Supplemental Announcement to the 2021 Annual Report of Honbridge Holdings Limited [Purpose and Background of the Announcement](index=1&type=section&id=Purpose%20and%20Background%20of%20the%20Announcement) This announcement supplements the 2021 Annual Report of Honbridge Holdings Limited, detailing the use of proceeds from placing and share subscription - This announcement aims to supplement the content regarding the use of proceeds in the 2021 Annual Report[1](index=1&type=chunk) [Update on Use of Proceeds](index=1&type=section&id=Update%20on%20Use%20of%20Proceeds) Approximately HK$18.4 million of proceeds remained unutilized as of December 31, 2021, earmarked for the Brazil iron ore project by June 30, 2023 Unutilized Proceeds Utilization Plan | Item | Amount (HKD) | Expected Use | Estimated Utilization Deadline | | :--- | :--- | :--- | :--- | | Unutilized Proceeds | 18,400,000 | Brazil Iron Ore Project | June 30, 2023 | - All other contents of the 2021 Annual Report remain unchanged except for the above disclosure[1](index=1&type=chunk)[2](index=2&type=chunk) [Board Members and Responsibility Statement](index=2&type=section&id=Board%20Members%20and%20Responsibility%20Statement) The announcement lists the executive, non-executive, and independent non-executive directors as of the announcement date, who collectively and individually assume full responsibility for the accuracy and completeness of the information - The announcement provides a complete list of board members as of the announcement date, including Chairman Mr. He Xuechu, Vice Chairman and Co-CEO Mr. Liu Jian, among others[3](index=3&type=chunk) - The company's board of directors collectively and individually assumes full responsibility for the accuracy and completeness of the information in this announcement[3](index=3&type=chunk)

Financial Performance - For the three months ended September 30, 2022, the company reported a revenue of HKD 60,065,000, a decrease of 50.7% compared to HKD 121,868,000 in the same period of 2021[5] - The gross profit for the same period was HKD 15,495,000, down 57.2% from HKD 36,183,000 year-over-year[5] - The company recorded a profit before tax of HKD 14,959,000, compared to a loss of HKD 6,449,000 in the previous year[5] - Lithium battery sales for the nine months ended September 30, 2022, were HKD 85,854,000, a decline of 73.4% from HKD 322,644,000 in the same period of 2021[10] - The company reported a net profit attributable to owners of HKD 18,604,000 for the third quarter, compared to a loss of HKD 16,237,000 in the same quarter of the previous year[5] - The total comprehensive income for the period was a loss of HKD 154,463,000, compared to a loss of HKD 400,629,000 in the same period last year[5] - The company reported a loss attributable to owners of HKD 71,017,000 for the nine months ended September 30, 2022, compared to a profit of HKD 108,736,000 in the same period of 2021[21] - For the third quarter of 2022, the company reported revenue of HKD 97.3 million, a decrease of 70.3% compared to HKD 327.1 million in the same period last year[54] - The loss attributable to the company's owners for the period was approximately HKD 71 million, compared to a profit of HKD 108.7 million in the previous year[54] - Gross profit for the period was approximately HKD 29,000,000, with a gross margin of 29.8%, an increase from 28.7% in the previous year[56] - The company recorded a net loss attributable to shareholders of approximately HKD 71,000,000 for the period, compared to a profit of HKD 108,700,000 in the same period last year[60] Expenses and Costs - The administrative expenses for the nine months ended September 30, 2022, were HKD 72,730,000, an increase of 23.4% from HKD 58,946,000 in the same period of 2021[5] - Financial costs for the nine months ended September 30, 2022, were HKD 5,888,000, a decrease of 21.2% from HKD 7,474,000 in the same period of 2021[13] - Financial costs decreased to approximately HKD 5,900,000, down from HKD 7,500,000 in the previous year, due to reduced borrowings[59] Investments and Acquisitions - The company acquired additional equity in Jihang International Technology Co., Ltd. for approximately HKD 30,000,000, leading to a gain of HKD 30,877,000 recognized in the financial statements[12] - The company completed the acquisition of 32% of the target company for RMB 25.6 million (approximately HKD 30 million) on June 10, 2022[43] - Following the completion of the acquisition and capital increase agreements, the company will hold a 35.56% stake in the target company[45] - The company completed the acquisition of a controlling stake in Caocao International on August 10, 2022, which operates ride-hailing services in Paris, generating approximately HKD 6,900,000 in revenue from August 10 to September 30, 2022[55] - The company has invested a total of approximately $157.5 million in the SAM project, including $79.9 million in funding and $78.4 million in acquisition costs[31] Business Operations - The lithium-ion battery business has been supplying batteries to multiple high-end vehicle models since 2018, including models from Volvo and Lynk[24] - Zhejiang Hengyuan New Energy, a subsidiary, has a maximum annual production capacity of approximately 2,000,000 kWh of ternary lithium-ion batteries[25] - Shandong Hengyuan New Energy, an associate company, currently has an annual production capacity of 150,000 kWh for lithium iron phosphate batteries and 225,000 kWh for ternary lithium-ion batteries[26] - The company is actively negotiating with potential new customers in the automotive and energy storage sectors despite challenges in customer acquisition[24] - The average cost of batteries produced by the company is higher than that of competitors due to insufficient production capacity and low utilization rates[24] - The company has maintained stable business relationships with major suppliers and customers in the industry, which poses challenges for diversifying its customer base[24] - As of September 30, 2022, GETI operates 676 battery swapping stations and has 1,562 package users in China[28] - The GETI battery-sharing business in China reported revenue of approximately HKD 4,500,000 for the period ending September 30, 2022, with no growth compared to the same period last year[55] Project Developments - The total investment for the SAM project in Brazil is projected to be $2.78 billion, with an average operating cost of $27.6 per ton of iron concentrate for the first 18 years[34] - The project is expected to create approximately 6,200 direct jobs during the construction phase and around 1,100 direct jobs during the operational phase, along with 5,600 indirect jobs[32] - The average iron concentrate grade produced in the first 18 years of the SAM project is estimated to be 66.2%[31] - The environmental permit process for the SAM project has seen positive progress, with the project being designated as a priority by the Brazilian federal government[35] - Approximately 1,150 attendees participated in two public hearings regarding the environmental permit for the SAM project, showing strong local support[37] - The updated comprehensive economic feasibility analysis (PIAE) for the SAM project was approved by the Brazilian National Mining Agency (ANM) on May 22, 2022[39] - The expected FOB offshore cost for the first 18 years of the SAM project is approximately $40.9 per ton, increasing to $47.1 per ton thereafter[34] - The SAM project plans to incorporate 5G technology in mining operations and aims to utilize renewable energy for project power supply[41] - The company is actively advancing the SAM iron ore project despite challenges, with broad support from local communities and businesses in Brazil and China[66] Shareholder Information - As of September 30, 2022, the total number of shares held by major shareholders includes 4,065,000,000 shares held by Hongqiao Capital, representing 41.25% of the total shares[78] - The company’s chairman, He Xuechu, holds a total of 4,145,399,189 shares, accounting for 42.07% of the total shares[78] - The company has complied with all code provisions set out in the GEM Listing Rules Appendix 15 during the nine months ended September 30, 2022[70] - The company’s current share option plan was adopted on May 26, 2022, following the expiration of the previous plan on May 20, 2022[75] - As of September 30, 2022, there are 8,750,000 share options granted under the old share option plan that remain unexercised[77] Future Outlook - The company anticipates continued high growth in the new energy vehicle industry, with new vehicle sales expected to reach around 20% of total car sales by 2025[64] - Following the acquisition of Caocao International, the company plans to expand its services to other cities in France and Europe, positioning ride-hailing as a significant revenue source[65] - The sales framework agreement with Zhejiang Geely Holdings Group has an annual cap of RMB 300 million for the year ending December 31, 2022[84] - Sales under the sales framework agreement amounted to approximately HKD 77 million for the nine months ended September 30, 2022[86] - The annual cap for the year ending December 31, 2023, is set at RMB 350 million[84]

Financial Performance - For the six months ended June 30, 2022, the company reported total revenue of HKD 37,232,000, a decrease of 81.9% compared to HKD 205,286,000 for the same period in 2021[7] - The gross profit for the same period was HKD 13,531,000, down 76.6% from HKD 57,673,000 in 2021[7] - The company incurred a loss before tax of HKD 91,136,000, compared to a profit of HKD 139,227,000 in the previous year, representing a significant decline[7] - The net loss attributable to owners of the company for the six months was HKD 89,621,000, compared to a profit of HKD 124,973,000 in 2021[7] - The total comprehensive income for the six months ended June 30, 2022, was HKD 219,179,000, compared to HKD 322,975,000 for the same period in 2021, reflecting a decrease of approximately 32%[10] - The group incurred a segment loss of HKD 14,869,000 for the first half of 2022, compared to a profit of HKD 26,729,000 in the same period of 2021[26] - Revenue from external customers in China dropped to HKD 13,265,000 in 2022 from HKD 123,740,000 in 2021, reflecting a decline of 89.3%[27] - The company reported a decrease in battery replacement service revenue to HKD 2,618,000, down from HKD 3,108,000 in the previous year, representing a decline of approximately 16%[18] Assets and Liabilities - As of June 30, 2022, total assets amounted to HKD 7,088,846,000, an increase from HKD 6,621,889,000 at the end of 2021[8] - The company reported a total equity of HKD 4,901,937,000, up from HKD 4,685,791,000 at the end of 2021[8] - The total assets for the reportable segments as of June 30, 2022, were HKD 7,466,053,000, a decrease from HKD 7,800,520,000 as of June 30, 2021[22] - The company’s total liabilities for the reportable segments as of June 30, 2022, were HKD 482,930,000, compared to HKD 552,058,000 as of June 30, 2021, reflecting a decrease of approximately 12.5%[22] - The total liabilities from borrowings as of June 30, 2022, were RMB 271,519,000, a decrease of 4.5% from RMB 284,404,000 as of December 31, 2021[49] Cash Flow and Financial Management - The net cash generated from operating activities for the first half of 2022 was HKD 7,256,000, a significant improvement from a net cash used of HKD 28,798,000 in the first half of 2021[12] - The company’s net cash used in financing activities for the first half of 2022 was HKD 5,311,000, a significant improvement from HKD 69,401,000 in the same period of 2021[12] - The company’s cash flow management aims to minimize financial market risks while generating long-term returns through managing long-term financial investments[57] - The company does not currently have a foreign currency hedging policy, as it holds most financial assets/liabilities in its functional currency, resulting in low foreign exchange risk[58] - The company faces minimal cash flow interest rate risk, as it does not have significant floating-rate financial assets or liabilities[59] Strategic Focus and Future Plans - The company plans to focus on new energy and diversified businesses as part of its future strategy[3] - The company is exploring market expansion opportunities and potential mergers and acquisitions to enhance growth[3] - The company anticipates continued high growth in the new energy vehicle industry, with new energy vehicle sales expected to reach about 20% of total new car sales by 2025, equating to 5 million vehicles[107] - The company is actively pursuing mergers, investments, and collaborations in areas such as smart vehicle cockpits, automotive chips, electric control, and autonomous driving[109] Project Developments - The total investment for the SAM project in Brazil is expected to be $2.78 billion, with an operational cost of approximately $27.6 per ton of iron concentrate for the first 18 years[73] - The SAM project aims for an annual dry basis iron concentrate production of 27,500,000 tons, with an average grade of 66.2% over the first 18 years[70] - The environmental permit process for the SAM project has seen positive progress, with the project being designated as a priority by the Brazilian federal government[74] - The SAM iron ore project in Brazil has made recent positive progress, including the completion of public hearings and approval of the comprehensive economic feasibility analysis by the Brazilian National Mining Agency[110] Employee and Shareholder Information - The company had 183 employees as of June 30, 2022, down from 241 employees a year earlier[117] - The total number of shares held by major shareholders includes 4,065,000,000 shares owned by Hongqiao Capital, representing 41.25% of the total shares[128] - The company’s major shareholder, Li Shufu, holds a total of 1,953,739,675 shares, representing 19.83% of the total shares[128] - The total shareholding percentage of the company's chairman, He Xuechu, is 42.07%[128] Compliance and Governance - The company has complied with all code provisions set out in the GEM Listing Rules during the six-month period ending June 30, 2022[119] - The Audit Committee has reviewed the unaudited performance for the six months ended June 30, 2022, and believes it has been prepared in accordance with applicable accounting standards and regulations[141] - The company has adopted the GEM Listing Rules regarding the standards for directors' securities transactions, confirming compliance during the six months ended June 30, 2022[140]

[Financial Highlights](index=4&type=section&id=Financial%20Highlights) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The company shifted from profit to a **HK$56.81 million loss** attributable to owners in Q1 2022, with revenue plummeting **87.4% to HK$11.87 million** due to declining lithium-ion battery sales, though total comprehensive income reached **HK$730 million** from exchange gains Key Financial Indicators for Q1 2022 | Indicator | For the three months ended March 31 (HK$ thousands) | For the three months ended March 31 (HK$ thousands) | | :--- | :--- | :--- | | | **2022** | **2021** | | **Revenue** | 11,865 | 94,346 | | **Gross Profit** | 7,428 | 29,178 | | **(Loss)/Profit before tax** | (56,378) | 161,804 | | **(Loss)/Profit for the period** | (56,378) | 161,804 | | **(Loss)/Profit attributable to owners of the Company** | (56,806) | 154,992 | | **Total comprehensive income for the period** | 730,129 | (197,723) | | **Basic (loss)/earnings per share** | (0.58) HK cents | 1.59 HK cents | [Notes to the Financial Statements](index=5&type=section&id=Notes%20to%20the%20Financial%20Statements) Notes to the financial statements reveal specific reasons for performance changes, primarily a sharp decline in total revenue from lithium-ion battery sales and a shift from significant other operating income to expenses due to a **HK$49.26 million loss** on financial assets at fair value through profit or loss, with no dividends declared this quarter [Revenue](index=5&type=section&id=Revenue) Total revenue for the period was **HK$11.87 million**, an **87.4% decrease** from **HK$94.35 million** in the prior year, primarily due to a sharp drop in lithium-ion battery sales from **HK$92.71 million** to **HK$10.58 million**, alongside a slight decline in battery swapping service income Revenue Composition (HK$ thousands) | Item | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Lithium-ion battery sales | 10,575 | 92,714 | | Battery swapping service income | 1,290 | 1,632 | | **Total** | **11,865** | **94,346** | [Other Operating Expenses/Income](index=5&type=section&id=Other%20Operating%20Expenses%2FIncome) The period recorded **net other operating expenses of HK$42.94 million**, a stark contrast to **HK$116 million in income** last year, primarily due to a shift from **HK$109 million gain** to a **HK$49.26 million loss** on financial assets at fair value through profit or loss - A **HK$49.26 million loss** on financial assets at fair value through profit or loss was the primary reason for the shift from other operating income to expenses[10](index=10&type=chunk) [Finance Costs](index=6&type=section&id=Finance%20Costs) Finance costs decreased by **37.1%** year-on-year from **HK$3.33 million** to **HK$2.09 million**, primarily due to reduced interest expenses on bank and other borrowings - Interest expenses on bank and other borrowings decreased from **HK$3.28 million** to **HK$2.01 million**, significantly contributing to the reduction in finance costs[13](index=13&type=chunk) [Dividends](index=6&type=section&id=Dividends) The Board resolved not to declare any dividends for the three months ended March 31, 2022, consistent with the prior year's policy - The Board resolved not to declare any dividends for the three months ended March 31, 2022[14](index=14&type=chunk) [Earnings/Loss Per Share](index=6&type=section&id=Earnings%2FLoss%20Per%20Share) Due to the company's shift from profit to loss, basic loss per share was **0.58 HK cents**, compared to basic earnings per share of **1.59 HK cents** in the prior year - Basic (loss)/earnings per share shifted from **1.59 HK cents** in the prior year to **(0.58) HK cents** for the current period[6](index=6&type=chunk)[15](index=15&type=chunk) [Changes in Reserves](index=7&type=section&id=Changes%20in%20Reserves) As of March 31, 2022, the Group's total equity increased to **HK$5.416 billion** from **HK$4.686 billion** at the beginning of the year, primarily driven by **HK$787 million** in exchange reserve gains, offsetting operating losses - Exchange gains of **HK$787 million** from currency translation during the period were the main driver for the increase in total comprehensive income and total equity[17](index=17&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) [Business Segment Performance](index=8&type=section&id=Business%20Segment%20Performance) The company's core businesses include lithium-ion batteries, battery sharing services, and the Brazilian SAM iron ore project, with the battery business facing challenges from low capacity utilization and high costs, the GETI battery sharing service experiencing revenue decline due to competition, and the SAM project facing significant delays in environmental permit applications [Lithium-ion Battery Business](index=8&type=section&id=Lithium-ion%20Battery%20Business) The Group's lithium-ion battery business, primarily through Zhejiang Hengyuan New Energy (52% owned) and Shandong Hengyuan New Energy (24.5% owned), supplies batteries for high-end PHEV models, but faces challenges from insufficient capacity and high costs, leading to the loss of Lynk & Co PHEV orders since 2021, prompting active negotiations with new automotive and energy storage clients - Insufficient battery factory capacity and low utilization rates, leading to higher average costs than competitors, were the primary reasons for losing Lynk & Co orders[20](index=20&type=chunk) - The Group conducts its lithium battery business through Zhejiang Hengyuan New Energy (**52% owned**) and Shandong Hengyuan New Energy (an associate, **24.5% owned**)[21](index=21&type=chunk)[22](index=22&type=chunk) [Battery Sharing Business](index=9&type=section&id=Battery%20Sharing%20Business) The Group operates an e-bike battery sharing business under the 'GETI' brand in Jiangsu and Zhejiang provinces, China, with approximately **676 swapping stations** and **2,233 package users** as of March 2022, utilizing both self-operated and franchised models - As of March 2022, the GETI brand had approximately **676 battery swapping stations** and **2,233 package users**[24](index=24&type=chunk) [Progress of SAM Iron Ore Project](index=9&type=section&id=Progress%20of%20SAM%20Iron%20Ore%20Project) The Group's SAM iron ore project in Brazil, a significant long-term investment with cumulative funding of approximately **USD157 million**, aims for **27.5 million tonnes** of high-quality iron concentrate annually with a total estimated investment of **USD2.78 billion**, but faces severe delays in its preliminary environmental license application due to tightened regulations and lawsuits following other dam failures in Brazil - The Group has cumulatively invested approximately **USD157 million** in the Brazilian SAM iron ore project[26](index=26&type=chunk) Key Expected Indicators for SAM Project | Indicator | Value | | :--- | :--- | | Annual Production (dry basis iron concentrate) | 27,500,000 tonnes | | Total Investment (Capex) | 2.78 billion USD | | Operating Cost (Opex, first 18 years) | Approx. 27.6 USD/tonne | | FOB Cost (first 18 years) | Approx. 40.9 USD/tonne | - The issuance of the preliminary environmental license (LP) for the SAM project has been severely delayed due to two tailings dam failures at other Brazilian mines and related lawsuits[30](index=30&type=chunk)[32](index=32&type=chunk) [Financial Performance Analysis](index=12&type=section&id=Financial%20Performance%20Analysis) In Q1 2022, the Group's revenue plummeted **87.4% to HK$11.9 million** due to reduced demand for lithium-ion batteries from Volvo Cars, resulting in a **HK$56.8 million loss** attributable to owners, primarily from a sharp decline in gross profit and a **HK$49.3 million fair value loss** on financial assets, though administrative and finance costs decreased, with cash balance at **HK$426 million** and a **5.3% debt-to-equity ratio** - Operating revenue significantly decreased by **87.4%**, primarily due to reduced demand for lithium-ion batteries from key client Volvo Cars[35](index=35&type=chunk) - Key reasons for the shift from profit to loss include a **net loss of approximately HK$49.3 million** on financial assets (compared to a **HK$109 million gain** in the prior year) and a substantial decrease in gross profit[35](index=35&type=chunk)[38](index=38&type=chunk) - Administrative expenses decreased by **18.1%** year-on-year, and finance costs declined due to reduced borrowings[36](index=36&type=chunk) - As of March 31, 2022, the Group's cash and cash equivalents balance was approximately **HK$426 million**, with a debt-to-equity ratio of **5.3%**[38](index=38&type=chunk)[39](index=39&type=chunk) [Business Outlook](index=13&type=section&id=Business%20Outlook) The company anticipates continued high growth in the new energy vehicle industry but expects a significant revenue decline in H1 2022 for its PHEV battery business due to intense competition and rising industry standards, while actively pursuing new product launches for new clients by mid-2022, advancing the Brazilian SAM iron ore project, and exploring M&A, investment, and cooperation opportunities in smart vehicle sectors as part of its dual-track strategy in new energy and resources - Operating revenue is expected to decline significantly in H1 2022, primarily due to a substantial reduction in PHEV battery orders from Volvo Cars[41](index=41&type=chunk) - The company aims to introduce new products for new clients by mid-2022 to adapt to market changes[41](index=41&type=chunk) - The company will continue to explore M&A, investment, and cooperation opportunities in areas such as smart vehicle cockpits, automotive chips, autonomous driving, and shared mobility[41](index=41&type=chunk) - The Group's overall business strategy is a dual-track development in new energy vehicle-related businesses and resource sectors[42](index=42&type=chunk) [Corporate Governance and Other Disclosures](index=14&type=section&id=Corporate%20Governance%20and%20Other%20Disclosures) [Directors' and Shareholders' Interests](index=15&type=section&id=Directors'%20and%20Shareholders'%20Interests) The report discloses directors' and major shareholders' equity as of March 31, 2022, with Chairman Mr. He Xuechu holding approximately **42.07%** as the controlling shareholder, and Zhejiang Geely Holding Group Co Ltd and its controlling shareholder Mr. Li Shufu collectively holding approximately **19.83%** as major shareholders Major Shareholders' Shareholdings (as of March 31, 2022) | Shareholder Name/Entity | Total Shares Held | Approximate Shareholding Percentage (%) | | :--- | :--- | :--- | | He Xuechu | 4,145,399,189 | 42.07 | | Zhejiang Geely Holding Group Co Ltd | 1,850,675,675 | 18.78 | | Li Shufu | 1,953,739,675 | 19.83 | [Share Option Scheme](index=16&type=section&id=Share%20Option%20Scheme) Under the company's share option scheme adopted on May 21, 2012, **8,750,000** unexercised share options granted to employees on May 14, 2015, with an exercise price of **HK$2.61** per share, remained outstanding at the end of the reporting period - At the end of the reporting period, **8,750,000** unexercised share options granted to employees remained outstanding, with an exercise price of **HK$2.61**[49](index=49&type=chunk) [Connected Transactions](index=18&type=section&id=Connected%20Transactions) During the reporting period, the Group engaged in a connected transaction, selling approximately **HK$2.4 million** worth of lithium-ion batteries to an associate of Zhejiang Geely, a major shareholder of the company - The Group sold approximately **HK$2.4 million** worth of lithium-ion batteries to an associate of Zhejiang Geely, a major shareholder[55](index=55&type=chunk) [Compliance and Audit](index=14&type=section&id=Compliance%20and%20Audit) The company confirmed compliance with all Corporate Governance Code provisions in Appendix 15 of the GEM Listing Rules for the three months ended March 31, 2022, and its Audit Committee reviewed the unaudited results, deeming them prepared in accordance with applicable accounting standards and regulations with adequate disclosure - The company has complied with all Corporate Governance Code provisions set out in Appendix 15 of the GEM Listing Rules[42](index=42&type=chunk) - The Audit Committee has reviewed the Group's unaudited results for the three months ended March 31, 2022[58](index=58&type=chunk)

Financial Performance - The company reported revenue of HKD 478.9 million for the year ended December 31, 2021, a 61% increase from HKD 297.1 million in the previous year[8]. - Profit attributable to owners of the company was approximately HKD 88.5 million, a significant decrease from HKD 1,156.6 million in 2020, primarily due to the absence of asset impairment reversals related to the SAM iron ore project[9]. - The gross profit for the year was approximately HKD 115.1 million, with a gross profit margin of 24.0%, down from 31.3% in the previous year[67]. - Other operating income for the year was approximately HKD 114.6 million, compared to an expense of HKD 47.8 million in the previous year[67]. - Financial costs for the year were approximately HKD 8.8 million, a decrease from HKD 16.8 million in the previous year, primarily due to the repayment of loans from Zhejiang Geely[68]. - The group recorded a net gain of HKD 119.8 million from financial assets measured at fair value through profit or loss, compared to a loss of HKD 50 million in the previous year[70]. - The group's cash and cash equivalents balance as of December 31, 2021, was approximately HKD 396.4 million, an increase from HKD 372.7 million as of December 31, 2020[71]. - The capital debt ratio of the group as of December 31, 2021, was 6.1%, improved from 8.9% as of December 31, 2020, due to a reduction in total loans and borrowings[71]. - The total net proceeds from the placement and subscription of new shares amounted to HKD 1,336 million, with HKD 950 million allocated for enhancing lithium-ion battery capacity and potential investments in the electric vehicle sector[73]. - The company confirmed a financial cost of approximately HKD 800,000 related to short-term loans provided to Zhejiang Hengyuan New Energy during the fiscal year ending December 31, 2021[128]. Lithium-Ion Battery Business - The lithium-ion battery business contributed approximately HKD 473.1 million in revenue, with strong export sales to Europe increasing by about HKD 116.7 million, accounting for 24.4% of total lithium battery sales[8]. - The lithium-ion battery division recorded revenue of approximately HKD 473.1 million (around RMB 392.7 million) for the year ended December 31, 2021, representing an increase of about 62.7% compared to the previous year's revenue of HKD 290.8 million (around RMB 259 million)[20]. - The profit for the lithium-ion battery division was approximately HKD 17.2 million, a turnaround from a loss of HKD 130.5 million in 2020, primarily due to reduced impairment of property, plant, and equipment and increased gross profit[20]. - The company has a production capacity of approximately 2 million kWh for lithium-ion batteries at its subsidiary Zhejiang Hengyuan New Energy, with the first production line for soft-pack batteries having started mass production in 2018[18]. - The company’s lithium-ion battery products include 12V and 48V batteries, in addition to those used for PHEVs[15]. GETI Battery-Sharing Business - The GETI battery-sharing business in China had approximately 666 battery swap stations and 2,242 package users by December 2021, with revenue of about HKD 5.8 million[8]. - The battery sharing business, branded as "GETI," has established around 666 battery swap stations and served over 1 million battery swap services since its launch in mid-2019[21]. - The company plans to expand the GETI service to other regions in China and enhance battery quality and specifications to improve user experience[8]. Market Trends and Industry Outlook - The global shift from traditional gasoline vehicles to low-emission electric vehicles is expected to continue, with new energy vehicle sales projected to reach about 20% of total new car sales by 2025[10]. - The company anticipates continued high growth in the new energy vehicle industry in the coming years due to recent policy developments in China[10]. - The group anticipates that new energy vehicle sales will reach approximately 20% of total new car sales by 2025, with an expected growth trend in the industry[78]. Strategic Initiatives and Investments - The company is actively pursuing potential acquisitions in the smart vehicle driving seat, automotive chips, and components sectors, as well as in electric control and autonomous driving technologies[13]. - The company has invested a total of approximately USD 157 million in the Brazilian iron ore project, with an expected annual production of 27.5 million tons of dry iron concentrate at an average grade of 66.2% over the first eighteen years of operation[25]. - The company is exploring strategic partnerships and investments in the electric vehicle battery sector to mitigate sales concentration risks[83]. - The company is focused on dual-track development in the new energy vehicle sector and resource areas to create shareholder value[80]. Challenges and Risks - The company is facing challenges due to increased competition and new industry benchmarks, which are expected to lead to a significant decline in revenue in the first half of 2022[12]. - The lithium-ion battery division faces risks from reliance on a few major customers, which could significantly impact financial performance if orders decrease[83]. - Rising raw material costs for lithium-ion batteries, particularly cobalt and lithium, could adversely affect profitability and financial performance[84]. Governance and Compliance - The company did not recommend the payment of a final dividend for the year ended December 31, 2021, consistent with the previous year[1]. - The board of directors consists of seven members, with more than one-third being independent non-executive directors, ensuring appropriate professional qualifications and financial management expertise[139]. - The company has adopted a board diversity policy to enhance efficiency, considering factors such as gender, age, cultural background, and professional experience[149]. - The internal control system is designed to provide reasonable assurance against significant misstatements or losses, with risk management procedures established to identify, assess, and mitigate risks[153]. - The company has established a dividend policy that considers financial condition, capital levels, future cash requirements, and market conditions before declaring dividends[161]. Employee and Workplace Policies - The total number of employees as of December 31, 2021, was 198, down from 261 in 2020, indicating a reduction of approximately 24%[187]. - The overall average monthly employee turnover rate during the reporting period was approximately 29.28%[191]. - The company maintains a zero-tolerance policy towards discrimination and harassment in the workplace[195]. - The group has achieved ISO 45001:2018 certification for its occupational health and safety management system, emphasizing a "safety first" approach[200]. - The group conducts regular occupational health education training and safety drills to enhance employee awareness of safety practices[200]. Environmental, Social, and Governance (ESG) Commitment - The company emphasizes the importance of integrating Environmental, Social, and Governance (ESG) principles into its risk management system[172]. - The ESG report for the year ending December 31, 2021, highlights the company's commitment to sustainable development and transparency in its ESG measures and performance[172]. - The board of directors is responsible for overseeing the company's ESG strategy and ensuring the accuracy of the ESG report[174]. - The company maintains regular communication with shareholders and potential investors through meetings and announcements[169].

Financial Performance - For the nine months ended September 30, 2021, the total revenue was HKD 327,154,000, a significant increase of 84.4% compared to HKD 177,435,000 for the same period in 2020[8] - Lithium battery sales contributed HKD 322,644,000 to the revenue, up from HKD 172,997,000 in the previous year, reflecting a growth of 86.5%[8] - The gross profit for the nine months ended September 30, 2021, was HKD 93,856,000, compared to HKD 37,597,000 in 2020, marking an increase of 149.5%[5] - The company reported a profit before tax of HKD 132,778,000 for the nine months ended September 30, 2021, compared to a loss of HKD 168,167,000 in the same period of 2020[5] - The net profit attributable to the owners of the company for the nine months was HKD 108,736,000, a turnaround from a loss of HKD 163,021,000 in the previous year[5] - The company reported a basic and diluted earnings per share of HKD 1.12 for the nine months ended September 30, 2021, compared to a loss per share of HKD 1.67 in the previous year[5] - Profit attributable to owners for the same period was approximately HKD 108.7 million, a significant turnaround from a loss of HKD 163 million in the previous year[36] - Gross profit for the nine months was approximately HKD 93.9 million, with a gross margin of 28.7%, up from HKD 37.6 million and a gross margin of 21.2% in the previous year[33] Foreign Exchange and Financial Costs - The company incurred a foreign exchange loss of HKD 372,671,000 for the nine months, compared to a loss of HKD 1,230,772,000 in the same period of 2020[5] - The financial costs decreased to HKD 7,474,000 from HKD 13,578,000, representing a reduction of 45.0%[10] - Financial costs decreased to approximately HKD 7.5 million from HKD 13.6 million in the previous year, attributed to loan repayments[36] Market Presence and Business Strategy - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[4] - The company has been negotiating with potential new customers in the automotive and energy storage sectors to expand its market presence[17] - The company anticipates continued high growth in the electric vehicle industry over the coming years, driven by the global shift from traditional gasoline vehicles to low and zero-emission electric vehicles[40] - The company is pursuing a cautious yet proactive approach in its business operations and development, considering mergers and acquisitions in areas such as automotive chips, electric control, and autonomous driving[40] - The company’s overall business strategy focuses on dual-track development in the electric vehicle sector and resource areas to create shareholder value[41] Investments and Projects - The total investment for the SAM project is expected to be $2.24 billion, excluding pipeline and port projects led by Lotus Brasil and the Brazilian government[26] - As of September 30, 2021, the company has invested a total of approximately $156.4 million in the SAM project, including $78 million in funding for preliminary work[23] - The company aims to obtain environmental permits (LP) by Q4 2021 to Q1 2022, with the possibility of installation permits (LI) by Q2 2023 and trial production by Q2 2026[25] - The company has not yet obtained preliminary environmental feasibility approval for the SAM iron ore project, but recent positive developments in Minas Gerais have prompted continued project advancement[40] Shareholder Information - As of September 30, 2021, the company’s major shareholder, He Xuechu, holds approximately 42.07% of the shares[44] - The total shares held by Hongqiao Capital amount to 4,065,000,000, representing 41.25% of the company[50] - Zhejiang Geely Holding Group owns 100% of Geely International (Hong Kong) Limited, which holds 18.78% of the company's issued shares[51] Compliance and Governance - The company has complied with all code provisions of the GEM Listing Rules during the nine months ending September 30, 2021[41] - The board of directors confirmed compliance with the trading standards for securities transactions during the nine months ending September 30, 2021[59] - The audit committee reviewed the unaudited performance for the nine months ending September 30, 2021, ensuring compliance with applicable accounting standards[60] - The company has established an audit committee in accordance with GEM listing rules and corporate governance codes[60]

Financial Performance - The company reported revenue of HKD 205,286,000 for the six months ended June 30, 2021, compared to HKD 91,833,000 for the same period in 2020, representing a growth of 123.5%[5] - The gross profit for the six months ended June 30, 2021, was HKD 57,673,000, compared to HKD 28,495,000 in the previous year, indicating an increase of 102.5%[5] - The net loss for the six months ended June 30, 2021, was HKD 22,577,000, a significant improvement from a loss of HKD 62,693,000 in the same period of 2020[5] - The company achieved a basic and diluted loss per share of HKD 0.31 for the six months ended June 30, 2021, compared to a loss of HKD 0.53 per share in the previous year[6] - The total comprehensive income for the six months ended June 30, 2021, was HKD 337,824,000, compared to a loss of HKD 242,695,000 in the same period of 2020[6] - The company reported a profit of HKD 26,729,000 for the six months ended June 30, 2021, compared to a loss of HKD 7,557,000 in the same period of 2020[17] - The company’s total comprehensive income for the period was HKD 337,824 thousand, compared to HKD 139,227 thousand in the previous year, representing a significant increase[9] Assets and Liabilities - Total assets increased to HKD 7,345,699 thousand, up from HKD 7,056,524 thousand, representing a growth of approximately 4.1% year-over-year[8] - Current assets rose to HKD 764,083 thousand, compared to HKD 746,681 thousand, reflecting an increase of about 2.3%[8] - Current liabilities decreased significantly to HKD 293,154 thousand from HKD 457,309 thousand, a reduction of approximately 35.9%[8] - Total equity increased to HKD 5,225,949 thousand from HKD 4,799,022 thousand, marking an increase of approximately 8.9%[9] - The company’s borrowings decreased to HKD 136,597 thousand from HKD 182,421 thousand, a decline of approximately 25.2%[8] - The company’s borrowings amounted to HKD 278,726,000 as of June 30, 2021, a decrease from HKD 425,411,000 as of December 31, 2020[39] Cash Flow and Investments - Net cash and cash equivalents at the end of the period were HKD 270,102 thousand, down from HKD 372,651 thousand, indicating a decrease of about 27.5%[10] - The company reported a net cash outflow from operating activities of HKD (28,798) thousand, compared to an inflow of HKD 31,769 thousand in the previous year[10] - The company made a capital injection of HKD 89,103 thousand into a non-wholly owned subsidiary during the period[11] - The company plans to invest HKD 200,000,000 in the Brazilian iron ore project and HKD 186,000,000 for general operating expenses[76] Market and Strategic Initiatives - The company plans to continue expanding its market presence and developing new products and technologies to drive future growth[4] - The company has identified potential acquisition targets to enhance its business portfolio and market reach[4] - The management expressed optimism about future performance, citing improved operational efficiencies and market conditions[4] - The company aims to explore strategic investments in smart vehicle technologies, including autonomous driving and vehicle lightweighting, in response to trends in electrification and shared mobility[75] Operational Developments - The company has established around 400 battery swap stations and 1,800 subscription users for its battery-sharing business under the "GETI" brand as of June 2021[52] - The production capacity of the subsidiary Zhejiang Hengyuan New Energy is approximately 2,000,000 kWh of ternary lithium batteries annually, with the first production line having started mass production in 2018[50] - The company is currently negotiating with potential new customers in the automotive and energy storage sectors to expand its market presence despite challenges in customer acquisition[49] Environmental and Regulatory Matters - The company aims to obtain environmental permits for the SAM project by Q4 2021, with installation permits expected by Q2 2023 and trial production by Q2 2026, subject to uncertainties[57] - SAM has faced significant delays in obtaining environmental permits due to regulatory changes and incidents, including a dam collapse in 2015 that halted approvals for all tailings dams in Brazil[59] - In March 2021, SAM restarted its environmental assessment process after signing a technical cooperation agreement with IBAMA and SEMAD, allowing for the continuation of the preliminary environmental permit application[61] Shareholder and Corporate Governance - The major shareholder, Hongqiao Capital, holds approximately 4,065,000,000 shares, representing about 41.25% of the total shares[94] - The total number of shares held by the director and major executives as of June 30, 2021, includes 4,145,399,189 shares, accounting for approximately 42.07%[87] - The company has complied with all code provisions set out in the GEM Listing Rules Appendix 15 during the six-month period ending June 30, 2021[86] - The company has established an audit committee in compliance with GEM listing rules and corporate governance codes[104]

Financial Performance - The company reported a revenue of HKD 94,346,000 for the three months ended March 31, 2021, compared to HKD 35,172,000 for the same period in 2020, representing a growth of 168%[8] - Lithium-ion battery sales accounted for HKD 92,714,000, significantly increasing from HKD 34,258,000 year-over-year[8] - The company achieved a gross profit of HKD 161,804,000 for the quarter, with a net profit attributable to owners of HKD 154,992,000[6] - Other operating income totaled HKD 115,800,000, up from HKD 17,793,000 in the previous year, driven by various income streams including bank interest and government grants[9] - The financial costs for the quarter were HKD 3,325,000, a decrease from HKD 5,998,000 in the same period last year[10] - The total comprehensive income for the period was a loss of HKD 197,723,000, primarily due to foreign exchange losses[6] - The basic and diluted earnings per share for the period were both HKD 1.59[6] - The company reported a basic earnings of approximately HKD 154,992,000 for the three months ended March 31, 2021, compared to a loss of HKD 67,983,000 for the same period in 2020[13] - The total equity of the company as of March 31, 2021, was HKD 4,799,022,000, an increase from HKD 4,766,595,000 as of March 31, 2020[14] - The gross profit for the period was about HKD 29.2 million, with a gross margin of 30.9%, an improvement from a gross margin of 27.8% in the previous year[36] - Other operating income for the period was approximately HKD 115.8 million, a substantial increase from HKD 17.8 million in the previous year, mainly due to the rise in the stock price of a subsidiary[36] - Financial costs decreased to approximately HKD 3.3 million from HKD 6 million in the previous year, primarily due to reduced borrowings[36] - The company has improved operational efficiency and reduced indirect costs, contributing to the enhanced gross margin[36] Market Expansion and Strategy - The company plans to continue expanding its market presence and developing new technologies in the lithium battery sector[5] - The company is committed to enhancing its operational efficiency and exploring potential mergers and acquisitions to drive growth[5] - The company is negotiating with automotive manufacturers and potential new customers in the energy storage sector to promote product matching[15] - The company plans to expand its battery swapping service under the "GETI" brand, which currently has about 229 battery swapping stations and 2,100 active users[35] - The company aims to provide safe, convenient, and reliable battery swapping services across China, leveraging the transition from lead-acid to lithium batteries in electric bicycles[35] - The company anticipates significant growth in the new energy vehicle market, projecting a competitive increase in the sector by 2025, with an expected total of 5 million vehicles[39] - The company is exploring mergers, investments, and partnerships in areas such as smart vehicle technology, automotive chips, and autonomous driving[40] - The company is committed to a dual-track development strategy focusing on new energy vehicles and resource sectors to create shareholder value[40] Production and Capacity - The subsidiary Zhejiang Hengyuan New Energy has a designed annual production capacity of approximately 2,000,000 kWh of ternary lithium-ion batteries[17] - The current annual production capacity of the joint venture Shandong Hengyuan New Energy is 150,000 kWh for lithium iron phosphate batteries and 225,000 kWh for ternary lithium-ion batteries[18] - Approximately 98.3% of the total revenue was contributed by the lithium-ion battery factory in Zhejiang, with the remaining revenue primarily from battery replacement services for electric bicycles in China[35] Environmental and Regulatory Matters - The environmental permit application process has faced significant delays due to regulatory changes and past mining disasters, impacting the timeline for project approvals[26] - If the preliminary environmental permit (LP) is obtained in Q4 2021, the installation permit (LI) could be granted by Q2 2023, with trial production expected in Q2 2026[24] - The company has completed a new environmental impact study in compliance with updated regulations, submitted in early 2019[27] - The project is interdependent with the pipeline project by Lotus Brasil, which should be submitted for environmental approval together[27] - The company has been actively communicating with environmental authorities to optimize the project and address regulatory requirements[26] Investment and Financial Position - The total investment for the SAM project is expected to be $2.24 billion, excluding pipeline and port projects led by Lotus Brasil and the Brazilian government[25] - The annual production capacity of the SAM project is projected to reach 27.5 million tons of iron concentrate, with an average grade of 66.2% over the first 18 years of operation[22] - The estimated operating cost (Opex) for the first 18 years is approximately $20.4 per ton of iron concentrate, increasing to about $25.7 per ton thereafter[25] - The expected FOB (Free on Board) cost for the first 18 years is around $33.7 per ton, rising to $39.0 per ton thereafter[25] - The company has cumulatively invested approximately $155.22 million in the SAM project, including $76.8 million in funding and $78.42 million in acquisition costs[22] - The company is actively seeking to recover investments in Shandong Hengyuan New Energy through negotiations or legal actions due to unpaid capital contributions[39] Shareholder Information - 洪桥资本持有4,065,000,000股股份，占总股份的41.25%[59] - 貿学初及其配偶FOO Yatyan合计持有4,145,399,189股股份，占总股份的42.07%[59] - 吉利国际(香港)有限公司持有1,850,675,675股股份，占总股份的18.78%[59] - 李书福通过浙江吉利控股集团有限公司持有1,953,739,675股股份，占总股份的19.83%[59] Compliance and Governance - 本公司在截至2021年3月31日的期间内未有任何与业务构成竞争的权益[62] - 本公司已成立审核委员会，确保业绩按适用会计准则编制并充分披露[65] - 截至2021年3月31日，董事会确认所有董事遵守交易必守标准[63] - 本公司在截至2021年3月31日的三个月内未进行任何上市证券的购买、出售或赎回[65]

Financial Performance - The company reported a revenue of HKD 85,602,000 for the three months ended September 30, 2020, compared to HKD 70,564,000 for the same period in 2019, representing a 21.3% increase[4]. - Gross profit for the three months ended September 30, 2020, was HKD 20,574,000, a significant recovery from a gross loss of HKD 515,000 in the same period last year[4]. - The company incurred a loss of HKD 40,639,000 for the three months ended September 30, 2020, compared to a profit of HKD 12,108,000 in the same period in 2019, indicating a shift in performance[4]. - The company reported a total comprehensive loss of HKD 110,561,000 for the three months ended September 30, 2020, compared to a loss of HKD 267,669,000 in the same period last year[4]. - The company’s total revenue for the nine months ended September 30, 2020, was HKD 177,435,000, down from HKD 196,082,000 in the previous year, indicating a decline of 9.5%[8]. - The company reported a loss attributable to owners of approximately HKD 163,021,000 for the nine months ended September 30, 2020, compared to a loss of HKD 18,874,000 for the same period in 2019[16]. - The gross profit for the nine months ended September 30, 2020, was approximately HKD 37.6 million, with a gross margin of 21.2%, an improvement attributed to higher profit margins from upgraded products[33]. - The company recorded revenue of approximately HKD 177.4 million for the nine months ended September 30, 2020, a decrease of 9.5% compared to HKD 196.1 million in the same period last year[33]. Expenses and Costs - The company’s administrative expenses increased to HKD 12,307,000 for the three months ended September 30, 2020, compared to HKD 10,563,000 in the same period in 2019[4]. - The company’s financial costs decreased to HKD 3,672,000 for the three months ended September 30, 2020, from HKD 4,468,000 in the same period in 2019, showing a reduction of 17.8%[4]. - The financial cost for bank and other loans interest was HKD 13,338,000 for the nine months ended September 30, 2020, an increase from HKD 12,634,000 in 2019[13]. - The sales and distribution costs for the period were approximately HKD 15 million, an increase attributed to higher product maintenance costs[34]. - The financial cost for the nine months ending September 30, 2020, was approximately HKD 13,600,000, compared to HKD 13,000,000 for the same period in 2019[36]. Assets and Liabilities - The total liabilities, including borrowings, amounted to HKD 67,155,000[10]. - The company’s total assets were reported at HKD 293,303,000[10]. - The company reported a total equity of HKD 3,255,270,000 as of September 30, 2020, compared to HKD 4,766,595,000 as of January 1, 2020, indicating a decrease of approximately 31.7%[17]. - The cash and cash equivalents balance as of September 30, 2020, was approximately HKD 277,000,000, with a focus on prudent cost control amid economic challenges[37]. Business Operations - Lithium-ion battery sales amounted to HKD 172,997,000 for the nine months ended September 30, 2020, down from HKD 195,875,000 in the previous year, reflecting a decline of 11.6%[8]. - The revenue from the battery sharing business under the "GETI" brand was approximately HKD 4,400,000 for the period ending September 30, 2020[23]. - As of September 2020, the "GETI" battery swapping stations numbered around 229, serving approximately 2,600 subscription users[23]. - The company has successfully entered the Chinese Ministry of Industry and Information Technology's catalog for new energy vehicles with its battery packs, including models from Volvo and Lynk & Co[18]. - The production capacity of Zhejiang Hengyuan New Energy is approximately 2,000,000 kWh of ternary lithium batteries annually, with the first production line capable of producing 500,000 kWh having started operation in mid-2018[19]. - The company is actively negotiating with major and new automotive manufacturers in the energy storage sector to explore new customer opportunities[18]. - The company has developed standardized battery modules with over 10,000 plug-in cycles and multiple safety features for its battery sharing business[26]. - The company has been involved in the production and supply of battery modules for various plug-in hybrid electric vehicles (PHEVs) including models from Volvo and Lynk & Co[18]. Losses and Financial Challenges - The company recognized a loss of HKD 4,558,000 from an associate for the three months ended September 30, 2020, compared to a minimal loss of HKD 7,000 in the same period last year[4]. - The company’s basic loss per share for the three months ended September 30, 2020, was HKD 0.44, compared to a loss of HKD 0.06 in the same period last year[4]. - The company incurred a loss of HKD 163,021,000 during the third quarter of 2020, compared to a loss of HKD 18,874,000 in the same period of 2019, representing an increase in losses of approximately 764.5%[17]. - The loss attributable to the owners for the nine months ending September 30, 2020, was approximately HKD 163,000,000, an increase from HKD 18,900,000 in 2019, primarily due to losses from joint ventures and non-cash losses from the sale of subsidiaries[36]. - The company recognized a loss of approximately HKD 38,800,000 due to uncertainties regarding capital contributions from Jiangsu Tiankai related to Shandong Hengyuan New Energy[36]. Shareholder Information - The total number of shares held by Hongqiao Capital Limited is 4,065,000,000, representing approximately 41.25% of the total shares[55]. - Mr. He Xuechu holds 57,939,189 shares directly and has a total stake of 4,145,399,189 shares, which is about 42.07%[55]. - The major shareholder, Geely International (Hong Kong) Limited, holds 1,850,675,675 shares, accounting for 18.78% of the total shares[55]. - The total number of shares outstanding is approximately 9,902,000,000, based on the holdings of major shareholders[55]. - The company has granted stock options totaling 8,750,000 shares, with an exercise price of HKD 2.61, set to expire in 2023[52]. - The stock options granted in 2012 have a total of 5,000,000 shares that have expired, leaving no unexercised options from that grant[52]. - Mr. Li Shufu, a major shareholder, holds 103,064,000 shares directly, contributing to a total of 1,953,739,675 shares when including his controlled entities[55]. - The company has not reported any new strategies or market expansions in the latest earnings call[58]. Loans and Financial Support - Zhejiang Geely provided a loan of RMB 100,000,000 (approximately HKD 114,000,000) to Zhejiang Hengyuan New Energy at a fixed annual interest rate of 4.75%, which was fully repaid by September 30, 2020[59]. - In 2019, Zhejiang Geely issued two loans to Zhejiang Hengyuan New Energy totaling RMB 152,800,000 (approximately HKD 174,100,000) at a fixed annual interest rate of 4.35%, both of which were fully repaid by September 30, 2020[59]. - Shanghai Huapu Automobile Co., Ltd. provided a loan of RMB 33,600,000 (approximately HKD 36,850,000) to Zhejiang Hengyuan New Energy, with a repayment period extended to March 20, 2021[59]. - As of September 30, 2020, the company recognized financial costs of HKD 5,600,000 related to the aforementioned short-term loans[59]. Environmental and Community Engagement - The environmental permit application process for the SAM project is ongoing, with the company taking legal measures to expedite the process and resolve the public civil lawsuit[41]. - The company is actively monitoring the environmental permit approval process and has received interim rulings allowing continued environmental studies[41]. - SAM received support letters from 5 municipal mayors and 15 local organizations/associations after the environmental permit process was suspended[42]. - SAM donated 70,000 medical surgical masks to six municipalities in northern Minas Gerais during the early stages of the COVID-19 pandemic[42]. - SAM signed a non-binding MOU with Huawei Brazil to collaborate on the development of unmanned mining technology and the application of 5G technology in mining operations[42].