions/Disposals](index=49&type=section&id=Significant%20Investments%20and%20Acquisitions/Disposals) This section describes the Group's significant investment and acquisition/disposal activities during the reporting period - As of June 30, 2019, and December 31, 2018, the Group held no significant investments, and there were no significant acquisitions or disposals during the period[157](index=157&type=chunk)[158](index=158&type=chunk) [Liquidity and Financial Position](index=50&type=section&id=Liquidity%20and%20Financial%20Position) This section analyzes the Group's current assets, current liabilities, current ratio, and cash balance - Current assets for the period were approximately **RMB 337.9 million** (December 31, 2018: RMB 351.8 million), and current liabilities were approximately **RMB 31.5 million** (December 31, 2018: RMB 58.9 million)[159](index=159&type=chunk) - The current ratio improved from **6.0** as of December 31, 2018, to **10.7** as of June 30, 2019, indicating a significant improvement in liquidity[159](index=159&type=chunk) - As of June 30, 2019, the Group had no outstanding interest-bearing bank loans or other borrowings[159](index=159&type=chunk) - Bank and cash balances were approximately **RMB 191.4 million** (December 31, 2018: RMB 167.9 million)[159](index=159&type=chunk) [Gearing Ratio and Pledged Assets](index=50&type=section&id=Gearing%20Ratio%20and%20Pledged%20Assets) This section describes the Group's gearing ratio and pledged assets - As of June 30, 2019, the gearing ratio was **0%** (December 31, 2018: 0%), indicating no net debt for the company[161](index=161&type=chunk) - As of June 30, 2019, and December 31, 2018, the Company had no pledged assets[164](index=164&type=chunk) [Dividends and Human Resources](index=51&type=section&id=Dividends%20and%20Human%20Resources) This section states that the Board does not recommend an interim dividend and provides information on the Group's human resources and share option scheme - The directors do not recommend the payment of any interim dividend for the period[166](index=166&type=chunk) - As of June 30, 2019, the Group employed **30 employees** (December 31, 2018: 39 employees), with total staff costs of approximately **RMB 4.1 million** (prior period: RMB 4.8 million)[167](index=167&type=chunk) - No share options were issued or outstanding during the period and as of June 30, 2019, and December 31, 2018[167](index=167&type=chunk) [Future Outlook and Prospects](index=52&type=section&id=Future%20Outlook%20and%20Prospects) This section outlines the Group's future development strategies in the current economic environment, including mine restart, diversification of existing businesses, and new business expansion - The Group will continue to study the feasibility of restarting mine production and closely monitor commodity markets to capture future economic growth in China[169](index=169&type=chunk) - The Group will continue to invest resources in its existing business segments (financial services and engineering services) and actively expand its coal trading business to broaden revenue streams and mitigate the impact of unfavorable commodity market conditions[169](index=169&type=chunk) - The Company will explore potential acquisition opportunities to capture business opportunities in the Chinese market and diversify the Group's business and broaden its revenue base[170](index=170&type=chunk) [Significant Events After Reporting Period](index=52&type=section&id=Significant%20Events%20After%20Reporting%20Period) This section states that there were no significant events affecting the Group after the reporting period - As of the date of this report, there were no significant events affecting the Group after the period[171](index=171&type=chunk) [Shareholder Interests and Securities Transactions](index=53&type=section&id=Shareholder%20Interests%20and%20Securities%20Transactions) This section discloses the interests of directors and chief executive, major shareholders in the company's shares, as well as the company's securities transactions and disclosures related to listing rules [Directors' and Chief Executive's Interests](index=53&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests) This section describes the interests of directors and the chief executive in the company's shares and related shares - As of June 30, 2019, no director or chief executive of the Company had any interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations that were required to be disclosed[173](index=173&type=chunk) [Major Shareholders' Interests](index=53&type=section&id=Major%20Shareholders'%20Interests) This section lists major shareholders holding 5% or more of the company's share capital as of June 30, 2019 Major Shareholders' Interests (as of June 30, 2019) | Name | Nature of Interest | Total Interest in Shares (L) | Approximate Percentage of Share Capital | | :--- | :----------------- | :--------------------------- | :-------------------------------------- | | Tianyuan International Limited | Beneficial owner | 412,592,702 | 25.47% | | Mr. Guo Jianzhong | Controlled corporation interest and beneficial owner | 454,958,702 | 28.08% | | Affinitiv Mobile Ventures Ltd. | Beneficial owner | 320,000,000 | 19.75% | | China Huarong Asset Management Co., Ltd. | Controlled corporation interest | 320,000,000 | 19.75% | | Legend Vantage Limited | Beneficial owner | 188,638,883 | 11.64% | - Mr. Guo Jianzhong is the largest shareholder, holding **28.08%** of the equity, including his personal holdings and shares held through Tianyuan International Limited[174](index=174&type=chunk)[176](index=176&type=chunk) - China Huarong Asset Management Co., Ltd. and its associates hold **19.75%** of the equity through Affinitiv Mobile Ventures Ltd[174](index=174&type=chunk)[177](index=177&type=chunk) [Purchase, Redemption or Sale of Securities](index=55&type=section&id=Purchase,%20Redemption%20or%20Sale%20of%20Securities) This section states that the Company and its subsidiaries did not engage in any purchase, redemption, or sale of securities during the reporting period - Neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities during the period[180](index=180&type=chunk) [Listing Rules Disclosure](index=56&type=section&id=Listing%20Rules%20Disclosure) This section discloses ongoing disclosure information regarding the Group's loan to Shenzhen Danfeng Bailu Hotel Apartment Co., Ltd. under Listing Rule 13.20 - The Group's **RMB 100 million** loan to Danfeng has been extended to September 11, 2019, with outstanding and accrued loan balances and interest of **RMB 100 million** and **RMB 2.2 million**, respectively[181](index=181&type=chunk) - The total loan amount exceeds **8%** of the asset ratio as defined in Listing Rule 14.07(1), thus triggering ongoing disclosure obligations[181](index=181&type=chunk) [Corporate Governance](index=56&type=section&id=Corporate%20Governance) This section describes the Company's corporate governance practices, including compliance with the Corporate Governance Code, the Model Code for Securities Transactions by Directors, and the Audit Committee's review [Compliance with Corporate Governance Code](index=56&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) This section describes the Company's compliance with the Corporate Governance Code and notes a deviation from Code Provision A.4.1 - The Company is committed to maintaining high standards of corporate governance and has taken appropriate steps to comply with the provisions of the Corporate Governance Code set out in Appendix 14 of the Listing Rules[182](index=182&type=chunk) - Except for Mr. Chen Bingquan and Mr. Cao Ye who have three-year terms, all other non-executive directors are appointed without a specific term but are subject to retirement by rotation in accordance with the Company's articles of association, which deviates from Code Provision A.4.1[182](index=182&type=chunk) [Model Code for Securities Transactions by Directors](index=57&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) This section describes the directors' compliance with the Model Code for Securities Transactions - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 of the Listing Rules, and after inquiry, all directors have complied with the said code throughout the period[184](index=184&type=chunk) [Audit Committee Review](index=57&type=section&id=Audit%20Committee%20Review) This section describes the Audit Committee's review of the interim results - The Audit Committee, comprising three independent non-executive directors, has reviewed the interim results for the period, aiming to review and monitor the Group's financial reporting process, internal control, and risk management systems[185](index=185&type=chunk)

潍力集團 HUILI GROUP Huili Resources (Group) Limited 滙 力 資 源 （ 集 團 ） 有 限 公 司 ( 於爾曼群島註冊成立的有限公司) 2018 # 目錄 公司資料 2 | --- | --- | |------------------------|-------| | | | | | | | 本集團之主要附屬公司 | 3 | | 礦山資料 | 4 | | 管理層討論與分析 | 7 | | 董事及高級管理層之履歷 | 18 | | 董事會報告 | 22 | | 企業管治報告 | 33 | | 獨立核數師報告 | 44 | | 合併資產負債表 | 51 | | 合併收益表 | 52 | | 合併全面收益表 | 53 | | 合併權益變動表 | 55 | | 合併現金流量表 | 56 | | 合併財務報表附註 | 58 | | | | 五年財務概要 143 公司資料 董事會 執行董事 王茜女士 劉慧杰先生 周建忠先生（於二零一九年三月十一日獲委任） 李曉斌先生（於二零一九年三月十一日辭任） 賈岱女士（於二零一九年二月十三日辭任） 獨立非執行董事 項思英女士（主席） （ ...