Economic Performance - China's GDP for the first three quarters of 2020 was RMB 72.3 trillion, representing a 0.7% growth compared to the previous year[13]. - For the year ended December 31, 2020, ELL Environmental recorded a revenue of HK$59.0 million, representing a year-on-year decrease of 23.8%[25]. - Total revenue decreased by HK$18.5 million or 23.8% to HK$59.0 million for FY2020 compared to HK$77.5 million for FY2019, mainly due to the absence of retrospective water tariff adjustments in FY2020[48]. - The gross profit for the same period was HK$29.6 million, reflecting a year-on-year decrease of 12.7%[25]. - Gross profit decreased by HK$4.3 million or 12.7% from HK$33.9 million for FY2019 to HK$29.6 million for FY2020, while gross profit margin increased from 43.8% to 50.2%[50]. - Profit before tax decreased by HK$11.9 million or 70.1% from HK$17.0 million in FY2019 to HK$5.1 million in FY2020[58]. - Loss attributable to owners of the Company was HK$5.0 million for FY2020 compared to a profit of HK$1.0 million in FY2019[66]. Environmental Performance - The proportion of national surface water assessment sections with excellent water quality reached 81.8%, an increase of 6.4% year-on-year[13]. - The proportion of sections with poor water quality dropped to 0.8%, a decrease of 2.4% compared to the same period last year[13]. - The "improvement in quality and efficiency" of wastewater treatment facilities has achieved excellent results during the year[13]. - The environmental protection industry in China remained stable throughout 2020, despite challenges posed by the COVID-19 pandemic[13]. - The environmental protection industry in China is expected to benefit from national policies and measures, with a focus on increasing capital investment and driving development through innovation and technology[31]. - The "Action Plan for Prevention and Control of Water Pollution" aims for significant improvements in water quality, including achieving over 70% of key river basins meeting quality standards by 2020[33]. - The Group's wastewater treatment capacity is 80,000 tonnes per day, with a total of 13,047,864 tonnes of wastewater treated in 2020[165]. - In 2020, the Group removed 7,709.08 tonnes of Chemical Oxygen Demand (COD) from treated wastewater[165]. - The wastewater treatment facilities utilize Moving Bed Biofilm Reactor (MBBR) and Cyclic Activated Sludge Technology (CAST) for efficient treatment processes[166]. - The Group adheres to local wastewater treatment standards to ensure the quality of treated wastewater[173]. Business Strategy and Development - The Company will focus on actively promoting the resource utilisation of urban domestic sewage, industrial wastewater, and agricultural sewage[17]. - Central treasury funds for wastewater resource utilisation will be increased, indicating strong demand for wastewater treatment in China[17]. - The Company plans to optimize its business development strategy in response to national policy changes and market dynamics[17]. - The Company aims to contribute to environmental protection by aligning with national water pollution treatment efforts[17]. - The Group is launching a biofuel pellets production business in Indonesia and preparing to construct a new power plant in Bangka, Indonesia, to enhance revenue[21]. - The company is developing a biofuel pellets manufacturing plant in Indonesia, expected to commence operations in late 2021, aiming for diversified growth[42]. - A new power plant with a capacity of 10 megawatts is being developed in Bangka, Indonesia, with agreements for equipment purchases totaling approximately US$1.1 million and RMB10.4 million[42]. - The Group is actively discussing water tariff adjustments for Rugao Hengfa and has reached a preliminary consensus with local authorities[19]. - Water tariffs for Haian Hengfa increased from RMB0.91 per tonne to RMB1.14 per tonne in 2020, contributing to revenue and profit growth[38]. - Rugao Hengfa is expected to raise water tariffs from RMB2.67 per tonne to over RMB3 per tonne, enhancing performance prospects[38]. Financial Health - The net loss for the year was HK$1.5 million[25]. - As of December 31, 2020, bank balances and cash decreased by HK$13.0 million or 20.3% to HK$51.1 million from HK$64.1 million as of December 31, 2019[69]. - The book value of net assets decreased by HK$2.5 million or 0.7% to HK$375.2 million as of December 31, 2020, from HK$377.7 million as of December 31, 2019[68]. - The gearing ratio remained stable at 0.07 and 0.06 as of December 31, 2019, and December 31, 2020, respectively[75]. - Other income and net gains decreased by HK$8.1 million or 60.2% from HK$13.4 million in FY2019 to HK$5.3 million in FY2020, primarily due to foreign exchange losses and absence of sludge processing fee recovery[55]. - Administrative expenses decreased slightly by HK$0.3 million or 1.2% from HK$28.2 million in FY2019 to HK$27.9 million in FY2020, representing 36.4% and 47.2% of revenue for FY2019 and FY2020, respectively[56]. - Finance costs remained stable at HK$2.0 million for FY2020 compared to HK$2.1 million for FY2019[57]. - Employee costs for FY2020 were HK$13.2 million, a decrease from HK$18.6 million in FY2019, with a total of 114 employees as of December 31, 2020[94]. - The Group had no significant investments, material acquisitions, or disposals during FY2020[86]. - No final dividend was recommended for FY2020, compared to HK$0.005 per share in FY2019[97]. - The Group has no plans for other material investments or capital asset additions as of the date of the annual report[87]. Sustainability and Governance - The Group has established an Environmental, Social and Governance Policy to guide sustainable practices across all operations[119]. - ELL Environmental engages stakeholders through various communication channels, including general meetings and site visits, to gather feedback on its sustainability performance[125]. - An independent sustainability consultant conducts annual materiality assessments to identify key environmental, social, and governance issues relevant to the Group[128]. - The Group aims to deliver high-quality environmental protection solutions to mitigate pollution and reduce environmental impact[123]. - ELL Environmental encourages employee participation in voluntary activities, contributing positively to the community[124]. - The reporting methods used in the sustainability report are consistent with previous years, ensuring comparability of performance data[121]. - The Group emphasizes a balanced presentation of both positive and negative information regarding its sustainability performance[120]. - The Group identified 27 ESG issues based on stakeholder communication, listing requirements, and sustainability trends in the industry[131]. - The Board oversees ESG risk management, integrating stakeholder concerns to identify material issues for the Group[143]. - The Group has implemented an Anti-corruption Policy and Code of Conduct to maintain business ethics and integrity[147]. - During the Reporting Period, there were no material non-compliance issues related to corruption or fraud[148]. - The Group's materiality analysis combines stakeholder feedback with management assessments to focus on significant ESG topics[134]. - The Group aims to improve sustainability strategies based on the results of the materiality assessment[132]. Operational Compliance - The Group has implemented comprehensive policies to manage environmental performance and compliance with relevant laws and regulations[160]. - Regular assessments of suppliers are conducted to ensure compliance with quality and environmental standards[159]. - The Group is committed to positive environmental impact as a core responsibility in its operations in China and Indonesia[160]. - No material non-compliance with relevant laws and regulations was reported during the reporting period[160]. - The Group's operations are governed by multiple environmental laws in both China and Indonesia, ensuring adherence to environmental protection standards[160]. - The wastewater treatment business is committed to meeting the Integrated Wastewater Discharge Standard and Class 1-A or Class 1-B requirements, having obtained the necessary Pollutant Emission Permits[177]. - Daily water quality checks include parameters such as chemical oxygen demand (COD), biological oxygen demand (BOD), pH value, and ammonia (NH3), with results documented in monthly reports[177]. - The company has implemented measures to reduce noise pollution, including prioritizing low-noise equipment and conducting regular inspections[196]. - A hazardous waste warehouse has been established at the Haian Hengfa facilities to properly store hazardous waste and prevent leakage[198]. - An environmental impact assessment has been conducted for the biofuel pellet production plant in Indonesia to minimize negative environmental impacts during construction[199]. - The environmental assessment report outlines emissions such as waste, air emissions, and wastewater, along with measures to handle and reduce these emissions[200].
强泰环保(01395) - 2020 - 年度财报