# 5. OPERATING SEGMENTS (Continued)

# Geographical information

The Group mainly operates in Hong Kong and the PRC. The Group’s revenue from external customers and information about its non-current assets by geographical location are detailed below:

5. 經營分部（續）

地區資料

本集團主要於香港及中國經營。本集團按地區劃分之來自對外客戶之收益及有關其非流動資產之資料詳列如下：

	Continuing operations
Revenue from
external customers
持續經營業務
從對外客戶而來之收益	 Discontinued operation
Revenue from
external customers
已終止經營業務
從對外客戶而來之收益	Continuing operations
N*on-current assets
持續經營業務
非流動資產*	 Discontinued operation
N*
on-current assets已終止經營業務
非流動資產*

2018
二零一八年	2017
二零一七年	2018
二零一八年	2017
二零一七年	2018
二零一八年	2017
二零一七年	2018
二零一八年	2017
二零一七年

HK$’000
千港元	HK$’000
千港元	HK$’000
千港元	HK$’000
千港元	HK$’000
千港元	HK$’000
千港元	HK$’000
千港元	HK$’000
千港元

Australia                    澳洲	21	68	—	—	—	—	—	—

Europe                     歐洲	10,437	10,218	—	—	—	—	—	—

Hong Kong                   香港	144,595	(1,493)	—	—	665,778	432,895	—	—

The Middle East                 中東	—	705	—	—	—	—	—	—

The PRC                     中國	32,777	44,412	—	—	1,465,511	2,386,289	—	—

The United States of America          美利堅合眾國	207	79	—	—	—	—	—	—

	188,037	53,989	—	—	2,131,289	2,819,184	—	—

\* Non-current assets excluded deferred tax assets, other receivables and loan receivables.

\* 非流動資產不包括遞延稅項資產、其他應收款項及應收貸款。


# 5. OPERATING SEGMENTS (Continued)

# Information about major customers

Revenue from customers of the corresponding years contributing over 10% of the total revenue of the Group are as follows:

5. 經營分部（續）

有關主要客戶之資料

於相關年度向本集團總收益貢獻10% 以上之來自客戶之收益如下：

	For the year ended
31 December
截至十二月三十一日止年度

2018
二零一八年	2017
二零一七年

HK$’000
千港元	HK$’000
千港元

Customer 11               客戶11	N/A不適用4	18,549

Customer 21               客戶21	19,901	13,303

Customer 32               客戶32	21,264	20,809

Customer 42               客戶42	N/A不適用4	9,159

Customer 53               客戶53	N/A不適用4	16,200

Customer 63               客戶63	N/A不適用4	12,191

Customer 73               客戶73	N/A不適用4	10,560

1 Revenue from sale of jewelry products.

2 Revenue from property investment.

3 Revenue from money lending.

4 The corresponding revenue did not contribute over 10% of the total revenue of the Group.

1 來自銷售珠寶產品之收益。

2 來自物業投資之收益。

3 來自借貸之收益。

4 相關收益並無向本集團總收益貢獻 10% 以上。


# 9 Preparation

# Report Overview

This 2018 ESG Report of Hua Hong Semiconductor Limited (hereinafter referred to as “this Report”) disclosures its principles in fulfilling CSR and the work carried out in 2018. It mainly addresses our Stakeholders about the sustainable development regarding the relevant economic, environmental, and social issues.

# Reference Basis

This Report adopts the “Environmental, Social and Governance Reporting Guide” issued by the Stock Exchange of Hong Kong Limited and the “Sustainability Reporting Standards (2016)” of the Global Reporting Initiative (GRI) as its reference basis.

# Scope of Report

Organizational scope:	The Company as defined. This Report by the Company, Hua Hong Semiconductor Limited,
includes all subsidiaries of the Company.

Reporting period:	From 01 January 2018 to 31 December 2018

Release cycle:	This is an annual report

# Data Descriptions

Data and cases in this Report originate from the Company’s original records in day-to-day operation or financial reports. In case of discrepancies, the financial reports data shall prevail.


# 目錄

釋義	85

主要財務指標	88

致股東的信	89

公司資料	91

董事及高級管理層	94

企業管治報告	101

董事會報告	112

2018年環境、社會及管治報告	139

獨立核數師報告	167

綜合損益表	175

綜合全面收益表	176

綜合財務狀況表	177

綜合權益變動表	179

綜合現金流量表	181

財務報表附註	183

五年財務概覽	296


# INDEBTEDNESS

The following table sets forth our other borrowings as at the dates indicated:

	As at
31 December	As at
30 April
2017

2015	2016

HK$(’000)	 HK$(’000)	 HK$(’000)

		(Unaudited)

Non-current

Other liability ...........................	11,282	 –	 –

Other liability of approximately HK\$11.3 million represented the fair value of the Pre-IPO Investment recognised as at 31 December 2015. As at 31 December 2016 and 30 April 2017, such other liability was transferred to our Group’s equity because the put option granted to our pre-IPO investor, namely Top Champ, to require our Company to repurchase the Shares held by Top Champ was removed under the Supplemental Deed. For details of the Supplemental Deed and the Pre-IPO Investment, please refer to the paragraphs headed “History, Reorganisation and corporate structure — Pre-IPO Investment” in this prospectus.

At the close of business on 30 April 2017, being the latest practicable date for the purpose of this indebtedness statement, we had aggregate bank facilities of HK\$8.0 million and which were unutilised. The bank facilities were guaranteed by Shui On (Shun On) and Mr. TC Yik and such guarantees provided will be fully released before Listing.

During the Track Record Period and up to the Latest Practicable Date, we did not experience any delay or default in payment of trade and non-trade payables or bank borrowing or any defaults in material financial covenants and finance costs of other liability, or any difficulties in obtaining banking facilities with terms that are commercially acceptable to us. As of the date of this prospectus, we did not have any plan for material external debt financing.

# Contingent liabilities

As at 30 April 2017, being the latest practicable date for the purpose of the indebtedness statement, we did not have any material contingent liabilities or guarantees.

Save as aforesaid or as otherwise disclosed herein, and apart from intra-group liabilities, as at the Latest Practicable Date, our Group did not have outstanding loan, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances trade receivables or acceptable credits, authorised debentures, mortgages, charges, finance leases or hire purchase commitments, guarantees, material covenants, or other material contingent liabilities. As at the Latest Practicable Date, our Group did not have any external financing plans.

# OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENT

As at the Latest Practicable Date, we had not entered into any material off-balance sheet arrangement.


# RELATED PARTY TRANSACTIONS

For details of related party transactions, see note 32 to the Accountants’ Report in Appendix I to this prospectus. Our Directors confirm that these transactions were conducted in the ordinary and usual course of business and on normal commercial terms. Our Directors are of the view that the related party transactions did not cause any distortion of our results of operations or make our historical results non-reflective in the Track Record Period.

# KEY FINANCIAL RATIOS

The following table sets forth our key financial ratios as at each of the dates indicated:

	For the year ended 31 December

2015	2016

Profitability ratios

(1)Net Profit Marign (%) ................................	91.2	12.9

(2)Return on equity (%) .................................	238.0	10.7

(3)Return on total assets (%) .............................	112.0	8.7

	As at/year ended 31 December

2015	2016

Liquidity ratio

(4)Current ratio (times) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5.5	2.5

Cailpta sufficiency ratio

(5)Interest coverage (times) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	 N/A	23.1

(6)Gearing ratio (%) ...................................	71.3	 –

(7)Net debt to equity ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	 Net cash	 Net cash

Notes:

1. Net profit margin was calculated by dividing profit for the year by revenue and multiplying the resulting value by 100%. Please refer to the paragraphs headed “Review of historical results of operations” above in this section for more details on the fluctuations of our net profit margin.

2. Return on equity equals profit for the year divided by the equity attributable to owners of the parent at the end of relevant year and multiplied the resulting value by 100%.

3. Return on total assets equals profit for the year divided by the total assets at the end of the relevant year and multiplied the resulting value by 100%.

4. Current ratio is calculated based on the total current assets at the end of the year divided by the total current liabilities at the end of the year.

5. Interest coverage equals profit before finance costs and tax divided by finance costs in the relevant year. Finance costs incurred for the year ended 31 December 2016 arose due to the imputed interest charged for the Pre-IPO Investment. Please see the paragraph headed “Financial information – Indebtedness” in this prospectus for further details of the Pre-IPO Investment as other liabilities.

6. Gearing ratio is calculated as the total debt at the end of the year divided by total equity at the end of the respective year and multiplied by 100%. Total debts includes payables incurred not in ordinary course of business (being other liabilities).

7. Net debt to equity ratio is calculated as total debts (other liabilities) net of cash and cash equivalents and restricted cash, and at the end of the year divided by total equity at the end of the respective year and multiplied by 100%.


# Additional information

Information on inventory balances of the Group, for only ribbed smoked sheets, concentrated latex and block rubber, are as follows:

(Unit: Thousand Baht)

	Consolidated
financial statements	Separate
financial statements

2018	2017	2018	2017

Inventories at net realisable value (NRV)*	10,411,061	15,979,154	5,886,610	7,773,263

Inventories at lower of cost or net

realisable value (NRV) - as measured and
included in the financial statements	10,201,733	15,394,383	5,793,784	7,467,859

Difference	209,328	584,771	92,826	305,404

\* For reporting purposes, inventories are stated at the lower of cost or net realisable value, while for inventory management purposes the Group uses net realisable value (NRV) which is the estimated selling price in the ordinary course of business less the necessary costs of completion and cost to make the sale. The use of different valuation methods for these two purposes resulted in a difference at the reporting date.

Under Thai Financial Reporting Standards, such differences are not allowed to be recognised in the profit and loss until the inventories are actually sold. The amount of such difference changes over time depending on the actual price at the time of sale.

# 10. Derivative financial instruments

(Unit: Thousand Baht)

	Consolidated financial statements

2018	2017

Assets	Liabilities	Assets	Liabilities

Cross currency swaps	-	(4,479)	23,778	(55,844)

Foreign exchange options	641	(14,483)	-	(65,293)

Rubber options	127	(157)	14,161	(58,646)

Forward foreign exchange contracts	10,642	(45,743)	113,261	(5,183)

Rubber futures	45,413	(106,524)	256,739	(45,338)

Physical forward contracts	2,778	(17)	-	(939)

Total derivative financial instruments	59,601	(171,403)	407,939	(231,243)


(Unit: Thousand Baht)

	Separate financial statements

2018	2017

Assets	Liabilities	Assets	Liabilities

Cross currency swaps	-	(4,479)	23,778	(55,844)

Foreign exchange options	641	(11,394)	-	(48,665)

Rubber options	127	(157)	14,161	(58,646)

Forward foreign exchange contracts	1,569	-	64,804	(971)

Rubber futures	30,742	(95,302)	153,777	(34,004)

Total derivative financial instruments	33,079	(111,332)	256,520	(198,130)

# 11. Restricted bank deposits

As at 31 December 2018, the subsidiaries had fixed deposits pledged as collateral amounting to Baht 2 million (2017: Baht 12 million).

Fixed deposits, which were opened with a bank on behalf of the subsidiary, were pledged as collateral for contract compliance with government agencies.

# 12. Investments in subsidiaries

12.1 Details of investments in subsidiaries as presented in separate financial statements are as follows:

(Unit: Million Baht)

Company’s name	Paid-up capital	Shareholding
percentage	Cost	Dividend received
during the year

	2018	2017	2018	2017	2018	2017	2018	2017

			(%)	(%)

Subsidiaries

Sri Trang USA, Inc.	179	114	100.00	100.00	179	114	-	-

PT Sri Trang Lingga Indonesia	359	359	90.00	90.00	330	330	-	-

Anvar Parawood Co., Ltd.	10	10	99.94	99.94	26	26	-	-

Rubberland Products Co., Ltd.	1,600	1,600	99.99	99.99	1,935	1,935	500	500

Namhua Rubber Co., Ltd.	500	500	99.99	99.99	560	560	-	-

Sadao P.S. Rubber Co., Ltd.	40	40	99.99	99.99	54	54	-	-

Startex Rubber Co., Ltd.	2,198	2,115	99.99	99.99	2,196	2,113	-	-

Premier System Engineering Co., Ltd.	50	50	82.00	82.00	100	100	-	-

Starlihgt Express Transport Co., Ltd.	15	15	76.67	76.67	39	39	23	25

Sri Trang Rubber & Plantation Co., Ltd.	6,495	6,298	99.99	99.99	6,495	6,297	-	-

Shi Donhg Shangai Rubber Co., Ltd.	155	155	100.00	100.00	155	155	-	-

Sri Trang Gloves (Thailand) Co., Ltd.	200	200	81.50	81.50	6,430	6,430	408	2,707

Total					18,499	18,153	931	3,232


FINANCIAL STATEMENTS

# 32. INTANGIBLE ASSETS (CONTINUED)

(in RMB million)	2016

Goodwill (i)	Expressway
operating
rights	Prepaid land
premiums	Core
Deposits	Trademarks	Software
and others	Total

Cost

 As at 1 January 2016	12,460	11,232	8,331	15,082	2,442	5,091	54,638

 Acquisitions of subsidiaries	–	–	914	–	7,113	2,427	10,454

 Additions	8,468	–	830	–	–	1,234	10,532

 Disposals of subsidiaries	–	–	–	–	(287)	(75)	(362)

 Disposals	(289)	–	–	–	–	(124)	(413)

 As at 31 December 2016	20,639	11,232	10,075	15,082	9,268	8,553	74,849

Accumulated amortization

 As at 1 January 2016	–	2,231	679	3,393	245	3,174	9,722

 Acquisitions of subsidiaries	–	–	–	–	28	49	77

 Charge for the year	–	486	58	754	73	752	2,123

 Disposals of subsidiaries	–	–	–	–	–	(30)	(30)

 Disposals	–	–	–	–	–	(60)	(60)

 As at 31 December 2016	–	2,717	737	4,147	346	3,885	11,832

Net book value

 As at 31 December 2016	20,639	8,515	9,338	10,935	8,922	4,668	63,017

 As at 1 January 2016	12,460	9,001	7,652	11,689	2,197	1,917	44,916

As at 31 December 2017, expressway operating rights with a carrying amount of RMB5,711 million (31 December 2016: RMB8,515 million) were pledged as collateral for long term borrowings amounting to RMB2,939 million (31 December 2016: RMB3,921 million).

As at 31 December 2017, none prepaid land premiums (31 December 2016: RMB1,178 million) were pledged as collateral for long term borrowings (31 December 2016: RMB400 million).

As at 31 December 2017, prepaid land premiums with a carrying amount of 52 million (31 December 2016: RMB84 million) were still in progress of applying for title certificates.


# 32. INTANGIBLE ASSETS (CONTINUED)

# (I) GOODWILL

(in RMB million)	2017

As at
1 January 2017	Additions	Disposals	As at
31 December 2017

Ping An Bank	8,761	–	–	8,761

Shanghai Jahwa	2,502	–	–	2,502

Mabyorn Group Limited	2,106	–	(275)	1,831

Ping An Securities	328	–	–	328

Shenzhen Ping An Commercial Property
 Investment Co., Ltd.	66	–	–	66

Beijing Shuangronghui Investment Co., Ltd.	134	–	–	134

Shanghai Gezhouba Yangming Property
 Co., Ltd.	241	–	–	241

Ping An E-wallet	1,073	–	–	1,073

Autohome Inc.	5,265	–	–	5,265

Other	163	143	–	306

Total	20,639	143	(275)	20,507

Less: Impairment losses	–	–	–	–

Net book value	20,639	143	(275)	20,507

(in RMB million)	2016

As at
1 January 2016	Increase	Decrease	As at
31 December 2016

Ping An Bank	8,761	–	–	8,761

Shanghai Jahwa	2,502	–	–	2,502

Mabyorn Group Limited	–	2,106	–	2,106

Ping An Securities	328	–	–	328

Shenzhen Ping An Commercial Property
 Investment Co., Ltd.	66	–	–	66

Beijing Shuangronghui Investment Co., Ltd.	134	–	–	134

Shanghai Gezhouba Yangming Property
 Co., Ltd.	239	2	–	241

Ping An E-wallet	–	1,073	–	1,073

Autohome Inc.	–	5,265	–	5,265

Other	430	22	(289)	163

Total	12,460	8,468	(289)	20,639

Less: Impairment losses	–	–	–	–

Net book value	12,460	8,468	(289)	20,639

The primary valuation technique used is cash flow projections based on business plans approved by management covering a three to five year period and a risk adjusted discount rate. Cash flows beyond that period have been extrapolated using a steady growth rate and terminal value. Discount rates used by the Group range from 9% to 16% (2016: 9% to 15%) and growth rates, where applicable, range from 2% to 33% (2016: 2% to 34%).

The results of cash flow projections exceed the carrying amount of each related cash-generating unit or group of units. However, subsequent impairment tests may be based upon different assumptions and future cash flow projections, which may result in an impairment of these assets in the foreseeable future.


# Intangible assets

Intangible assets acquired separately are measured initially at cost. The useful lives of intangible assets are assessed to be either finite or indefinite.

Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash-generating unit level. Such intangible assets are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for on a prospective basis.

# Investments and other financial assets

Financial assets of the Group in the scope of HKAS 39 are classified as loans and receivables. The Group determines the classification of its financial assets after initial recognition. When financial assets are recognised initially, they are measured at fair value plus, directly attributable transaction costs.

All regular way purchases and sales of financial assets are recognised on the trade date, that is, the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace.

# Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such assets are subsequently measured at amortised cost using the effective interest rate method less any allowance for impairment. Amortised cost is calculated taking into account any discount or premium on acquisition and includes fees that are an integral part of the effective interest rate. The effective rate amortisation is included in interest income in the income statement. The loss arising from impairment is recognised in the income statement in other operating expenses.

# Impairment of financial assets

The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that a debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

# Assets carried at amortised cost

For financial assets carried at amortised cost, the Group first assesses individually whether objective evidence of impairment exists for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate (that is, the effective interest rate computed at initial recognition). If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.


The carrying amount of the asset is reduced either directly or through the use of an allowance account and the amount of the loss is recognised in the income statement. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Loans and receivables together with any associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group.

If, in a subsequent period, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or decreased by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to the income statement.

# Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

• the rights to receive cash flows from the asset have expired;

• the Group has transferred the rights to receive cash flows from the asset, or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass-through” arrangement; and

• either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

# Financial liabilities at amortised cost

Financial liabilities including trade and other payables and due to shareholders are initially stated at fair value plus directly attributable transaction costs. After initial recognition, financial liabilities are subsequently measured at amortised cost, using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

Gains and losses are recognised in the income statement when the liabilities are derecognised as well as through the effective interest rate method amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance costs in the income statement.

A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognised in the income statement.

# Offsetting financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the combined statements of financial position if, and only if, there is currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.


# Provision of money lending services

During the nine months ended 30 September 2020, the impact of the global pandemic caused a general suspension in economic activities and the strict measures adopted for social distancing in general led to the worsening of individual employment and a significant drop in business operations. Similarly, the PRC Mainland market was also affected and hence the credit risk in the money lending services was perceived to be higher accordingly. Given the stringent economic and business outlook, the Group strictly adhered to cautious credit assessment and reviewed the Group’s policies by timely assessing existing and potential clients’ credit profile with reference to the then market condition and their respective background. In view of the current uncertain economic condition that affected projection on assets valuation, business forecasts and individual’s repayment abilities, the Group continued to adopt a prudent approach in selecting qualified credit applicants for potential business opportunities. Accordingly, there was a significant decrease in revenue generated for this business segment to approximately HK\$0.01 million for the nine months ended 30 September 2020 (for the nine months ended 30 September 2019: approximately HK\$0.41 million).

# Outlook

In view of the current social and economic challenges encountered in the PRC Mainland and globally, the Group believed that the strategies to explore appropriate new business and regional markets in order to mitigate overall business risks is the proper approach for sustainable operation. The Group hopes the business segment in the provision of education management services in the PRC Mainland will gradually recover in the second half of 2020, while the pandemic in the PRC Mainland remains stable and controlled. The business segments of trading of precious metal and money lending require cautious assessment and robust risk control management. The Group will continue to explore further opportunities to strengthen business and market presence in its business segment of provision of education management services as well as to manage its business segments of trading of precious metal and money lending on a cautious and prudent basis. All in all, the Group will continue to strive for balance in further developing its existing business model whereas securing the return and value to the shareholders of the Company as a whole.


# Financial Review

For the nine months ended 30 September 2020, the Group had a total revenue of approximately HK\$6.4 million (for the nine months ended 30 September 2019: approximately HK\$195.9 million), representing a decrease of approximately 96.7% as compared with the nine months ended 30 September 2019. For the nine months ended 30 September 2020, the Group recorded a loss of approximately HK\$27.4 million (for the nine months ended 30 September 2019: approximately HK\$26.4 million), representing an increase of approximately 3.8% as compared with the nine months ended 30 September 2019. The increase in loss was mainly attributable to net effect of:

(i) a significant decrease in the Group’s total revenue of approximately 96.7% as discussed in above;

(ii) for the nine months ended 30 September 2020, approximately HK\$4.1 million for the carrying value of inventories sold was recognised (for the nine months ended 30 September 2019: approximately HK\$185 million);

(iii) the fair value loss on investment in unlisted equity securities of approximately HK\$2.5 million;

(iv) a provision of loss allowance of approximately HK\$1.4 million provided on loan receivable;

(v) a decrease in trading losses on commodity forward contracts of approximately HK\$2.7 million;

(vi) a decrease in employee costs of approximately HK\$3.4 million; and

(vii) a decrease in other operating expenses of approximately HK\$3.2 million.

For the nine months ended 30 September 2020, the Group’s loss attributable to owners of the Company was approximately HK\$26.4 million, as compared to the loss attributable to owners of the Company of approximately HK\$27.2 million for the nine months ended 30 September 2019.

# Gearing ratio

The Group monitors capital on the basis of the net gearing ratio. This ratio is calculated as net debt divided by total capital.

As at 30 September 2020, no gearing ratio was presented as the Group has net cash surplus (31 December 2019: net cash surplus).


# 9 TAXATION (Continued)

The movement in gross deferredi ncome tax assets andl iabilities during the year, without takingi nto consideration the offsetting of balances within the same taxj urisdiction,i s as follows:

# Deferred tax assets

	Amortization
of operating
lease

HK$’000

At 1 January 2017	2,142

Credited to the consolidated income statement	178

Exchange differences	156

At 31 December 2017 and 1 January 2018	2,476

Credited to the consolidated income statement	41

Disposal of a subsidiary	(2,573)

Exchange differences	56

At 31 December 2018	–

# Deferred tax liabilities

	Unrealized
earning	Amortization
of operating
lease	 Total

HK$’000	 HK$’000	 HK$’000

At 1 January 2017	−	(1,003)	(1,003)

Charged to the consolidated income statement	(241)	(301)	(542)

Exchange differences	(12)	(81)	(93)

At 31 December 2017 and 1 January 2018	(253)	(1,385)	(1,638)

Charged to the consolidated income statement	(42)	(129)	(171)

Disposal of a subsidiary	–	1,547	1,547

Exchange differences	13	(33)	(20)

At 31 December 2018	(282)	–	(282)

Deferred tax assets are recognized for taxl osses carry-forward to the extent that the realization of the related tax benefit through the future taxable profitsi s probable. As at 31 December 2018, the Group had unrecognized tax losses of approximately HK\$339,020,000 (2017: approximately HK\$344,853,000) to carry forward against future taxablei ncome, subject to agreement by the Inland Revenue Department of Hong Kong andl ocal tax bureau of the PRC. The decrease of unrecognized tax lossesi s mainly attributed to the disposal of Beijing Si Hai Jun Tian Trading Company Limited (“Si Hai Jun Tian”) andl apsed of certain taxl osses of the PRC subsidiaries during the year ended 31 December 2018. No deferred taxation has been recognisedi n respect of the taxl osses due to unpredictability of future profit streams. The taxl osses of the PRC subsidiaries have an expiry period of five years, while the taxl osses of Hong Kong subsidiaries have no expiry date.


# 9 TAXATION (Continued)

# Deferred tax liabilities (Continued)

The Group did not recognize deferredi ncome tax assets of approximately HK\$1,112,000 (2017: approximately HK\$2,571,000) in respect of taxl osses of approximately HK\$4,449,000 (2017: approximately HK\$10,282,000) that will expirei n five years from the yeari ncurred. The remaining tax losses of approximately HK\$334,571,000 (2017: approximately HK\$334,571,000) can be carried forwardi ndefinitely to offset against future taxablei ncome.

Deferredi ncome taxl iabilities of HK\$2,306,000 have not been recognized for the withholding tax and other taxes that would be payable on the unremitted earnings of certain subsidiaries andj oint ventures for the year ended 31 December 2017. Total unremitted earnings amounted to HK\$23,059,000 as at 31 December 2017. The unrecognized deferredi ncome taxl iabilitiesi n relation to the unremitted earnings decrease to nil is attributed to the disposal of Hao You during the year ended 31 December 2018.

# 10 EARNINGS/(LOSS) PER SHARE

Basic earnings/(loss) per sharei s calculated by dividing the profit/(loss) attributable to equity holders of the Company by the weighted average number of ordinary sharesi ni ssue during the year. Diluted earnings/(loss) per sharei s calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. Diluted earnings/(loss) per share for the years ended 31 December 2018 and 2017 were the same as basic earnings/(loss) per share as the Company had no potentially dilutive ordinary sharesi ni ssue during these years.

	2018	2017

Weighted average number of ordinary shares in issue (thousands)	13,498,107	13,498,107

Loss from continuing operations attributable to equity
holders of the Company (HK$’000)	(67,026)	(142,528)

Basic and diluted loss per share from continuing operations
attributable to equity holders of the Company
(HK cents per share)	(0.49)	(1.06)

Profit from discontinued operations attributable to
equity holders of the Company (HK$’000)	140,763	38,859

Basic and diluted earnings per share from discontinued operations
attributable to equity holders of the Company
(HK cents per share)	1.04	0.29

Earnings/(loss) per share attributable to equity holders of the
Company
(HK cents per share)	0.55	(0.77)


In 2021, the Senior Management of the Bank discussed the substantive assessment results of previous years and decided to continue using the substantive assessment results of previous years considering that there are no significant changes in the business and operating environment.

# Response to the UN SDG

The Bank actively responds to UN Sustainable Development Goals to contribute to the global SDG in implementing social responsibility strategies.


SDG	Specific measures	Social    responsibility
toipcs	Section(s)

 cimonocE		Improve governance system
Equal emlpoyment and
protect emlpoyees’ rihgts
and interests
Offer         reasonable
professional development
channels
Provide strong support to
real economy
Support small and micro
enterprises	Serve small and micro
enterprises
Favourable emlpoyment
environment
Promote   professional
development
Improve      business
performance
Overall risk management	Optimising
corporate
governance
Serving    private,
small and micro
enterprises
Facilitating   rural
revitalisation
Driving emerging
industries
Broadening career
channels

	Diigtisation
Support       economic
transformation
Serve agriculture, rural areas
and farmers
Boost         infrastructure
construction	Promote     economic
development
Improve real economy
Build intelligent outlets
Inclusive finance in rural
areas	Serving    private,
small and micro
enterprises
Facilitating   rural
revitalisation
Driving emerging
industries
Supporting
projects for public
benefits

 laicoS		Conduct targeted poverty
alleviation in an efficient and
orderly way
Boost         infrastructure
construction	Practice targeted poverty
relief
Inclusive finance in rural
areas	Facilitating   rural
revitalisation
Supporting
projects for public
benefits

	Create a healthy working
environment
Care about emlpoyees’
hillhpysca and menta ealth	Safety        protection
measures
Pay attention to health
and safety	Caring        for
emlpoyees’
hilpysca       and
mental health
Building a warm
and   family-like
corporate culture


# REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Sole Member and the Board of Directors of LG&E and KU Energy LLC

# Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of LG&E and KU Energy LLC and subsidiaries (the “Company”) as of December 31, 2017 and 2016, the related consolidated statements of income, comprehensive income, equity, and cash flows, for the years then ended, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

# Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

Louisville, Kentucky

February 22, 2018

We have served as the Company’s auditor since 2015.


# Report of Independent Registered Public Accounting Firm

# The Board of Directors and Sole Member of LG&E and KU Energy LLC

We have audited the accompanying consolidated statements of income, comprehensive income, equity, and cash flows of LG&E and KU Energy LLC and subsidiaries for the year ended December 31, 2015. Our audit also included the financial statement schedule listed in the Index at Item 15(a)(2) for the year ended December 31, 2015. These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated results of operations and cash flows of LG&E and KU Energy LLC and subsidiaries for the year ended December 31, 2015, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule for the year ended December 31, 2015, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

Louisville, Kentucky

February 19, 2016


# Finance costs – net

Finance costs increased by approximately RMB0.1 million, or 11.8%, from approximately RMB1.1 million for 6M2018 to approximately RMB1.2 million for 6M2019 primarily due to the increase in bank borrowings drawn in 6M2019.

# Income tax expense

Our income tax expense increased by approximately RMB1.1 million, or 15.8%, from approximately RMB6.7 million for 6M2018 to approximately RMB7.7 million for 6M2019 primarily due to the increase in Listing expenses incurred from nil for 6M2018 to approximately RMB6.4 million for 6M2019, which was not deductible for tax purpose. For further details, please refer to the paragraph headed “Selected items of consolidated statements of comprehensive income— Income tax expense” in this section.

# Profit for the year

As a result of the foregoing, our profit for the period decreased by approximately RMB3.3 million, or approximately 16.5%, from approximately RMB19.8 million for 6M2018 to approximately RMB16.5 million for 6M2019.

# FY2018 compared to FY2017

# Revenue

Our revenue increased by approximately RMB155.5 million, or 52.1%, from approximately RMB298.7 million for FY2017 to approximately RMB454.2 million for FY2018. This increase was primarily due to the combined effect of the increase in both the sales volume and average selling price of all our PHC pile and commercial concrete products as a result of the increased market demand. The increases were primarily driven by the growth in the construction industry in Jiangsu Province and the increased demand from our customers for the development of residential and commercial projects in Qidong City.

• PHC pile. Our revenue from sales of PHC pile increased from approximately RMB158.6 million in FY2017 and to approximately RMB230.9 million in FY2018. The increase in revenue from sales of PHC pile for FY2018 of approximately RMB72.3 million, or 45.6% was primarily due to the increase in sales volume of our PHC pile.

We sold approximately 1.1 million metres and 1.2 million metres of PHC pile for FY2017 and FY2018, respectively. The increase in sales volume was primarily due to the increase in sales volume of grade 500 PHC pile as a result of the new orders from Customer N (one of our ten largest customers in FY2018) of approximately 61,000 metres combined with the increase sales volume of grade 600 PHC pile as a result of the additional orders in FY2018 from Customer G (one of our five largest customers in FY2017 and FY2018) of approximately 36,000 metres. The increase was partially offset by the decrease in sales volume of grade 400 PHC pile as we tend to focus on the production of grade 500 PHC pile and grade 600 PHC pile which are of relatively higher strength as compared to grade 400 PHC pile.


• Square pile. Our revenue from sales of square pile increased from approximately RMB0.2 million in FY2017 to approximately RMB2.4 million in FY2018. The increase in revenue from sales of square pile for FY2018 of approximately RMB2.2 million, or 1,182.8%, was primarily due to the increase in sales volume of our square pile.

We sold approximately 2,000 metres and 15,000 metres of square pile for FY2017 and FY2018, respectively. The increase in sales volume was primarily due to increase in sales volume of our square pile as a result of new orders from Customer R of approximately 11,000 metres in FY2018.

• Commercial concrete. Our revenue from sales of commercial concrete increased from approximately RMB139.9 million in FY2017 to approximately RMB220.9 million in FY2018. The increase in revenue from sales of commercial concrete for FY2018 of approximately RMB81.0 million, or 57.9% was primarily due to the increase in sales volume of our commercial concrete.

We sold approximately 0.4 million m3 and 0.5 million m3 of commercial concrete for FY2017 and FY2018, respectively. The increase in sales volume was primarily due to the increase in sales volume of grade C10-C25 commercial concrete as a result of the new orders in FY2018 from Customer K (one of our five largest customers in FY2018) of approximately 63,000 m3.

# Cost of sales

Our cost of sales increased by approximately RMB127.8 million, or 51.7%, from approximately RMB247.0 million for FY2017 to approximately RMB374.7 million for FY2018 primarily due to the combined effect of the increase in sales volume of both our PHC pile and commercial concrete products. The increase was generally in line with the growth of revenue for FY2018.

# Gross profit and gross profit margin

As a result of the foregoing, our gross profit increased by approximately RMB27.8 million, or 53.7%, from approximately RMB51.7 million for FY2017 to approximately RMB79.5 million for FY2018. Our gross profit margin remained relatively stable at approximately 17.3% and 17.5% for FY2017 and FY2018.

• PHC piles. Gross profit margin of PHC pile increased from approximately 14.4% for FY2017 to approximately 18.1% for FY2018. The increase in gross profit margin of PHC pile was primarily due to the increase in average selling price of the product increased at a faster rate than the cost of sales as a result of our pricing strategy. The strong pricing power we enjoyed was primarily due to the highly concentrated market landscape for PHC pile in Nantong. According to the F&S Report, the PHC pile industry in Nantong was very concentrated with only four PHC pile manufacturers and our Group had a market share of approximately 7.1% in Nantong in terms of PHC pile production volume in 2018.


# 33 IMMEDIATE AND ULTIMATE CONTROLLING PARTIES

As at 31 December 2021, the directors consider the immediate parent to be MicroPort Scientific, which is incorporated in British Virgin Islands and does not produce financial statements available for public use.

As at 31 December 2021, the directors consider the ultimate controlling party is MicroPort, which is incorporated in Cayman Islands. MicroPort is listed on the Main Board of The Stock Exchange of Hong Kong Limited and produces financial statements available for public use.

# 34 POSSIBLE IMPACT OF AMENDMENTS, NEW STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE FOR THE RELEVANT PERIODS

Up to the date of issue of the Historical Financial Information, the HKICPA has issued a number of amendments, new standards and interpretations which are not yet effective for the accounting period beginning on 1 January 2022 and which have not been adopted in the Historical Financial Information. These include the following:

	Effective for
accounting periods
beignning on or after

Annual Improvements to HKFRSs 2018-2020	 1 January 2022

Amendments to HKFRS 3, Reference to the Conceptual Framework	1 January 2022

Amendments to HKAS 16, Property, Plant and Equipment: Proceeds beforeI ntended Use	1 January 2022

Amendments to HKAS 37, Onerous Contracts–  Cost of Fulfilling a Contract	1 January 2022

Amendments to HKAS 1, Classification ofL iabilities as Current orN on-current	1 January 2023

HKFRS 17, Insurance contracts	1 January 2023

Amendments to HKAS 1 and HKFRS Practice Statement 2, Disclosure ofA ccounting Policies	1 January 2023

Amendments to HKAS 8, Definition ofA ccounting Estimates	1 January 2023

Amendments to HKAS 12, Deferred Tax related toA ssets andL iabilities arisinlgf rom a Singe
Transaction	1 January 2023

Amendments to HKFRS 10 and HKAS 28, Sale or contribution of assets between an investor and its
associate orj oint venture	To be determined

The Group is in the process of making an assessment of what the impact of these amendments is expected to be in the period of initial application. So far the Group has concluded that the adoption of them is unlikely to have a significant impact on the Group’s consolidated financial statements.

# 35 SUBSEQUENT EVENTS

On 22 June 2022, a share subdivision was approved by the shareholders of the Company, pursuant to which, each issued and unissued share capital was subdivided to five shares of the corresponding class with par value of US\$0.00002 each.

# SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Company and its subsidiaries in respect of any period subsequent to 31 December 2021.


The following information does not form part of the Accountants’ Report from KPMG, Certified Public Accountants, Hong Kong, the Company’s reporting accountants, as set out in Appendix I to this prospectus, and is included for illustrative purposes only. The unaudited pro forma financial information should be read in conjunction with the “Financial Information” section in this prospectus and the Accountants’ Report set out in Appendix I to this prospectus.

# A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS

The following unaudited pro forma statement of adjusted consolidated net tangible assets of the Group prepared in accordance with Rule 4.29 of the Listing Rules and with reference to Accounting Guideline 7 ‘‘Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars’’ issued by the Hong Kong Institute of Certified Public Accountants and is set out below to illustrate the effect of the Global Offering on the consolidated net tangible assets of the Group attributable to the equity shareholders of the Company as at 31 December 2021 as if the Global Offering had taken place on 31 December 2021.

The unaudited pro forma statement of adjusted consolidated net tangible assets has been prepared for illustrative purposes only and because of its hypothetical nature, it may not give a true picture of the consolidated net tangible assets of the Group attributable to equity shareholders of the Company had the Global Offering been completed as at 31 December 2021 or any future date.

	Consolidated net
tanibllige abilities
attributable to equity
shareholders of the
Company as at
31 December 2021 (1)	Estimated
net proceeds
from the
Global
Offering (2)(5)	Estimated
impact upon
the
conversion of
the Series A-1
Preferred
Shares and
the Series A-2
Preferred
Shares (3)	Unaudited
pro forma
adjusted
consolidated
net taniblge
assets
attributable
to equity
shareholders
of the
Company as
at
31 December
2021	Unaudited pro
forma adjusted
consolidated net
taniblge assets
attributable to equity
shareholders of the
Company
per Share (4)

RMB’000	 RMB’000	 RMB’000	 RMB’000	 RMB	 HK$ (5)

Based on an Offer Price of
HK$24.64 per Offer Share	(302,325)	263,425	1,237,990	1,199,090	2.06	2.41

Notes:

(1) The consolidated net tangible liabilities attributable to equity shareholders of the Company as at 31 December 2021 is based on the consolidated net liabilities attributable to equity shareholders of the Company of RMB174,940,000 as at 31 December 2021, less the intangible assets of RMB127,385,000, as extracted from the Accountants’ Report set out in Appendix I to this Prospectus.

(2) The estimated net proceeds from the Global Offering are based on 13,700,000 new Shares and the indicative Offer Price of HK\$24.64 per Share, after deduction of estimated underwriting fees and other related listing expenses payable by the Company (excluding listing expenses of RMB26,338,000 which have been accounted for prior to 31 December 2021) and does not take account of any Shares which may be issued upon the exercise of the Over-allotment Option.

(3) The aggregated balance of the liability portion of the Series A-1 Preferred Shares and the Series A-2 Preferred Shares was RMB1,237,990,000 as of 31 December 2021 (as set out in Note 27 of Appendix I in this prospectus). Upon the Listing, the Series A-1 Preferred Shares and the Series A-2 Preferred Shares will be automatically converted into ordinary shares of the Company and will be re-designated from liabilities to equity.

(4) The unaudited pro forma adjusted net tangible assets attributable to equity shareholders of the Company per Share is arrived at after adjustments on the basis that a total of 582,658,100 Shares were in issue assuming that the Global Offering and the Share Subdivision had been completed on 31 December 2021, (including the completion of the


# Other Income (Expense), Net

	Fiscal Years Ended November 30,	Percent Change

2018	2017	2016	2018 to 2017	2017 to 2016

(in thousands)

Other income (expense), net	$   (8,984)	$    1,123	$    5,461	(900.0)%	79.4%

Percentage of revenue	(0.04)%	0.01%	0.04%

Amounts recorded as other income (expense), net include foreign currency transaction gains and losses, other than cash flow hedges, investment gains and losses, non-service component of pension costs, debt extinguishment gains and losses and other non-operating gains and losses, such as changes in the fair value of convertible debt conversion spread, and settlements received from class actions lawsuits.

Other income (expense), net decreased from net other income in fiscal year 2017 to net other (expense) in fiscal year 2018, primarily due to the adverse impact from changes in foreign currency exchange rates of \$16.6 million, mainly in our Latin American businesses and an increase in the non-service component of pensions costs due to the acquisition of Convergys. These losses and expenses were partially offset by gains of \$10.0 million related to changes in the fair value of the conversion spread of convertible debentures assumed in connection with the acquisition of Convergys and extinguishment gains on settlement of certain of those debentures. These losses were also partially offset by a gain of \$2.8 million recognized upon reclassification of a cost-method investment as a trading security.

The decrease in other income (expense), net in fiscal year 2017, compared to fiscal year 2016, was primarily due to a \$5.0 million benefit received from class-action legal settlements in our Technology Solutions segment.

# Provision for Income Taxes

	Fiscal Years Ended November 30,	Percent Change

2018	2017	2016	2018 to 2017	2017 to 2016

(in thousands)

Provision for income taxes	$ 156,779	$ 163,558	$ 121,059	(4.1)%	35.1%

Percentage of income before income taxes	34.28%	35.19%	34.00%

Income taxes consist of our current and deferred tax expense resulting from our income earned in domestic and foreign jurisdictions.

The Tax Cuts and Jobs Act of 2017 (the “TCJA”) provides for significant changes to the U.S. Internal Revenue Code of 1986, as amended, including lowering the U.S. federal corporate income tax rate from 35% to 21%, implementing a territorial tax system, imposing a one-time tax on foreign unremitted earnings and setting limitations on deductibility of certain costs (e.g., interest expense), among other things. Accordingly, we recorded a net adjustment of \$33.1 million related to the TCJA during fiscal year 2018. This adjustment included a \$59.8 million of transition tax expense for mandatory repatriation, partially offset by a \$26.7 million of tax benefit from the remeasurement of our net deferred tax balance to the new U.S. tax rate enacted under the TCJA.

Excluding the impact of the adjustments related to the TCJA, our effective tax rate during fiscal year 2018 was 27.04%. The current year tax rate is lower compared to the prior year, primarily due to the impact of the lower tax rate under the TCJA. The decrease in tax rate was also due to the mix of taxable income in different geographic regions and the impact of the Convergys acquisition.

The differences in our effective tax rates between fiscal years 2017 and 2016 was primarily due to the mix of taxable income in different geographic regions and, to a lesser extent, the reversal of certain tax reserves as a result of the expiration of the statute of limitations in certain tax jurisdiction.

Further information on the treatment of undistributed foreign earnings and a reconciliation of the federal statutory income tax rate to our effective tax rate can be found in Note 16 of the Consolidated Financial Statements included in Part II, Item 8 of this Report.


# Liquidity and Capital Resources

# Cash Conversion Cycle

		Three Months Ended

November 30,
2018	November 30,
2017	November 30,
2016

(Amounts in thousands)

Days sales outstanding

Revenue (products and services)	(a)	$     5,622,201	$     5,311,877	$     3,886,902

Accounts receivable, including receivable from
 related parties	(b)	3,855,496	2,846,448	1,756,596

Days sales outstanding	(c) = (b)/((a)/the
number of days
during the
period)	62	49	41

Days inventory outstanding

Cost of revenue (products and services)	(d)	$     4,970,717	$     4,849,909	$     3,508,116

Inventories	(e)	2,518,319	2,162,626	1,741,734

Days inventory outstanding	(f) = (e)/((d)/the
number of days
during the
period)	46	41	45

Days payable outstanding

Cost of revenue (products and services)	(g)	$     4,970,717	$     4,849,909	$     3,508,116

Accounts payable, including payable to
 related parties	(h)	3,048,102	2,643,608	1,713,834

Days payable outstanding	(i) = (h)/((g)/the
number of days
during the
period)	56	50	44

Cash conversion cycle	(j) = (c)+(f)-(i)	52	40	42

# Cash Flows

Our Technology Solutions business is working capital intensive. Our working capital needs are primarily to finance accounts receivable and inventory. We rely heavily on term loans, accounts receivable arrangements, our securitization programs and our revolver programs for our working capital needs. We have financed our growth and cash needs to date primarily through cash generated from operations and financing activities. As a general rule, when sales volumes are increasing, our net investment in working capital dollars typically increases, which generally results in decreased cash flow generated from operating activities. Conversely, when sales volume decreases, our net investment in working capital dollars typically decreases, which generally results in increases in cash flows generated from operating activities. We calculate cash conversion cycle as days of the last fiscal quarter’s sales outstanding in accounts receivable plus days of supply on hand in inventory, less days of the last fiscal quarter’s direct cost outstanding in accounts payable. Our cash conversion cycle was 52 days, 40 days and 42 days at the end of fiscal years 2018, 2017 and 2016, respectively. The increase in fiscal year 2018, compared to the prior two years, was primarily a result of higher days sales outstanding due the Convergys acquisition which was included from the date of acquisition. In addition, higher inventory due to growth and the impact of more revenue recorded on a net basis in our Technology Solutions segment also increased our cash conversion cycle.

To increase our market share and better serve our customers, we may further expand our operations through investments or acquisitions. We expect that such expansion would require an initial investment in working capital, personnel, facilities and operations. These investments or acquisitions would likely be funded primarily by our existing cash and cash equivalents, additional borrowings, or the issuance of securities.

Net cash provided by operating activities was \$100.7 million in fiscal year 2018, primarily generated from our net income of \$300.6 million, adjustments for non-cash items of \$204.9 million, an increase in accounts payable of \$382.0 million and the net change in other assets and liabilities of \$94.1 million, partially offset by an increase in accounts receivable of \$513.0 million, and an increase in inventories of \$367.9 million. The increase in accounts payable and inventories was primarily due to


# A . 財務資料

# 合併全面收益表

	附註	截至十二月三十一日止年度

二零零八年	二零零九年	二零一零年

人民幣千元	人民幣千元	人民幣千元

收益 . . . . . . . . . . . . . . . . . . . . . . . . . .	5	133,349	346,549	374,883

營運成本 . . . . . . . . . . . . . . . . . . . . . . .		(71,987)	(222,937)	(204,823)

毛利 . . . . . . . . . . . . . . . . . . . . . . . . . .		61,362	123,612	170,060

其他收入 . . . . . . . . . . . . . . . . . . . . . . .	6	4,292	4,803	26

市場推廣及宣傳開支 . . . . . . . . . . . . . . . .		(820)	(1,779)	(2,979)

行政開支 . . . . . . . . . . . . . . . . . . . . . . .		(2,093)	(3,348)	(6,267)

[ . ]開支 ........................		—	 —	(21,531)

融資成本 . . . . . . . . . . . . . . . . . . . . . . .	7	(816)	(1,317)	(3,640)

除稅前溢利 . . . . . . . . . . . . . . . . . . . . . .		61,925	121,971	135,669

所得稅開支 . . . . . . . . . . . . . . . . . . . . . .	8	(16,261)	(33,130)	(40,639)

年度溢利及全面收益總額 . . . . . . . . . . . . .		45,664	88,841	95,030

每股盈利	11

基本（ 人民幣）. . . . . . . . . . . . . . . . . . . .		0.57	0.80	0.38


# 合併財務狀況表

	附註	於
十二月三十一日

二零零八年	二零零九年	二零一零年

人民幣千元	人民幣千元	人民幣千元

非流動資產

物業、廠房及設備 . . . . . . . . . . . . . . . .	13	43,272	40,407	376,300

已付收購物業、廠房及設備的按金 . . . . .		18,700	28,494	273

租賃按金 . . . . . . . . . . . . . . . . . . . . . .	 14 (a)	1,000	3,000	—

		62,972	71,901	376,573

流動資產

貿易及其他應收款項 . . . . . . . . . . . . . . .	 14 (b)	65,707	230,249	280,440

應收一名董事款項 . . . . . . . . . . . . . . . .	15	29,216	82,121	—

銀行結餘及現金 . . . . . . . . . . . . . . . . . .	16	973	1,764	12,520

		95,896	314,134	292,960

流動負債

貿易及其他應付款項 . . . . . . . . . . . . . . .	17	44,535	130,009	127,678

應付一名董事款項 . . . . . . . . . . . . . . . .	15	11,382	11,395	26,464

應付稅項 . . . . . . . . . . . . . . . . . . . . . .		16,664	49,503	39,185

有抵押銀行借貸 . . . . . . . . . . . . . . . . . .	18	7,500	27,500	40,000

		80,081	218,407	233,327

流動資產淨值 . . . . . . . . . . . . . . . . . . .		15,815	95,727	59,633

資產淨值 . . . . . . . . . . . . . . . . . . . . . .		78,787	167,628	436,206

資本及儲備

實繳資本╱[ . ] . . . . . . . . . . . . . . . . . . .	19	39,406	39,406	39,451

儲備 . . . . . . . . . . . . . . . . . . . . . . . . .		39,381	128,222	396,755

權益總額 . . . . . . . . . . . . . . . . . . . . . .		78,787	167,628	436,206


# 35. OPERATING LEASE ARRANGEMENTS

# (a) As lessor

The Group leases its investment properties (note 14 to the financial statements) under operating lease arrangements, with leases negotiated for terms mainly ranging from five to ten years. The terms of the leases generally also require the tenants to pay security deposits and provide for periodic rent adjustments according to the then prevailing market conditions.

As at 31 December 2018, the Group had total future minimum lease receivables under non-cancellable operating leases with its tenants falling due as follows:

	2018	2017

HK$’000	HK$’000

Within one year	20,491	17,079

In the second to fifth years, inclusive	88,342	74,662

After five years	65,456	99,347

	174,289	191,088

# (b) As lessee

The Group leases certain of its office buildings, retail shops and warehouses under operating lease arrangements. Leases for the properties are negotiated for terms ranging from one to ten years.

At 31 December 2018, the Group had total future minimum lease payments under non-cancellable operating leases falling due as follows:

	2018	2017

HK$’000	HK$’000

Within one year	2,765	4,240

In the second to fifth years, inclusive	4,426	7,339

After five years	8,966	–

	16,157	11,579


# 36. COMMITMENTS

In addition to the operating lease commitments detailed in note 35 above, the Group had the following capital commitments at the end of the reporting period:

	2018	2017

HK$’000	HK$’000

Contracted, but not provided for:

Plant and machinery	7,796	–

Acquisition of equity investment	1,138	–

	8,934	–

# 37. RELATED PARTY TRANSACTIONS

# (a) Compensation of key management personnel of the Group

	2018	2017

HK$’000	HK$’000

Short term employee benefits	14,017	11,092

Equity-settled share option benefits	5,625	5,081

Total compensation paid to key management personnel	19,642	16,173

Further details of directors’ emoluments are included in note 8 to the financial statements.

# (b) Loans from a director

	2018	2017

HK$’000	HK$’000

Mr. Tse Kam Pang	12,000	12,000

Mr. Tse Kam Pang is one of the directors and also the Chairman of the Company. As at 31 December 2018, loans with an aggregate amount of HK\$12,000,000 are unsecured, interest-free and not repayable within the next twelve months.

# (c) Other transactions with related parties:

The Chairman of the Company has unconditional guaranteed certain bank loans and other loans made to the Group of up to HK\$90,000,000 (2017: HK\$40,000,000) as at the end of the reporting period, as further detailed in note 26(ii) to the financial statements.

# (d) Outstanding balances with related parties:

(i) The Group had an outstanding balance due to its non-controlling interests of HK\$41,102,000 (2017: HK\$42,438,000) as at the end of the reporting period, as further detailed in note 31 to the financial statements.

(ii) Details of the Group’s other receivable balances with its associate as at the end of the reporting period are disclosed in note 21 to the financial statements.


An analysis of revenue by segment is as follows:

Products by industry	Year ended 31 December

2018	2017

(RMB’000)	(RMB’000)

Design, survey and consultancy	3,514,181	2,976,736

Construction contracting	3,671,965	3,995,809

Total	7,186,146	6,972,545

# DESIGN, SURVEY AND CONSULTANCY SEGMENT

The design, survey and consultancy segment includes design, survey and consultancy services for urban rail transit construction as well as industrial and civil construction and municipal administration. The design, survey and consultancy segment has been the traditional and core business of the Group. In 2018, in the unfavorable context of slowdown in investment in rail transit, the Group intensively developed existing markets by fully utilizing the technical advantages in the industry, consolidated its dominant status in urban rail transit design, properly performed existing contracts and focused on following up state-level new areas and third-tire and fourth-tire cities, and expanded its business into 65 domestic and overseas cities, and improved the influence of its urban construction brand. In 2018, tenders for new rail transit lines were launched in only 14 cities in rail transit industry across the nation, but the Company still won the bids for a total of 6 overall design projects in Beijing, Chongqing, Xi’an, Delingha and Hangzhou, and maintained the largest market share in the industry.

For the year ended 31 December 2018, the design, survey and consultancy segment of the Group achieved a revenue of RMB3,514 million, representing an increase of RMB537 million or 18.04% compared to RMB2,977 million for the corresponding period in 2017. Among which, the revenue of the urban rail transit construction business amounted to RMB2,848 million, representing an increase of RMB330 million or 13.11% compared to RMB2,518 million for the corresponding period of last year. The revenue of the industrial and civil construction and municipal construction business amounted to RMB666 million, representing an increase of RMB207 million or 45.10% compared to RMB459 million for the corresponding period of last year.

Revenue distribution of the design, survey and consultancy segment


# CONSTRUCTION CONTRACTING SEGMENT

The construction contracting segment of the Group focuses on the services for urban rail transit construction projects and relevant infrastructure construction projects. The construction contracting projects undertaken by the Group covered cities, including Beijing, Kunming, Zunyi, Suzhou, Zhengzhou and Huangshan.


# UHS BEHAVIORAL HEALTH DIVISION

Strategic growth in the U.K. has expanded the reach of Cygnet Health Care Limited. Cygnet Hospital Stevenage, located north of London, is one of 21 Cygnet Health Care facilities with 1,100 patient beds serving residents of the U.K.

Last year, UHS acquired Alpha Hospitals, four behavioral health hospitals in the U.K. The facilities were an excellent fit geographically and complemented the services provided at our Cygnet Health Care Limited hospitals, acquired one year earlier. The Division now operates 21 hospitals in the U.K., with 1,100 beds.

UHS continued its strategy to enhance mental health care in the United States through acquisitions, organic growth and strategic alliances.

Specifically, Foundations Recovery Network, a premier provider of addiction treatment, will strengthen our services with four residential treatment facilities and eight outpatient centers that treat co-occurring addiction and mental health disorders. UHS will utilize Foundations Recovery Network’s specialty direct to consumer marketing, national sales team, web-based marketing, and call center to support the growth of our specialty eating disorders, trauma, autism and neuropsychiatry programs.


Organic growth in the division contributed to the addition of 344 new beds in key markets. Fremont Hospital in California added 52 beds, including an eating disorder and women’s trauma care program. Forest View Hospital in Michigan and Palo Verde Behavioral Health in Arizona both expanded adolescent and adult beds and Newport News Behavioral Health Center opened its first acute inpatient psychiatric beds to serve children and adolescents in Virginia.

To meet the aging population’s increased demand for services in its community, The BridgeWay in Arkansas added a 20-bed senior care unit. Other expansion projects included the conversion of 18 acute beds to an “Extended Acute Care Unit” (EAC) at Brooke Glen Behavioral Hospital in Pennsylvania and 16 beds from residential treatment to acute care services at Brynn Marr Hospital in North Carolina.

Construction of a new, 80-bed acute behavioral health hospital in Stuart, Florida is underway and scheduled for completion in 2016.

# CREATING STRATEGIC PARTNERSHIPS TO ADDRESS COMMUNITY BEHAVIORAL HEALTH NEEDS

Nationally, health systems identify the need to collaborate with specialty behavioral health providers to deliver mental health services. UHS Behavioral Health Integration Solutions, our new line of business, leverages our expertise and resources to develop mutually beneficial strategic partnerships with healthcare systems. During the year, key relationships were established creating access to quality mental health programs and services while reducing unnecessary emergency department use, lowering readmission rates, improving outcomes and increasing patient satisfaction.

The Canyon in Malibu, California is an exclusive co-occurring residential treatment program acquired as part of the Foundations Recovery Network purchase. Four residential treatment facilities and eight outpatient centers were added in Georgia, California and Tennessee.


# CAPITAL COMMITMENTS

	2020	2019

HK$’000	HK$’000

Cailpta exdipenture in reshpect of te acquisition of property,
 lpant and eiqupment contracted for but not provided in the
 consolidated financial statements	27,000	–

# CORPORATE GOVERNANCE

The Company has applied the principles as set out in the Corporate Governance Code (the “CG Code”) contained in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange (the “Listing Rules”).

The Board is of the view that during the Current Period, the Company has complied with all the code provisions as set out in the CG Code.

# MODEL CODE FOR DIRECTORS’ SECURITIES TRANSACTIONS

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Listing Rules (the “Securities Dealing Code”).

The Company has made specific enquiry of all the Directors and all the Directors have confirmed that they complied with the required standard set out in the Securities Dealing Code during the Current Period and throughout the period up to the date of this announcement.

# AUDIT COMMITTEE

The Audit Committee comprises three members, all of whom are independent non-executive Directors, namely Mr. Leung Ho Chi, Mr. Tse Yung Hoi and Mr. Chan Ching Sum. Mr. Leung Ho Chi is the chairman of the Audit Committee. The Audit Committee has written terms of reference in compliance with the Listing Rules and the CG Code.

The Audit Committee has in conjunction with the management reviewed the accounting principles and practices adopted by the Group and discussed risk management, internal controls and financial reporting matters of the Group. The Audit Committee has no disagreement with the accounting treatment adopted by the Company. The consolidated annual results of the Group for the Current Period have been reviewed by the Audit Committee.


# SCOPE OF WORK OF SHINEWING (HK) CPA LIMITED

The figures above in respect of the Group’s consolidated statement of financial position, consolidated statement of profit or loss and other comprehensive income and the related notes thereto for the year ended 31 March 2020 as set out in this preliminary results announcement have been agreed with the Group’s auditor, SHINEWING (HK) CPA Limited, to the amounts set out in the Group’s audited consolidated financial statements for the year ended 31 March 2020. The work performed by SHINEWING (HK) CPA Limited in this respect did not constitute an assurance engagement in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the Hong Kong Institute of Certified Public Accountants and consequently no assurance has been expressed by SHINEWING (HK) CPA Limited on this preliminary announcement.

# PUBLICATION OF ANNUAL RESULTS AND ANNUAL REPORT

This announcement is published on the Company’s corporate website at www.vicointernational.hk and the HKEXnews at www.hkexnews.hk. The 2019/2020 Annual Report of the Company will be dispatched to shareholders of the Company and published on the aforesaid websites in due course.

# 2020 ANNUAL GENERAL MEETING

The 2020 AGM of the Company is scheduled to be held on Wednesday, 2 September 2020. Notice of the 2020 AGM will be published on the websites of both the Stock Exchange and the Company and dispatched to the Company’s shareholders in due course.

# APPRECIATION

The Board would like to extend its sincere thanks to the Group’s shareholders, business partners and customers for their utmost support to the Group. The Group would also like to take this opportunity to thank all management members and staff for their hard work and dedication throughout the year.

By order of the Board

Vico International Holdings Limited

Hui Pui Sing

Chairman

Hong Kong, 24 June 2020

As at the date of this announcement, the executive directors are Mr. Hui Pui Sing, Ms. Tong Man Wah, Mr. Hui Yip Ho Eric, Ms. Hui Wing Man Rebecca and Mr. Kong Man Ho, the non-executive director is Mr. Wong Chun Man and the independent non-executive directors are Mr. Leung Ho Chi, Mr. Chan Ching Sum and Mr. Tse Yung Hoi.


# Substantial shareholders’ and other persons’ interests and short positions in shares and underlying shares

As at 31 December 2018, so far as is known to the Directors, the following persons (other than a Director or chief executive of the Company) had or were deemed or taken to have an interest or short position in the shares or underlying shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept under section 336 of the SFO:

Name of shareholder	Nature of interest	Number of
ordinary
shares of
the Company
interested	Percentage of
th’e Companys
issued share
(3)capital

Hong Kong (Rong An) Investment Limited
(“Hong Kong Rong An”)	Beneficial owner	804,064,808	37.83%

CECEP Chongqing Industry Co., Ltd.
(“CECEP Chongqing”) (1)	Interest in controlled
corporation	804,064,808	37.83%

China Energy Conservation and
Environmental Protection Group
(“CECEP”) (2)	Interest in controlled
corporation	804,064,808	37.83%

Kingom Power Limited
(“Kingom Power”)	Beneficial owner	643,720,000	30.29%

Winwett Investments Limited	Beneficial owner	136,820,000	6.44%

Mr. Huang Shao Rong	Beneficial owner	19,587,000	0.92%

	Nominee for another person
(other than a bare trustee)	208,532,000	9.81%

Ever Luxuriant Global Trading Limited	Beneficial owner	208,532,000	9.81%

Mr. Lin Haibin	Beneficial owner	27,723,000	1.30%

	Nominee for another person
(other than a bare trustee)	172,538,000	8.12%

Haibin International Investments Limited	Beneficial owner	172,538,000	8.12%

Export – Import Bank of China	Person having a security
interest in shares	300,000,000	14.12%


Notes:

(1) CECEP Chongqing owned 100% of the issued share capital of Hong Kong Rong An, and was thus deemed to be interested in all shares of the Company that Hong Kong Rong An was interested in under the SFO.

(2) CECEP Chongqing was a non-wholly-owned subsidiary of CECEP. CECEP was therefore deemed to be interested in all shares of the Company CECEP Chongqing was interested in under the SFO.

(3) Based on a total of 2,125,308,000 issued shares of the Company as at 31 December 2018.

Save as disclosed above, as at 31 December 2018, the Directors were not aware of any other person who had interests or short positions in the shares or underlying shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept under section 336 of the SFO.

# Emolument policies

The Group’s emolument policies are formulated on the performance of individual employees and on the basis of the salary trends in Hong Kong and the PRC, and will be reviewed regularly. Subject to the Group’s profitability, the Group may also distribute discretionary bonus to its employees as an incentive for their contribution to the Group. The Group has adopted a share option scheme for its employees as described in the paragraph below.

# Permitted Indemnity

Pursuant to the Articles of Association of the Company, the applicable laws and regulations, every Director shall be indemnified and secured harmless out of the assets and profits of the Company against all actions, costs, charges, losses, damages and expenses which they or any of them may incur or sustain in the execution of their duties in their offices. Such permitted indemnity provision has been in force throughout the year under review. The Company has arranged appropriate Directors’ and officers’ liability insurance coverage for the Directors and officers of the Group.

# Share option scheme

The Company has a share option scheme which was adopted on 31 March 2011 whereby the Directors are authorised, at their discretion, to invite employees of the Group, including directors of any company in the Group, to take up options to subscribe for shares of the Company. The purpose of the scheme is to provide an opportunity for employees of the Group to acquire an equity participation in the Company and to encourage them to work towards enhancing the value of the Company and its shares for the benefit of the Company and its shareholders as a whole.


\[ A ( S ) \ne S \, ; \qquad \qquad \qquad \qquad \qquad \qquad ( 2 . 1 4 ) \]

since \( A \neq { \mathrm { I d } } \), such a subspace exists. Consider the vector bundle V on Y constructed in (2.11) using S. As before, P(V ) denotes the projective bundle over Y parametrizing the lines in the fibers of V .

There is an embedding

\[ \delta : P ( V ) \longrightarrow Q \qquad \qquad \qquad \qquad \qquad ( 2 . 1 5 ) \]

which we will now describe. For the map f in (2.2), the image \( f \circ \delta ( P ( V ) ) \) is the point given by the quotient

\[ 0 \, \longrightarrow \, { \widehat V } \, \longrightarrow \, { \mathcal O } _ { X } ^ { \oplus r } \, \longrightarrow \, \bigl ( \bigoplus _ { i = 1 } ^ { d _ { p } - 1 } ( { \mathcal O } _ { X } ^ { \oplus r } ) _ { x _ { i } } / H _ { i } \bigr ) \oplus \bigl ( { \mathcal O } _ { X } ^ { \oplus r } \bigr ) _ { x _ { 0 } } / S \bigr ) \, \longrightarrow \, 0 \, . \]

where \( H _ { i } \) are the hyperplanes fixed above; in particular, \( f \circ \delta \) is a constant map. Note that bV is an extension of the vector bundle V to X. For any point \( y \in Y \) and any point in the fiber \( y ^ { \prime } \in P ( V ) _ { y } \), consider the short exact sequence on X

\[ 0 \, \longrightarrow \, E \, \longrightarrow \, \widehat { V } ^ { * } \, \longrightarrow \, ( \oplus _ { j = 1 } ^ { d _ { z } - 1 } ( \widehat { V } _ { y _ { j } } ^ { * } / L _ { j } ^ { \perp } ) \oplus ( \widehat { V } _ { y } ^ { * } / L ( y ^ { \prime } ) ^ { \perp } ) \, \longrightarrow \, 0 \, , \]

where \( L ( y ^ { \prime } ) \, \subset \, V _ { y } \) is the line in \( V _ { y } \) corresponding to the above point \( y ^ { \prime } \), and \( L _ { j } ^ { \perp } \, \subset \, \widehat { V } _ { y _ { j } } ^ { * } \) (respectively, \( L ( y ^ { \prime } ) ^ { \perp } \subset \widehat { V } _ { y } ^ { * } ) \) is the annihilator of \( L _ { j } \) (respectively, \( L ( y ^ { \prime } ) ) \); note that \( \widehat { V } _ { y _ { j } } \) is identified with \( \mathbb { C } ^ { r } \) and \( \widehat { V } _ { y } \) is identified with \( V _ { y } \). Therefore, we have

\[ \widehat { V } \hookrightarrow E ^ { * } . \]

The map \( \delta \) in (2.15) sends any \( y ^ { \prime } \) to the above extension \( E ^ { * } \) of bV constructed from \( y ^ { \prime } \).

From (2.10) we know that \( \mathrm { P G L } ( r , \mathbb { C } ) \) is contained in \( \operatorname { A u t } ( p ^ { - 1 } ( U ) ) \) with

\[ 0 \oplus { \mathfrak { g } } \, \subset \, { \mathfrak { g } } \oplus { \mathfrak { g } } \, = \, H ^ { 0 } ( p ^ { - 1 } ( U ) , \, T ( p ^ { - 1 } ( U ) ) ) \]

as its Lie algebra. This action of \( \mathrm { P G L } ( r , \mathbb { C } ) \) on \( p ^ { - 1 } ( U ) \) clearly preserves the intersection \( \delta ( P ( V ) ) \cap p ^ { - 1 } ( U ) \). Therefore, if the action of the element A in (2.13) extends to Q, then the extended action must preserve the image \( \delta ( P ( V ) ) \).

On the other hand, from Lemma 2.3 we know that the action of A on \( P ( V ) | _ { Y \backslash \{ y _ { 0 } \} } \) does not extend to P(V ) because (2.14) holds. This completes the proof of the theorem.

# 3. Holomorphic maps from a symmetric product

Proposition 3.1. Let X and Y be compact connected Riemann surface with

\[ \operatorname { g e n u s } ( X ) \, \geq \, \operatorname { g e n u s } ( Y ) \, \geq \, 2 \, . \]

If there is a nonconstant holomorphic map \( \beta \; : \; \mathrm { S y m } ^ { d } ( Y ) \; \longrightarrow \; X \), then \( d \)= 1, and \( \beta \) is an isomorphism.


Proof. Let \( \beta \, : \, \mathrm { S y m } ^ { d } ( Y ) \, \longrightarrow \, X \) be a nonconstant holomorphic map. Let

\[ \beta ^ { * } \, : \, H ^ { 0 } ( X , \, \Omega _ { X } ^ { 1 } ) \, \longrightarrow \, H ^ { 0 } ( \mathrm { S y m } ^ { d } ( Y ) , \, \Omega _ { \mathrm { S y m } ^ { d } ( Y ) } ^ { 1 } ) \]

be the pull-back of 1–forms defined by \( \omega \longmapsto \beta ^ { * } \omega \). This homomorphism \( \beta ^ { * } \) is injective, because \( \beta \) is surjective. Since

\[ \mathrm { d i m } \, H ^ { 0 } ( \mathrm { S y m } ^ { d } ( Y ) , \, \Omega _ { \mathrm { S y m } ^ { d } ( Y ) } ^ { 1 } ) \, = \, \mathrm { g e n u s } ( Y ) \]

[Ma, p. 322, (4.3)], the injectivity of \( \beta ^ { * } \) implies that \( \operatorname { g e n u s } ( Y ) \; \geq \; \operatorname { g e n u s } ( X ) \). Therefore, the given condition \( \operatorname { g e n u s } ( X ) \ \geq \operatorname { g e n u s } ( Y ) \) implies that

• \( \operatorname { g e n u s } ( X ) \, = \, \operatorname { g e n u s } ( Y ) \), and

• the above homomorphism \( \beta ^ { * } \) is an isomorphism.

If \( d \geq \) 2, the wedge product

\[ \wedge ^ { 2 } H ^ { 0 } ( \mathrm { S y m } ^ { d } ( Y ) , \, \Omega _ { \mathrm { S y m } ^ { d } ( Y ) } ^ { 1 } ) \, \longrightarrow \, H ^ { 0 } ( \mathrm { S y m } ^ { d } ( Y ) , \, \Omega _ { \mathrm { S y m } ^ { d } ( Y ) } ^ { 2 } ) \]

is a nonzero homomorphism [Ma, p. 325, (6.3)]. On the other hand, the wedge product on \( H ^ { 0 } ( X , \, \Omega _ { X } ^ { 1 } ) \) is the zero homomorphism because \( H ^ { 0 } ( X , \, \Omega _ { X } ^ { 2 } ) \; = \; 0 \). In other words, \( \beta ^ { * } \) is not compatible with the wedge product operation on holomorphic 1-forms if \( d \geq \) 2. So we conclude that \( d \) = 1.

Since \( \mathrm { g e n u s } ( X ) \, = \, \mathrm { g e n u s } ( Y ) \), from Riemann–Hurwitz formula for Euler characteristic if follows that \( \mathrm { d e g r e e } ( \beta ) \) = 1. In other words, \( \beta \) is an isomorphism.

Let \( X ^ { \prime } \) be a compact connected Riemann surface of genus at least two. Fix positive integers \( r ^ { \prime } \ge \) 2, \( d _ { p } ^ { \prime } \) and \( d _ { z } ^ { \prime } \). Let

\[ \boldsymbol { \mathcal { Q } } ^ { \prime } \, = \, \boldsymbol { \mathcal { Q } } _ { X } ^ { \prime } ( \boldsymbol { r } ^ { \prime } , d _ { p } ^ { \prime } . d _ { z } ^ { \prime } ) \]

be the corresponding generalized quot scheme (see (2.2)).

Proposition 3.2. If the two varieties \( \mathcal { Q } ^ { \prime } \) and Q (constructed in (2.2)) are isomorphic, then X is isomorphic to \( X ^ { \prime } \).

Proof. Assume that \( Q \) 0 and Q are isomorphic. We will show that X and \( X ^ { \prime } \) are isomorphic.

Let \( \eta \, : \, \mathrm { S y m } ^ { d _ { p } } ( X ) \times \mathrm { S y m } ^ { d _ { z } } ( X ) \, \longrightarrow \, \mathrm { P i c } ^ { d _ { p } } ( X ) \times \mathrm { P i c } ^ { d _ { z } } ( X ) \) be the morphism defined by

\[ \left( ( x _ { 1 } \, , \, \cdot \, \cdot \, , x _ { d _ { p } } ) \, , ( y _ { 1 } \, , \, \cdot \, \cdot \, , y _ { d _ { z } } ) \right) \longmapsto \left( { \mathcal { O } } _ { X } ( x _ { 1 } + \, . \, . \, . + x _ { d _ { p } } ) \, , { \mathcal { O } } _ { X } ( y _ { 1 } + \, . \, . \, . \, + y _ { d _ { z } } ) \right) . \]

Since the general fiber of the map p in (2.5) is a product of copies of projective spaces, the composition

\[ \eta \circ p : \, \mathcal { Q } \longrightarrow \operatorname { P i c } ^ { d _ { p } } ( X ) \times \operatorname { P i c } ^ { d _ { z } } ( X ) \]

is the Albanese map for Q, as there is no nonconstant holomorphic map from a projec-tive space to an abelian variety. In particular, the Albanese variety of Q is of dimension


# Financial Risks

Details of the Company’s Financial Risk exposures are provided as follows:

# Foreign Exchange

The Company sells its bullion and gold concentrate in USD. Most of its costs are denominated in SEK and EUR with an interest-bearing liability denominated in HKD, while the Company’s presentation currency is AUD.

The Company may use foreign exchange forwards from time to time to reduce exposure to unpredictable fluctuations in the foreign exchange rates if considered suitable by the Directors. No hedging of foreign exchange exposure was used during the period.

# Commodity Price

The Company is exposed to movements in the gold price. The Company may use a variety of financial instruments (such as gold forwards and gold call options) from time to time to reduce exposure to unpredictable fluctuations in the project life revenue streams if considered suitable by the Directors. At present the Company has no plans to hedge commodity price risk.

# Liquidity

The Company is exposed to liquidity risk through its financial liabilities and its obligations to make payment on its financial liabilities as and when they fall due. The Company maintains a balance in its approach to funding using debt and or equity raisings.

# Credit

Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The Company’s maximum exposures to credit risk at reporting date in relation to each class of financial asset is the carrying amount of those assets as indicated in the Consolidated Interim Statement of Financial Position.

Credit risk is managed on a group basis and predominantly arises from cash and cash equivalents deposited with banks and financial institutions, trade and other receivables and environmental and other bonds. While the Company has policies in place to ensure that sales are made to customers with an appropriate credit history, the Company is exposed to a concentration of credit risk in relation to its gold concentrate sales to a nearby smelter in Finland.

# Interest Rate

Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate because of changes in market interest rates. Cash flow interest rate risk is the risk that the future cash flow from a financial instrument will fluctuate because of changes in market interest rates. The Company’s policy is to manage its exposure to interest rate risk by holding cash in short term, fixed and variable rate deposits with reputable high credit quality financial institutions. The Company constantly analyses its interest rate exposure. Consideration is given to potential renewals of existing positions, alternative financing and or the mix of fixed and variable interest rates.


# Costs

Fuel, power, labour, and all other costs can vary from existing rates and assumptions.

# Charges on Company Assets

There were no charges on the Company’s assets as at 30 June 2021 or 31 December 2020.

# Contingent Liabilities

As at 30 June 2021, there are no material updates to the contingent liabilities contained in Company’s 2020 Annual Report.

# Company Strategy

The Company is principally engaged in gold exploration, mining, and processing in the Nordic region. The Company’s objective is to focus on the development of existing and new mining assets in reasonable proximity to our process plants in Vammala, Finland and Svartliden, Sweden. The Company operates with a long-term business strategy to operate responsibly considering the interests of all stakeholders including its staff, contractors, and the public including civic groups, together with the environment and the general amenity of its areas of operation. It aims to produce positive financial outcomes through (i) the economic operations of its operating mines and process plants; (ii) development of new projects consistent with the Company’s objective, such as the Group’s newest operations at Fäboliden; and (iii) attention to the Company’s corporate and social responsibilities, including a focus on ongoing safety and environmental compliance, and ongoing positive interaction with the communities within which it operates.

# Significant Investments Held, Material Acquisitions and Disposal of Subsidiaries, and Future Plans for Material Investments or Capital Assets

Save for those disclosed in this announcement, there were no other significant investments held, nor were there material acquisitions or disposals of subsidiaries during the period. Apart from those disclosed in this announcement, there was no plan authorised by the Board for other material investments or additions of capital assets at the date of this announcement.

# Purchase, Sale or Redemption of the Company’s Listed Securities

During the period ended 30 June 2021, neither the Company nor any of its subsidiaries had purchased, sold, or redeemed any of the Company’s listed shares.


# Internet of Things

The Internet of Things (IoT) is about making intelligent digitally-enabled and connected products. The falling costs of key infrastructure and the proliferation of consumer and enterprise user applications have proven a catalyst.

During 2015-17, companies announced \$98 billion worth of M&A deals in this segment. IoT also attracted \$3.5 billion in CVC investments, spread across all the major sectors. Such investments point towards a burgeoning IoT ecosystem that includes wearables, sensors, infrastructure and smart products across many sectors, including smart utilities, connected home, industrial IoT, connected health and automobiles.

Amazon acquired Ring, maker of smart home doorbells, cameras, and security systems


# Robotics and Drones

Signi cant advances in new materials, computing and battery power as well as the rapid growth in both industrial and consumer applications is stimulating investment in robotics. These investments range from industrial automation and drones to service process automation.

The robotics segment received nearly \$7 billion worth of M&A investments, seven times more than the \$1 billion corporate venture investments in this segment. M&A was dominated by technology and industrials. Corporate venture investments in this segment came from a range of non-tech sectors, such as industrials, media and consumer business.

M&A by Sector

(By deal volumes)

Boeing acquired Aurora Flight Sciences, developer and manufacturer of advanced aerospace platforms and autonomous drone systems


The following is an analysis of the Group’s assets and liabilities by operating segments:

	Exhibition and events	Cultural and entertainment	Financing	Total

At
31 December
2020	At
30 June
2020	At
31 December
2020	At
30 June
2020	At
31 December
2020	At
30 June
2020	At
31 December
2020	At
30 June
2020

HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000

(Unaudited)	(Audited)	(Unaudited)	(Audited)	(Unaudited)	(Audited)	(Unaudited)	(Audited)

Assets

Segment assets	85,025	86,051	479,872	544,971	404,046	461,062	968,943	1,092,084

Unallocated corporate assets							51,934	65,286

							1,020,877	1,157,370

Liabilities

Segment liabilities	1,768	6,815	32,969	119,140	7,645	6,735	42,382	132,690

Unallocated corporate liabilities							186,856	327,027

							229,238	459,717

For the purpose of monitoring segment performance and allocating resources between segments:

— all assets are allocated to reportable segments other than corporate assets; and

— all liabilities are allocated to reportable segments other than corporate liabilities.

# Other segment information

# For the six months ended 31 December

	Exhibition and events	Cultural and entertainment	Financing	Unallocated	Total

2020	2019	2020	2019	2020	2019	2020	2019	2020	2019

HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000

(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)

Depreciation of property,
lpant and eiqupment	(39)	(41)	(283)	(133)	(17)	(4)	(628)	(732)	(967)	(910)

Depreciation of rihgt-of-use assets	(135)	(422)	(538)	(900)	–	–	(2,646)	(2,874)	(3,319)	(4,196)

Write-off of property,
lpant and eiqupment	(94)	–	(8)	(24)	–	–	(1)	–	(103)	(24)

Cailpta exdipentures	–	–	(21)	(39)	(35)	(23)	–	(618)	(56)	(680)

Net gain/(loss) on financial
assets at FVTPL	–	(3,727)	–	–	–	–	1,082	(7,358)	1,082	(11,085)

Gain/(loss) on disposal of subsidiaries	2,412	(2,818)	–	–	–	–	–	–	2,412	(2,818)

Gain on dereigstration of subsidiaries	(99)	–	4,671	–	–	–	(1)	–	4,571	–

Amortisation of intaniblge assets	–	(1,797)	(2,889)	(3,542)	–	–	–	–	(2,889)	(5,339)


# 5. REVENUE

	For the six months ended
31 December

2020	2019

HK$’000	HK$’000

(Unaudited)	(Unaudited)

Organisation and sponsorship of exhibitions, event lpanning
and related services	–	45,934

Contracting services and entertainment equipment solution	–	83,919

Brand management	5,035	10,493

Promotion and consulting services	49,070	161,959

Trading of goods	57,272	90,090

Financing income

— Credit factoring services	20,917	20,695

— Finance leasing services	4,597	12,101

— Money lending services	397	1,400

Total	137,288	426,591

Timing of revenue recognition

At point in time	89,706	381,902

Over time	21,671	10,493

Revenue from contracts with customers	111,377	392,395

Revenue from other sources	25,911	34,196

Total	137,288	426,591

# 6. OTHER INCOME

	For the six months ended
31 December

2020	2019

HK$’000	HK$’000

(Unaudited)	(Unaudited)

Non-refundable trade deposits forfeited	–	4,026

Government grants	2,793	13,175

Interest income	104	272

Sundry income	970	308

	3,867	17,781


 Exhibit
 No.	Description

10.28	Steelcase Inc. Incentive Compensation Plan Form of Restricted Stock Units Agreement
(FY 2016) (33)

10.29	 Steelcase Inc. Incentive Compensation Plan Form of Performance Units Agreement
(TSR) (FY 2017) (34)

10.30	 Steelcase Inc. Incentive Compensation Plan Form of Cash-Based Award Agreement
(ROIC) (FY 2017) (35)

10.31	Steelcase Inc. Incentive Compensation Plan Form of Restricted Stock Units Agreement
(FY 2017) (36)

10.32	 Steelcase Inc. Incentive Compensation Plan Form of Performance Units Agreement
(TSR) (FY 2018)

10.33	 Steelcase Inc. Incentive Compensation Plan Form of Cash-Based Award Agreement
(ROIC) (FY 2018)

10.34	Steelcase Inc. Incentive Compensation Plan Form of Restricted Stock Units Agreement
(FY 2018)

10.35	Summary of Steelcase Benefit Plan for Outside Directors (37)

10.36	Summary of Compensation for the Board of Directors of Steelcase Inc., as updated April
14, 2016 (38)

21.1	Subsidiaries of the Registrant

23.1	Consent of Deloitte & Touche LLP

31.1	Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350, pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

101.INS	XBRL Instance Document

101.SCH	XBRL Schema Document

101.CAL	XBRL Calculation Linkbase Document

101.LAB	XBRL Labels Linkbase Document

101.PRE	XBRL Presentation Linkbase Document

101.DEF	XBRL Definition Linkbase Document

(1) Filed as Exhibit 3.1 to the Company’s Form 8-K, as filed with the Commission on July 15, 2011 (commission file number 001-13873), and incorporated herein by reference.

(2) Filed as Exhibit No 3.2 to the Company's Form 10-K, as filed with the Commission on April 17, 2014 (commission file number 001-13873), and incorporated herein by reference.

(3) Filed as Exhibit No. 4.1 to the Company’s Form 8-K, as filed with the Commission on August 7, 2006 (commission file number 001-13873), and incorporated herein by reference.

(4) Filed as Exhibit No. 4.2 to the Company’s Form 8-K, as filed with the Commission on February 3, 2011 (commission file number 001-13873), and incorporated herein by reference.

(5) Filed as Exhibit No. 4.3 to the Company’s Form 8-K, as filed with the Commission on February 3, 2011 (commission file number 001-13873), and incorporated herein by reference.

(6) Filed as Exhibit No. 10.1 to the Company's Form 8-K, as filed with the Commission on September 28, 2016 (commission file number 001-13873), and incorporated herein by reference.

(7) Filed as Exhibit No. 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended November 28, 2008, as filed with the Commission on January 7, 2009 (commission file number 001-13873),and incorporated herein by reference.

(8) Filed as Exhibit No. 10.2 to the Company's Form 8-K, as filed with the Commission on January 16, 2015 (commission file number 001-13873), and incorporated herein by reference.