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的內容概不負責，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。 Da Sen Holdings Group Limited 大 森 控 股 集 團 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1580） 截至二零二三年九月三十日止六個月 的中期業績公告 大森控股集團有限公司（「本公司」）董事會（「董事會」）欣然公佈本公司及其附屬公 司（「本集團」）截至二零二三年九月三十日止六個月的未經審核合併業績。本中期財 務資料未經審核，惟已由本公司審核委員會審閱。 概要 • 合併收益減少69.3%至人民幣10.7百萬元 • 合併除稅前經營虧損減少93.6%至人民幣1.0百萬元 • 毛利由毛損人民幣0.8百萬元改善至人民幣9.6百萬元 • 本公司擁有人應佔虧損由虧損人民幣15.8百萬元改善至人民幣0.2百萬元 • 每股基本虧損由虧損人民幣2.33分改善至人民幣0.03分 ...

Financial Performance - For the fifteen months ending March 31, 2023, the company experienced a decline in revenue compared to the year ending December 31, 2021, due to external factors affecting demand [16]. - The group's consolidated revenue for the fifteen months ended March 31, 2023, was approximately RMB 59.5 million, a decrease of 65.6% compared to RMB 172.7 million for the year ended December 31, 2021 [45]. - The group recorded a gross loss of approximately RMB 5.1 million for the fifteen months ended March 31, 2023, significantly reduced by 91.0% from RMB 57.1 million for the year ended December 31, 2021 [45]. - The consolidated loss before tax for the fifteen months ended March 31, 2023, decreased significantly to approximately RMB 51.8 million, compared to RMB 119.1 million for the year ended December 31, 2021, primarily due to improved gross loss margin, cost control measures, and debt restructuring gains [48]. - The company reported a net loss of RMB 51,770,000 and a net cash outflow from operations of RMB 13,194,000 for the fifteen months ending March 31, 2023 [191]. Cost Control and Profitability - The company focused on higher-margin customers and implemented cost control measures, resulting in an improvement in gross loss margin and a significant reduction in losses [16]. - The gross loss margin improved to 8.6% for the fifteen months ended March 31, 2023, compared to 33.0% for the year ended December 31, 2021 [45]. - The group is focusing on higher-margin customers and implementing cost control measures to improve profitability [41]. - Management believes that the wood business will turn profitable for the fiscal year ending March 31, 2024, as these strategies develop [43]. - The company has implemented strict cost control measures while focusing on the development of new export businesses for plywood products and the operations of Shenzhen Micro Payment [97]. Debt Restructuring and Financial Position - The company completed a debt restructuring plan in January 2023, which significantly improved its debt situation [16]. - The total interest-bearing debt as of March 31, 2023, was approximately RMB 44.7 million, with a debt-to-equity ratio of about 171.5%, up from 125.0% as of December 31, 2021, mainly due to a decrease in equity [49]. - The total current liabilities as of March 31, 2023, were approximately RMB 114.8 million, down from RMB 130.3 million as of December 31, 2021, primarily due to debt restructuring that reduced borrowings [52]. - A creditor plan was implemented and completed on January 6, 2023, which involved settling debts amounting to approximately RMB 35 million [196]. - The company is in discussions to extend the repayment period of defaulted loans, including a loan of RMB 8,500,000 due in June 2022 and two loans totaling HKD 650,000 (approximately RMB 569,000) due in May and June 2022, with an extension of at least 12 months proposed [95]. Asset Management and Sales - The company is negotiating the sale of non-core assets located in the industrial park of Chengwu County, Heze City, Shandong Province, which is expected to further enhance its financial and debt status upon completion [16]. - The company is negotiating the sale of land and buildings in the industrial park of Chengwu County, Heze City, Shandong Province, to repay overdue debts totaling approximately RMB 16 million [59]. - The company is in discussions to sell assets in Shandong Province, expecting proceeds of no less than RMB 20 million, which will be used for loan repayment and general operating funds [199]. New Business Development - The group is preparing to develop new high-margin plywood products for export to Asian countries, particularly Japan, with partnerships expected to commence in 2023 [17]. - A joint venture agreement was signed with Shenzhen Weifuchong to operate a virtual hotel room card system and e-commerce membership platform, anticipated to broaden revenue sources and generate income by the fiscal year ending March 31, 2024 [17]. - The company is developing higher-margin products in the plywood business and plans to export these products to Asian countries, particularly Japan [97]. - A joint venture agreement was established with Shenzhen Micro Payment Technology Co., Ltd. to operate a hotel virtual room card system and an e-commerce membership club platform, with an app expected to launch in August 2023 [97]. - The company anticipates that Shenzhen Micro Payment will start generating revenue in the fiscal year ending March 31, 2024, contributing new revenue sources and potentially reversing the company's loss situation [97]. Shareholder and Equity Information - Major shareholder Mr. Huang Zhenhan holds 864,686,442 shares, which is 53.4% of the company's equity [146]. - The company raised approximately HKD 29.2 million through a public offering, with HKD 23.4 million allocated to fulfill payment obligations under the creditor plan and for operational funding [65]. - The company issued convertible bonds totaling HKD 7.8 million with a 10% interest rate, maturing on March 23, 2025, and a conversion price of HKD 0.15 per bond [67]. - The company capitalized approximately HKD 4.39 million of debt into 73,104,116 shares at a price of HKD 0.060 per share, issued on April 21, 2023 [66]. - The company successfully raised approximately HKD 23.2 million through a public offering of 584,640,000 new shares at HKD 0.04 per share, which was fully utilized for debt reduction and operational funding [116][118]. Governance and Compliance - The company has complied with relevant laws and regulations, ensuring no significant non-compliance issues were reported [149]. - The board consists of seven members, including three executive directors, one non-executive director, and three independent non-executive directors [156]. - The company has adhered to the corporate governance code as per the listing rules throughout the reporting period [155]. - The independent non-executive directors serve a term of three years, with all directors required to retire at least once every three years [161]. - The company appointed Tianjian International CPA Limited as its auditor on February 24, 2022, to fill a temporary vacancy [152].

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的內容概不負責，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。 Da Sen Holdings Group Limited 大 森 控 股 集 團 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1580） 截至二零二三年三月三十一日止十五個月 的全年業績公告 大森控股集團有限公司（「本公司」）董事（「董事」）會（「董事會」）謹此公佈本公司及 其附屬公司（統稱「本集團」）截至二零二三年三月三十一日止十五個月的經審核合 併業績，連同截至二零二一年十二月三十一日止年度的比較數字。由於經審核合併 財務報表涵蓋截至二零二三年三月三十一日止十五個月，而比較財務報表涵蓋截至 二零二一年十二月三十一日止十二個月，故比較數字並非完全可資比較。 概要 • 合併收益減少65.6%至約人民幣59.5百萬元 • 除稅前合併虧損減少56.5%至約人民幣51.8百萬元 • 本公司擁有人應佔虧損約為人民幣50.8百萬元 • 每股基本虧損：人民幣3.47分 • 董事會不建議派發末期股 ...

Financial Performance - Da Sen Holdings Group reported a significant increase in revenue, achieving a total of HKD 1.2 billion, representing a year-on-year growth of 25%[1] - The company reported a net profit margin of 12%, an increase from 10% in the previous year, reflecting improved cost management[9] - The consolidated revenue for the year ended December 31, 2021, was approximately RMB 173 million, a slight decrease of 1% compared to RMB 175 million in 2020[46] - The consolidated gross loss for the year was approximately RMB 57 million, significantly reduced by 50% from RMB 114 million in 2020, resulting in a gross loss margin of 33% compared to 65% in the previous year[46] - The consolidated loss before tax decreased from approximately RMB 205 million in 2020 to about RMB 119 million in 2021, attributed to improved profit margins and cost control measures[46] - The consolidated net loss after tax for the year was approximately RMB 119 million, down from RMB 235 million in 2020, with a basic loss per share of RMB 12.23 compared to RMB 24.15 in the previous year[47] User Growth and Market Expansion - The company’s user base expanded to 500,000 active users, marking a 40% increase compared to the previous year[2] - Future outlook indicates a projected revenue growth of 30% for the next fiscal year, driven by new product launches and market expansion strategies[3] - Da Sen Holdings plans to expand its market presence in Southeast Asia, targeting a 15% market share within the next two years[5] - Discussions began with new business partners to export products to Asian countries, particularly Japan, with regional sales offices planned in South China[20] Product Development and Investment - The company is investing HKD 200 million in R&D for new technologies aimed at enhancing product efficiency and sustainability[4] - New product lines are set to launch in Q3 2023, anticipated to contribute an additional HKD 150 million in revenue[7] - The management team is focused on enhancing product competitiveness, seeking new customers, and controlling costs in response to stakeholder concerns[19] Cost Management and Operational Efficiency - The management has outlined a strategy to improve operational efficiency, aiming for a 10% reduction in costs over the next year[8] - Total sales and administrative expenses amounted to approximately RMB 18 million, an increase of 17% from RMB 15 million in 2020, primarily due to enhanced cost control measures[46] Debt and Restructuring - The company achieved significant milestones in debt and business restructuring, expecting improved liquidity after completing the proposed restructuring and selling non-core assets[19] - A debt restructuring plan was approved by the necessary majority of plan creditors on December 9, 2021, and subsequently by the High Court on January 11, 2022[61] - The group has been in close contact with creditors to settle outstanding debts, including interest payments, following a court ruling in favor of a creditor[58] Shareholder Value and Dividends - Da Sen Holdings is committed to enhancing shareholder value, with plans to increase dividends by 20% in the upcoming fiscal year[10] - No dividends were recommended for the year ended December 31, 2021, consistent with the previous year[105] Environmental and Sustainability Initiatives - The company is exploring environmentally friendly solutions to reduce waste emissions and will implement more effective asset management measures in Heze, Shandong[20] Corporate Governance - The board consists of seven directors, including three executive directors, one non-executive director, and three independent non-executive directors[168] - The company has implemented corporate governance principles and complied with the applicable code provisions throughout the year ending December 31, 2021[167] - The board has established four committees: Audit Committee, Remuneration Committee, Nomination Committee, and Risk Management Committee[179] Employee and Compensation - The group had a total employee compensation and related costs of approximately RMB 8.7 million for the year ended December 31, 2021[141] - The board of directors approved salary adjustments for all directors in response to the financial impact of COVID-19, with new annual salaries ranging from HKD 144,000 to HKD 396,000[143] Financial Position and Assets - As of December 31, 2021, the group's current assets were approximately RMB 910 million, a decrease from RMB 1,640 million in 2020, primarily due to ongoing funding needs for operations[51] - The debt-to-equity ratio as of December 31, 2021, was approximately 125.0%, up from 34.2% in 2020, primarily due to an increase in bank loans[48] - The company's plywood products accounted for about 99% of total revenue for the year ended December 31, 2021[43] Impairment and Provisions - Trade receivables impairment provisions amounted to RMB 104.6 million for the year ended December 31, 2021, an increase of RMB 22.6 million compared to the previous year[89] - Impairment charges for property, plant, and equipment were recognized at RMB 15 million for the year ended December 31, 2021[94] - Investment property impairment expenses were confirmed at RMB 0.9 million for the year ended December 31, 2021[96] Future Plans and Initiatives - New business initiatives aimed at improving sales and enhancing operational cash flow have shown progress in 2021, with plans to accelerate these improvements in 2022[86] - The company plans to issue up to 16,398,159 new shares to plan creditors as part of a restructuring agreement, with a consent fee capped at 5% of the principal and accumulated interest of the relevant bonds as of December 31, 2020[64]

Financial Performance - For the year ended December 31, 2020, the reported loss attributable to shareholders was RMB 235.3 million, an increase of approximately 211% compared to the reported loss of RMB 75.6 million in 2019[16]. - The basic and diluted loss per share for continuing operations was RMB 21.68, compared to RMB 7.20 in 2019, while the total loss per share (including discontinued operations) was RMB 24.15, compared to RMB 8.05 in 2019[16]. - The company's total comprehensive loss attributable to shareholders increased from approximately RMB 75.6 million for the year ended December 31, 2019, to about RMB 235.3 million for the year ended December 31, 2020[78]. - For the year ended December 31, 2020, the company's revenue decreased by approximately RMB 130.2 million or 42.6% to about RMB 175.3 million from approximately RMB 305.5 million for the year ended December 31, 2019[66]. - The plywood product sales revenue decreased by approximately RMB 131.6 million or 43.1% to about RMB 173.9 million for the year ended December 31, 2020[66]. - The gross loss increased from approximately RMB 24.3 million for the year ended December 31, 2019, to a gross loss of RMB 113.8 million for the year ended December 31, 2020, with a gross loss margin rising from about 7.9% to approximately 64.9%[69]. - The net impairment loss on financial assets increased from approximately RMB 11.4 million for the year ended December 31, 2019, to about RMB 61.9 million for the year ended December 31, 2020[75]. - The total loss for the year ended December 31, 2020, was approximately RMB 24.0 million, compared to a loss of RMB 8.0 million for the year ended December 31, 2019, reflecting a significant decrease in revenue of about RMB 10.0 million[79]. Business Operations - In 2020, the company faced significant challenges due to COVID-19, leading to factory closures and production halts, but capacity was restored to reasonable levels by March 2020[17]. - In Q2 2020, the company experienced a decrease in demand from export customers for plywood products, resulting in negative profit margins, but management implemented customized solutions to retain key customers[17]. - The company anticipates continued operating losses for the fiscal year 2021, although signs of recovery are emerging as plywood product prices have successfully increased, reducing negative profit margins[17]. - In the second half of 2020, the company decided to close its wood biomass pellet business and lease out some factories to generate rental income, streamline operations, and save costs[17]. - The company has terminated its wood biomass pellet operations due to rising production and delivery costs, as well as decreased demand influenced by local government measures promoting natural gas usage[49]. - The company plans to enhance plywood sales prices and gross margins while exploring opportunities in the mid-to-low-end plywood market and furniture supply chain development[58]. - The company is focusing on optimizing and diversifying its plywood business to capitalize on domestic opportunities in China as demand recovers[60]. Financial Position and Liquidity - The current ratio as of December 31, 2020, was approximately 1.6, down from approximately 4.6 as of December 31, 2019, indicating a decline in liquidity[88]. - The debt-to-equity ratio increased to approximately 34.2% as of December 31, 2020, compared to 14.8% as of December 31, 2019, primarily due to a decrease in equity resulting from the net loss[89]. - Cash and cash equivalents decreased from approximately RMB 51.0 million as of December 31, 2019, to approximately RMB 5.8 million as of December 31, 2020, mainly due to property, plant, and equipment purchases of approximately RMB 16.1 million[86]. - Trade receivables decreased from approximately RMB 174.5 million as of December 31, 2019, to approximately RMB 88.9 million as of December 31, 2020, primarily due to reduced revenue and an additional impairment provision of approximately RMB 73.6 million[84]. - Inventory decreased from approximately RMB 82.7 million as of December 31, 2019, to approximately RMB 47.2 million as of December 31, 2020, mainly due to a reduction in estimated selling prices and a decrease in work-in-progress and finished goods[83]. Corporate Governance - The board consists of eight directors, including five executive directors and three independent non-executive directors[170]. - The company has implemented corporate governance principles in accordance with the applicable code provisions[169]. - The board of directors confirmed compliance with the corporate governance code regarding director training, with all directors participating in ongoing professional development[174]. - The audit committee, chaired by Mr. Guo Weicheng, consists of independent non-executive directors and serves as a communication bridge among directors, external auditors, and management[181]. - The remuneration committee, led by Ms. Lao Yuyi, is responsible for reviewing and approving the remuneration policies for all directors and senior management[182]. - The nomination committee, chaired by Mr. Cao Zhaobai, reviews the policy for nominating directors and ensures compliance with corporate governance standards[186]. - The risk management committee, chaired by Mr. Zhang Ayang, reviews the group's risk management and internal control systems[188]. Future Plans and Financing - The company plans to raise approximately HKD 54.5 million (approximately RMB 45.9 million) through the issuance of 779,520,000 new shares at a price of HKD 0.07 per share[97]. - The proceeds from the public offering will be allocated as follows: HKD 20 million for creditor payments, HKD 33.5 million (approximately RMB 28.3 million) for repaying bank loans, and HKD 1 million for working capital[97]. - The group aims to complete the creditor plan by the third quarter of 2021 and the proposed restructuring by the end of 2021[98]. - The company is actively seeking additional financing from major shareholders to meet short-term liquidity needs[98]. - The company plans to utilize its properties for long-term leasing to generate recurring rental income following the termination of the wood biomass pellet business[65]. Employee and Shareholder Information - The total salary and related costs provided to employees amounted to approximately RMB 12.2 million for the year ended December 31, 2020[139]. - As of December 31, 2020, the company had 153 employees in Hong Kong and mainland China[139]. - Major shareholders hold significant interests, with Mr. Kuo Ming Choi holding 30.77% of the total share capital[158]. - The company has a stock option plan that allows for the issuance of up to 72 million shares, with a maximum of 1% of issued shares allowed to be granted in any 12-month period[152].

Production and Operational Challenges - The company faced significant pressure on production costs for plywood products and wood biomass pellets due to ongoing environmental measures by the central government[52]. - Demand for wood biomass pellets decreased as some production facilities were closed based on local government recommendations, leading to impairment of related production facilities[52]. - The company decided to terminate the expansion plan for poplar core board production facilities, resulting in a forfeiture of approximately RMB 33 million related to land auction fees[52]. - Construction costs of approximately RMB 216 million paid for buildings on the forfeited land are being requested for refund from the local government[52]. - The company is reassessing the prospects of the wood biomass pellets business and may consider closing it if better commercial opportunities arise[52]. - Recent COVID-19 outbreaks in China caused temporary but not significant impacts on production activities, which have since returned to reasonable levels[53]. - There were delays and cancellations of some procurement orders from customers, temporarily affecting financial performance[53]. Management and Governance - The company reported a significant increase in overall business strategy and development since the appointment of the current chairman in December 2010[55]. - The CEO has over 11 years of experience in the garment industry, contributing to the company's operational and policy formulation since joining in December 2010[56]. - The sales and marketing strategies have been under the supervision of the sales director since December 2010, with a promotion to general manager in November 2014[58]. - The company has a strong management team with diverse backgrounds in manufacturing, finance, and legal sectors, enhancing its operational capabilities[61][62][67]. - The company secretary has over 15 years of experience in providing professional corporate services, which strengthens the company's governance[70]. - The management team includes independent non-executive directors with extensive experience in finance and law, ensuring robust oversight[66][67]. - The company has established a strong foundation in financial services through its chairman's previous experience in the finance and securities sector[55][62]. - The company is committed to continuous improvement in operational efficiency and strategic development to enhance shareholder value[61]. - The management's diverse expertise positions the company well for future growth and market expansion initiatives[70]. Financial Performance - For the year ended December 31, 2019, the group's revenue decreased by approximately 26.9% to RMB 318.5 million from RMB 435.7 million for the year ended December 31, 2018[85]. - Revenue from plywood products fell by approximately 19.3% to RMB 305.5 million, primarily due to price declines and decreased sales volume caused by the US-China trade war and China's economic downturn[85]. - Sales of wood biomass pellets dropped approximately 77.1% to RMB 13.0 million, mainly due to environmental policies limiting the use of combustion boilers in certain regions[85]. - The overall gross margin declined from approximately 12.7% to -9.0%, attributed to price drops and increased procurement costs for key raw materials[86]. - Other income decreased due to a reduction in VAT refunds related to lower sales of wood biomass pellets[88]. - The group recorded a net loss attributable to shareholders of approximately RMB 75.6 million, a decrease of about 492.2% from RMB 19.3 million in the previous year[96]. - Inventory decreased to RMB 82.7 million from RMB 108.0 million, mainly due to write-downs of plywood products and fewer work-in-progress items[99]. - Trade receivables decreased from approximately RMB 1,955 million to RMB 1,828 million, a reduction of about RMB 127 million, primarily due to decreased revenue amid the US-China trade war and economic downturn in China[100]. - Cash and cash equivalents increased from approximately RMB 483 million to RMB 510 million, an increase of about RMB 27 million, mainly due to net proceeds from share issuance of approximately RMB 279 million[101]. - Bank borrowings decreased from RMB 410 million to RMB 298 million, a reduction of RMB 112 million, with all borrowings being short-term and subject to renewal upon maturity[102]. - The debt-to-equity ratio as of December 31, 2019, was approximately 14.8%, a slight decrease from 15.3% in the previous year[106]. Shareholder and Corporate Governance - The company has confirmed that at least 25% of its issued shares are held by the public as of the report date[150]. - The annual general meeting is scheduled for May 22, 2020, in Hong Kong, with a suspension of share transfer registration from May 19 to May 22, 2020[152][153]. - The board consists of nine directors, including six executive directors and three independent non-executive directors[156]. - The company has complied with the corporate governance code principles throughout the year ending December 31, 2019[155]. - The company has received annual written confirmations regarding the independence of all independent non-executive directors[156]. - The company is aware of the importance of compliance with regulatory requirements and has adhered to relevant laws and regulations[148]. - The company has separated the roles of Chairman and CEO to ensure clear distinction between board management and business operations[158]. - The Audit Committee reviewed the group's annual performance and interim results for the year ending December 31, 2019, including the evaluation of the effectiveness of internal audit functions[168]. - The Remuneration Committee is responsible for reviewing and approving the remuneration policies for all directors and senior management, ensuring transparency in the process[169]. - The Nomination Committee reviewed the board's structure and diversity policy, ensuring alignment with the company's strategic needs[171]. - The Risk Management Committee approved risk management policies and reviewed the effectiveness of internal control systems at least once a year[174]. - All directors confirmed compliance with the standards set out in the company's securities trading code for the year ending December 31, 2019[164]. - The company has four committees under the board: Audit, Remuneration, Nomination, and Risk Management, all comprising independent non-executive directors[165]. - The attendance record for board meetings shows full participation from executive directors, with all attending 5 out of 5 board meetings[178]. - The company is committed to maintaining a diverse board composition, regularly reviewing measurable targets to ensure the implementation of diversity policies[172]. Risk Management and Compliance - The company has established and maintained an adequate and effective risk management and internal control system, which was reviewed by the internal audit team[187]. - The company plans to review its risk management and internal control systems annually[188]. - Key audit matters identified include revenue recognition, recoverability of receivables, and impairment of property, plant, and equipment[199].

Financial Performance - The group's total revenue for the year ended December 31, 2018, decreased by approximately 12.8% to RMB 435.7 million from RMB 499.6 million for the year ended December 31, 2017[46]. - Revenue from plywood products fell by about 5.6% to RMB 378.7 million, primarily due to intensified competition resulting from a slowdown in China's economic growth[46]. - Sales of wood biomass pellets dropped by approximately 42.1% to RMB 56.9 million, attributed to manufacturers' increased cost awareness in maintaining profit margins amid economic slowdown[49]. - The overall gross profit margin declined from approximately 19.5% for the year ended December 31, 2017, to about 12.7% for the year ended December 31, 2018, due to higher production and procurement costs driven by stricter environmental policies[50]. - Total comprehensive income attributable to shareholders decreased by approximately 61.6% from approximately RMB 50.1 million in 2017 to approximately RMB 19.3 million in 2018, mainly due to reduced gross margins on plywood products and wood biomass pellets[59]. - Net profit for the year was RMB 19,273 thousand, representing a 61.5% decrease from RMB 50,143 thousand in 2017[177]. - Basic and diluted earnings per share for 2018 were RMB 2.15, down from RMB 6.59 in 2017[177]. Operational Challenges - The company faced challenges in product manufacturing due to environmental measures implemented by the Chinese government, leading to a decline in sales of wood-based biomass pellets[23]. - Raw material costs remained at relatively high levels, resulting in a decrease in gross profit margin[23]. - Delays in the construction of production facilities were encountered due to administrative issues related to obtaining state land use certificates[23]. - The company is facing challenges due to environmental measures imposed by the Chinese government, which are expected to continue impacting gross profit margins in the foreseeable future[44]. - The construction of a new biomass pellet production line has been delayed due to pending land use approvals from the Ministry of Natural Resources[75]. Strategic Initiatives - The company plans to focus on enhancing plywood products and expanding production facilities as per the plans set during the IPO preparations two years ago[23]. - The company aims to catch up on the progress and utilize the new facilities to improve performance in the coming year[23]. - The group emphasizes strict quality control for plywood and biomass pellet products, significantly contributing to customer recognition and business growth[37]. - The group utilizes wood residues to produce wood-based biomass pellets, enhancing sustainability and cost control[37]. - The company expects the construction of new production facilities to commence in the foreseeable future as land use application processes have progressed[76]. Financial Position - Cash and cash equivalents decreased from approximately RMB 74.3 million in 2017 to approximately RMB 48.3 million in 2018, a decrease of about RMB 26.0 million, mainly due to payments for raw materials[64]. - Trade receivables increased from approximately RMB 153.2 million in 2017 to approximately RMB 195.5 million in 2018, an increase of about RMB 42.3 million, primarily due to delayed customer payments[62]. - Inventory increased from approximately RMB 89.0 million in 2017 to approximately RMB 108.0 million in 2018, an increase of about RMB 19.0 million, due to more work-in-progress and finished products[61]. - Bank borrowings increased from approximately RMB 27 million in 2017 to approximately RMB 41 million in 2018, with total bond issuance outstanding at approximately RMB 28.9 million[65]. Governance and Compliance - The company has adhered to the corporate governance code principles and applicable provisions throughout the year ending December 31, 2018[111]. - The independent auditor, PwC, has completed its term, and a resolution for its reappointment will be presented at the upcoming annual general meeting[108]. - The board consists of seven directors, including four executive directors and three independent non-executive directors[112]. - The company has established four committees under the board: Audit Committee, Remuneration Committee, Nomination Committee, and Risk Management Committee[121]. - All independent non-executive directors confirmed their independence throughout the year ending December 31, 2018[120]. Audit and Financial Reporting - The independent auditor's report stated that the consolidated financial statements present a true and fair view of the group's financial position as of December 31, 2018[146]. - The audit committee is responsible for overseeing the financial reporting process of the company[164]. - The audit aimed to obtain reasonable assurance that the consolidated financial statements are free from material misstatement due to fraud or error[165]. - The company is responsible for presenting the consolidated financial statements fairly in accordance with IFRS and the Hong Kong Companies Ordinance[163].