• Focus on multiple sectors. Our Manager looks for attractive investment opportunities in all major sectors of the U.S. mortgage market. Our management team evaluates investment opportunities in residential mortgage loans and securities and across a wide spectrum of commercial property types. We believe this approach enables our Manager to identify attractive investments when it believes certain portions of the market are attractively priced or when investment opportunities in one or more sectors are scarce. By pursuing a broad investment strategy within the mortgage market, we believe our investment mortgage portfolio is less exposed to dislocations in specific sectors of the market. We believe a diversified investment portfolio outperforms the traditional single strategy portfolios in the REIT market, with returns that are more resistant to changes in the interest rate and consumer credit environment.

• Concurrent evaluation of interest rate and credit risk. Our Manager seeks to balance our portfolio with both credit risk-intensive assets and interest rate risk-intensive assets. Both of these primary risk types are evaluated against a common risk-adjusted return framework.

• Active hedging and rebalancing of portfolio. Our Manager periodically evaluates our portfolio against pre-established risk tolerances and will take corrective action through asset sales, asset acquisitions, and dynamic hedging activities to bring the portfolio back within these risk tolerances. We believe this approach generates more attractive long-term returns than an approach that either attempts to hedge away a majority of the interest rate or credit risk in the portfolio at the time of acquisition, on the one end of the risk spectrum, or a highly speculative approach that does not attempt to hedge any of the interest rate or credit risk in the portfolio, on the other end of the risk spectrum.

• Opportunistic approach to increased risk. Our Manager’s investment strategy is to preserve our ability to extend our risk taking capacity during periods of changing market fundamentals.

# Investment policies

We comply with investment policies and procedures and investment guidelines (our “Investment Policies”) that are approved by our board of directors and implemented by our Manager. Our Manager reports on our investment portfolio at each regularly scheduled meeting of our board of directors. Our independent directors do not review or approve individual investment, leverage or hedging decisions made by our Manager made in accordance with our Investment Policies.

Our Investment Policies include the following guidelines, among others:

• no investment shall be made that would cause us to fail to qualify as a REIT for federal income tax purposes;

• no investment shall be made that would cause us to be regulated as an investment company under the Investment Company Act;and

• our investments will be in our target assets.

Our Investment Policies may be changed by our board of directors without the approval of our stockholders.

# Our target assets

Our target asset classes and the principal investments in which we invest are as follows:

Asset Class	Principal Investments

Agency RMBS	•   RMBS for which Ginnie Mae, Fannie Mae or Freddie Mac
guarantees payments of principal and interest on the securities
they issue.

Non-Agency RMBS	•   Fixed and floating-rate residential Non-Agency RMBS, including
investment grade and non-investment grade classes. The
mortgage loan collateral for residential Non-Agency RMBS
consists of residential mortgage loans that do not generally
conform to underwriting guidelines issued by U.S. government
agencies or U.S. government-sponsored entities.

Other real estate-related assets and financial assets	 •   Fixed and floating-rate CMBS, including investment grade and
non-investment grade classes. CMBS are secured by, or evidence
ownership interest in, a sinlge commercial mortgage loan or a
pool of commercial mortgage loans.


# 2. APPLICATION OF AMENDMENTS TO HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”) (continued)

# Amendments to HKFRSs that are mandatorily effective for the current year (continued)

# Application of Amendments to HKAS 1 and HKAS 8 Definition of Material

The Group has applied the Amendments to HKAS 1 and HKAS 8 for the first time in the current year. The amendments provide a new definition of material that states “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments also clarify that materiality depends on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements taken as a whole.

The application of the Amendments to References to the Conceptual Framework in HKFRS Standards and the amendments to HKFRSs in the current year had no material impact on the Group’s financial positions and performance for the current and prior years and/or on the disclosures set out in these consolidated financial statements.

# New and amendments to HKFRSs in issue but not yet effective

The Group has not early applied the following new and amendments to HKFRSs that have been issued but are not yet effective:

HKFRS 17	Insurance Contracts and the related A1mendments

Amendment to HKFRS 16	Covid-19-R4elated Rent Concessions

Amendments to HKFRS 3	Reference to the Conceptual Framework2

Amendments to HKFRS 9,
HKAS 39, HKFRS 7, HKFRS 4
and HKFRS 16	Interest Rate Benchmark Reform — Phase 25

Amendments to HKFRS 10
and HKAS 28	Sale or Contribution of Assets between an Investor and its
A3ssociate or Joint Venture

Amendments to HKAS 1	Classification of Liabilities as Current or Non-current and
related amendments to Hong Kong Interpretation 5
(2020)1

Amendments to HKAS 16	Property, Plant and Equipment — Proceeds before Intended
U2se

Amendments to HKAS 37	Onerous Contracts — Cost of Fulfilling a Contract2

Amendments to HKFRSs	Annual Improvements to HKFRSs 2018–20202

1 Effective for annual periods beginning on or after 1 January 2023.

2 Effective for annual periods beginning on or after 1 January 2022.

3 Effective for annual periods beginning on or after a date to be determined.

4 Effective for annual periods beginning on or after 1 June 2020.

5 Effective for annual periods beginning on or after 1 January 2021.

Except for the amendments in HKFRSs mentioned below, the directors of the Company anticipate that the application of all other new and amendments to HKFRSs will have no material impact on the consolidated financial statements in the foreseeable future.


# 2. APPLICATION OF AMENDMENTS TO HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”) (continued)

# Amendments to HKAS 1 Classification of Liabilities as Current or Non-current and related amendments to Hong Kong Interpretation 5 (2020)

The amendments provide clarification and additional guidance on the assessment of right to defer settlement for at least twelve months from reporting date for classification of liabilities as current or non-current, which:

• specify that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period. Specifically, the amendments clarify that:

(i) the classification should not be affected by management intentions or expectations to settle the liability within 12 months; and

(ii) if the right is conditional on the compliance with covenants, the right exists if the conditions are met at the end of the reporting period, even if the lender does not test compliance until a later date; and

• clarify that if a liability has terms that could, at the option of the counterparty, result in its settlement by the transfer of the entity’s own equity instruments, these terms do not affect its classification as current or non-current only if the entity recognises the option separately as an equity instrument applying HKAS 32 Financial Instruments: Presentation.

In addition, Hong Kong Interpretation 5 was revised as a consequence of the Amendments to HKAS 1 to align the corresponding wordings with no change in conclusion.

Based on the Group’s outstanding liabilities as at 31 December 2020, the application of the amendments will not result in reclassification of the Group’s liabilities.

# 3. BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES

# 3.1 Basic of preparation of consolidated financial statements

The consolidated financial statements have been prepared in accordance with the HKFRSs issued by the HKICPA. For the purpose of preparation of the consolidated financial statements, information is considered material if such information is reasonably expected to influence decisions made by primary users. In addition, the consolidated financial statements include applicable disclosures required by the Rules Governing the Listing of Securities on the Stock Exchange and the Hong Kong Companies Ordinance.

The consolidated financial statements have been prepared on the historical cost basis. Historical cost is generally based on the fair value of the consideration given in exchange of goods and services.


This summary aims to give you an overview of the information contained in this prospectus. Since this is a summary, it does not contain all the information that may be important to you and is qualified in its entirety by, and should be read in conjunction with, the full text of this prospectus. You should read the whole document including the appendices hereto, which constitute an integral part of this prospectus, before you decide to invest in our Offer Shares. There are risks associated with any investment. Some of the particular risks in investing in our Offer Shares are set out in the section headed “Risk factors” in this prospectus. You should read that section carefully before you decide to invest in our Offer Shares.

# OVERVIEW

We are an established operator of elderly residential care homes in Hong Kong providing comprehensive residential care home services to our elderly residents through our network of “Shui On瑞安” and “Shui Hing 瑞興” branded elderly residential care homes across four districts in Hong Kong. Our revenue is primarily derived from:

(i) rendering of elderly home care services: including the provision of accommodation with dietician-managed meal plans, 24-hour nursing and caretaking assistance and professional services such as regular medical consultation, physiotherapy, occupational therapy, psychological and social care services; and

(ii) sales of elderly related goods and provision of healthcare services: elderly related goods include adult nappies, nutritional milk, other medical consumable products and daily supplies;whereas healthcare services include customisable add-on healthcare services such as medical and physiotherapy services that may be provided by external providers on an as-needed basis to suit their needs.

During the Track Record Period and up to the Latest Practicable Date, we expanded our network of elderly residential care homes from four to five elderly residential care homes located in Kwun Tong, Shatin, Eastern and Kwai Tsing districts and were strategically situated in the vicinity of public housing estates and residential areas with a high density of potential customers nearby as well as shopping malls and public transport and other public facilities.

During the Track Record Period, our Group primarily generated revenue from three types of customers: (i) the Social Welfare Department (the “SWD”) that leased a fixed number of residential care places at elderly residential care homes that participate in the Enhanced Bought Place Scheme (the “EBPS”) under the EBPS Agreements, where the EBPS is a publicly funded welfare programme of the SWD that offers leased residential care places at a subsidised rate to eligible elderly citizens in Hong Kong; (ii) the individual customers that include both EBPS-subsidised and non-subsidised customers;and (iii) non-governmental organisations which leased a few residential care places at our elderly residential care homes. As at the Latest Practicable Date, we had a total of 573 elderly residents, of which 1.4% were between 50 and 59 years old, 4.7% were between 60 and 69 years old, 16.9% were between 70 and 79 years old, 48.0% were between 80 and 89 years old, 26.2% were between 90 and 99 years old and 2.8% were 100 years old or above.

As at the Latest Practicable Date, the SWD leased a total of 193 residential care places from our two EBPS participating elderly residential care homes which are classified as class EA1, the highest classification rated by the SWD under the EBPS.

The following table sets forth our revenue from (i) rendering of elderly home care services; and (ii) sales of elderly related goods and provision of healthcare services for the periods indicated:


	For the year ended 31 December

2015	2016

HK$(’000)	%	 HK$(’000)	%

(N)Renderioeng of elderly htome care services  .....	33,582	84.1	48,874	82.9

Sales of elderly related goods and provision of
\( ( N o t e ) \))healthcare services .................	6,355	15.9	10,101	17.1

Total ................................	39,937	100.0	58,975	100.0

Note: The revenue generated by Wan Tsui was not included as part of our Group’s revenue generated during the Track Record Period as Wan Tsui was considered as our associate prior to the disposal of our entire interest in Wan Tsui on 28 June 2016. For details of its accounting treatment, please see the paragraphs headed “Financial information — Share of profits and losses/gain on disposal of associates” in this prospectus and note 15 to the Accountants’ Report as set out in Appendix I to this prospectus. The completion of the acquisition of approximately 66.7% interest in Shui On (Kwai Shing E.) and the entire interest in Shui On (Sun Tin Wai) by our Group took place by the end of August 2016 and September 2016, respectively. As such, our revenue generated from the rendering of elderly home care services for the year ended 31 December 2016 took into account our revenue generated from each of Shui On (Kwai Shing E.) and Shui On (Sun Tin Wai) elderly residential care homes during the period between the dates when they became our subsidiaries and 31 December 2016.

The table below sets forth details of the average monthly occupancy rate of each of our elderly residential care homes during the Track Record Period:

Elderly residential care home	Overall average	Average for non-EBPS
residential care lpaces
(individual customers
and non-governmental
organisations)	Average for residential
care lpaces under
the EBPS

For the year ended
31 December	For the year ended
31 December	For the year ended
31 December

2015	2016	2015	2016	2015	2016

	%	%	%	%	%	%

Shui On (Shun On) .............	95.8	94.9	94.9	91.5	98.3	98.3

(N3)Shuit Hi oe  ng...............	96.7	96.7	96.7	96.7	 –	 –

(N3)Shui Otn (Hin Whoe  ga)........	98.6	98.6	98.6	98.6	 –	 –

(N2dShuit3) O n(S   e  n unTinWos ai)a. .	 N/A	98.9	 N/A	98.9	 N/A	 –

(NShuioe2 Ot)n (Kwai Shing E.)   . . . .	 N/A	93.2	 N/A	84.9	 N/A	98.5

Notes:

1. The monthly occupancy rate is calculated by dividing the number of elderly residents as at the month end of each elderly residential care home by the number of residential care places available at that elderly residential care home. The average monthly occupancy rate is the average of all the monthly occupancy rates over the financial year.

2. The relevant periods for calculating the average monthly occupancy rates of Shui On (Kwai Shing E.) and Shui On (Sun Tin Wai) only cover the periods since the dates when they became our subsidiaries and up to 31 December 2016. The completion of the acquisition of approximately 66.7% interest in Shui On (Kwai Shing E.) and the entire interest in Shui On (Sun Tin Wai) by our Group took place by the end of August 2016 and September 2017, respectively.

3. The Shui Hing, Shui On (Hing Wah) and Shui On (Sun Tin Wai) elderly residential care homes do not participate in the EBPS. As such, the average monthly occupancy rate for residential care places under the EBPS is not applicable to them.

# OUR ELDERLY RESIDENTIAL CARE HOMES

Through our principal Hong Kong subsidiaries including Shui On (Shun On), Shui Hing, Shui On (Hing Wah), Shui On (Sun Tin Wai) and Shui On (Kwai Shing E.), we owned and operated four “Shui On瑞安” and one “Shui Hing 瑞興” branded elderly residential care homes across the Kwun Tong, Shatin, Eastern and Kwai Tsing districts in Hong Kong with a total of 589 residential care places as at the Latest Practicable Date.

Our elderly residential care homes are strategically situated in the vicinity of public housing estates and residential areas with a high density of potential customers nearby as well as shopping malls and


# CORPORATE REORGANISATION AND GROUP STRUCTURE

share capital for cash at par. On 26 May 2008, Honour Event disposed its entire shareholding in Expand Pacific Limited to Mr. Tsang, our executive Director at a consideration of HK\$1.00.

First Credit had advanced an aggregate sum of HK\$114,350 by way of loan to Expand Pacific Limited. The said loan of HK\$114,350 was unsecured, interest-free and with no fixed term of repayment but repayable on demand. The said loan was repaid in full on 24 March 2009.

On 15 January 2008, First Consortium acquired from Best Year Enterprises Limited (a company wholly-owned by Mr. Sin) one ordinary share of HK\$1.00 in the capital of Head Return Limited (formerly known as FC Mortgage Referral Limited), being its entire issued share capital, for cash at par. On 14 May 2008, First Consortium disposed its entire shareholding in Head Return Limited to Mr. Sin at a consideration of HK\$1.00.

First Credit had advanced an aggregate sum of HK\$111,914 by way of loan to Head Return Limited. The said loan of HK\$111,914 was unsecured, interest-free and with no fixed term of repayment but repayable on demand. The said loan was repaid in full on 24 March 2009.

Expand Pacific Limited and Head Return Limited are limited liability companies incorporated in Hong Kong on 29 August 2007 and 18 October 2007 respectively. Our Group did not conduct any business operation in these companies before the aforesaid disposals.

# THE REORGANISATION

# Incorporation of our Company

Our Company was incorporated under the Companies Law in the Cayman Islands as an exempted company with limited liability on 9 March 2009. Our Company has established a place of business in Hong Kong at Units 909–911, 9th Floor, Far East Consortium Building, 121 Des Voeux Road Central, Hong Kong and was registered as a non-Hong Kong company in Hong Kong under Part XI of the Companies Ordinance on 2 April 2009. As at the date of incorporation, the authorised share capital of our Company was HK\$380,000 divided into 38,000,000 Shares of HK\$0.01 each and one nil-paid Share was issued and allotted to the initial subscriber, Codan Trust Company (Cayman) Limited. The said one Share was transferred to Best Year Enterprises Limited (a shareholder of First Consortium and a wholly-owned company of Mr. Sin) on the same date.


# CORPORATE REORGANISATION AND GROUP STRUCTURE

# Acquisition of First Consortium by our Company

On 25 April 2009, pursuant to a sale and purchase agreement entered into between (i) the then shareholders of First Consortium as vendors, namely Best Year Enterprises Limited, Power Profit Far East Limited, Win Action Limited, Choy Sze Chung Jojo, Easy Finance Management Limited, Tam Yuk Ching Jenny, Top Stanton Holdings Limited, Tsang Kai Kin Clinton, Yearman Limited, Capital Top Limited, Gainyear Holdings Limited, Firstcorp Group Limited, Union Nation Investments Limited, Tse Young Lai, Rise Day Investments Limited, Jade Wing Investments Limited, Enhance Pacific Limited and Nation Field Limited and (ii) our Company as purchaser, our Company acquired the entire issued share capital of First Consortium. In consideration of the acquisition, (i) the one nil-paid Share held by Best Year Enterprises Limited was credited as fully paid; and (ii) our Company issued and allotted 19,230,766 Shares to the then shareholders of the First Consortium, details of the allotment are as follows:

Name of Shareholders	No. of shares
held by the
shareholders
in First
Consortium
before
acquisition	No. of Shares
issued by our
Company as
consideration
for the
acquisition	Total No. of
Shares held by
the
Shareholders
after the
acquisition	Approximate
percentage of
shareholding
after the
acquisition

Best Year Enterprises Limited
(Note 1)	1,538,469	1,538,468	1,538,469	8.00%

Tse Young Lai	2,994,872	2,994,872	2,994,872	15.57%

Power Profit Far East Limited	2,346,152	2,346,152	2,346,152	12.20%

Win Action Limited	1,923,076	1,923,076	1,923,076	10.00%

Nation Field Limited	1,615,385	1,615,385	1,615,385	8.40%

Tam Yuk Ching Jenny	1,333,332	1,333,332	1,333,332	6.93%

Top Stanton Holdings Limited	1,230,768	1,230,768	1,230,768	6.40%

Easy Finance Management
Limited	846,153	846,153	846,153	4.40%

Tsang Kai Kin Clinton	782,051	782,051	782,051	4.07%

Rise Day Investments Limited
(Note 2)	769,231	769,231	769,231	4.00%

Choy Sze Chung Jojo	769,230	769,230	769,230	4.00%

Yearman Limited	769,230	769,230	769,230	4.00%

Enhance Pacific Limited
(Note 1)	589,743	589,743	589,743	3.07%

CailTpta oiip Lmted	512,820	512,820	512,820	2.67%

Gainyear Holdings Limited	461,538	461,538	461,538	2.40%

Union Nation Investments
Limited	312,820	312,820	312,820	1.62%

Firstcorp Group Limited	307,692	307,692	307,692	1.60%

Jade Wing Investments
Limited (Note 2)	128,205	128,205	128,205	0.67%

Total:	19,230,767	19,230,766	19,230,767	100.00%


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# MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)

# FINANCIAL REVIEW

# Revenue

Revenue in 2020 was approximately HK\$329.9 million, representing a decline of approximately 18.9% from the previous year (2019: approximately HK\$406.7 million). The reduction in revenue was mainly driven by the net effects of a number of the Group’s customers have reduced their printing orders as a result of the depressed government spending and the effect as COVID-19 related government restrictions came into force in Australia. On top of COVID-19 impact, one of the Group’s top five customers has decided not to renew its contract with the Group with effective from 2020. Such negative impact was partly offset by increasing trend of publishers to print their books locally for quicker turnaround time.

# Gross profit and gross profit margin

Our gross profit decreased by approximately HK\$45.3 million, or approximately 48.2%, from approximately HK\$93.8 million in 2019 to approximately HK\$48.5 million in 2020. Gross profit margin dropped by approximately 8.4% in comparison of the prior year. Such drop was mainly due to reduction of revenue as well as the fixed direct and indirect costs are difficult to alter in the short term.

# Other income

Other income significantly increased from approximately HK\$13.5 million in 2019 to approximately HK\$45.9 million in 2020. It was attributable to approximately HK\$40.9 million government subsidy from the JobKeeper Payment Scheme offered by the Australian Government which is a temporary subsidy for businesses significantly affected by COVID-19.

# Selling and distribution costs

Selling and distribution costs decreased by approximately HK\$5.1 million or 17.9% from approximately HK\$28.6 million in 2019 to approximately HK\$23.5 million in 2020. The decrease was greatly in line with the reduction in revenue during the year as freight costs dropped and reduction of sales staff headcount due to the implementation of cost control measures.

# Administrative expenses

Administrative expenses decreased by approximately HK\$2.5 million from approximately HK\$31.3 million in 2019 to approximately HK\$28.8 million in 2020, representing a year-on-year drop of approximately 8.1%. Various administrative expenses were reduced in the light of the implementation of cost control measures and reduction in the number of administrative staff headcount but partially offset by the industrial trend of increasing in insurance premium charges.

# Income tax expense

Income tax expense decreased from approximately HK\$13.8 million (effective income tax rate: 30.1%) in 2019 to approximately HK\$12.6 million (effective income tax rate: 31.0%) in 2020. Such decrease was consistent with the reduction in taxable income during the current year.

# Net profit

The Group reported a net profit of approximately HK\$28.1 million in 2020 compared to HK\$32.1 million in the prior year, which represented a decrease of approximately HK\$ 4.0 million or 12.7%. The profitability of the Group was impacted by COVID-19 when the government agencies and publishers have reduced their printing orders. The Group’s management has taken proactive measures to mitigate the Group’s operational risk, enhance operational efficiency and reduce costs. The Group received considerable financial support from the Australian government’s JobKeeper Payment Scheme, which has cushioned the impact of COVID-19 on the business.


# MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)

# FINANCIAL REVIEW (Continued)

# Liquidity and financial resources

As at 31 December 2020, the Group had net current assets of approximately HK\$236.8 million (2019: approximately HK\$209.9 million), among which, cash and bank balances were approximately HK\$174.8 million (2019: cash and bank balance together with the pledged deposit: HK\$169.0 million) which were denominated in Australian Dollars (“AUD”), US Dollars (“USD”) and HK\$.

The Group’s current ratio was approximately 4.5 times (2019: approximately 4.2 times), which is calculated by the Group’s current assets over current liabilities. The only interest bearing liabilities were lease liabilities of approximately HK\$34.2 million (2019: approximately HK\$28.7 million) which were denominated in AUD. The Group’s gearing ratio as at 31 December 2020 was approximately 11.6% (2019: approximately 10.5%), which is calculated on the basis of the Group’s total interest-bearing debts over total equity. The increase of the Group’s interest-bearing liabilities, hence the gearing ratio, was mainly due to the renewal of various property and equipment leases during the year. Save as the aforesaid, the Group maintained net cash position and healthy current and gearing ratios, reflecting its healthy financial position.

The Group adopts centralised financing and treasury policies in order to ensure that Group funding is utilised efficiently. The Group also regularly monitors its liquidity requirements and its relationship with bankers to ensure that it maintains sufficient reserves of cash and adequate committed lines of funding from major financial institutions to meet its liquidity requirements in the short and long term.

# Working capital management

The Group’s capital employed includes share capital, reserves and lease liabilities. The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The impact of the level of capital on shareholders’ return is also recognised and the Group acknowledges the need to maintain a balance between the higher returns that might be possible with greater gearing and the advantages and security afforded by a sound capital position. The Group is not subject to any externally imposed capital requirements.

The allocation of capital between its specific business segments’ operations and activities is, to a large extent, driven by optimisation of the return achieved on the capital allocated. The process of allocating capital to specific business segment operations and activities is undertaken independently of those responsible for the operation.

# Foreign currency management

The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than the functional currencies. The currencies in which transactions primarily denominated are AUD, NZD, USD, European Union Euros, Great British Pound and HK\$. As at 31 December 2020 and 2019, foreign exchange risks on financial assets and liabilities denominated in other currencies were insignificant to the Group.

Management evaluates the Group’s foreign currency risk using cash flow forecasts with the objective of keeping its exposure to a minimum. The Group may in certain circumstances use forward exchange contracts to hedge its foreign currency risk. When used, the contracts would normally have maturities of less than one year at reporting date. The Group does not hold or issue financial instruments for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted for as trading instruments.


# 21. BUSINESS REVIEW

Business review of the Company is set out in “Management Discussion and Analyasis” on page 4 of this annual report.

# 22. PERMITTED INDEMNITY PROVISION

A permitted indemnity provision for the benefit of the directors of the Company is currently in force and was in force throughout the financial year.

The Company has taken out and maintained directors’ liability insurance throughout the year, which provides appropriate cover for the directors of the Group.

# 23. EVENT AFTER THE REPORTING PERIOD

Details of events occuring after the reporting period are set out in note 43 to the consolidated financial statements.

# 24. AUDITOR

The consolidated financial statements have been audited by RSM Hong Kong who retire and, being eligible, offer themselves for re-appointment.

On behalf of the Board

Li Yin Hui

Chairman

27 March 2017


TO THE SHAREHOLDERS OF CHINA FIRE SAFETY ENTERPRISE GROUP LIMITED

(Incorporated in the Cayman Islands with limited liability)

# Opinion

We have audited the consolidated financial statements of China Fire Safety Enterprise Group Limited and its subsidiaries (the “Group”) set out on pages 39 to 115, which comprise the consolidated statement of financial position as at 31 December 2016, and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2016, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”) and have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance.

# Basis for Opinion

We conducted our audit in accordance with Hong Kong Standards on Auditing (“HKSAs”) issued by the HKICPA. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the HKICPA’s Code of Ethics for Professional Accountants (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


highest known oil elevation and the potential exists for an associated natural gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering or performance data and reliable technology establish the higher contact with reasonable certainty. Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when: (i) successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and (ii) the project has been approved for development by all necessary parties and entities, including governmental entities.

Developed oil, natural gas and NGL reserves are reserves of any category that can be expected to be recovered through existing wells with existing equipment and operating methods where production can be initiated or restored with relatively low expenditure compared to the cost of drilling a new well.

The information provided below on our oil, natural gas and NGL reserves is presented in accordance with regulations prescribed by the SEC. Our reserve estimates are generally based upon extrapolation of historical production trends, analogy to similar properties and volumetric calculations. Accordingly, these estimates will change as future information becomes available and as commodity prices change. These changes could be material and could occur in the near term.

Presented below is a summary of changes in estimated reserves for 2017, 2016 and 2015:

	Oil	Gas	NGL	Total

(mmbbl)	(bcf)	(mmbbl)	(mmboe)

December 31, 2017

Proved reserves, beginning of period	399.1	6,496	226.4	1,708

Extensions, discoveries and other additions	62.7	3,694	44.9	723

Revisions of previous estimates	(168.1)	(315)	(31.0)	(252)

Production	(32.7)	(878)	(20.9)	(200)

Sale of reservesinplace	(0.9)	(418)	(0.8)	(71)

Purchase of reservesinplace	0.1	21	—	4

Proved reserves, end of period(a)	260.2	8,600	218.6	1,912

Proved developed reserves:

Beginning of period	200.4	5,126	134.1	1,189

End of period	150.9	4,980	134.9	1,116

Proved undeveloped reserves:

Beginning of period	198.7	1,370	92.2	519

End of period(b)	109.3	3,620	83.6	796


	Oil	Gas	NGL	Total

(mmbbl)	(bcf)	(mmbbl)	(mmboe)

December 31, 2016

Proved reserves, beginning of period	313.7	6,041	183.5	1,504

Extensions, discoveries and other additions	191.2	1,798	89.0	580

Revisions of previous estimates	(58.9)	598	2.8	43

Production	(33.2)	(1,050)	(24.4)	(233)

Sale of reservesinplace	(14.7)	(1,190)	(28.1)	(241)

Purchase of reservesinplace	1.0	299	3.6	55

Proved reserves, end of period(c)	399.1	6,496	226.4	1,708

Proved developed reserves:

Beginning of period	215.6	5,329	158.0	1,262

End of period	200.4	5,126	134.1	1,189

Proved undeveloped reserves:

Beginning of period	98.1	712	25.5	242

End of period(b)	198.7	1,370	92.2	519

December 31, 2015

Proved reserves, beginning of period	420.8	10,692	266.3	2,469

Extensions, discoveries and other additions	61.1	805	35.3	231

Revisions of previous estimates	(110.0)	(4,191)	(75.8)	(885)

Production	(41.6)	(1,070)	(28.0)	(248)

Sale of reservesinplace	(16.6)	(195)	(14.3)	(63)

Purchase of reservesinplace	—	—	—	—

Proved reserves, end of period(d)	313.7	6,041	183.5	1,504

Proved developed reserves:

Beginning of period	229.3	8,615	198.5	1,864

End of period	215.6	5,329	158.0	1,262

Proved undeveloped reserves:

Beginning of period	191.5	2,077	67.8	605

End of period(b)	98.1	712	25.5	242

(a) Includes 1 mmbbl of oil, 20 bcf of natural gas and 2 mmbbls of NGL reserves owned by the Chesapeake Granite Wash Trust, of which 1 mmbbl of oil, 10 bcf of natural gas and 1 mmbbl of NGL are attributable to noncontrolling interest holders

(b) As of December 31, 2017, 2016 and 2015, there were no PUDs that had remained undeveloped for five years or more.

(c) Includes 1 mmbbl of oil, 23 bcf of natural gas and 2 mmbbls of NGL reserves owned by the Chesapeake Granite Wash Trust, 1 mmbbl of oil, 12 bcf of natural gas and 1 mmbbl of NGL of which are attributable to the noncontrolling interest holders.

(d) Includes 1 mmbbl of oil, 32 bcf of natural gas and 3 mmbbls of NGL reserves owned by the Chesapeake Granite Wash Trust, 1 mmbbl of oil, 16 bcf of natural gas and 2 mmbbls of NGL of which are attributable to the noncontrolling interest holders.


# IX. NOTES TO THE ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

# 49. OPERATING INCOME, COSTS (CONTINUED)

# (2) Operating income classified by recognition time point (Continued)

# 2019

Item	Forwarding and
related business	Logistics	E-commerce

Operating income	——	——	——

Including: Recognition at a
certain point in
time	54,832,554,258.05	19,839,396,911.93	2,798,645,856.41

Recognition
within a certain
time period	–	–	–

Lease income	–	–	184,507,950.59

Total	54,832,554,258.05	19,839,396,911.93	2,983,153,807.00

# (3) The income adjusted in the current year for the performance obligations already fulfilled (or partially fulfilled) in the prior year was RMB0.00.


# IX. NOTES TO THE ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

# 50. TAXES AND SURCHARGES

Item	Current year	Prior year

Property tax	81,494,136.22	89,439,423.17

Land use tax	37,239,612.42	38,845,280.69

Stamp duties	19,872,747.80	27,586,169.98

Urban maintenance & construction tax	18,537,678.51	23,350,421.21

Education surcharge	14,534,378.34	13,456,328.39

Others	5,945,722.05	5,839,842.14

Total	177,624,275.34	198,517,465.58

# 51. SELLING EXPENSES

Item	Current year	Prior year

Employee benefits	630,343,946.91	641,544,865.73

Business entertainment expenses	31,405,608.88	38,642,115.67

Depreciation and amortisation charges on other assets	25,951,678.90	19,728,872.05

Travel expenses	16,716,781.49	27,383,501.26

Depreciation of right-of-use assets	14,320,092.31	11,338,692.76

Office expenses	13,124,014.10	11,214,201.43

Technical service fee for communication network	12,312,010.49	14,438,986.29

Intermediary service fee	11,897,848.68	23,666,524.86

Vehicle expenses	9,343,461.49	11,906,102.19

Property and utilities fees	9,194,002.79	9,210,111.90

Rental	8,565,734.15	15,226,785.39

Others	23,164,417.66	27,438,433.09

Total	806,339,597.85	851,739,192.62


Details of specific categories of options granted under 2002 Share Option Scheme are as follows:

Option type	Date of grant	Exercise period	Adjusted
Exercise price

			HK$

			(Notes 3, 4)

2007 Option	13.11.2007	01.01.2010–12.11.2017	1.075

	13.11.2007	01.01.2011–12.11.2017	1.075

The following table discloses movements in the Company’s share options granted under the 2002 Share Option Scheme during the year:

	Option type	Outstanding
at
1.1.2017	Adjustment
for the
Rights Issue	Exercised
during
the year	Transferred
during
the year	Adjustment
for the
Share
Consolidation	Lapsed
during
the year	Outstanding
at
31.12.2017

			(Note 3)			(Note 4)

Category 1: Directors

Chen Wei	2007 Option	41,910,000	20,955,000	–	(62,865,000)	–	–	–

Tang Yui Man Francis	2007 Option	13,970,000	6,985,000	–	(20,955,000)	–	–	–

Total for Directors		55,880,000	27,940,000	–	(83,820,000)	–	–	–

Category 2: Other Participants

Other Participants	2007 Option	37,719,000	18,859,500	–	83,820,000	(112,318,800)	(28,079,700)	–

Total for Other Participants		37,719,000	18,859,500	–	83,820,000	(112,318,800)	(28,079,700)	–

All categories		93,599,000	46,799,500	–	–	(112,318,800)	(28,079,700)	–

Notes:

1. The vesting period of the share options is from the date of grant until the commencement date of the exercise period.

2. Mr. Chen Wei and Mr. Tang Yui Man Francis resigned as the executive director of the Company during the year and the options were transferred to under the category of other participants.

3. On 14 March 2017, the exercise price of and the number of shares entitled to be subscribed for under the outstanding share options have been adjusted in the following manner following the completion of Rights Issue:

Directors/Employees	Number of
share options
before the
Rihgts Issue	Exercise price
per share
before the
Rihgts Issue	Adjusted
number of
share options
after the
Rihgts Issue	Adjusted
exercise price
per share
after the
Rihgts Issue

		HK$		HK$

Chen Wei	41,910,000	0.322	62,865,000	0.215

Tang Yui Man Francis	13,970,000	0.322	20,955,000	0.215

Other Participants	37,719,000	0.322	56,578,500	0.215

Total	93,599,000		140,398,500


4. On 7 November 2017, the exercise price of and the number of shares entitled to be subscribed for under the outstanding share options have been adjusted in the following manner following the completion of Share Consolidation:

Directors/Employees	Number of
share options
before the
Share
Consolidation	Exercise
price per
share before
the Share
Consolidation	Adjusted
number of
share options
after the
Share
Consolidation	Adjusted
exercise price
per share
after
Rihgts Issue

		HK$		HK$

Other Participants	140,398,500	0.215	28,079,700	1.075

5. During the year, no options were exercised or cancelled but 28,079,700 options were lapsed under the 2002 Share Option Scheme.

As at 31 December 2017 and the date of this report, the Company had no underlying shares comprised in options outstanding under the 2002 Share Option Scheme.

# (B) A new share option scheme was adopted by shareholders of the Company on 17 May 2012 (“Date of Adoption”) (the “2012 Share Option Scheme”), under which the Board may, at its discretion, offer any Eligible Persons (as hereinafter mentioned) options to subscribe for shares in the Company subject to the terms and conditions stipulated therein. The 2012 Share Option Scheme has a life of 10 years from the Date of Adoption.

The 2012 Share Option Scheme is a share incentive scheme and is established to enable the Group to, (i) recognise and acknowledge the contributions that Eligible Persons have (or may have) made or may make to the Group (whether directly or indirectly); (ii) attract and retain and appropriately remunerate the best possible quality of employees and other Eligible Persons; (iii) motivate the Eligible Persons to optimize their performance and efficiency for the benefit of the Group; (iv) enhance its business, employee and other relations; and/or (v) retain maximum flexibility as to the range and nature of rewards and incentives which the Company can offer to Eligible Persons. The Eligible Persons include (a) any full time or part time employees of the Group or any Directors of the Company or any of its subsidiaries; (b) any customer, supplier or provider of services, landlord or tenant, agent, partner, consultant, or adviser of or a contractor to or person doing business with any member of the Group; (c) trustee of any trust the principal beneficiary of which is, or discretionary trust the discretionary objects of which include, any person referred to (a) or (b) above; (d) a company wholly beneficially owned by any person referred to in (a) or (b) above, and (e) such other persons (or classes of persons) as the Board may in its absolute discretion determine.

The exercisable period of share options would be determined by the Board of Directors at its absolute discretion and notified by the Board of Directors to each Eligible Person as being the period during which the share options may be exercised, such period to expire not later than 10 years after the date of grant of the share options. The minimum period for which a share option must be held before it can be exercised would be determined by the Board. The share options granted must be taken up within 28 days from the date of grant.


The following is the text of a report received from the reporting accountants of the Company, Ernst & Young, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this prospectus.

22nd Floor

CITIC Tower

1 Tim Mei Avenue, Central

Hong Kong

12 September 2014

The Directors

ELL Environmental Holdings Limited

Quam Capital Limited

Dear Sirs,

We set out below our report on the financial information of ELL Environmental Holdings Limited (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”) comprising the consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows of the Group for each of the years ended 31 December 2011, 2012 and 2013, and the five months ended 31 May 2014 (the “Track Record Period”), and the consolidated statements of financial position of the Group as at 31 December 2011, 2012 and 2013 and 31 May 2014, and the statement of financial position of the Company as at 31 May 2014, together with the notes thereto (the “Financial Information”), and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group for the five months ended 31 May 2013 (the “Interim Comparative Information”), prepared on the basis of presentation set out in note 2.1 of Section II below, for inclusion in the prospectus of the Company dated 12 September 2014 (the “Prospectus”) in connection with the listing of the shares of the Company on the Main Board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).

The Company was incorporated as an exempted company with limited liability in the Cayman Islands on 25 February 2014. Pursuant to a group reorganisation (the “Reorganisation”) as described in the paragraph headed “Reorganisation” in the section headed “History, Reorganisation and Corporate Structure” to the Prospectus, the Company became the holding company of the subsidiaries comprising the Group. Apart from the Reorganisation, the Company has not commenced any business or operation since its incorporation.

As at the date of this report, no statutory financial statements have been prepared for the Company, as it is not subject to statutory audit requirements under the relevant rules and regulations in itsj urisdiction of incorporation.


As at the date of this report, the Company has direct and indirect interests in the subsidiaries as set out in note 1 of Section II below. All companies now comprising the Group have adopted 31 December as their financial year end date. The statutory financial statements of the companies now comprising the Group were prepared in accordance with the relevant accounting principles applicable to these companies in the countries in which they were incorporated and/or established. Details of their statutory auditors during the Track Record Period are set out in note 1 of Section II below.

For the purpose of this report, the directors of the Company (the “Directors”) have prepared the consolidated financial statements of the Group (the “Underlying Financial Statements”) in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”), which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (“HKASs”) and Interpretations issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”). The Underlying Financial Statements for each of the years ended 31 December 2011, 2012 and 2013, and the five months ended 31 May 2014 were audited by us in accordance with Hong Kong Standards on Auditing issued by the HKICPA.

The Financial Information set out in this report has been prepared from the Underlying Financial Statements with no adjustments made thereon.

# Directors’ responsibility

The Directors are responsible for the preparation of the Underlying Financial Statements, the Financial Information and the Interim Comparative Information that give a true and fair view in accordance with HKFRSs, and for such internal control as the Directors determine is necessary to enable the preparation of the Underlying Financial Statements and the Financial Information and the Interim Comparative Information that are free from material misstatement, whether due to fraud or error.

# Reporting accountants’ responsibility

It is our responsibility to form an independent opinion and a review conclusion on the Financial Information and the Interim Comparative Information respectively, and to report our opinion and review conclusion thereon to you.

For the purpose of this report, we have carried out procedures on the Financial Information in accordance with Auditing Guideline 3.340 Prospectuses and the Reporting Accountant issued by the HKICPA.

We have also performed a review of the Interim Comparative Information in accordance with Hong Kong Standard on Review Engagements 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the HKICPA. A review consists principally of making enquires of management and applying analytical procedures to the financial information and, bases thereon, assessing whether the accounting policies and presentation have been


# Electronics Parts

The Electronics Parts segment contributed approximately HK\$903 million to the total revenue of the Group for the 12-month period, representing a decrease of 21% as compared with HK\$1,141 million for 15-month period ended December 31, 2016. Gross profit margin increased to 19% for the Year Under Review as compared with 16% for period ended December 31, 2016.

# Construction and Industrial Products

The revenue and gross profit margin of the Construction and Industrial Products segment were HK\$698 million (period ended December 31, 2016: HK\$805 million) and 7% (period ended December 31, 2016: 14%) respectively for the Year Under Review. There was a 2% increase in sales in Australia but a drop of 23% in sales to the other regions (exclude the PRC). The increasing prices of aluminium and other raw materials, have hindered the export sales to overseas customers.

# Branded OPLV Products

The Group had continued the Branded OPLV Products market in Mainland China by engaging distributors for selling Branded OPLV Products. Sales decreased from HK\$290 million for the period ended December 31, 2016 to HK\$178 million for the Year Under Review. Gross profit margin of Branded OPLV Products increased from 3% for the period ended December 31, 2016 to 7% for the Year Under Review. Facing the fierce competition in the door and windows market, along with the low gross profit margin and high marketing costs, the Branded OPLV Products segment continued to be a loss-making operation in the Year Under Review.

In order to prevent further loss to the Group, the management of the Company has decided to dispose this loss-making operation for better allocation of the Group’s resources.

On December 28, 2017, the Group entered into a conditional sales and purchase agreement to dispose of its entire equity interest in OPLV (Nanyang) Doors and Windows Systems Co., Ltd and OPLV Architectural Design Pty Ltd. Details of the disposal of the Branded OPLV products segment are set out under the paragraph headed “Significant Investment, Material Acquisition and Disposal” of this annual report.

# Cost of sales

With the significant decline in sales, cost of sales decreased by 20% from HK\$1,935 million for the period ended December 31, 2016 to HK\$1,547 million for the Year Under Review. This was in line with the decrease in sales from HK\$2,236 million for the period ended December 31, 2016 to HK\$1,779 million for the Year Under Review.

# Gross profit

Despite the decrease of gross profit from HK\$301 million for the period ended December 31, 2016 to HK\$232 million for the Year Under Review, our gross profit margin has dropped from 14% for the period ended December 31, 2016 to 13% for the Year Under Review. The Group has been actively seeking ways to reduce sales of lower gross profit margin products to achieve a higher overall gross profit margin for this fiscal year. Yet, the persisting unfavorable macro factors, including the volatility in each of the market the Group operates and the uncertainty over the economic condition in China, had dampened consumer sentiment and reduced the demand of the Group’s products.

# Distribution and selling expenses

Distribution and selling expenses decreased by 27% from HK\$142 million for the period ended December 31, 2016 to HK\$104 million for the Year Under Review. The decrease was in line with the decline in sales, which led to a significant decrease in staff costs and travelling expenses.

# Administrative expenses

Administrative expenses dropped by 25% from HK\$340 million for the period ended December 31, 2016 to HK\$255 million for the Year Under Review. The decrease was due to absence of provision for impairment of intangible assets, decrease in staff costs due to decrease in number of employees, and absence of the write-off of trade receivables from former Australian Customers of the Group for the Year Under Review.

# Other income

Other income comprised net sales of scrapped materials which was HK\$11 million for the Year Under Review.


# Other gains/(losses) – net

Other gains/(losses) changed from HK\$17 million loss for the period ended December 31, 2016 to HK\$12 million gain for the Year Under Review. The change was mainly due to the appreciation of AUD against HKD during the Year Under Review which the Group had enjoyed significant exchange gains and absence of losses from certain derivative financial instruments.

# Finance income

Finance income mainly comprised interest income which amounted to approximately HK\$1 million for the Year Under Review compared to HK\$3 million for the period ended December 31, 2016.

# Finance costs

Finance costs amounted to approximately HK\$47 million for Year Under Review compared to HK\$29 million for the period ended December 31, 2016.

# Income tax expense

Our income tax changed from income tax expense of HK\$38 million for the period ended December 31, 2016 to HK\$8 million for the Year Under Review.

# Currency translation differences in other comprehensive income

Currency translation differences amounted to approximately HK\$47 million for the Year Under Review, which was mainly attributable to the currency translation differences of RMB against the HKD.

# Adjusted EBITDA results, excluding non-recurring items

	Year ended
December 31,
 2017	Fifteen
 months ended
 December 31,
 2016

HK$ million	HK$ million

Loss before income tax	(150)	(196)

Adjusted by:

Depreciation	100	99

Amortisation	6	6

Interest expenses	47	29

Adjusted by:

Other non-recurring items:

Legal and professional fee	10	4

Provision for impairment on other prepayment and deposits	–	7

Relocation cost	4	–

Write off of trade receivables	–	3

OPLV operating losses (Note)	52	108

Total	69	60

Note: Details of the proposed disposal of the OPLV are set out in the Note 16 to the consolidated financial statements of this annual report and the announcement of the Company dated December 28, 2017.


# Regulations in Relation to the Cement Industry

According to the Notice of the General Office of the State Council on Transmitting Several Opinions of State Development and Reform Commission and Other Departments concerning Preventing the Haphazard Investment in Steel, Electrolytic Aluminum and Cement Industries (《國務院辦公廳轉發發展改革委等部門關於制止鋼鐵電解鋁水泥行業盲目投資若干意見的通知》), Notice of the General Office of the State Council on Transmitting Several Opinions of State Development and Reform Commission, the Ministry of Finance, the Ministry of Land and Resources, People’s Bank of China and State Environmental Protection Administration concerning Curbing Overcapacity in Some Industries and Guiding Healthy Development of the Industry through Repeat Construction (《國務院批轉發展改革委等部門關於抑制部分行業產能過剩和重複建設引導產業健康發展若干意見的通知》), Guiding Opinions of the People’s Bank of China, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission on Further Doing a Good Job in Supporting the Restructuring and Revitalization of Key Industries and Curbing Overcapacity in Some Industries through Financial Services (《中國人民銀行、銀監會、證監會、保監會關於進一步做好金融服務支持重點產業調整振興和抑制部分行業產能過剩的指導意見》), and Guiding Opinions of the General Office of the State Council on Supporting Economic Structural Adjustment and Transformation and Upgrading through Finance (《國務院辦公廳關於金融支持經濟結構調整和轉型升級的指導意見》), Guiding Opinions of the State Council on Resolving Serious Production Overcapacity Conflicts (《國務院關於化解產能嚴重過剩矛盾的指導意見》), cement industry belongs to overcapacity industry, shall be subject to stringent control.

According to the Regulations of Cement Industry (2015) (《水泥行業規範條件(2015年本)》), cement construction projects (including cement clinker and cement grinding) should meet the requirements laid down in the Plan for Major Function Division, national industrial plan and policies and local structural adjustment plan for cement industry. Construction land shall should also comply with urban and rural planning, a general land development plan and land use standards. New cement projects are not forbidden in famous scenic places, natural reserves, designated zones for preserving the sources of drinking water, the areas under the prevention and cure measures against atmospheric pollution and susceptible to air pollution, non-industrial development zones and other places that need protection from environmental pollution. As for cement clinker projects, the principles of replacement with equal or less capacity should always be followed, so the overcapacity from these out-of-date projects could be curbed. At the same time, developing special types of cement (including cement for specific purposes) should also be encouraged among active cement manufacturers so that production quality and efficiency will be improved. When commencing new cement projects, a recycling industrial chain shall be taken into consideration. Meanwhile, newly-built cement clinker projects shall consider how to deal with residential and industrial solid wastes from the cities and its industries. New cement grinding projects shall be able to consume local solid wastes that are suitable to be converted into mixed raw materials. Cement construction projects shall meet these requirements. Investment and financing, land supply, evaluation of environmental protection, energy-efficiency assessment, safety supervision, production permit and shutting down of old plants relating to cement projects shall be handled according to these requirements.


Local authorities under the Ministry of Industry and Information Technology of the People’s Republic of China should urge the cement production companies in their administrativej urisdiction to comply with these requirements. The Ministry of Industry and Information Technology shall announce the names of enterprises and production lines that satisfy these requirements based on an enterprise’s application, and implements dynamic administration, encouraging enterprises to declare that their production and operations satisfy these requirements. Relevant associations and intermediaries shall promote and supervise the implementation of these requirements in a cooperative manner.

According to the Notice of the Ministry of Industry and Information Technology on Issuing the Measures for Capacity Replacement in Certain Industries with Severe Overcapacity, capacity replacement indicators used for transaction in cement (clinker) industry shall be confirmed and publicized by the provincial People’s Government after reporting to it by the provincial competent department of Industry and Information Technology of the transferor of such indicators, and shall be reported to the Ministry of Industry and Information Technology for registration and be released on the supply and demand information platform of national capacity replacement indicators. The provincial competent departments of Industry and Information Technology shall report the capacity replacement scheme and verification and confirmation opinions of cement (clinker) industry to the their respective provincial People’s Government for confirmation and publication, and concurrently to report it to the Ministry of Industry and Information Technology for release on the supply and demand information platform of national capacity replacement indicators. The provincial competent departments of Industry and Information Technology shall list all eliminated projects for replacement in annual backward production capacity enterprise list, and organize the demolition of main equipments (production line) to disable them to resume production, pursuant to the capacity replacement scheme reported to the public by the provincial People’s Government as well as the Notice on Issuing the Work Assessment and Implementation Scheme on Elimination of Backward Production Capacities. The Ministry of Industry and Information Technology shall organize the coordination member units between the work departments of elimination of backward production capacities to conduct supervision and examination on elimination of backward production and excessive capacities for capacity replacement and publicize the examination results.

# Regulation in Relation to Equipment Manufacturing Industry

Primary regulation on equipment manufacturing include Regulation of the People’s Republic of China on Production License for Industrial Products (《中華人民共和國工業產品生產許可證管理條例》), Measures for the Implementation of the Regulation of the People’s Republic of China on Production License for Industrial Products (《中華人民共和國工業產品生產許可證管理條例實施辦法》), Regulation on Supervision of the Safety of Special Equipment (《特種設備安全監察條例》), Regulation on Supervision of the Quality and Safety of Special Equipment (《特種設備質量監督與安全監察規定》), Measures for the Supervision and Management of Personnel Operating Special Equipment (《特種設備作業人員監督管理辦法》) and Technical Guidance on Steel Structure Residence Construction Industrialization(《鋼結構住宅建築產業化技術導則》). Such laws and regulations have provisions on qualification, quality and safety management of equipment manufacturing and the design, construction and development of steel structured residential properties with no more than 12 storeys.


(c) in the redemption and repurchase of shares (subject to the provisions of section 37 of the Companies Law);

(d) writing-off the preliminary expenses of the company;

(e) writing-off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company; and

(f) providing for the premium payable on redemption or purchase of any shares or debentures of the company.

No distribution or dividend may be paid to members out of the share premium account unless immediately following the date on which the distribution or dividend is proposed to be paid the company will be able to pay its debts as they fall due in the ordinary course of business.

The Companies Law provides that, subject to confirmation by the Grand Court of the Cayman Islands, a company limited by shares or a company limited by guarantee and having a share capital may, if so authorised by its articles of association, by special resolution reduce its share capital in any way.

Subject to the detailed provisions of the Companies Law, a company limited by shares or a company limited by guarantee and having a share capital may, if so authorised by its articles of association, issue shares which are to be redeemed or are liable to be redeemed at the option of the company or a shareholder. In addition, such a company may, if authorised to do so by its articles of association, purchase its own shares, including any redeemable shares. The manner of such a purchase must be authorised either by the articles of association or by an ordinary resolution of the company. The articles of association may provide that the manner of purchase may be determined by the directors of the company. At no time may a company redeem or purchase its shares unless they are fully paid. A company may not redeem or purchase any of its shares if, as a result of the redemption or purchase, there would no longer be any member of the company holding shares. A payment out of capital by a company for the redemption or purchase of its own shares is not lawful unless immediately following the date on which the payment is proposed to be made, the company shall be able to pay its debts as they fall due in the ordinary course of business.

There is no statutory restriction in the Cayman Islands on the provision of financial assistance by a company for the purchase of, or subscription for, its own or its holding company’s shares. Accordingly, a company may provide financial assistance if the directors of the company consider, in discharging their duties of care and to act in good faith, for a proper purpose and in the interests of the company, that such assistance can properly be given. Such assistance should be on an arm’s-length basis.


# 4 Dividends and Distributions

With the exception of section 34 of the Companies Law, there are no statutory provisions relating to the payment of dividends. Based upon English case law which is likely to be persuasive in the Cayman Islands in this area, dividends may be paid only out of profits. In addition, section 34 of the Companies Law permits, subject to a solvency test and the provisions, if any, of the company’s memorandum and articles of association, the payment of dividends and distributions out of the share premium account (see paragraph 3 above for details).

# 5 Shareholders’ Suits

The Cayman Islands courts can be expected to follow English case law precedents. The rule in Foss v. Harbottle (and the exceptions thereto which permit a minority shareholder to commence a class action against or derivative actions in the name of the company to challenge (a) an act which is ultra vires the company or illegal, (b) an act which constitutes a fraud against the minority where the wrongdoers are themselves in control of the company, and (c) an action which requires a resolution with a qualified (or special) majority which has not been obtained) has been applied and followed by the courts in the Cayman Islands.

# 6 Protection of Minorities

In the case of a company (not being a bank) having a share capital divided into shares, the Grand Court of the Cayman Islands may, on the application of members holding not less than one-fifth of the shares of the company in issue, appoint an inspector to examine into the affairs of the company and to report thereon in such manner as the Grand Court shall direct.

Any shareholder of a company may petition the Grand Court of the Cayman Islands which may make a winding up order if the court is of the opinion that it isj ust and equitable that the company should be wound up.

Claims against a company by its shareholders must, as a general rule, be based on the general laws of contract or tort applicable in the Cayman Islands or their individual rights as shareholders as established by the company’s memorandum and articles of association.

The English common law rule that the majority will not be permitted to commit a fraud on the minority has been applied and followed by the courts of the Cayman Islands.

# 7 Disposal of Assets

The Companies Law contains no specific restrictions on the powers of directors to dispose of assets of a company. As a matter of general law, in the exercise of those powers, the directors must discharge their duties of care and to act in good faith, for a proper purpose and in the interests of the company.


163

# 22 FINANCIAL INSTRUMENTS BY CATEGORY

The Group holds the following financial instruments:

22 按類別劃分之金融工具

本集團持有以下金融工具：

	2020
二零二零年	2019
二零一九年

HK$’000
港幣千元	HK$’000
港幣千元

Financial assets 金融資產

Financial assets at amortised cost: 按攤銷成本列賬之金融資產：
Trade, bills and other receivables (Note 25)
貿易應收賬款、應收票據及其他應收賬款（附註25）	1,303,528	1,362,782

Bank balances and cash (Note 28)
銀行結餘及現金（附註28）	637,753	490,241

Financial assets at fair value throuhg
other comhpreensive income (Note 23(a))
按公平值入賬及列入其他綜合收益之金融資產（附註23(a)）	13,034	31,855

Financial assets at fair value throuhfig prot or loss (Note 23(b))
按公平值入賬及列入損益之金融資產（附註23(b)）	4,362	5,895

Derivative financial instruments (Note 27)
衍生金融工具（附註27）	227	2

	1,958,904	1,890,775

	2020
二零二零年	2019
二零一九年

HK$’000
港幣千元	HK$’000
港幣千元

Financial liabilities 金融負債

Financial liabilities at amortised cost: 按攤銷成本列賬之金融負債：
Trade, bills and other payables (Note 34)

貿易應付賬款、應付票據及其他應付賬款（附註34）	936,438	923,742

Bank borrowings (Note 32) 銀行借貸（附註32）	377,008	657,612

Lease liabilities (Note 16) 租賃負債（附註16）	29,195	35,667

Derivative financial instruments (Note 27)
衍生金融工具（附註27）	12	141

	1,342,653	1,617,162

The Group’s exposure to various risks associated with the financial instruments is discussed in Note 3. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets mentioned above.

本集團承受與金融工具有關之各種風險於附註3討論。於報告期末之最高信貸風險為上述各類金融資產之賬面值。


164

# 23 FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME AND THROUGH PROFIT OR LOSS

# (a) Financial assets at fair value through other comprehensive income include the following:

23 按公平值入賬及列入其他綜合收益及列入損益之金融資產

(a) 按公平值入賬及列入其他綜合收益之金融資產包括以下各項：

	2020
二零二零年	2019
二零一九年

HK$’000
港幣千元	HK$’000
港幣千元

Financial instruments level 3: 第3層金融工具：

Equity investments in unlisted entity securities
於非上市實體證券之股本投資	13,034	31,855

The unlisted equity securities represent investments in private entities incorporated in Taiwan, the British Virgin Islands and Hong Kong and are denominated in the following currencies:

非上市股本證券指於台灣、英屬維爾京群島及香港註冊成立之私人公司之投資，乃按以下貨幣列值：

	2020
二零二零年	2019
二零一九年

HK$’000
港幣千元	HK$’000
港幣千元

HK$ 港幣	6,000	24,000

NTD 新台幣	7,034	7,855

	13,034	31,855

Movement of financial assets at fair value through other comprehensive income is analysed as follows:

按公平值入賬及列入其他綜合收益之金融資產之變動分析如下：

	2020
二零二零年

HK$’000
港幣千元

At beignninfg o the 年year 於初	31,855

Fair value losses on financial assets at fair
value throuhg other comprehensive income
按公平值入賬及列入其他綜合收益之金融資產之公平值虧損	(19,156)

Exchange gain 匯兌虧損	335

At end of the year 於年末	13,034


# 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued

# 2.17 Accounting for income taxes (Continued)

The determination of the average tax rates requires an estimation of (1) when the existing temporary differences will reverse and (2) the amount of future taxable profit in those years. The estimate of future taxable profit includes:

– income or loss excluding reversals of temporary differences; and

– reversals of existing temporary differences

Current tax assets and current tax liabilities are presented in net if, and only if,

(a) the Group has the legally enforceable right to set off the recognised amounts; and

(b) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

The Group presents deferred tax assets and deferred tax liabilities in net if, and only if,

(a) the entity has a legally enforceable right to set off current tax assets against current tax liabilities; and

(b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

(i) the same taxable entity; or

(ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

# 2.18 Segment reporting

The Group identifies operating segments and prepares segment information based on the regular internal financial information reported to the chief operating decision maker for their decisions about resources allocation to the Group’s business components and for their review of the performance of those components.


# 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued

# 2.19 Related parties

For the purposes of the consolidated financial statements, a party is considered to be related to the Group if:

# (a) the party is a person or a close member of that person’s family and if that person:

(i) has control or joint control over the Group;

(ii) has significant influence over the Group; or

(iii) is a member of the key management personnel of the Group or of a parent of the Group.

# (b) the party is an entity and if any of the following conditions applies:

(i) the entity and the Group are members of the same group;

(ii) one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member);

(iii) the entity and the Group are joint ventures of the same third party;

(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;

(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group (if the Group is itself such a plan) and the sponsoring employers are also related to the Group;

(vi) the entity is controlled or jointly controlled by a person identified in (a);

(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity); and

(viii) the entity, or any member of a group of which it is a part, provides key management personnel services to the Group or to the parent of the Group.

Close family members of an individual are those family members who may be expected to influence, or be influenced by, that individual in their dealings with the entity.


# 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

# 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 primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:

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

• the Group has transferred its 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, it evaluates if, and to what extent, it has retained the risk and rewards of ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of the Group’s continuing involvement. 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.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

# Impairment of financial assets

The Group recognises an allowance for expected credit losses (“ECLs”) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

# General approach

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

At each reporting date, the Group assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information that is available without undue cost or effort, including historical and forward-looking information.

In certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.


# 2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

# Impairment of financial assets (continued)

# General approach (continued)

Debt investments at fair value through other comprehensive income and financial assets at amortised cost are subject to impairment under the general approach and they are classified within the following stages for measurement of ECLs except for trade receivables and contract assets which apply the simplified approach as detailed below.

Stage 1	– Financial instruments for which credit risk has not increased significantly since initial recognition and for which
the loss allowance is measured at an amount equal to 12-month ECLs

Stage 2
Stage 3	– Financial instruments for which credit risk has increased significantly since initial recognition but that are not
credit-impaired financial assets and for which the loss allowance is measured at an amount equal to lifetime ECLs
– Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated credit-
impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs

# Simplified approach

For trade receivables and contract assets that do not contain a significant financing component or when the Group applies the practical expedient of not adjusting the effect of a significant financing component, the Group applies the simplified approach in calculating ECLs. Under the simplified approach, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

# Financial liabilities

# Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, or payables, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Group’s financial liabilities include other payables.

# Subsequent measurement

The subsequent measurement of financial liabilities depends on their classification as follows:

# Financial liabilities at amortised cost (loans and borrowings)

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost, using the effective interest rate method unless the effect of discounting would be immaterial, in which case they are stated at cost. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised as well as through the effective interest rate 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 profit or loss.

# Derecognition of financial liabilities

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 profit or loss.


Established at the end of 2014, NIO is principally engaged in the research and development, manufacturing, sales and after-sales service of high-end luxury smart electric vehicles. NIO gets hold of the core research and development technologies of the batteries, electric drives and electric control systems of electric vehicles, and has competitiveness in vehicle design and brand promotion and is capable of efficiently integrating vehicle manufacturing supply chain system to promote the entire vehicle manufacturing, which as a whole makes NIO the fastest Internet-based electric vehicle manufacturing enterprise in China in terms of research and development and mass production. ES8, its first high-end luxury 7-seater electric sport utility vehicle (SUV) put into mass production, had been officially launched in December 2017. NIO has gained the supports from various Internet giants and leading investment institutions, among which Tencent is the leading investor of this round of fund-raising of NIO. NIO is an independent third party of the Group.

New energy vehicle industry is in a middle to long term strong growth trend, which has been generally recognised by the society. Recently, the Chinese Government has launched a series of policies and measures to support the rapid development of the new energy vehicle industry in China. The Company has been identifying and exploring quality targets and investment opportunities in new energy vehicle industry. This transaction represents an important exploration of the Company in such area, which is expected to create an outstanding investment return for the Shareholders and further consolidate the overall market advantage of the Company in various modern consumption upgrade sectors, including automobile, logistics, consumption and finance.

# Yimidida

On 30 November 2017, a wholly-owned subsidiary of the Company entered into a capital increment agreement with Yimidida (“Yimidida Capital Increment Agreement”), pursuant to which the Group, as one of the investors, agreed to subscribe for the shares newly issued by Yimidida at a consideration of RMB130.00 million in US\$ equivalent.

Jointly established by several regional leading less-than-truckload logistics enterprises, Yimidida, with the mode of direct operation in core areas and regional franchise, unified the branding, systems, clearing, services and management standards of its partners along the whole ecological chain, and rapidly established the less-than-truckload freight express network across the country. Yimidida improves its franchisees’ ability in soliciting orders and profitability, achieves a strong coalition, and gains its advantages in core network and continuous low cost as a national less-than-truckload express enterprise, by making full use of the long-term operation, high network coverage rate and low operation costs of its regional franchisees and providing national services. Yimidida is an independent third party of the Group.

Logistics industry is a fundamental and strategic industry which supports the national economic development and also a major industry supported by CDB. The Company has been identifying and exploring appropriate investment opportunities in logistics industry and established an investment layout to a certain extent in logistics infrastructure and supply chain service. This transaction represents another achievement of the Company’s continuous efforts in the development of logistics industry and identifying investment opportunities in sub-sectors, which is expected to create an outstanding investment return for the Shareholders and further consolidate the overall market advantage of the Company in various modern service industries, including automobile, logistics, consumption and finance.


# Wacai

On 8 April 2017, a wholly-owned subsidiary of the Company had entered into a preferred share purchase agreement (the “Wacai Investment Agreement”) with Wacai, pursuant to which the Group, as one of the investors, agreed to subscribe for the newly issued preferred shares of Wacai at a consideration of US\$25.00 million, representing approximately 3.09% of the enlarged issued share capital of Wacai, and the subscription of the preferred shares of Wacai by the Company has been completed.

As one of the earliest established Fin-tech companies in the PRC, Wacai has now become a leading online comprehensive financial planning and wealth management platform in the industry. In June 2009, Wacai launched the first personal finance bookkeeping mobile application named “Wacai Bookkeeper” in the PRC, and since then gradually evolved into a holistic personal finance platform with products including “Wacai Bao Wealth Management”, “Credit Card Manager”, “Money Manager” and “Money Town Community”. With its devotion to providing one-stop online financial management tools, information and advisory services to the mass market, Wacai has developed an ecosystem around personal financial planning, wealth management, credit management, and vertical online discussion forum. Based on the profound understanding of customer needs, user-friendly product design, cutting edge finance technology, and rigorous risk management, Wacai has been providing consistent and high-quality services to over 47.00 million registered users in the past eight years. Wacai is an independent third party of the Group.

# G7

On 29 December 2016, a wholly-owned subsidiary of the Company had entered into a convertible preferred share subscription agreement with G7 pursuant to which the Group, as one of the investors, agreed to subscribe for the newly issued preferred shares of G7 at a cash consideration of US\$25.00 million, representing approximately 5.59% of the enlarged issued share capital of G7.

G7 is a leading logistics data service company in the PRC with its business coverage spanning across the PRC and its neighboring countries in Asia. G7 is connected to over 300,000 cargo vehicles of more than 30,000 customers. By installing smart devices on vehicles in the fleet, G7 utilises the real-time sensing technology to provide data services that span the entire logistic process, to connect the data of every single vehicle, consignor, fleet owner and driver, and thus to improve the efficiency of transport service. Based on the big data of the connected vehicles, G7 cooperates with premium partners from oil distribution, toll roads and bridges, insurance, banking and financial leasing industries to establish a one-stop service platform that integrates primary consumption of fleets. The platform enables safer, more economical, more efficient and more environmentally-friendly logistic services. G7 is an independent third party of the Company.

# Spruce

On 24 November 2016, the Company had entered into an investment agreement with Spruce pursuant to which the Company agreed to subscribe for the newly issued convertible preferred shares of Spruce at a cash consideration of US\$25.70 million, representing approximately 1.24% of the enlarged issued capital of Spruce.


# IV NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

# 30 DEBT SECURITIES ISSUED (Continued)

# (1) Bonds issued

		As at 31 December

2020	2019

2.75% USD fixed rate Green Bonds
maturing in October 2020	(i)	-	3,488

5.30% subordinated fixed rate bonds
maturing in June 2026	(ii)	50,000	50,000

4.99% subordinated fixed rate bonds
maturing in December 2027	(iii)	50,000	50,000

4.45% Tier-two capital fixed rate bonds
maturing in October 2027	(iv)	40,000	40,000

4.45% Tier-two capital fixed rate bonds
maturing in April 2028	(v)	40,000	40,000

4.28% Tier-two capital fixed rate bonds
maturing in March 2029	(vi)	50,000	50,000

4.30%Tier-two capital fixed rate bonds
maturing in April 2029	(vii)	40,000	40,000

3.10% Tier-two capital fixed rate bonds
maturing in April 2030	(viii)	40,000	-

4.53% Tier-two capital fixed rate bonds
maturing in March 2034	(ix)	10,000	10,000

4.63% Tier-two capital fixed rate bonds
maturing in April 2034	(x)	20,000	20,000

Medium term notes issued	(xi)	42,643	31,163

1.99% fixed rate financial bond
maturing in April 2023	(xii)	20,000	-

3.68% CNY fixed rate Green Bonds
maturing in June 2022	(xiii)	2,720	3,000

3.90% fixed rate financial bond
maturing in November 2023	(xiv)	1,650	-

3.30% fixed rate financial bond
maturing in September 2022	(xv)	3,870	2,890

2.68% fixed rate financial bond
maturing in March 2023	(xvi)	4,000	-

4.70% fixed rate capital replenishment
bond maturing in August 2021	(xvii)	2,410	3,000

3.40% fixed rate financial bond
maturing in September 2024	(xviii)	2,000	1,880

2.75% fixed rate financial bond
maturing in March 2025	(xix)	6,000	-

3.80% fixed rate financial bond
maturing in June 2025	(xx)	500	-

5.55% fixed rate capital replenishment
bond maturing in March 2028	(xxi)	3,500	3,500

3.60% fixed rate capital replenishment
bond maturing in March 2030	(xxii)	1,500	-

Total nominal value		430,793	348,921

Less: Unamortized issuance cost and
discounts		(90)	(235)

Total		430,703	348,686