2019 年度報告 ANNUAL REPORT CONTENT 目錄 2 Corporate Information 公司資料 4 Corporate Profile 企業簡歷 6 Chairman's Statement 主席報告 9 Management Discussion and Analysis 管理層討論及分析 20 Profile of Directors and Senior Management 董事及高級管理層簡歷 23 Corporate Governance Report 企業管治報告 40 Environmental, Social and Governance Report 環境、社會及管治報告 50 Report of the Directors 董事會報告 63 Independent Auditor's Report 獨立審計師報告 71 Consolidated Statement of Profit or Loss and Other Comprehensive Income 綜合損益及其他全面收益表 72 Consolidated Statement of Financ ...

Financial Performance - Sales of marble slabs decreased by 21.8% from RMB20.0 million in HY2018 to RMB15.7 million in HY2019 due to reduced demand linked to the US-China trade standoff [18]. - Revenue from the marble slags business increased to approximately RMB13.6 million in HY2019, up from RMB5.1 million in HY2018, driven by increased production and strong demand from GCC manufacturers [19]. - The Group's revenue increased by RMB4.2 million or 16.7% from RMB25.1 million for HY2018 to RMB29.3 million for HY2019, primarily due to an increase in sales of marble slags [25]. - The Group recorded a loss of RMB20.6 million for HY2019 compared to a profit of RMB0.9 million for HY2018, influenced by litigation provisions and impairment losses [37]. - Gross profit rose by RMB1.2 million or 3.8% to RMB4.4 million for HY2019, with the gross profit margin increasing from 12.6% to 14.9% [31]. - The total comprehensive loss attributable to owners of the company for the period was RMB20,487,000, compared to a comprehensive income of RMB6,177,000 in 2018 [136]. - Basic and diluted loss per share for the period was RMB (0.73) cents, compared to earnings of RMB 0.03 cents per share in 2018 [127]. Sales and Production - Sales of marble slabs decreased by 21.8% from RMB20,042,000 in HY2018 to RMB15,663,000 in HY2019, attributed to reduced demand in the decoration sector [29]. - Sales of marble slags increased significantly by 168.9% from RMB5,071,000 in HY2018 to RMB13,635,000 in HY2019, driven by higher production and strong demand from manufacturers [29]. - The sales volume of marble slabs decreased by 28.4% to 56,562 square meters in HY2019, while marble slags sales volume increased by 146.4% to 485,704 tonnes [30]. - Average selling prices for marble slabs increased by 9.1% to RMB277 per square meter, while marble slags saw a 7.7% increase to RMB28 per tonne [30]. Expenditures and Costs - For the six months ended June 30, 2019, the Group's total expenditure on mining operations was approximately RMB9.4 million, including RMB3.6 million for depreciation, RMB3.5 million for fuel and materials, and RMB1.0 million for repair and safety protection costs [13]. - Administrative expenses increased from RMB18.6 million in HY2018 to RMB20.0 million in HY2019, primarily due to a rise in share option expenses [35]. - Capital expenditure amounted to RMB3.2 million during HY2019, up from RMB1.3 million in HY2018, mainly for acquiring plant and machinery [40]. - The total staff cost for the first half of 2019 was approximately RMB13.2 million, compared to RMB3.1 million in the first half of 2018, reflecting an increase in employee headcount from 23 to 28 [48]. Cash Flow and Financial Position - The Group's cash and bank balances decreased to RMB57.6 million as of June 30, 2019, from RMB65.1 million at the end of 2018 [39]. - The net current assets as of June 30, 2019, were RMB112,896,000, down from RMB118,541,000 at the end of 2018, indicating a decrease of about 4.5% [131]. - The company reported a net cash used in operating activities of RMB4,553,000 for the six months ended June 30, 2019, an improvement compared to RMB29,187,000 for the same period in 2018 [138]. - Cash and cash equivalents at the end of the period were RMB57,567,000, down from RMB65,058,000 at the beginning of the period, reflecting a decrease of approximately 11.5% [138]. Shareholder Information - As of June 30, 2019, Mr. Zheng Yonghui holds a total interest of 426,737,542 ordinary shares, representing 15.07% of the company's issued capital [106]. - Mr. Zheng Yonghui directly owns 138,740,000 ordinary shares, which accounts for 4.90% of the company's issued capital [106]. - Oasis Tycoon Investments Limited, controlled by Mr. Zheng, holds 287,997,542 ordinary shares, representing 10.17% of the company's issued capital [106]. Legal and Regulatory Matters - The company is currently involved in multiple litigation cases, including a claim for approximately HK$23.7 million against a former director's company and a claim for approximately HK$21.2 million against the Company itself [78]. - A provision of RMB1.2 million was made for ongoing litigation related to a loan assignment agreement dispute [80]. - The joint venture for heavy calcium carbonate production was temporarily suspended due to legal issues surrounding mining rights [67]. Accounting Standards and Policies - The Group's interim financial statements for the six months ended June 30, 2019, were prepared in accordance with IAS 34 and the relevant disclosure requirements of the Hong Kong Listing Rules [147]. - The Group has not applied any new standards or interpretations that are not yet effective for the current accounting period, except for IFRS 16, which has introduced a single accounting model for lessees [152]. - The Group recognized the cumulative effect of the initial application of IFRS 16 as an adjustment to the opening balance of equity at January 1, 2019 [158]. - The adoption of IFRS 16 positively impacted reported profit from operations compared to the previous IAS 17, as interest expense and depreciation replaced rental expenses [177].

Financial Performance - For the year ended December 31, 2018, the Group recorded revenue of RMB67.7 million, representing an increase of approximately 115.6% compared to RMB31.4 million in FY2017[19] - The gross profit for FY2018 was RMB4.5 million, a significant increase of 309.1% from RMB1.1 million in FY2017[19] - The net loss attributable to owners of the Company for FY2018 was RMB19.3 million, compared to a net profit of RMB7.8 million in FY2017[20] - Basic loss per share for FY2018 was RMB0.7 cents, compared to basic earnings per share of RMB0.5 cents for FY2017[20] - The Group's revenue for the fiscal year 2018 was approximately RMB 67.7 million, representing an increase of about 115.6% from RMB 31.4 million in fiscal year 2017[24] - Gross profit for the fiscal year 2018 was approximately RMB 4.5 million, a significant increase of 309.1% compared to RMB 1.1 million in fiscal year 2017[24] - The Group reported a net loss attributable to shareholders of RMB 19.3 million for fiscal year 2018, compared to a net profit of RMB 7.8 million in fiscal year 2017[24] - Sales volume of marble slabs increased by 113.1% to 204,566 square meters in fiscal year 2018, while sales volume of marble slags rose by 44.8% to 563,187 tonnes[35] - Average selling price of marble slabs increased by 4.5% to RMB 257 per square meter, and average selling price of marble slags increased by 35.9% to RMB 26.9 per tonne[35] Resource Management - The Zhangjiaba Mine contains 44.2 million cubic meters of measured and indicated marble resources, with a block rate expected to be 38%[10] - As of December 31, 2018, the total marble reserves at Zhangjiaba Mine were estimated at 13.69 million cubic meters, down from 15.21 million cubic meters in 2017[15] - The total resources at Zhangjiaba Mine decreased from 42.65 million cubic meters in 2017 to 42.24 million cubic meters in 2018[15] - The Zhangjiaba mine contains 44.2 million cubic meters of measured and indicated marble resources, with 16.8 million cubic meters classified as proved and probable reserves[36] Business Challenges and Strategies - The Group is facing challenges due to escalating US-China trade disputes and competition from overseas marble stone importers[21] - The Group continues to produce and sell marble slags and is also engaged in trading marble slabs sourced from other suppliers[22] - The Group is developing the Zhangjiaba mine to lower benches for higher quality large block production, though timelines for production remain uncertain[22] - The Group continues to explore new business opportunities to maximize shareholder value in the future[28] - The Group plans to expand its downstream business in ground calcium carbonate production through a joint venture established in August 2018, with a 51% stake held by the Group[27] Financial Management - Total expenditure for mining operations in fiscal year 2018 was approximately RMB 20.7 million, an increase from RMB 15.1 million in fiscal year 2017[41] - Cash and bank balances as of December 31, 2018, were approximately RMB65.1 million, down from RMB168.6 million in FY2017, indicating a need for future liquidity management[54] - The Group's capital expenditure for FY2018 amounted to RMB2.8 million, primarily related to stripping costs capitalized for mine platforms[55] - The five largest customers accounted for 90% of total sales in FY2018, with the largest customer representing 46% of total sales, indicating a high customer concentration risk[66] - The Group aims to broaden its customer base by offering new packages to distributors and integrating downstream production, which may reduce reliance on major customers[67] - The Group's credit terms for marble slabs business customers typically allow for a 90-day payment period, while marble slags business customers have a payment period of 0 to 90 days[72] Governance and Compliance - The company has complied with the Corporate Governance Code for the fiscal year ended December 31, 2018, with some deviations noted[109] - The roles of chairman and CEO were not separated during FY2018, with Mr. Wang Minliang holding both roles until his resignation on September 12, 2018[110] - The company did not have a designated CEO during FY2018, with executive directors undertaking CEO responsibilities[110] - The chairman position remained vacant after Mr. Wang's resignation, with independent board members temporarily assuming the role to ensure effective governance[110] - The company did not arrange appropriate insurance cover for legal actions against directors, believing the risk of litigation to be low due to existing internal controls[114] - The company confirmed that all directors complied with the Model Code for Securities Transactions throughout the year ended December 31, 2018[121] - The Board is tasked with overseeing the Group's businesses, strategic decisions, internal control, risk management, and performance evaluation[141] - The Board's governance framework aims to protect shareholder interests and enhance shareholder value[111] Audit and Risk Management - The Audit Committee comprises three Independent Non-executive Directors, with Ms. Wang Yihua serving as the chairman[161] - The Audit Committee is responsible for recommending the appointment and removal of external auditors and overseeing internal control procedures[156] - The Audit Committee continuously reviews the risk management and internal controls significant to the Group, considering the adequacy of resources and qualifications of staff[199] - The management is tasked with designing, maintaining, implementing, and monitoring the risk management and internal control system to protect the Group's assets[200] - The Board acknowledges its responsibility to safeguard the Group's assets and prevent fraud and irregularities[194] Board Composition and Diversity - The Board consists of seven Directors, including three Independent Non-executive Directors, promoting critical review and control of management processes[147] - The Company emphasizes the importance of Board diversity in maintaining a competitive advantage, considering skills, experience, and other qualities[146] - The Board's composition is characterized by significant diversity in terms of gender, age, professional experience, skills, and knowledge[147] - The Nomination Policy ensures diversity in the Board's skills, experience, and perspectives to meet the Group's business development requirements[1] - The independent non-executive directors serve a term of three years, subject to re-election at least once every three years[130][135]