Revenue Growth - The coal trading segment generated revenue of RMB 1,279,197,000 for the six months ended June 30, 2023, compared to RMB 712,176,000 for the same period in 2022, representing an increase of approximately 79.5%[32] - Total revenue for the group reached RMB 1,334,580,000 for the six months ended June 30, 2023, up from RMB 780,204,000 in the previous year, marking a growth of about 71.1%[32] - The coal business contributed revenue of RMB 1.33 billion in the current period, compared to RMB 780 million in the previous year, reflecting a significant increase[95] - Revenue for the period increased by approximately 71.1% to about RMB 1.33 billion from approximately RMB 780 million in the previous period, mainly driven by a revenue increase of about RMB 560 million from the coal business[119] - The coal business segment reported a revenue growth of approximately 71.7% compared to the same period last year, indicating successful capitalizing on market opportunities[171] Financial Performance - The net foreign exchange gain amounted to RMB 6,787,000 for the first half of 2023, compared to RMB 6,169,000 in the same period of 2022, reflecting an increase of approximately 10%[34] - The group reported a total of RMB 15,401,000 in other income for the first half of 2023, compared to RMB 130,000 in the same period of 2022[34] - The group’s basic earnings per share remained unchanged as there were no dilutive potential ordinary shares in issue during the reporting period[43] - The group reported a net other income of approximately RMB 154 million, up from RMB 76 million in the previous period, mainly from unrealized exchange gains and government subsidies[122] - The income tax expense for the period was approximately RMB 13.9 million, compared to RMB 5.2 million in the previous period[148] Capital Expenditures and Investments - The group incurred capital expenditures of approximately RMB 4,388,000 for property, plant, and equipment during the six months ended June 30, 2023, down from RMB 11,645,000 in the previous year[45] - The company has capital commitments of RMB 9,269 thousand for property and equipment as of June 30, 2023, compared to RMB 9,910 thousand as of December 31, 2022[65] - The company completed the acquisition of 95% of Shanxi Fanpo for RMB 9.6 million in January 2022 and acquired the remaining 5% for RMB 500,000 in February 2023, making it a wholly-owned subsidiary[115] - The acquisition of Margaux Investment Limited for HKD 41.847 million aims to vertically integrate and expand the coal business, enhancing existing coal trading and supply chain management services[92] - The acquisition of the remaining 5% equity in Shanxi Fanpo was completed for RMB 500,000, making it a wholly-owned subsidiary[126] Assets and Liabilities - As of June 30, 2023, total other receivables and prepayments, net amount to RMB 93,184 thousand, a significant increase from RMB 31,947 thousand as of December 31, 2022, representing a growth of 191.5%[50] - Trade receivables and notes amounted to RMB 370,563 thousand as of June 30, 2023, compared to RMB 183,893 thousand as of December 31, 2022, indicating an increase of 101.5%[69] - Other payables and accrued expenses totaled RMB 88,505 thousand as of June 30, 2023, up from RMB 57,187 thousand as of December 31, 2022, reflecting a rise of 54.6%[74] - The company reported trade payables of RMB 596,451 thousand as of June 30, 2023, compared to RMB 167,354 thousand as of December 31, 2022, showing a substantial increase of 256.5%[73] - As of June 30, 2023, the equity attributable to the owners of the company increased to RMB 654.6 million, a rise of approximately 14.3% from RMB 572.5 million on December 31, 2022[156] Market Conditions and Outlook - Domestic raw coal production for the first half of 2023 was approximately 2.3 billion tons, a year-on-year growth of about 4.4%, while raw coal imports surged to approximately 220 million tons, marking a year-on-year increase of about 93%[87] - The national coal price index for 5500K coal decreased from RMB 791 per ton at the beginning of the period to RMB 731 per ton by the end of June 2023, indicating downward pressure on coal prices due to lower domestic demand[88] - The demand for coal is expected to remain strong, supported by the anticipated growth in electricity consumption, projected at around 6% for 2023[89] - The long-term outlook for the coal industry in China remains optimistic, with projected annual electricity consumption growth of 4.4% from 2021 to 2025[175] - The company remains optimistic about the prospects of its core business, particularly in the coal sector, for the second half of 2023[197] Strategic Initiatives - The company plans to continue seeking opportunities to develop its coal business through value-accretive acquisitions or strategic resource reallocations[94] - The company is actively exploring the feasibility of resuming mining operations to capitalize on future growth opportunities in the Chinese economy[193] - The company is reallocating more resources to its coal business to seize opportunities in the thriving coal industry[194] - The company aims to diversify its revenue sources and reduce reliance on a single market or product through the expansion of its coal business[195] - The company has adopted a cautious strategic approach to manage potential risks while seizing opportunities in the market[193]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公佈全 部或任何部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 Huili Resources (Group) Limited 滙 力 資 源（ 集 團 ）有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1303） 截 至 二 零 二 三 年 六 月 三 十 日 止 六 個 月 的 中 期 業 績 滙力資源（集團）有限公司（「本公司」）董事（「董事」）會（「董事會」）謹宣佈本公司及 其附屬公司（統稱「本集團」）截至二零二三年六月三十日止六個月（「本期間」）的 未經審核中期簡明合併業績，連同二零二二年同期（「先前期間」）的比較數字如 下： ...

Coal Business Expansion - The group expanded its coal business into Hainan, China, and diversified into coal processing and supply chain services, marking a significant milestone [19]. - The acquisition of 95% equity in Shanxi Fanpo Clean Energy Technology Co., Ltd. was completed through a wholly-owned subsidiary [19]. - The company completed the acquisition of Shanxi Fanpo in January 2022, expanding its upstream operations in the coal industry and diversifying its revenue sources [28]. - The company is actively seeking opportunities to develop its coal business through value-accretive acquisitions or strategic resource reallocation [29]. - The company is focusing on its coal business as a strategic segment, reallocating resources accordingly [121]. - The company is expanding its coal business scope to diversify revenue streams and mitigate adverse market conditions, aiming to improve operational status and optimize business structure [93]. - The company is focused on expanding its coal trading business, leveraging the expertise of its management team in this sector [108]. Financial Performance - The revenue from the coal mining and washing industry grew by approximately 16.9% year-on-year, reaching RMB 6.8 trillion in 2022 [19]. - In 2022, the company's coal trading business generated revenue of approximately RMB 2.01 billion, an increase of about 37.5% compared to RMB 1.46 billion in 2021 [30]. - The company's revenue increased by approximately 37.0% to about RMB 2.02 billion from RMB 1.47 billion in the previous year, primarily due to a RMB 540 million increase in coal business revenue [44]. - Gross profit surged nearly 19 times to approximately RMB 2.12 billion from RMB 107 million in the previous year, driven by higher average selling prices and sales volume of coal products [44]. - Operating profit for the coal business reached RMB 2.01 billion with an operating profit margin of 10.5%, compared to RMB 1.46 billion and a margin of 0.27% in the previous year [48]. Resource Management - As of December 31, 2022, the total controlled nickel resources amounted to 9,430 tons with a grade of 0.71% [9]. - The total controlled copper resources were 3,150 tons with a grade of 0.24% as of December 31, 2022 [9]. - The total zinc resources at the Baiganhu project were 251,450 tons with a grade of 6.49% [9]. - The total lead resources at the Baiganhu project were 156,580 tons with a grade of 4.03% [9]. - The company holds two mining licenses and two exploration licenses in Xinjiang, China, and is evaluating the feasibility of production and seeking potential partners for development [35]. Market Conditions - National coal production recorded a year-on-year increase of approximately 9% in 2022, driven by stable power generation demand and reduced coal imports [19]. - The coal import volume is projected to decrease by about 9.2% year-on-year to approximately 29 million tons in 2022 due to various geopolitical factors [20]. - The long-term contract fulfillment rate for coal is expected to reach 100% in 2023, up from 90% in 2022, which may tighten supply in the short term [24]. - The company anticipates that electricity demand will continue to grow, with an expected annual growth rate of 4.4% from 2021 to 2025, supporting long-term coal market health [27]. - In 2023, the coal supply-demand structural imbalance is expected to worsen, potentially driving up coal prices due to stricter supply regulations requiring a minimum supply guarantee rate of 75% for thermal coal [94]. Corporate Governance - The company has appointed independent directors with extensive experience in finance and investment, strengthening its governance structure [110]. - The management team includes professionals with significant experience in public offerings and financial management, which may benefit future fundraising efforts [113]. - The company is committed to maintaining high standards of corporate governance and financial transparency [112]. - The board consists of eight directors, including four executive directors and three independent non-executive directors [185]. - The company has established mechanisms to ensure the board receives independent opinions and advice [189]. Employee Management - The group employed 743 employees as of December 31, 2022, a significant increase from 46 employees in the previous year [85]. - Total employee costs for the year were approximately RMB 59.5 million, up from RMB 9.0 million in the prior year [85]. Environmental and Social Responsibility - The company has complied with all relevant environmental laws and regulations in China, with no environmental claims or penalties reported during the year [132]. - The company is focusing on green development in its mining operations to balance resource development and ecological protection [46]. Debt and Financial Management - The company has fully repaid a loan of RMB 65 million that was extended for a total of 36 months [38]. - A loan agreement for HKD 22.6 million (approximately RMB 18.5 million) was established, which was fully repaid by December 2022 [41]. - The group maintained a debt-to-equity ratio of 0% as of December 31, 2022, consistent with the previous year [72]. Strategic Outlook - The group acknowledges a cautious outlook due to ongoing global inflation and geopolitical tensions, impacting market predictability [86]. - The board maintains a cautiously optimistic outlook for the core coal business, focusing on sustainable development and exploring cooperative mining opportunities to maximize resource value [96]. - The company plans to actively pursue potential acquisition opportunities to capture market opportunities in China and diversify its revenue base [96].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全 部或任何部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 Huili Resources (Group) Limited 滙 力 資 源（ 集 團 ）有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1303） 有 關 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 的 全 年 業 績 公 告 之 補 充 公 告 茲 提 述 滙 力 資 源（集 團）有 限 公 司（連 同 其 附 屬 公 司 統 稱「本 集 團」）日 期 為 二 零 二三年三月二十八日的公告（「公告」），內容有關本集團截至二零二二年十二月 三十一日（「本年度」）止年度的年度業績。除另有界定者外，本公告所用詞彙與 公告所界定者具相同涵義。 除該等公告所提供的資料外，董事會謹此澄清，董事不建議就本年度派付任何 未期股息（先前年度：無）。 承董事會命 滙力資源（集團）有限公司 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公佈全 部或任何部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 Huili Resources (Group) Limited 滙 力 資 源（ 集 團 ）有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1303） 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 的 年 度 業 績 公 佈 滙力資源（集團）有限公司（「本公司」）董事（「董事」）會（「董事會」）謹宣佈本公司及 其附屬公司（統稱「本集團」）截至二零二二年十二月三十一日止年度的合併業 績，連同過往財政年度的比較數字。 合併全面收益表 截至二零二二年十二月三十一日止年度 二零二二年 二零二一年 附註 人民幣千元 人民幣千元 收益 3 2,015,009 1,470,396 ...

Financial Performance - The company reported revenue of RMB 780,204,000 for the six months ended June 30, 2022, representing a 70.4% increase from RMB 457,893,000 in the same period of 2021[9]. - Gross profit for the same period was RMB 29,558,000, compared to RMB 5,507,000 in 2021, indicating a significant improvement in profitability[9]. - The operating profit for the six months ended June 30, 2022, was RMB 25,614,000, recovering from an operating loss of RMB 5,896,000 in the previous year[9]. - The net profit for the period was RMB 20,683,000, a turnaround from a net loss of RMB 7,182,000 in the same period of 2021[9]. - The company reported a total comprehensive income of RMB 17,760,000 for the six months ended June 30, 2022, compared to a loss of RMB 6,719,000 in the previous year[11]. - The company recorded other income of RMB 7,627,000 for the period, significantly up from RMB 560,000 in the previous year[9]. - The group reported a profit attributable to equity holders of RMB 20,955,000 for the six months ended June 30, 2022, compared to a loss of RMB 7,152,000 in the same period of 2021[60]. - Basic and diluted earnings per share for the six months ended June 30, 2022, were RMB 1.29, compared to a loss per share of RMB 0.44 in the same period of 2021[60]. - The group’s total tax expense for the six months ended June 30, 2022, was RMB 5,231,000, compared to RMB 1,338,000 in the same period of 2021, representing a significant increase[54]. Assets and Liabilities - As of June 30, 2022, total assets amounted to RMB 628,904,000, an increase of 12.5% from RMB 558,586,000 as of December 31, 2021[12][14]. - Non-current assets increased to RMB 262,904,000, up 21.3% from RMB 216,821,000 in the previous year[12][14]. - Current assets totaled RMB 366,000,000, reflecting a rise of 7.1% compared to RMB 341,765,000 as of December 31, 2021[12][14]. - Total liabilities reached RMB 218,165,000, representing a 31.2% increase from RMB 166,274,000 in the prior year[14]. - The company reported a cumulative loss of RMB (381,502,000) as of June 30, 2022, compared to RMB (402,223,000) at the end of the previous year[14]. - The company’s total equity increased to RMB 410,739,000, up from RMB 392,312,000, marking a growth of 4.4%[14]. Business Operations - The company is engaged in coal trading and processing, as well as mining and sales of nickel, copper, lead, and zinc products in China[20]. - The company has not conducted any mining production or capital expenditures related to development and mining activities during the reporting period[7][8]. - The company continues to focus on expanding its coal trading and processing capabilities within China, leveraging its established supply chain management[35]. - The financial services segment is expected to grow as the company enhances its service offerings in the energy sector[35]. - The company is actively seeking opportunities to develop its coal business through value-accretive acquisitions or strategic resource reallocation[99]. Coal Business Performance - For the six months ended June 30, 2022, the coal business segment generated revenue of RMB 777,160,000, a significant increase from RMB 455,104,000 for the same period in 2021, representing a growth of approximately 70.8%[43][46]. - The revenue from coal trading was RMB 712,176,000, while coal processing services contributed RMB 28,829,000 and coal supply chain services added RMB 36,155,000[47]. - The operating profit for the coal business segment was RMB 28,180,000, while the financial services segment reported an operating profit of RMB 2,560,000[39]. - The coal business segment experienced a revenue growth of approximately 70.8% compared to the previous period, demonstrating successful diversification and risk management strategies by the company[141]. Acquisitions and Investments - The acquisition of 95% equity in Shanxi Fanpo was completed on January 5, 2022, for a total consideration of RMB 9,599,000[79]. - Shanxi Fanpo contributed approximately RMB 150,087,000 in revenue and RMB 3,841,000 in profit to the group from the acquisition date to the reporting period end[82]. - The group plans to diversify its revenue sources and expand its business portfolio through the acquisition of Shanxi Fanpo, which operates in the coal sales and washing industry[79]. - The group recognized a bargain purchase gain of approximately RMB 3,081,000 from the acquisition of Shanxi Fanpo[82]. Financial Risks and Management - The company’s business is exposed to various financial risks, including market risk, credit risk, and liquidity risk, with no use of derivatives for hedging or trading purposes[28]. - The group’s expected credit loss for trade receivables was RMB 6,500,000, indicating a focus on managing credit risk[39]. - The group is committed to strict control over outstanding receivables, with management regularly reviewing overdue balances[64]. - The group has not recognized any impairment on trade receivables as of June 30, 2022, indicating effective credit risk management[134]. Market Conditions - The coal mining industry in China saw a revenue increase of 60.8% year-on-year, reaching RMB 16,570.6 billion from January to May 2022[91]. - The daily production of raw coal reached a historical high of 12.77 million tons in March 2022, following the implementation of coal supply guarantee policies[92]. - The total coal imports in China decreased by 13.6% year-on-year, amounting to 95.95 million tons due to export bans and geopolitical tensions[92]. - The price index for NCEI 5500K coal rose from RMB 750 per ton in January 2022 to RMB 807 per ton in February 2022, before stabilizing at RMB 770 per ton from March to June 2022[96]. Corporate Governance - The company has revised its articles of association to comply with the updated listing rules effective from January 1, 2022[164]. - The company has adopted corporate governance practices in line with the updated code effective from January 1, 2022[166]. - The audit committee, consisting of three independent non-executive directors, reviewed the interim results[170]. - The interim results have not been audited but have been reviewed by the audit committee[170]. Shareholder Information - Affinitiv Mobile Ventures Ltd. and China Huarong Overseas Investment Holdings Co., Limited each hold 320,000,000 shares, representing 19.75% of the company's issued share capital[151]. - The total number of shares available for issuance under the share option scheme is 162,000,000, which is approximately 10% of the total issued shares as of June 30, 2022[157]. - The new share option scheme adopted on May 28, 2021, will remain effective for 10 years until May 27, 2031[154]. - The share option plan aims to incentivize and reward participants for their contributions to the group and to attract and retain talent[155].

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)