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9241859_5.pdf | en | <table><tr><td>Hicend Futures</td><td>Hicend Futures Co., Ltd. (海證期貨有限公司)</td></tr><tr><td>HuaAn Funds</td><td>HuaAn Funds Management Co., Ltd. (華安基金管理有限公司)</td></tr><tr><td>Guoxiang Properties</td><td>Shanhgai GuoxianPLdg ro有公perties Co., t. (上海國翔置業限司)</td></tr><tr><td>SPD Bank</td><td>Shanhdgai PuonDlCg eveo浦發銀股有
pment Bank o., Ltd. (上海東展行份限公司)</td></tr><tr><td>Shanhgai Rural Commercial Bank</td><td>Shanhgai Rural Commercial Bank Co., Ltd. (上海農村商業銀行股份有限公
司)</td></tr><tr><td>Convertible Bonds/
A Share Convertible Bonds</td><td>’the convertible corporate bonds (which can be converted into the Companys
A Shares) amounting to RMB7 billion issued by the Company on 7 July 2017
and listed on Shanhai Stock Exchange on 24 July 2017g</td></tr><tr><td>Company Law</td><td>the Company Law of the PRC</td></tr><tr><td>Securities Law</td><td>the Securities Law of the PRC</td></tr><tr><td>SSE Listing Rules</td><td>the Rules Governing the Listing of Stocks on the Shanhai Stock Egxchange</td></tr><tr><td>Hong Kong Listing Rules</td><td>the Rules Governing the Listing of Securities on The Stock Exchange of Hong
Kong Limited, as amended, sulppemented or otherwise modified from time
to time</td></tr><tr><td>Model Code</td><td>the Model Code for Securities Transactions by Directors of Listed Issuers as
set out in Appendix 10 to the Hong Kong Listing Rules</td></tr><tr><td>Corporate Governance Code</td><td>the Corporate Governance Code and Corporate Governance Report as set
out in Appendix 14 to the Hong Kong Listing Rules</td></tr><tr><td>SFO</td><td>the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong
Kong), as amended, sulpemented and modifpied otherwise from time to time</td></tr><tr><td>Reporting Period</td><td>the first half of 2020</td></tr><tr><td>Yuan</td><td>RMB Yuan</td></tr><tr><td>A Shares</td><td>domestic shares of the Company, with a nominal value of RMB1.00 each,
which are listed on the Shanhai Stock Exchange and are traded in RMBg</td></tr><tr><td>H Shares</td><td>overseas listed foreign shares of the Company, with a nominal value of
RMB1.00 each, which are listed on the Hong Kong Stock Exchange and traded
in Hong Kong dollars</td></tr><tr><td>FICC</td><td>Fixed Income, Currencies and Commodities</td></tr><tr><td>Daohe APP</td><td>APP serving corporate and institutional customers</td></tr><tr><td>Matrix System</td><td>the corporate and institutional customers management system</td></tr><tr><td>Jun Hong APP</td><td>APP serving retail customers</td></tr><tr><td>Jun Hong Bai Shi Tong</td><td>the retail customers management system</td></tr></table> |
9241859_6.pdf | en | # I. PROFILE
<table><tr><td>Name in Chinese</td><td>國泰君安証券股份有限公司</td></tr><tr><td>Abbreviation in Chinese</td><td>國泰君安</td></tr><tr><td>Name in Enlhgis</td><td>Guotai Junan Securities Co., Ltd.</td></tr><tr><td>Abbreviation in Enlgish</td><td>GTJA, Guotai Junan Securities</td></tr><tr><td>Legal Representative</td><td>HE Qing</td></tr><tr><td>General Manager</td><td>WANG Song</td></tr></table>
# Registered Capital and Net Capital of the Company
# Unit: thousand yuan Currency: RMB
<table><tr><td></td><td>At the
end of the
Reporting
Period</td><td>At the
end of
last year</td></tr><tr><td>Registered Capital</td><td>8,907,948</td><td>8,907,948</td></tr><tr><td>Net Capital</td><td>89,338,264</td><td>85,971,493</td></tr><tr><td>ShNtare Capiteal o</td><td>8,907,949</td><td>8,907,948</td></tr></table>
Note: From July 2019 when the Company completed the change of registered capital to the end of the Reporting Period, the cumulative number of Shares converted from the \( \mathrm { A } \) Share Convertible Bonds of the Company was 614 Shares, and the share capital of the Company increased to 8,907,948,568 Shares. The Company will apply for registering the change of the registered capital in a timely manner in accordance with the relevant requirements.
# Business Qualifications for Each Individual Business of the Company
# √ Applicable □ Not applicable
# 1. Individual Business Qualifications of the Company
<table><tr><td>No.</td><td>Approval Department</td><td>Qualification Name/Membership</td></tr><tr><td>1</td><td>Th’e PeolfChpes Bank o ina</td><td>Interbank Borrowing Qualification (Yin Huo Zheng [2000] No.
122, Yin Zong Bu Han [2016] No. 22)
Interbank Bonds Market Maker (Yin Fa [2004] No. 157)
Participation of Gold Trading on Shanhgai Gold Exchange as
an Institutional Dealer (Yin Shi Huang Jin Bei [2014] No. 143)
Free Trade Accounting Business (August 2015)</td></tr><tr><td>2</td><td>CSRC and its local branches</td><td>Operation license of securities businesses: securities brokerage;
securities investment advisory; securities transaction and
securities investment related financial advisory; securities
underwriting and sponsorship; securities proprietary trading;
margin financing and securities lending; agency sale of
securities investment fund; agency sale of financial products;
stock option market making. (Number: 10270000)
Online Agency Securities Trading (Zheng Jian Xin Xi Zi [2001]
No. 3)</td></tr></table> |
11750420_9.pdf | en | \[ \sigma ( \hat { \rho } _ { c l } ) = \left( \begin{array} { c c c c } { { 4 \alpha _ { c l } ^ { 2 } + 1 } } & { { 0 } } & { { - 4 \alpha _ { c l } ^ { 2 } } } & { { 0 } } \\ { { 0 } } & { { 1 } } & { { 0 } } & { { 0 } } \\ { { - 4 \alpha _ { c l } ^ { 2 } } } & { { 0 } } & { { 4 \alpha _ { c l } ^ { 2 } + 1 } } & { { 0 } } \\ { { 0 } } & { { 0 } } & { { 0 } } & { { 1 } } \end{array} \right) , \eqno ( 4 9 ) \]
where \( \alpha _ { c l } \) is the real and positive amplitude of the coherent states in the DOPOs. We have found that the Gaussian dis-cord calculated with Eq. (49) verges on \( D ^ { \leftarrow } \sim 0 . 0 2 3 5 6 \) for \( \alpha _ { c l } \gtrsim 5 0 \), which is in a good agreement with the values in the simulation. Eq. (48) clearly represents a mixture of Gaussian states, thus the result indicates a genuine quantum correlation between coherent states with a mutual injection path without excess noise.
# E. Distribution functions for quadrature amplitudes
Here, we focus on a low-loss case, where the distribution functions for the squeezed amplitude p around the oscillation threshold are o from Gaussian curves. Fig. 7 and 8 displays instantaneous distributions for x and p at some time points for \( \gamma _ { s } \, = \, 0 . 1 \), \( \gamma _ { c } \, = \, 0 . 2 \). In Fig. 7, the distribution for x gets broadened as the pumping rate increases. The dashed lines are Gaussian fitting curves for each time point. We see that it has some deviation from the fitting curve at \( \tau \) = 33 and 35. This indicates that the system is at the onset of the macroscopic bifurcation in x.
As shown in Fig. 8, both \( { \cal P } ( p _ { 1 } ) \) and \( \overline { { P ( p _ { 2 } ) } } \) at pumping rates around the oscillation threshold come to have small fringes at the sides of their central peaks. The fringes survive until the clear bifurcation in \( P ( x _ { 1 } ) \) and \( P ( x _ { 2 } ) \). On the other hand, they vanish when \( \gamma _ { s } \) and \( \gamma _ { c } \) are comparable to or larger than \( \zeta \) = 1. Therefore, \( P ( p _ { 1 } ) \) and \( P ( p _ { 2 } ) \) suggests the existence of the macroscopic superposition of the zero-phase state and \( \pi \)-phase state in a suciently closed two-DOPO system. For-mation of the superposition in such a slow pumping schedule with only a small \( \gamma _ { c } \) means that the quantum noise stored in the injection path is essential in the formation of superposition components here. The injection path contains a squeezed field for the two oscillators, which protects a macroscopic superpo-sition state from decoherence [47, 48]. It is worth noting that the theoretical model considered here is dierent from that in the previous studies. The side peaks in \( P ( p _ { 1 } ) \) and \( P ( p _ { 2 } ) \) are as high as those in an even cat state \| − αi + \|αi with \( \alpha \sim \) 0.9 although the state has a larger photon number than\|α\|2 = 0.81. This is because such a DOPO state does not cor-respond to a pure cat state. Note that the fringe signal will be a bit weaker than the flying optical cat states made with judicious techniques [64, 65]. Also, a larger g and a faster pumping schedule will give a clearer fringe due to the tran-sient eect, as the single DOPO case [62].
Here, we add the extra squeezing of the intracavity DOPO fields which supports the eect by the mutual injections. Fig. 9 displays the variances of \( p _ { 1 } \) and \( p _ { 2 } \) versus time (i.e. the pumping rate). When the system is below the threshold, they decrease with the rise in the pumping rate. Following the os-cillation of the DOPOs, they get back to the value for a co- herent state and the vacuum state (0.25). The minimum value∼ 0.043 is smaller than that for a single intracavity DOPO field [5] (0.125, meaning -3 dB squeezing). It suggests that the mutual injections enhance the squeezing in the DOPOs.
FIG. 7. (Color online) Distribution functions at dierent time points for (a) \( x _ { 1 } \) and (b) \( x _ { 2 } \). The dashed lines are Gaussian fitting curves with \( \sigma \) = (6.6, 9.1, 13.5, 20.0) for τ = (29, 31, 33, 35). 200,000 trajectories are used. \( \gamma _ { s } = 0 . 1 \), \( \gamma _ { c } = 0 . 2 \) and \( _ { g } \) = 0.01.
Compared to expectation values of observables, the con-vergence of the distribution functions (Fig. 8) to the num-ber of sampling is slower, because the sampled points have to cover the whole space where the distribution can have a non-negligible value. Thus, we have taken 200,000 runs to draw the curves here. Simultaneous formation of the side peaks in both \( P ( p _ { 1 } ) \) and \( P ( p _ { 2 } ) \) is a good indicator that the accuracy is not bad, because the two DOPOs obey the SDEs of the same form. However, numerical errors still lead to obvious negative values in some curves. Also, one of the p distribution func-tions is fluctuated a lot at some time points, leading to a larger fringe visibility and negative values.
# V. DISCUSSION
In this section, we discuss other theoretical schemes to sim-ulate the system considered here, the validity of the simulation in this study, and the possible contribution of the quantum ef-fects in the system to the performance of the coherent Ising machines. |
11750420_10.pdf | en | FIG. 8. (Color online) Distribution functions at dierent time points for (a) \( p _ { 1 } \) and (b)\( p _ { 2 } \). Zoomed curves around the side peaks are added for both. 200,000 trajectories are used. \( \gamma _ { s } \, = \, 0 . 1 \), \( \gamma _ { c } \, = \, 0 . 2 \) and \( g \) = 0.01.
FIG. 9. (Color online) Variances of \( p _ { 1 } \) (blue curve) and \( p _ { 2 } \) (red curve). The two curves are almost identical due to the same form of the SDEs for each DOPO. 200,000 trajectories are used. \( \gamma _ { s } = 0 . 1 \),\( \gamma _ { c } = 0 . 2 \) and \( _ { g } \) = 0.01.
# A. Other theoretical schemes
First, we refer to the diculty in the simulation in this study with other theoretical schemes. Regarding a numerical anal-ysis for an open quantum system, direct integration on the master equation with the Fock state basis is the most stan-dard method as investigated in the previous relevant studies[47, 48]. It treats a series of ordinary dierential equations for the components of the density matrix for the system. Single-shot numerical integration for them gives all the information of the solution, thus we do not have to repeat stochastic sim-ulations or take ensemble averages over a number of samples. Also, it is relatively easy to get a good accuracy in numerical integration of an ordinary dierential equation. However, the basis has an infinite number of eigenstates hence we have to truncate some of them. Here, the more photons possible in the system, the more eigenstates needed. In addition, the number of modes crucially aects the complexity of the simulation. When we consider two DOPOs and the injection path with m eigenstates for each, the number of components of the den-sity matrix is \( m ^ { 6 } \). This amounts to unrealistic numbers such as 10 \( \mathsf { n n t } \) and 1000 \( 1 0 ^ { 6 } \) thus the simulation with the parameters here will be too costly.
Solving the Fokker-Planck equation will be useful if we can find a potential solution. However, it supposes a system at |
9223620_14.pdf | en | # 15. SHARE BASED PAYMENT TRANSACTIONS
The Company has adopted a share option scheme (“Share Option Scheme”) on 1 March 2018 to enable the Company to grant options to selected participants as incentives or rewards for their contribution to the Group and continuing efforts to promote the interest of the Group. The terms of the Share Option Scheme are in accordance with Chapter 23 of the GEM Listing Rules.
Details of Share Options and their movements during the six months ended 30 September 2020 are as follows:
<table><tr><td rowspan="3"></td><td rowspan="2">Date of Grant</td><td rowspan="2">Exercise
price per
Share</td><td colspan="6">Number of Shares issuable under the options</td></tr><tr><td>as at
01/04/
2020</td><td>granted
during the
period</td><td>exercised
during the
period</td><td>lapsed
during the
period</td><td>as at
30/09/
2020</td><td>Exercise
period</td></tr><tr><td></td><td>HK$</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Director</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ms. Wong Bik Kwan Bikie
(“Ms. Wong”)</td><td>18/04/2019</td><td>0.12</td><td>7,980,000</td><td>–</td><td>–</td><td>–</td><td>7,980,000</td><td>Note 1</td></tr><tr><td>Emlpofyees o the Group</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>In aggregate</td><td>18/04/2019</td><td>0.12</td><td>14,480,000</td><td>–</td><td>–</td><td>(1,000,000)</td><td>13,480,000</td><td>Note 1</td></tr><tr><td></td><td></td><td></td><td>22,460,000</td><td>–</td><td>–</td><td>(1,000,000)</td><td>21,460,000</td><td></td></tr></table>
# Notes:
1. (i) up to 40% of the Share Options are exercisable on or after 18 April 2019;
(ii) up to 70% of the Share Options are exercisable on or after 18 April 2020;
(iii) all the remaining Share Options are exercisable on or after 18 April 2021;
and in each case, not later than 17 April 2024.
Save as disclosed above, no options were granted, exercised, forfeited, cancelled or lapsed during the six months ended 30 September 2020. |
9223620_15.pdf | en | # 16. RELATED PARTY TRANSACTIONS
(a) Save as disclosed elsewhere in these consolidated financial statements, the Group had the following transactions with its related parties during the reporting periods:
<table><tr><td rowspan="4"></td><td colspan="2">For the six months ended
30 September</td></tr><tr><td>2020</td><td>2019</td></tr><tr><td>HK$’000</td><td>HK$’000</td></tr><tr><td>(Unaudited)</td><td>(Unaudited)</td></tr><tr><td>Rental expense paid to a related company (note (i))</td><td>533</td><td>177</td></tr><tr><td>Compensation of key management personnel (note (ii))</td><td></td><td></td></tr><tr><td>Salaries, allowances and other benefits</td><td>3,006</td><td>2,870</td></tr><tr><td>Contributions to defined contribution retirement lpan</td><td>45</td><td>38</td></tr><tr><td>Equity-settled share-based payment expenses</td><td>101</td><td>831</td></tr><tr><td></td><td>3,152</td><td>3,739</td></tr></table>
Notes:
(i) The Group entered into a lease agreement of warehouse with Solaire International Limited (“Solaire”). Solaire is held by Ms. Wong, Chairman, Chief Executive Officer and Executive Director of the Company. The transaction is conducted on normal commercial terms or better and is a connected transaction. The transaction is a de minimis transaction in accordance with GEM Listing Rules 20.74(1) fully exempt from the reporting, annual review, announcement, circular (including independent financial advice) and shareholders’ approval requirements.
(ii) The compensation represents the remuneration paid and was payable to the directors and other members of key management during the reporting periods.
(b) The amount due to a related company is unsecured, interest-free and repayable on demand.
# 17. CORONAVIRUS DISEASE 2019 OUTBREAK
Due to the outbreak of the COVID-19 epidemic in January 2020, a series of precautionary and control measures have been and continued to be implemented. It has impacted the global business environment. Up to the date of this financial statements, COVID-19 has not resulted in material impact to the Group. Pending the development and spread of COVID-19 subsequent to the date of this financial statements, further changes in economic conditions may have impact on the financial results of the Group, the extent of which could not be estimated as at the date of this financial statements. The Group will continue to monitor the development of COVID-19 and react actively to its impact on the financial position and operating results of the Group. |
2590131_37.pdf | en | # Audit Committee (continued)
The Audit Committee shall meet at least twice a year. During the year, three meetings of the Audit Committee were held and attended by the external auditors of the Company. The attendance of the members was set out in the sub-section headed “Board Meetings” of this report.
The primary duties of the Audit Committee include acting as the key representative body for overseeing the relationship with the external auditors; reviewing and monitoring the effectiveness of the audit process; reviewing the Group’s financial information; overseeing the Group’s financial reporting system and risk management and internal control systems. The latest terms of reference of the Audit Committee can be viewed on the websites of the Stock Exchange and the Company at www.hkexnews.hk and www.avicjoyhk.com, respectively.
During the year, the Audit Committee has held three meetings and has reviewed and discussed the financial reporting matters, including:
(i) reviewed and recommended for the Board’s approval the interim and annual results, the interim report and annual report and other financial statements;
(ii) considered and discussed the reports and presentations from the external auditors and the senior management, respectively, with particular focus on the appropriateness of accounting policies and practices, areas of judgment, compliance with the Hong Kong Financial Reporting Standards and other legal requirements in relation to financial reporting;
(iii) recommended to the Board on the re-appointment of the external auditors and the relevant terms of engagement, including their remuneration;
(iv) reviewed the risk management and internal control systems of the Group and the effectiveness of the Group’s internal audit function for the year which covered financial, operational and compliance controls. The process used in such review including discussions with the management of the Company on the risk areas identified and the review of findings and reports from an independent professional advisor. The Audit Committee reviewed and concurred with the management’s confirmation that the Group’s risk management and internal control systems were effective and adequate for the year; and
(v) reviewed and was satisfied with the adequacy of the resources, staff qualification and experience, training programmes and budget of the Company’s accounting, financial reporting and internal audit functions. |
2590131_38.pdf | en | # Remuneration Committee
From 1 January 2017 to 1 April 2017, the Remuneration Committee comprised four members, namely Mr. Hu Xiaowen (Chairman of the Remuneration Committee), Mr. Wu Meng, Mr. Gong Changhui and Mr. Zhu Dong. Subsequent to Mr. Wu’s resignation and his cessation to be a member of the Remuneration Committee with effect from 1 April 2017, the Remuneration Committee comprises three members, namely, Mr. Hu Xiaowen, Mr. Gong Changhui and Mr. Zhu’s. Subsequent to Mr. Huang Bo’s appointment as a member of the Remuneration Committee with effect from 30 June 2017, the Remuneration Committee comprises four members, namely, Mr. Hu Xiaowen, Mr. Gong Changhui, Mr. Zhu Dong and Mr. Huang Bo. Subsequent to Mr. Zhu’s resignation and his cessation to be a member of the Remuneration Committee with effect from 5 November 2017, Mr. Huang’s resignation and his cessation to be a member of the Remuneration Committee with effect from 23 November 2017, Mr. Hu’s resignation and his cessation to be the chairman and a member of the Remuneration Committee with effect from 2 December 2017, and Mr. Gong’s resignation and his cessation to be a member of the Remuneration Committee with effect from 4 December 2017 and the appointment of Mr. Jiang Ping as the chairman and a member of the Remuneration Committee, the appointment of Mr. Guo Wei and Ms. Wu Rui as members of the Remuneration Committee, all with effect from 4 December 2017, the Remuneration Committee comprises three members, namely, Mr. Jiang Ping (Chairman of the Remuneration Committee), Mr. Guo Wei and Ms. Wu Rui.
The Remuneration Committee shall meet at least once a year. During the year, three meetings of the Remuneration Committee were held and the attendance of the members was set out in the sub-section headed “Board Meetings” of this report.
Details of the Directors’ emoluments and remuneration payable to members of senior management by band are set out in note 9 to the financial statements. The Remuneration Committee adopted the model “to determine, with delegated responsibility, the remuneration packages of individual executive Directors and senior management”.
The primary duties of the Remuneration Committee include to make recommendations to the Board on the Company’s policy and structure for all Directors’ and senior management’s remuneration, to review and approve the management’s remuneration proposal with reference to the Company’s corporate goals and objectives, to determine the remuneration packages of individual executive Directors and senior management including benefits in kind, pension rights and compensation payment comprising any compensation payable for loss or termination of their office or appointment, to make recommendations to the Board on the remuneration of non-executive Directors. The latest terms of reference of the Remuneration Committee can be viewed on the websites of the Stock Exchange and the Company at www.hkexnews.hk and www.avicjoyhk.com, respectively. |
11706481_74.pdf | en | # 5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
# Financial assets (Continued)
# Classification of financial assets (Continued)
# Investments in debt securities
An investment in debt securities is classified as follows depending on the instruments’ contractual cash flow characteristics and the Group’s business model for managing the investment:
• Amortised cost when (a) the contractual terms of the asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding and (b) the financial asset is held within a business model whose objective is achieved by collecting contractual cash flows.
• FVTOCI when (a) the contractual terms of the asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding and (b) the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial asset.
• FVTPL when either (a) the contractual terms of the asset give rise on specified dates to cash flows that are not solely payment of principal and interest on the principal amount outstanding or (b) the financial asset is held within a business whose objective is neither (i) collecting contractual cash flows nor (ii) collecting contractual cash flows and selling the financial asset.
For investments in debt securities subsequently measured at FVTOCI, fair value changes are recognised in other comprehensive income and accumulated in the “FVTOCI (debt investment) reserve” except for impairment loss (see below) and foreign exchange gains or losses. Interest income is calculated using the effective interest method and is recognised in profit or loss. When an investment in debt securities is derecognised, the fair value changes previously recognised in other comprehensive income are reclassified from equity to profit or loss as a reclassification adjustment.
An investment is debt securities is derecognised when the Group sells the investment or when the contractual rights to the cash flows from the asset expire. |
11706481_75.pdf | en | # 5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
# Financial assets (Continued)
# Classification of financial assets (Continued)
# Transaction costs
Transaction costs directly attributable for the acquisition of financial assets (other than those classified or designated as at FVTPL) are included in the initial measurement of the financial assets. For financial assets subsequently measured at amortised cost, such transaction costs are included in the calculation of amortised cost using the effective interest method (i.e. in effect amortised through profit or loss over the lives of the financial assets). For investments in equity securities at FVTOCI, such transaction costs are recognised in other comprehensive income as part of change in fair value at the next remeasurement. For investments in debt securities classified as FVTOCI, such transaction costs are amortised to profit or loss using the effective interest method (i.e. in effect amortised through profit or loss over the lives of the financial assets).
# Impairment on financial assets
The Group has applied the expected credit loss model under HKFRS 9 to the following types of financial assets:
• financial assets that are subsequently measured at amortised cost (including cash and cash equivalents and trade receivables); and
• contract assets as defined in HKFRS 15.
Expected credit loss (ECL) of a financial asset is measured based on an unbiased and probability-weighted amount. It also reflects the time value of money and reasonable and supportable information that is available to the Group without undue cost or effect at the reporting date about past events, current conditions and forecasts of future economic conditions. The maximum period considered when estimating ECL is the maximum contractual period over which the Group is exposed to credit risk.
ECL is measured on either of the following bases:
• 12-month expected credit loss when, at the reporting date, the credit risk on a financial asset has not increased significantly since initial recognition; and
• Lifetime expected credit loss when (a) at the reporting date, the credit risk on a financial asset has increased significantly since initial recognition; or (b) at the reporting date, the financial asset has become credit-impaired. |
9303069_8.pdf | en | # EXECUTIVE DIRECTORS
Mr. Tung Tsun Hong (董信康先生) (“Mr. TH Tung”), aged 80, the founder of the Group, the chairman of the Board, an executive director (the “Director”) and one of the controlling shareholders. Mr. TH Tung joined the Group on 16 January 1981. Mr. TH Tung has approximately 62 years of experience in the textile and apparel industry. He is primarily responsible for overseeing the Group’s overall development strategy. He is the father of Mr. Stephen Tung and Mr. Stanley Tung, both being executive Directors.
Mr. Tung Wai Ting Stephen (董韋霆先生) (formerly known as Mr. Tung Hak Ming Stephen (董克明先生)) (“Mr. Stephen Tung”), aged 51, the chief executive officer, an executive Director and one of the controlling shareholders. Mr. Stephen Tung joined the Group on 6 October 1995. Mr. Stephen Tung obtained a Bachelor of Commerce degree at the University of Toronto in Canada in June 1993, and has approximately 25 years of experience in the textile and apparel industry. He is primarily responsible for administration, finance and production of the Group. Mr. Stephen Tung is the son of Mr. TH Tung, and brother of Mr. Stanley Tung, both being executive Directors.
Mr. Tung Cheuk Ming Stanley (董卓明先生) (“Mr. Stanley Tung”), aged 47, the sales director, an executive Director and one of the controlling shareholders. Mr. Stanley Tung joined the Group on 1 April 1997. Mr. Stanley Tung obtained a Bachelor of Arts degree from University of Toronto in Canada in November 1996, and has approximately 24 years of experience in the textile and apparel industry. He is primarily responsible for the sales and marketing of the Group. Furthermore, he has been assisting our product development by participating in international fabric exhibitions and fashion shows in various countries including the PRC and the United States. He is the son of Mr. TH Tung, and brother of Mr. Stephen Tung, both being executive Directors.
# INDEPENDENT NON-EXECUTIVE DIRECTORS
Mr. Tsang Ling Biu Gilbert (曾令鏢先生), aged 50, an independent non-executive Director. Mr. Tsang joined the Group on 19 June 2018. He is primarily responsible for supervising and providing independent advice to the Board. He is also the chairman of our audit committee. Mr. Tsang has over 23 years of experience in finance and accounting. Mr. Tsang obtained a Master of Commerce in Accounting and Finance from the University of New South Wales in Australia in 1995, and a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia in 1996. Mr. Tsang is also a fellow member of the CPA Australia (Certified Practising Accountants).
Mr. Tsang is a non-executive director of Tus International Limited (stock code: 872), a Hong Kong-based investment holding company principally engaged in the trading of cars.
Mr. Cheung Che Kit Richard (張之傑先生), aged 49, an independent non-executive Director. Mr. Cheung joined the Group on 19 June 2018. He is primarily responsible for supervising and providing independent advice to our Board. He is also a member of our audit committee, remuneration committee and nomination committee. Mr. Cheung obtained a Bachelor of Commerce degree with first class honour from Queen’s University in Canada in May 1995. Subsequently he obtained his Master’s degree in Business Administration with high distinction from Harvard Business School in the United States in June 2001. Since 2010, Mr. Cheung has been working as an executive director (Customer and International Business Development) for the Hong Kong Jockey Club. He is responsible for channeling gaming demand in all of racing, football and lottery wagering business, which also includes the exporting of the Hong Kong racing betting product to overseas jurisdictions. |
9303069_9.pdf | en | Mr. Leung Wang Ching Clarence, J.P. (梁宏正先生), aged 42, an independent non-executive Director. Mr. Leung joined the Group on 19 June 2018. He is primarily responsible for supervising and providing independent advice to our Board. He is also the chairman of our remuneration committee and nomination committee, and a member of our audit committee. Mr. Leung obtained a Master of Arts degree in Economics from the University of Cambridge in the United Kingdom in March 2003, and has approximately 21 years of experience in the textile and apparel industry.
Mr. Leung has been serving the community and the textile industry by holding various positions in a number of institutions and organisations. From April 2017 to March 2018, Mr. Leung was a member of the Textile Advisory Board. He has been a member of the Committee of Beijing Chinese People’s Political Consultative Conference (with a term of five years), the chairman of the Third Committee of Youth of the Business and Professionals Alliance for Hong Kong since 2013 and 2016, respectively.
Mr. Leung is currently an independent non-executive director of Lai Sun Development Company Limited (stock code: 488), a Hong Kong-based investment holding company principally engaged in property investment, property development and investment in and operation of hotels and restaurants.
# SENIOR MANAGEMENT
Ms. Poon Yuet Ling (潘月玲女士), aged 61, joined the Group on 5 August 1986 and is currently the senior accounting manager. Ms. Poon is primarily responsible for overseeing daily accounting operation, financial management, administration and human resource management of the Group. Ms. Poon completed her secondary education in Hong Kong in July 1977 and obtained an intermediate group certificate in business studies at the Hong Kong School of Commerce in February 1978. She has over 32 years of experience in accounting practice.
Mr. Tung Ming Po (董鳴寶先生), aged 74, is currently our assistant general manager. Mr. MP Tung is primarily responsible for administering and coordinating the manufacturing process of the Group. Prior to joining the Group, Mr. MP Tung worked in the same shipping agency for over 21 years, with his last position being the manager of the licenced crew department. As the manager, he was in charge of the manning of crew and officers such as recruitment, deployment and relief planning. Mr. Tung moved to Australia in December 1989 and returned to Hong Kong in September 1992, and joined the Group in October 1992.
Mr. Li Chi Hiu Lawrence (李之曉先生), aged 46, joined the Group on 1 July 2004 and is currently our sales manager. Mr. Li is primarily responsible for overseeing the sales management of the Group. Mr. Li graduated from the Seneca College of Applied Arts & Technology in Toronto, Canada in April 1997, and has more than 20 years of experience in the textile industry. Prior to joining our Group in 2005, Mr. Li was the project manager in Tiong Liong Industrial Company, a company based in Taiwan which manufactures and supplies functional textiles.
Mr. Cheung Ka Chun (張家俊先生), aged 38, was appointed as the chief financial officer and the company secretary of our Company on 16 January 2018 and is primarily responsible for (i) overseeing the financial and accounting functions of our Group and (ii) handling corporate secretarial and compliance work of our Group. Mr. Cheung has over 12 years of experience in audit and assurance and multi-national certified public accounting firms. Mr. Cheung was awarded the bachelor’s degree of Business Administration (majoring in accounting and finance) by the University of Hong Kong in December 2004. He is a member of the Hong Kong Institute of Certified Public Accountants. |
2152015_122.pdf | en | # (III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (Continued)
# 10. Financial instruments (Continued)
# 10.3 Impairment of financial assets (Continued)
# Impairment of financial assets measured at cost
If an impairment loss has been incurred on an investment in unquoted equity instrument (without a quoted price in an active market) whose fair value cannot be reliably measured, the carrying amount of the financial asset is reduced to the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. The amount of reduction is recognized as an impairment loss in profit or loss. The impairment loss on such financial asset is not reversed once it is recognized.
# 10.4 Transfer of financial assets
The Group derecognises a financial asset if one of the following conditions is satisfied: (1) the contractual rights to the cash flows from the financial asset expire; or (2) the financial asset has been transferred and substantially all the risks and rewards of ownership of the financial asset is transferred to the transferee; or (3) although the financial asset has been transferred, the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset but has not retained control of the financial asset.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the difference between the carrying amount of the financial asset transferred and the sum of the consideration received from the transfer and any cumulative gain or loss that has been recognized in other comprehensive income, is recognized in profit or loss.
# 10.5 Classification, recognition and measurement of financial liabilities
On initial recognition, financial liabilities are classified into financial liabilities at fair value through profit or loss and other financial liabilities.
The Group’s financial liabilities are other financial liabilities, including notes payable, account payable, dividends payable and other payables.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with gain or loss arising from derecognition or amortisation recognized in profit or loss.
# 10.6 Derecognition of financial liabilities
The Group derecognises a financial liability (or part of it) only when the underlying present obligation (or part of it) is discharged. An agreement between the Group (an existing borrower) and an existing lender to replace the original financial liability with a new financial liability with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. |
2152015_123.pdf | en | # (III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (Continued)
# 10. Financial instruments (Continued)
# 10.6 Derecognition of financial liabilities (Continued)
When the Group derecognises a financial liability or a part of it, it recognises the difference between the carrying amount of the financial liability (or part of the financial liability) derecognized and the consideration paid (including any non-cash assets transferred or new financial liabilities assumed) in profit or loss.
# 10.7O ffsetting financial assets and financial liabilities
Where the Group has a legal right that is currently enforceable to set off the recognized financial assets and financial liabilities, and intends either to settle on a net basis, or to realise the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability shall be offset and the net amount is presented in the balance sheet. Except for the above circumstances, financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset.
# 10.8 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. The issuance of equity instruments is deemed as changes in equity. The Group does not recognise any changes in the fair value of equity instruments. Transaction fees relevant to equity transactions are deducted from equity.
Distributions made by the Group to holders of equity instruments are treated as profit distributions.
# 11. Receivables
# 11.1 Receivables that are individually significant and for which bad debt provision is individually assessed
<table><tr><td>Criteria for determining
receivables that are individually
significant</td><td>A receivable that exceeds RMB5 million is deemed as an
individually significant receivable by the Group.</td></tr><tr><td>Method of determining
provision for receivables that
are individually significant</td><td>For receivables that are individually significant, the Group
assesses the receivables individually for impairment. For
a financial asset that is not impaired individually, the
Group includes the asset in a group of financial assets
with similar credit risk characteristics and collectively
assesses them for impairment. Receivables for which
an impairment loss is individually recognized are not
included in a collective assessment of impairment.</td></tr></table> |
9286580_188.pdf | en | <table><tr><td rowspan="2"></td><td rowspan="2">Notes</td><td colspan="2">Year ended 31 December</td></tr><tr><td>2020</td><td>2019</td></tr><tr><td>Investing activities</td><td></td><td></td><td></td></tr><tr><td>Proceeds from disposal and redemption of investments</td><td></td><td>2,570,954</td><td>1,940,528</td></tr><tr><td>Proceeds from disposal of propertly, pant and
equipment, land use rihgts, and other assets</td><td></td><td>368</td><td>399</td></tr><tr><td>Cash received from equity investment income</td><td></td><td>416</td><td>373</td></tr><tr><td>Payments on acquisition of investments</td><td></td><td>(2,783,341)</td><td>(2,190,629)</td></tr><tr><td>Payments on acquisition of propertly, pant and
equipment, land use rihgts and other assets</td><td></td><td>(4,619)</td><td>(4,056)</td></tr><tr><td>Net cash paid for acquisition of associates and joint
ventures</td><td>24</td><td>(2,027)</td><td>—</td></tr><tr><td>Net cash received from disposal of associates</td><td></td><td>—</td><td>321</td></tr><tr><td>Net cash flows used in investing activities</td><td></td><td>(218,249)</td><td>(253,064)</td></tr><tr><td>Financing activities</td><td></td><td></td><td></td></tr><tr><td>Cash received from debt securities issued</td><td>39</td><td>807,022</td><td>586,270</td></tr><tr><td>Cash received from other equity instruments issued</td><td>43</td><td>—</td><td>39,993</td></tr><tr><td>Cash paid for redemption of debt securities issued</td><td></td><td>(720,194)</td><td>(486,792)</td></tr><tr><td>Interest paid on debt securities issued</td><td></td><td>(22,319)</td><td>(22,829)</td></tr><tr><td>Dividends paid</td><td></td><td>(15,094)</td><td>(13,052)</td></tr><tr><td>Princilipe and nterest dlpai for easinliliig abites</td><td></td><td>(3,443)</td><td>(3,011)</td></tr><tr><td>Net cash flows from financing activities</td><td></td><td>45,972</td><td>100,579</td></tr><tr><td>Net decrease in cash and cash equivalents</td><td></td><td>(15,414)</td><td>(35,516)</td></tr><tr><td>Cash and cash equivalents as at 1 January</td><td></td><td>342,449</td><td>376,009</td></tr><tr><td>Effect of exchange rate changes on cash and cash
equivalents</td><td></td><td>(7,469)</td><td>1,956</td></tr><tr><td>Cash and cash equivalents as at 31 December</td><td>50</td><td>319,566</td><td>342,449</td></tr><tr><td>Cash flows from operating activities include:</td><td></td><td></td><td></td></tr><tr><td>Interest received</td><td></td><td>306,814</td><td>291,967</td></tr><tr><td>Interest paid</td><td></td><td>(117,290)</td><td>(119,236)</td></tr></table>
The accompanying notes form an integral part of these consolidated financial statements. |
9286580_189.pdf | en | # 1 Corporate information
China CITIC Bank Corporation Limited (the “Bank” or “CNCB”) is a joint stock company incorporated in the People’s Republic of China (the “PRC” or “Mainland China”) on 31 December 2006. Headquartered in Beijing, the Bank’s registered office is located at 6-30F and 32-42F No.10 Guanghua Road, Chaoyang District, Beijing, China. The Bank listed its A shares and H shares on Shanghai Stock Exchange and the Main Board of The Stock Exchange of Hong Kong Limited, respectively on 27 April 2007.
The Bank operates under financial services certificate No. B0006H111000001 issued by the China Banking Insurance Regulatory Commission (the “CBIRC”, originally named China Banking Regulatory Commission), and unified social credit code No. 91110000101690725E issued by the State Administration of Industry and Commerce of the PRC.
The principal activities of the Bank and its subsidiaries (collectively the “Group”) are the provision of corporate and personal banking services, conducting treasury business, the provision of asset management, finance leasing and other non-banking financial services.
As at 31 December 2020, the Group mainly operates in Mainland China with branches covering 31 provinces, autonomous regions and municipalities. In addition, the Bank’s subsidiaries have operations in Mainland China, the Hong Kong Special Administrative Region of PRC (“Hong Kong”) and other overseas countries and regions.
For the purpose of these consolidated financial statements, Mainland China refers to the PRC excluding Hong Kong, the Macau Special Administrative Region of the PRC (“Macau”) and Taiwan. Overseas refers to countries and regions other than Mainland China.
The consolidated financial statements were approved by the Board of Directors of the Bank on 25 March 2021.
# 2 Basis of preparation
These consolidated financial statements have been prepared on a going concern basis. The consolidated financial statements for the year ended 31 December 2020 comprise the Bank and its subsidiaries, associates and joint ventures.
# (a) Accounting year
The accounting year of the Group is from 1 January to 31 December.
# (b) Functional currency and presentation currency
The functional currency of the Bank is Renminbi (“RMB”). The functional currencies of overseas subsidiaries are determined in accordance with the primary economic environment in which they operate, and are translated into Renminbi for the preparation of the consolidated financial statements according to Note 4 (b)(ii). The consolidated financial statements of the Group are presented in Renminbi and, unless otherwise stated, expressed in millions of Renminbi.
# 3 Principle accounting policies
These consolidated financial statements have been prepared in accordance with all applicable International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), and the disclosure requirements of the Hong Kong Companies Ordinance (Cap. 622). These consolidated financial statements also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
These consolidated financial statements have been prepared under the historical cost convention, as modified by financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss and at fair value through other comprehensive income, and investment properties, which are carried at fair value. |
20732404_343.pdf | en | Mr. Shan Fu (付山), aged 52, has been a Director since February 5, 2018. Mr. Fu was re-designated as a Non-executive Director on September 27, 2019.
From June 2008 to October 2013, Mr. Fu served as the senior managing director of the Beijing branch of Blackstone (Shanghai) Equity Investment Management Company Limited. Since October 2013, Mr. Fu has served as aj oint chief executive officer and the Greater China chief executive officer of Vivo Capital LLC. Since January 2016, Mr. Fu has served as a non-executive director in TOT BIOPHARM International Company Limited (“TOT”), a company whose shares are listed on the Stock Exchange (stock code: 01875) since November 2019, a company incorporated with limited liability in Hong Kong. Since July 2018, Mr. Fu has served as a non-executive director of Sinovac Biotech Co., Ltd., a company whose shares are listed on the NASDAQ Global Market (stock code: SVA).
Mr. Fu received his Bachelor of Arts degree in history from Peking University in July 1988 and obtained his Master’s degree in history from Peking University in July 1991.
Mr. Lijun Lin (林利軍), aged 46, has been a Director since January 29, 2019. Mr. Lin was re-designated as a Non-executive Director on September 27, 2019.
From August 1997 to July 2001, Mr. Lin worked in the Shanghai Stock Exchange, where his last position held was assistant to the director of the listing department. From May 2004 to May 2015, Mr. Lin served as the chief executive officer of China Universal Asset Management Co., Ltd. From July 2014 to April 2017, Mr. Lin served as a director of Shanghai Chengtou Holding Co., Ltd., a company whose shares are listed on the Shanghai Stock Exchange (stock code: 600649). From November 2015 to March 2019, Mr. Lin served as a director of Yunfeng Financial Group Limited, a company whose shares are listed on the Hong Kong Stock Exchange (stock code: 00376). From March 2016 to June 2019, Mr. Lin served as a director of TANSH Global Food Group, a company whose shares are listed on the Hong Kong Stock Exchange (stock code: 03666). Since September 2015, Mr. Lin has served as a partner at Loyal Valley Capital. Mr. Lin has served as an independent director of Yintech Investment Holdings Limited, a company whose shares are listed on the NASDAQ Global Market (stock code: YIN), since April 2016, an independent director of Shanghai Xinhua Media Co., Ltd., a company whose shares are listed on the Shanghai Stock Exchange (stock code: 600825), since August 2017, a director of Wenzhou Kangning Hospital Co., Ltd., a company whose shares are listed on the Stock Exchange (stock code: 02120), since June 2017 and a non-executive director of Shanghai Junshi since June 2018.
Mr. Lin obtained a fund qualification certificate qualification from the Asset Management Association of China in June 2017. Mr. Lin received his Master’s degree in world economics from Fudan University in June 1997 and his Master’s degree in business administration from Harvard University in June 2003. |
20732404_344.pdf | en | # Independent Non-executive Directors
Dr. Zemin Zhang, Ph.D., aged 52, has been serving in the capacity of an independent Director since March 6, 2016. Dr. Zhang was re-designated as an INED of the Company effective as of September 27, 2019 and has been serving the Company as a member of our Scientific Advisory Board since November 2015. During the period when Dr. Zhang served as an independent Director from March 2016 to September 2019, Dr. Zhang provided independent and professional advice to the Board and was not involved in the day-to-day management of the Group.
From January 1998 to August 2014, Dr. Zhang served as a principal scientist at Genentech Inc. Since May 2014, Dr. Zhang has served as a tenured professor at the life sciences department of Peking University. Dr. Zhang is the founder of Analytical BioSciences Limited, and has served on the board since January 2019.
Dr. Zhang is serving as a member of the Chinese Society for Cell Biology of Bioinformatics and Systems Biology with a tenure from 2016 to 2019.
Dr. Zhang received his Bachelor of Science degree in genetics from Nankai University in July 1988 and obtained his Doctor’s degree in biochemistry and molecular biology from Pennsylvania State University in August 1995.
Ms. Lan Hu (胡蘭), aged 48, is appointed as an INED of the Company effective as of the date of this prospectus.
Ms. Hu has more than 20 years of experience in accounting. Ms. Hu has served as an INED in TOT BIOPHARMA International Company Limited, a company incorporated with limited liability in Hong Kong. Prior to that, Ms. Hu was the partner of the consulting services department of PricewaterhouseCoopers between July 2008 and June 2018, and she worked at PricewaterhouseCoopers from July 2002. Ms. Hu worked at Arther Andersen from July 1994 to June 2002.
Ms. Hu received her Bachelor’s degree in industrial accounting from Beijing Machinery and Industrial Institute in Beijing in July 1994 and obtained her master of business administration degree from the University of Buffalo, the State University of New York in February 2005. Ms. Hu gained her CICPA qualification in March 1997.
Dr. Kaixian Chen Ph.D. (陳凱先), aged 74, is appointed as an INED of the Company effective as of the date of this prospectus.
Since 1990, Dr. Chen has been a researcher of the Shanghai Institute of Materia Medica, Chinese Academy of Sciences, and has served as its director between 1996 and 2004, and was appointed as director of its degree committee in 2014. He has also been a professor of the Shanghai University of Traditional Chinese Medicine since 2005, served as president of the university from 2005 to 2014. |
20787988_273.pdf | en | # X. Related party relationship and transactions (Continued)
# (V). Related parties transactions (Continued)
# 4. Guarantee in related party transactions (Continued)
Note 6: The Company offers maximum guarantee of RMB100,000,000, which is the comprehensive bank credit amount offered by China Electronics Finance Co., Ltd, to Nanjing Panda Electronic Equipment Co., Ltd, a subsidiary of The Company. The bank credit has duration from 12nd July, 2017 to 12nd July, 2018 and the guarantee lasts for 2 years from the deadline of performance of the debtor. Nanjing Panda Electronic Equipment Co., Ltd offers its total assets as counter guarantee. As of 31st December 2017, Nanjing Panda Electronic Equipment Co., Ltd has used RMB13,278,087.04 of its total comprehensive bank credit, of which RMB3,479,104.00 is guaranteed by The Company in the form of letter of guarantee offered by The Company, RMB9,798,983.04 is guaranteed in the form of bank acceptance bill.
Note 7: The Company offers maximum guarantee of RMB40,000,000.00, which is the comprehensive bank credit amount offered by Shanghai Pudong Development Bank, Nanjing Branch, to Nanjing Panda Electronic Equipment Co., Ltd, subsidiary of The Company. The bank credit has duration from 24th July 2017 to 16th June 2018, and the guarantee lasts for 2 years from the deadline of performance of the debtor. Nanjing Panda Electronic Equipment Co., Ltd offers its total assets as counter guarantee. As of 31st December 2017, Nanjing Panda Electronic Equipment Co., Ltd has used RMB0.00 of its total comprehensive bank credit.
Note 8: The Company offers irrevocable maximum guarantee of RMB60,000,000.00, which is the comprehensive bank credit amount offered by China Merchant Bank, Nanjing Branch, Chengdong Branch, to Nanjing Panda Electronic Manufacture Co., Ltd., a subsidiary of The Company. The credit has a period from 1st November 2017 to 31st October 2018. The guarantee has a period from the date the guarantee is signed to the due date of each loan or to other financing agreements or the due date of received account receivables by China Merchant Bank, Nanjing Branch, or advance in cash, plus 2 years. If any of the above has extended their credit period, the guarantee period is extended accordingly, plus 2 years. Nanjing Panda Electronic Manufacture Co., Ltd. offers its total assets as counter guarantee. As of 31st December 2017, Nanjing Panda Electronic Manufacture Co., Ltd. has used RMB36,712,619.40 of its total comprehensive bank credit, of which RMB36,712,619.40 is guaranteed by The Company in the form of bank acceptance bill offered by The Company.
Note 9: The Company offers maximum guarantee of RMB60,000,000.00, which is the comprehensive bank credit amount offered by Industrial Bank, Nanjing Branch, Maigao Bridge Branch, to Nanjing Panda Electronic Manufacture Co., Ltd., subsidiary of The Company. The guarantee has a period from 19th January 2017 to 29th November 2017. The guarantee lasts for 2 years from the deadline of performance of the debtor. Nanjing Panda Electronic Manufacture Co., Ltd. offers its total assets as counter guarantee. As of 31st December 2017, Nanjing Panda Electronic Manufacture Co., Ltd has used RMB19,953,459.49 of its total comprehensive bank credit, of which RMB19,953,459.49 is guaranteed by The Company in the form of bank acceptance bill offered by The Company.
Note 10: The Company offers maximum guarantee of RMB40,000,000.00, which is the comprehensive bank credit amount offered by Shanghai Pudong Development Bank, Nanjing Branch, to Nanjing Panda Electronic Manufacture Co., Ltd, subsidiary of The Company. The bank credit has duration from 24th July 2017 to 16th June 2018, and the guarantee lasts for 2 years from the deadline of performance of the debtor. Nanjing Panda Electronic Equipment Co., Ltd offers its total assets as counter guarantee. As of 31st December 2017, Nanjing Panda Electronic Equipment Co., Ltd has used RMB0.00 of its total comprehensive bank credit. |
20787988_274.pdf | en | # X. Related party relationship and transactions (Continued)
# (V). Related parties transactions (Continued)
# 4. Guarantee in related party transactions (Continued)
Note 11: The Company offers irrevocable maximum guarantee of RMB50,000,000.00, which is the comprehensive bank credit amount offered by Shanghai Pudong Development Bank, Nanjing Branch，to Nanjing Huage Electronic Plastic Industry Co., Ltd., sub-subsidiary of The Company. The guarantee has a period from 24th July, 2017 to 16th June, 2018. The guarantee lasts for 2 years from the deadline of performance of the debtor. If any of the above has extended their credit period, the guarantee period is extended accordingly, plus 2 years. Nanjing Huage Electronic Plastic Industry Co., Ltd. offers its total assets as counter guarantee. As of 31st December 2017, Nanjing Huage Electronic Plastic Industry Co., Ltd. has used RMB5,943,215.36 of its total comprehensive bank credit, of which RMB5,943,215.36 is guaranteed in the form of bank acceptance bill offered by The Company.
Note 12: The Company offers irrevocable maximum guarantee of RMB50,000,000.00, which is the comprehensive bank credit amount offered by China Electronics Finance Co., Ltd to Nanjing Huage Electronic Plastic Industry Co., Ltd., sub-subsidiary of The Company. The guarantee has a period from 5th September, 2017 to 12th July, 2018. The guarantee lasts for 2 years from the deadline of performance of the debtor. If any of the above has extended their credit period, the guarantee period is extended accordingly, plus 2 years. Nanjing Huage Electronic Plastic Industry Co., Ltd. offers its total assets as counter guarantee. As of 31st December 2017, Nanjing Huage Electronic Plastic Industry Co., Ltd. has used RMB9,209,587.33 of its total comprehensive bank credit, of which RMB9,209,587.33 is guaranteed in the form of bank acceptance bill offered by The Company.
Note 13: The Company offers maximum guarantee of RMB15,000,000.00, which is the comprehensive bank credit amount offered by Industrial Bank, Nanjing Branch, Maigao Bridge Branch, to Nanjing Panda Machine Electricity Manufacturing Co., Ltd, a sub-subsidiary of The Company. The guarantee has a period from 22nd May 2017 to 29th November 2017. The guarantee lasts for 2 years from the deadline of performance of the debtor. Nanjing Panda Machine Electricity Manufacturing Co., Ltd offers its total assets as counter guarantee. As of 31st December 2017, Nanjing Panda Machine Electricity Manufacturing Co., Ltd has used RMB1,260,000.00 of its total comprehensive bank credit, of which RMB1,260,000.00 is guaranteed by The Company in the form of bank acceptance bill offered by The Company.
Conclusively, as of 31st December 2017, total guarantee offered by The Company amounting to RMB298,218,859.04, of which RMB109,253,510.60 is for acceptance bill guarantee, RMB95,318,449.33 is for letter of guarantee, and RMB45,000,000.00 is for credit loan guarantee, RMB48,646,899.11 for letter of credit. (As of 31st December 2016, total guarantee offered by The Company amounting RMB254,658,354.69 of which RMB76,477,158.47 is for acceptance bill guarantee, and RMB138,181,196.22 is for letter of guarantee and RMB40,000,000.00 for short-term borrowings). |
20784830_85.pdf | en | # 19. Property, plant and equipment (continued)
<table><tr><td>Company</td><td>Leasehold
buildings</td><td>Machinery
and
equipment</td><td>Motor
vehicles</td><td>Office
and other
equipment</td><td>Total</td></tr><tr><td></td><td>$’000</td><td>$’000</td><td>$’000</td><td>$’000</td><td>$’000</td></tr><tr><td>2015</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cost</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Beiiilgnnnfg o financa year</td><td>22,912</td><td>4,205</td><td>268</td><td>3,150</td><td>30,535</td></tr><tr><td>Additions</td><td>39</td><td>–</td><td>30</td><td>109</td><td>178</td></tr><tr><td>Disposals and write-offs</td><td>(1,580)</td><td>(51)</td><td>(269)</td><td>(2,160)</td><td>(4,060)</td></tr><tr><td>Reclassified to investment properties</td><td>(12,737)</td><td>–</td><td>–</td><td>–</td><td>(12,737)</td></tr><tr><td>End of financial year</td><td>8,634</td><td>4,154</td><td>29</td><td>1,099</td><td>13,916</td></tr><tr><td>Accumulated depreciation and impairment
losses</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Beiiilgnnnfg o financa year</td><td>3,559</td><td>4,197</td><td>268</td><td>2,642</td><td>10,666</td></tr><tr><td>Depreciation charge</td><td>796</td><td>2</td><td>1</td><td>184</td><td>983</td></tr><tr><td>Disposals and write-offs</td><td>–</td><td>(51)</td><td>(269)</td><td>(2,140)</td><td>(2,460)</td></tr><tr><td>Reclassified to investment properties</td><td>(2,596)</td><td>–</td><td>–</td><td>–</td><td>(2,596)</td></tr><tr><td>End of financial year</td><td>1,759</td><td>4,148</td><td>–</td><td>686</td><td>6,593</td></tr><tr><td>Net book value</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>End of financial year</td><td>6,875</td><td>6</td><td>29</td><td>413</td><td>7,323</td></tr></table>
<table><tr><td>Company</td><td>Leasehold
buildings</td><td>Machinery
and
equipment</td><td>Motor
vehicles</td><td>Office
and other
equipment</td><td>Assets
under
construction</td><td>Total</td></tr><tr><td></td><td>$’000</td><td>$’000</td><td>$’000</td><td>$’000</td><td>$’000</td><td>$’000</td></tr><tr><td>2014</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cost</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Beiiilgnnnfg o financa year</td><td>17,712</td><td>4,205</td><td>706</td><td>6,266</td><td>264</td><td>29,153</td></tr><tr><td>Additions</td><td>5,200</td><td>–</td><td>–</td><td>37</td><td>–</td><td>5,237</td></tr><tr><td>Disposals and write-offs</td><td>–</td><td>–</td><td>(438)</td><td>(3,153)</td><td>(264)</td><td>(3,855)</td></tr><tr><td>End of financial year</td><td>22,912</td><td>4,205</td><td>268</td><td>3,150</td><td>–</td><td>30,535</td></tr><tr><td>Accumulated depreciation and
impairment losses</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Beiiilgnnnfg o financa year</td><td>2,926</td><td>3,679</td><td>457</td><td>5,527</td><td>–</td><td>12,589</td></tr><tr><td>Depreciation charge</td><td>633</td><td>518</td><td>40</td><td>268</td><td>–</td><td>1,459</td></tr><tr><td>Disposals and write-offs</td><td>–</td><td>–</td><td>(229)</td><td>(3,153)</td><td>–</td><td>(3,382)</td></tr><tr><td>End of financial year</td><td>3,559</td><td>4,197</td><td>268</td><td>2,642</td><td>–</td><td>10,666</td></tr><tr><td>Net book value</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>End of financial year</td><td>19,353</td><td>8</td><td>–</td><td>508</td><td>–</td><td>19,869</td></tr></table> |
20784830_86.pdf | en | # 19. Property, plant and equipment (continued)
(a) In 2014, bank borrowings are secured by a debenture over the Group’s assets and a mortgage against a leasehold building in Singapore with a carrying amount of \$19,353,000 (Note 26).
(b) The amount of borrowing cost capitalised as part of the costs in relation to the construction of the new factory was\$899,000 (2014: \$1,337,000) with a capitalisation rate of 5.4% (2014: 5.15%).
# 20. Investment properties
<table><tr><td rowspan="2"></td><td>Group</td><td>Company</td></tr><tr><td>$’000</td><td>$’000</td></tr><tr><td>2015</td><td></td><td></td></tr><tr><td>Beiiilgnnnfg o financa year</td><td>–</td><td>–</td></tr><tr><td>Transferred from proiperty, lpant and equpment</td><td>37,019</td><td>10,141</td></tr><tr><td>Transferred from land use rihgts</td><td>3,729</td><td>–</td></tr><tr><td>End of financial year</td><td>40,748</td><td>10,141</td></tr></table>
Investment properties are leased to non-related parties under operating leases (Note 32).
The following amounts are recognised in profit and loss:
<table><tr><td rowspan="3"></td><td>Group</td><td>Company</td></tr><tr><td>2015</td><td>2015</td></tr><tr><td>$’000</td><td>$’000</td></tr><tr><td>Rental income (Note 6)</td><td>3,721</td><td>3,064</td></tr><tr><td>Direct operating expenses arising from:</td><td></td><td></td></tr><tr><td>– Investment properties that generate rental income</td><td>634</td><td>634</td></tr></table>
At the statement of financial position date, the details of the Group’s investment properties are as follows:
<table><tr><td>Location</td><td>Description/existing use</td><td>Tenure</td></tr><tr><td>28 Quality Road,
Singapore</td><td>A storey of office space of
a 3-storey office building</td><td>3-years lease from 1 April 2015</td></tr><tr><td>9 Fuyuan Street, Erlu, Baoan District,
Shenzhen City, China</td><td>A sinlge storefy actoriy buildng</td><td>5-years lease with an option for
a further 5-years from
1 October 2015</td></tr></table> |
3461238_67.pdf | en | # 2. Significant accounting policies and other explanatory information (Continued)
# 2B. Other explanatory information
# Provisions
A liability or provision is recognised when there is a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. A provision is made using best estimates of the amount required in settlement and where the effect of the time value of money is material, the amount recognised is the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense. Changes in estimates are reflected in profit or loss in the reporting year they occur.
# 2C. Critical judgements, assumptions and estimation uncertainties
The critical judgements made in the process of applying the accounting policies that have the most significant effect on the amounts recognised in the financial statements and the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting year, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities currently or within the next reporting year are discussed below. These estimates and assumptions are periodically monitored to ensure they incorporate all relevant information available at the date when financial statements are prepared. However, this does not prevent actual figures differing from estimates.
# Net realisable value of inventories:
A review is made on inventory for excess inventory and declines in net realisable value below cost and an allowance is recorded against the inventory balance for any such declines. The review requires management to consider the price protection and other return policies with suppliers and future demand for the products. In any case the realisable value represents the best estimate of the recoverable amount and is based on the acceptable evidence available at the end of the reporting year and inherently involves estimates regarding the future expected realisable value. The usual considerations for determining the amount of allowance or write-down include ageing analysis, technical assessment and subsequent events. In general, such an evaluation process requires significant judgement and materially affects the carrying amount of inventories at the end of the reporting year. Possible changes in these estimates could result in revisions to the stated value of the inventories. The carrying amount of inventories at the end of the reporting year is disclosed in Note 18 on inventories. |
3461238_68.pdf | en | # 2. Significant accounting policies and other explanatory information (Continued)
# 2C. Critical judgements, assumptions and estimation uncertainties (Continued)
# Customer loyalty programme:
The Group operates the (a) ValueClub, Challenger membership scheme and (b) Hachi membership scheme.
The Group allocates the consideration received from the sale of goods to the goods sold and the points issued under its ValueClub Reward Points Customer Loyalty Programme (the “Programme”). The consideration allocated to the points issued is measured at their fair values. Fair values are determined by considering, among others, the following factors: the range of products available to the customers, the prices at which the Group sells the products which can be redeemed and the changing patterns in the redemption rates.
The Group awards Hachi rebates based on a percentage of the product purchased by the customer under its Hachi Dollar Rebate Programme (the “Programme”). The fair value of the rebates is based on the actual amount the customer will be able to utilise to offset against their next purchase. The estimated redemption rate used to determine the carrying value of the rebates based on historical customer’s redemption.
The carrying amount of the Group’s deferred revenue in relation to the Programme at the end of the reporting year is disclosed in Note 25C on other liabilities.
Useful lives of property, plant and equipment:
The estimates for the useful lives and related depreciation charges for property, plant and equipment are based on commercial and other factors which could change significantly as a result of innovations and in response to market conditions. The depreciation charge is increased where useful lives are less than previously estimated lives, or the carrying amounts written off or written down for technically obsolete items or assets that have been abandoned. It is impracticable to disclose the extent of the possible effects. It is reasonably possible, based on existing knowledge, that outcomes within the next reporting year that are different from assumptions could require a material adjustment to the carrying amount of the balances affected. The carrying amount of the specific asset or class of assets at the end of the reporting year affected by the assumption is disclosed in Note 14 on property, plant and equipment. |
9313723_17.pdf | en | The Group recorded inventory turnover and average payable period of 44 days and 35 days respectively for the period under review (2019: 19 days and 22 days respectively) based on the amount of inventory and trade and bills payables as at 30 June 2020, divided by cost of sales for the same period and multiplied by 182 days (2019: 181 days).
During the six months period ended 30 June 2020, the Group recorded net operating cash outflow of HK\$890,888,000 compared with net operating cash inflow of HK\$544,454,000 in same period last year.
# Foreign Exchange Risk Management
The Group has foreign currency sales and purchases, bank deposits and borrowings primary in United States dollars and Renminbi which expose the Group to foreign currency risk.
The Group entered into short-term foreign currency forward contracts to hedge the currency risk related to its payable denominated in foreign currencies.
# Pledge of Assets
As at 30 June 2020, certain of the Group’s assets (including land and building, bank deposits, factored trade receivables and investments held-for-trading) with the carrying value of totaling approximately HK\$331 million were pledged to banks to secure general banking facilities granted to the Group.
# Employee and Remuneration Policy
At 30 June 2020, the Group employed approximately 500 employees in the Greater China region. The Group ensures that their employees are offered competitive remuneration packages. Other staff benefits include share option scheme, provident fund schemes and medical insurance. Also, discretionary bonus was granted to eligible employees based on the Group’s financial results and individual performance.
# PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES
During the period under review, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company’s listed securities. |
9313723_18.pdf | en | # CORPORATE GOVERNANCE
The Group has complied with the applicable code provisions in the Corporate Governance Code as contained in Appendix 14 to the Listing Rules (the “Code”) throughout the six months ended 30 June 2020, except for the following deviations:
Under the code provision A.1.8 of the Code, provides that an issuer should arrange appropriate insurance cover in respect of legal action against its directors. With regular and timely communications among the Directors and the management of the Group, the management of the Group believes that all potential claims and legal actions against the Directors can be handled effectively, and the possibility of actual litigation against the Directors is very low. The Company will consider to make such an arrangement as and when it thinks necessary.
Under the code provision A.2.1 of the Code, the roles of chairman and chief executive officer should be separate and should not performed by the same individual. Having considered the current business operation and the size of the Group, the Board is of the view that Dr. Yim Yuk Lun, Stanley BBS JP acting as both the Chairman and the Managing Director of the Group is acceptable and in the best interest of the Group.
Under the code provision A.4.1 of the Code, non-executive directors should be appointed for a specific term and subject to re-election. The non-executive directors have not been appointed for a specific term. However, according to the Bye-laws of the Company, one-third of the directors for the time being shall retire from office by rotation at each annual general meeting. As such, the Company considers that sufficient measures have been taken to ensure that the Company’s corporate governance practices are similar to those in the Code.
# AUDIT COMMITTEE
The Audit Committee of the Company has reviewed with management the accounting principles and policies adopted by the Group, internal control, risk management and the unaudited interim financial statements for the six months ended 30 June 2020.
# MODEL CODE
The Company has adopted the Model Code for Securities Transactions by Directors of Listed Companies contained in Appendix 10 of the Listing Rules (the “Model Code”) as the code of conduct regarding directors’ securities transactions.
Having made specific enquiry of all Directors, the Company confirmed that all Directors have complied with the required standard set out in the Model Code throughout the six months ended 30 June 2020. |
20752583_11.pdf | en | BCE INC. 2017 ANNUAL REPORT
# STRATEGIC IMPERATIVE
# Invest in broadband networks and services
Bell’s broadband networks are the foundation of our growth and innovation strategy. Fast fibre and mobile LTE connections power our leading wireless, TV, Internet, media and business services, and their outstanding quality and reliability continue to drive increased customer usage and satisfaction.
Bell networks connect Canadians to each other and the world, delivering billions of wireless calls, text messages and emails each day, providing fast, reliable access to streaming video and music, social media, online gaming, business applications and much more.
Canada’s largest companies rely on Bell’s networks and industry-leading roster of 28 data centres across the country for the fast and secure communications they need to support their operations and serve customers in Canada and around the globe.
As demand for bandwidth continues to accelerate, Bell is staying ahead with capital expenditures of \$4.03 billion supporting extensive wireless and fibre network expansion in 2017 to power our broadband growth strategy.
It’s On: Delivering the fastest broadband in more places
Our major fibre projects in urban centres made significant progress in 2017, expanding Bell’s direct fibre footprint to more than 3.7 million homes and businesses in Atlantic Canada, Québec, Ontario and Manitoba, up from approximately 3 million the year before. That now includes most of Toronto, and we recently announced that we will extend our all-fibre footprint across the fast-growing GTA/905 region surrounding Canada’s most populous city.
As we continue to expand our deployments, including in centres large and small throughout Manitoba with Bell MTS, we’re on track to bring direct fibre connections to a total of 4.5 million locations by the end of 2018 – approximately 50% of our long-term direct fibre build –providing even more Canadians with access to Gigabit Fibe Internet, the best TV experience with Fibe TV, and a range of new business services.
With our Toronto fibre build nearing completion, we are expanding our direct fibre links throughout Montréal and the GTA/905 region surrounding Toronto. |
20752583_12.pdf | en | # \$4.03B CAPITAL EXPENDITURESBell’s leading broadband network investments are driving innovation and customer growth
In wireless, we achieved a major milestone in 2017 as our LTE network, offering theoretical download speeds of up to 150 Megabits per second (Mbps), grew to reach 99% of the Canadian population, throughout urban centres, small towns and rural locations alike. We expect to grow LTE Advanced coverage, with speeds of up to 260 Mbps, to approximately 92% of Canadians by the end of 2018.
We’re achieving industry-leading wireless speeds with active spectrum deployment and aggregation as well as our industry-leading fibre backhaul infrastructure. We continued to enhance Canada’s Best National Network in 2017, with Tri-band LTE service now providing speeds up to 335 Mbps to 34% of Canadians and Quad-band LTE service offering up to 750 Mbps in more than 90 cities.
# Bell networks support ongoing service innovations
With our industry-leading investments in Canadian R&D, Bell is leveraging the best talent and advanced technologies to build efficient networks that adapt quickly as broadband services evolve.
Our advanced and ubiquitous wireless and fibre networks position us for success in the fast-growing Internet of Things (IoT) sector, which encompasses personal wearable devices, connected vehicles, the Connected Home, Smart City platforms and a broad range of business solutions.
In 2017, Bell announced the development of an LTE-M network to improve the efficiency of IoT devices by enabling lower power consumption and better coverage in underground and hard-to-reach areas.
Bell has announced several partnerships that highlight the huge potential of IoT technology and our innovation initiatives in the sector, including the first Smart City project in Kingston to improve the efficiency of municipal operations and services, and a unique vineyard monitoring system with the Henry of Pelham Estate Winery in Ontario’s Niagara Region.
# Connected cars and homes
We are also working with Hyundai, Kia and other auto manufacturers to provide connected vehicle services such as emergency roadside assistance, remote start and on-demand diagnostics over Bell’s national network. Bell’s Connected Car Bell Whole Home Wi-Fi ensures you get the fastest access speeds throughout your household.
product also offers vehicle tracking and notifications, maintenance alerts and an in-vehicle Wi-Fi hotspot.
In residential services, we launched Bell Whole Home Wi-Fi service, the first in Canada to use access points called pods and smart technology to ensure all devices throughout the home receive the strongest signal and fastest speeds available. Backed by the Fibe network, the new service works seamlessly with the advanced Home Hub 3000 modem and Wi-Fi router.
We expanded our partnership with Ericsson to take Fibe TV innovation to the next level with the new MediaFirst platform. Enabling next-generation services across multiple screens and other enhancements for Fibe TV and Alt TV, MediaFirst will help keep Bell a step ahead as our cable competitors try to catch up in the IPTV marketplace. |
20787384_309.pdf | en | # 55. Balance sheet and statement of changes in equity (continued)
# (b) Statement of changes in equity
<table><tr><td rowspan="3"></td><td colspan="4">Reserves</td></tr><tr><td>Share capital</td><td>Reserve for
fair value
changes/
Reserve for fair
value changes of
available-for-sale
securities</td><td>Retained
earnings</td><td>Total equity</td></tr><tr><td>HK$’m</td><td>HK$’m</td><td>HK$’m</td><td>HK$’m</td></tr><tr><td>At 1 January 2017</td><td>52,864</td><td>1,276</td><td>7,201</td><td>61,341</td></tr><tr><td>Profit for the year</td><td>–</td><td>–</td><td>15,515</td><td>15,515</td></tr><tr><td>Other comprehensive income:</td><td></td><td></td><td></td><td></td></tr><tr><td>Available-for-sale securities</td><td>–</td><td>354</td><td>–</td><td>354</td></tr><tr><td>Total comprehensive income</td><td>–</td><td>354</td><td>15,515</td><td>15,869</td></tr><tr><td>Dividends</td><td>–</td><td>–</td><td>(13,375)</td><td>(13,375)</td></tr><tr><td>At 31 December 2017</td><td>52,864</td><td>1,630</td><td>9,341</td><td>63,835</td></tr><tr><td>At 1 January 2018,
as previously reported</td><td>52,864</td><td>1,630</td><td>9,341</td><td>63,835</td></tr><tr><td>Effect of adoption of HKFRS 9</td><td>–</td><td>(2,730)</td><td>2,730</td><td>–</td></tr><tr><td>At 1 January 2018, after adoption
of HKFRS 9</td><td>52,864</td><td>(1,100)</td><td>12,071</td><td>63,835</td></tr><tr><td>Profit for the year</td><td>–</td><td>–</td><td>16,035</td><td>16,035</td></tr><tr><td>Other comprehensive income:</td><td></td><td></td><td></td><td></td></tr><tr><td>Equity instruments at fair value
through other comprehensive
income</td><td>–</td><td>(763)</td><td>–</td><td>(763)</td></tr><tr><td>Total comprehensive income</td><td>–</td><td>(763)</td><td>16,035</td><td>15,272</td></tr><tr><td>Dividends</td><td>–</td><td>–</td><td>(13,776)</td><td>(13,776)</td></tr><tr><td>At 31 December 2018</td><td>52,864</td><td>(1,863)</td><td>14,330</td><td>65,331</td></tr></table> |
20787384_310.pdf | en | # 56. Principal subsidiaries
The particulars of all direct and indirect subsidiaries of the Company are set out in “Appendix – Subsidiaries of the Company”. The following is a list of principal subsidiaries as at 31 December 2018:
<table><tr><td>Name</td><td>Place of
incorporation
and operation</td><td>Issued share capital</td><td>Interest held</td><td>Principal activities</td></tr><tr><td>Bank of China (Hong Kong) Limited</td><td>Hong Kong</td><td>HK$43,042,840,858</td><td>*100%</td><td>Banking business</td></tr><tr><td>BOC Group Life Assurance Company Limited</td><td>Hong Kong</td><td>HK$3,538,000,000</td><td>*51%</td><td>Life insurance
business</td></tr><tr><td>BOC Credit Card (International) Limited</td><td>Hong Kong</td><td>HK$480,000,000</td><td>100%</td><td>Credit card services</td></tr><tr><td>Bank of China (Malaysia) Berhad</td><td>Malaysia</td><td>RM760,518,480</td><td>100%</td><td>Banking business</td></tr><tr><td>Bank of China (Thai) Public Company Limited</td><td>Thailand</td><td>Baht10,000,000,000</td><td>100%</td><td>Banking business</td></tr><tr><td>Po Sang Securities and Futures Limited</td><td>Hong Kong</td><td>HK$335,000,000</td><td>100%</td><td>Securities and futures
brokerage</td></tr></table>
\* Shares held directly by the Company
The particulars of a subsidiary with significant non-controlling interests are as follows:
# BOC Group Life Assurance Company Limited
<table><tr><td></td><td>2018</td><td>2017</td></tr><tr><td>Proportion of ownership interests and voting rights held by
non-controlling interests</td><td>49%</td><td>49%</td></tr></table>
<table><tr><td rowspan="2"></td><td>2018</td><td>2017</td></tr><tr><td>HK$’m</td><td>HK$’m</td></tr><tr><td>Profit attributable to non-controlling interests</td><td>420</td><td>586</td></tr><tr><td>Accumulated non-controlling interests</td><td>4,083</td><td>4,334</td></tr><tr><td>Summarised financial information:</td><td></td><td></td></tr><tr><td>– total assets</td><td>132,417</td><td>130,597</td></tr><tr><td>– total liabilities</td><td>124,085</td><td>121,752</td></tr><tr><td>– profit for the year</td><td>857</td><td>1,196</td></tr><tr><td>– total comprehensive income for the year</td><td>(182)</td><td>1,492</td></tr></table> |
11686216_117.pdf | en | <table><tr><td rowspan="2"></td><td>2017
二零一七年</td><td>2016
二零一六年</td></tr><tr><td>HK$’000
千港元</td><td>HK$’000
千港元</td></tr><tr><td>CASH FLOWS FROM OPERATING 經營業務的現金流量
ACTIVITIES</td><td></td><td></td></tr><tr><td>Loss before tax 除稅前虧損</td><td>(193,533)</td><td>(327,092)</td></tr><tr><td>Adjustments for: 就下列各項作出調整：</td><td></td><td></td></tr><tr><td>Finance costs 融資成本</td><td>165,563</td><td>119,356</td></tr><tr><td>Bank interest income 銀行利息收入</td><td>(13)</td><td>(6)</td></tr><tr><td>Amortisation of film products 電影產品攤銷</td><td>1,210</td><td>10,745</td></tr><tr><td>Amortisation of land lease prepayments 預付土地租賃攤銷</td><td>13,757</td><td>13,703</td></tr><tr><td>Depreciation of property, plant and 物業、廠房及設備折舊
equipment</td><td>58,957</td><td>59,578</td></tr><tr><td>Expenses recognised in respect of 就權益結付股份付款
equity-settled share-based payments 確認的開支</td><td>31,422</td><td>—</td></tr><tr><td>Loss on fair value changes of 可換股債券公允值變動虧損
convertible bonds</td><td>4,902</td><td>22,200</td></tr><tr><td>Net losses on early redemption of 提早贖回可換股債券的
convertible bonds 虧損淨額</td><td>—</td><td>193</td></tr><tr><td>Waiver of interest of convertible bond 豁免可換股債券利息</td><td>—</td><td>(12,513)</td></tr><tr><td>Gain on fair value changes of investment 投資物業公允值變動的
properties 收益</td><td>(1,080)</td><td>(1,500)</td></tr><tr><td>Impairment losses of interest receivables 應收利息的減值虧損</td><td>5,239</td><td>—</td></tr><tr><td>Impairment losses of investments in 電影╱戲劇製作的減值虧損
films/drama production</td><td>5,775</td><td>—</td></tr><tr><td>Loss on disposal of an intangible asset 出售一項無形資產的虧損</td><td>79</td><td>—</td></tr><tr><td>Loss on disposal of an associate 出售一間聯營公司的虧損</td><td>110</td><td>—</td></tr><tr><td>Loss on capitalisation of loan interest 資本化應付貸款利息的虧損
payables</td><td>1,570</td><td>—</td></tr><tr><td>Loss on capitalisation of other payables 資本化其他應付款項的虧損</td><td>5,431</td><td>—</td></tr><tr><td>Impairment loss on available-for-sales 可供出售投資的減值虧損
investment</td><td>5,250</td><td>—</td></tr><tr><td>Impairment losses on trade and other 貿易及其他應收款項的
receivables 減值虧損</td><td>13</td><td>—</td></tr><tr><td>Share of loss of an associate 分佔一間聯營公司虧損</td><td>3</td><td>143</td></tr><tr><td>Share of loss of a joint venture 分佔一間合營企業虧損</td><td>620</td><td>904</td></tr><tr><td></td><td>105,275</td><td>(114,289)</td></tr><tr><td>Operating cash flows before movements in 營運資金變動前的經營
working capital 現金流量</td><td></td><td></td></tr><tr><td>Increase in inventories 存貨增加</td><td>(567)</td><td>(34)</td></tr><tr><td>Increase in film products and film 電影產品及在製電影產品
production in progress 增加</td><td>—</td><td>(3,630)</td></tr><tr><td>Increase in trade receivables 應收貿易款項增加</td><td>(114,468)</td><td>(3,253)</td></tr><tr><td>Increase in prepayments, deposits and 預付款項、按金及其他應收
other receivables 款項增加</td><td>(30,144)</td><td>(6,462)</td></tr><tr><td>Increase in trade payables 應付貿易款項增加</td><td>22,929</td><td>667</td></tr><tr><td>(Decrease)/increase in other payables and 其他應付款項及應計費用
accruals （減少）╱增加</td><td>(423)</td><td>18,764</td></tr><tr><td>NET CASH USED IN OPERATING 經營業務所用現金淨額
ACTIVITIES</td><td>(17,398)</td><td>(108,237)</td></tr></table> |
11686216_118.pdf | en | <table><tr><td rowspan="2"></td><td>2017
二零一七年</td><td>2016
二零一六年</td></tr><tr><td>HK$’000
千港元</td><td>HK$’000
千港元</td></tr><tr><td>CASH FLOWS FROM INVESTING 投資活動的現金流量
ACTIVITIES</td><td></td><td></td></tr><tr><td>Increase in films/dramas production 電影╱戲劇製作增加</td><td>(300)</td><td>(6,461)</td></tr><tr><td>Interest received 利息收入</td><td>13</td><td>6</td></tr><tr><td>Payments for property, plant and equipment 物業、廠房及設備付款</td><td>(102,274)</td><td>(88,377)</td></tr><tr><td>Payments for land lease prepayments 支付土地租賃預付款</td><td>—</td><td>(11,419)</td></tr><tr><td>Proceeds from disposal of an intangible 出售一項無形資產的所得款項
asset</td><td>1,000</td><td>—</td></tr><tr><td>Purchases of available-for-sale investments 購買可供出售投資</td><td>—</td><td>(125)</td></tr><tr><td>NET CASH USED IN INVESTING 投資活動所用淨現金
ACTIVITIES</td><td>(101,561)</td><td>(106,376)</td></tr><tr><td>CASH FLOWS FROM FINANCING 融資活動的現金流量
ACTIVITIES</td><td></td><td></td></tr><tr><td>Interest paid 已付利息</td><td>(155,199)</td><td>(83,051)</td></tr><tr><td>Proceeds from shareholders loans 股東貸款所得款項</td><td>98,593</td><td>286,234</td></tr><tr><td>Repayments of shareholders loans 償還股東貸款</td><td>(61,876)</td><td>(13,788)</td></tr><tr><td>Proceeds from short-term borrowing 短期借貸所得款項</td><td>118,733</td><td>61,494</td></tr><tr><td>Repayments of short-term borrowing 償還短期借貸</td><td>(77,661)</td><td>(265,996)</td></tr><tr><td>Repayments of loan from a related company 償還一間關聯公司的貸款</td><td>—</td><td>(12,400)</td></tr><tr><td>Proceeds from issuance of bonds 發行債券所得款項</td><td>412,457</td><td>242,678</td></tr><tr><td>Transaction costs of issuance of bonds 發行債券的交易成本</td><td>(87,557)</td><td>(18,045)</td></tr><tr><td>Repayments of bonds 償還債券</td><td>(73,819)</td><td>(3,000)</td></tr><tr><td>Repayments of finance leases obligation 償還財務租賃承擔</td><td>(2,573)</td><td>(98)</td></tr><tr><td>Proceeds from issue of share 發行股份的所得款項</td><td>3,851</td><td>—</td></tr><tr><td>NET CASH GENERATED BY FINANCING 融資活動所得現金淨額
ACTIVITIES</td><td>174,949</td><td>194,028</td></tr><tr><td>NET INCREASE/(DECREASE) IN CASH 現金及現金等值項目
AND CASH EQUIVALENTS 增加╱（減少）淨額</td><td>55,990</td><td>(20,585)</td></tr><tr><td>CASH AND CASH EQUIVALENTS AT 年初現金及現金等值項目
THE BEGINNING OF YEAR</td><td>(4,218)</td><td>4,360</td></tr><tr><td>EFFECTS OF EXCHANGE RATE 匯率變動對所持外幣現金
CHANGES ON THE BALANCE OF 結餘的影響
CASH HELD IN FOREIGN
CURRENCIES</td><td>(40,244)</td><td>12,007</td></tr><tr><td>CASH AND CASH EQUIVALENTS AT 年末現金及現金等值項目
THE END OF YEAR</td><td>11,528</td><td>(4,218)</td></tr><tr><td>ANALYSIS OF THE BALANCES OF 現金及現金等值項目結餘分析
CASH AND CASH EQUIVALENTS</td><td></td><td></td></tr><tr><td>Cash and bank balances 現金及銀行結餘</td><td>19,944</td><td>4,283</td></tr><tr><td>Bank overdrafts 銀行透支</td><td>(8,416)</td><td>(8,501)</td></tr><tr><td></td><td>11,528</td><td>(4,218)</td></tr></table> |
9263519_12.pdf | en | # 7. LOSS/PROFIT FROM OPERATIONS
<table><tr><td rowspan="4"></td><td colspan="2">For the three months ended
30 September</td><td colspan="2">For the six months ended
30 September</td></tr><tr><td>2021</td><td>2020</td><td>2021</td><td>2020</td></tr><tr><td>HK$’000</td><td>HK$’000</td><td>HK$’000</td><td>HK$’000</td></tr><tr><td>(Unaudited)</td><td>(Unaudited)</td><td>(Unaudited)</td><td>(Unaudited)</td></tr><tr><td>The Gr’oups (loss)/profit
from operations is arrived
at after charging/(crediting):</td><td></td><td></td><td></td><td></td></tr><tr><td>Cost of sales</td><td>6,205</td><td>2,516</td><td>8,651</td><td>208,107</td></tr><tr><td>Depreciation charge</td><td></td><td></td><td></td><td></td></tr><tr><td>– property, plant and
equipment</td><td>57</td><td>66</td><td>111</td><td>171</td></tr><tr><td>– right-of-use assets</td><td>–</td><td>1,359</td><td>–</td><td>2,704</td></tr><tr><td>Net foreign exchange
(loss)/gain</td><td>1</td><td>18</td><td>1</td><td>19</td></tr><tr><td>Staff costs (including
director’s remuneration)</td><td>5,940</td><td>6,415</td><td>12,398</td><td>11,395</td></tr></table>
# 8. FINANCE COSTS
<table><tr><td rowspan="4"></td><td colspan="2">For the three months ended
30 September</td><td colspan="2">For the six months ended
30 September</td></tr><tr><td>2021</td><td>2020</td><td>2021</td><td>2020</td></tr><tr><td>HK$’000</td><td>HK$’000</td><td>HK$’000</td><td>HK$’000</td></tr><tr><td>(Unaudited)</td><td>(Unaudited)</td><td>(Unaudited)</td><td>(Unaudited)</td></tr><tr><td>Interest on other borrowing</td><td>10,280</td><td>14,625</td><td>26,496</td><td>28,748</td></tr><tr><td>Interest on lease liabilities</td><td>–</td><td>319</td><td>–</td><td>319</td></tr><tr><td>Total</td><td>10,280</td><td>14,944</td><td>26,496</td><td>29,067</td></tr></table> |
9263519_13.pdf | en | # 9. INCOME TAX EXPENSE
<table><tr><td rowspan="4"></td><td colspan="2">For the three months ended
30 September</td><td colspan="2">For the six months ended
30 September</td></tr><tr><td>2021</td><td>2020</td><td>2021</td><td>2020</td></tr><tr><td>HK$’000</td><td>HK$’000</td><td>HK$’000</td><td>HK$’000</td></tr><tr><td>(Unaudited)</td><td>(Unaudited)</td><td>(Unaudited)</td><td>(Unaudited)</td></tr><tr><td>Current tax charged:</td><td></td><td></td><td></td><td></td></tr><tr><td>PRC Enterprise Income Tax</td><td>13</td><td>67</td><td>1,532</td><td>5,659</td></tr><tr><td>Total tax charged</td><td>13</td><td>67</td><td>1,532</td><td>5,659</td></tr></table>
Under the Law of the PRC on Enterprise Income Tax (the “EIT Law”) and Implementation Regulation of the EIT Law, the tax rate of the PRC subsidiaries is 25% from 1 January 2008 onwards.
No provision for Hong Kong Profits Tax has been made as the Group has no assessable profits in Hong Kong or the estimated assessable profit was wholly absorbed by tax losses brought forward for the six months ended 30 September 2021 (2020: Nil).
The Group had no significant unprovided deferred tax assets and liabilities at 30 September 2021 (2020: Nil).
# 10. LOSS PER SHARE
# Basic loss per share
The calculation of the basic loss per share is based on the loss attributable to owners of the Company for the three months ended 30 September 2021 of approximately HK\$11,253,000 (2020: loss attributable to owners of the Company of approximately HK\$27,994,000) and loss attributable to owners of the Company for the six months ended 30 September 2021 of approximately HK\$26,499,000 (2020: loss attributable to owners of the Company of approximately HK\$27,524,000) and the weighted average of 3,640,627,457 shares in issue during the three months ended 30 September 2021 (2020: 3,564,945,946 shares) and the weighted average of 3,640,627,457 shares in issue during the six months ended 30 September 2021 (2020: 3,564,945,946 shares).
# Diluted loss per share
No diluted loss per share were presented as there were no potential ordinary shares in issue for the three months and six months ended 30 September 2021. |
9250808_22.pdf | en | – We require significant capital investments and a high level of working capital to sustain our operations and overall growth
– We manufacture our products in a single location, and any material disruption of our operations could adversely affect our business
– Our expansion plans may not be successful
– Our production capacity might not be able to meet with growing market demand or changing market conditions
– We manufacture and sell only “high-end” steel flow control products
– We may not be able to develop new products or expand into new markets
– We may be subject to product liability claims
– We may be subject to liability in connection with industrial accidents at our production facilities
– Lack of business insurance coverage may incur substantial costs for our Group
– We are subject to foreign exchange exposure
– The interests of our Controlling Shareholders may differ from those of our other Shareholders
# Risks relating to the industry
– Our business depends very much on the continuous casting method in the steel manufacturing industry. Industry-wide adoption of other existing or new technologies that do not require steel flow control products in the future might seriously affect our business
– We cannot assure that we will be able to renew all necessary licences, certificates, approvals and permits for our production. Changes in licensing requirements applicable to our industry may adversely affect us
– The PRC Government may adopt measures to slow down growth in the steel manufacturing industry and other steel consuming industries, thereby adversely affecting the demand for our products
– Our industry is subject to global economic and market conditions
– We operate in a highly competitive industry
# Risks relating to conducting business in the PRC
– Political and economic policies of the PRC government and social conditions and legal developments of the PRC could affect our business |
9250808_23.pdf | en | – The government control of currency conversion could affect our business operations
– Uncertainties regarding interpretation and enforcement of the PRC laws and regulations may impose adverse impact on our business, operations and profitability
– The implementation of the new labour contract law and increase in labour costs in the PRC may adversely affect our business and financial conditions
– Under the Enterprise Income Tax Law (中華人民共和國企業所得稅法) and the related implementation regulations, which became effective on 1 January 2008, dividends from our subsidiary in the PRC may be subject to withholding tax or we may be subject to PRC tax on our worldwide income
– Dividends payable by us to our foreign investors and gain on the sale of our Shares may be subject to the PRC tax
– We cannot assure that we will continue to enjoy preferential tax treatments or financial incentives in the future
– PRC regulations on loans to and direct investment by offshore holding companies in PRC entities may delay or prevent us from using the proceeds of this offering to make loans or additional capital contributions to our PRC subsidiary
– We are a holding company and rely on dividend payments from our operating subsidiary
– Uncertainties on the PRC withholding tax rate on dividends payable by our subsidiary in the PRC
– PRC regulations relating to acquisitions of the PRC companies by foreign entities may limit our ability to acquire the PRC companies and adversely affect the implementation of our strategy as well as our business and prospects
– PRC regulations relating to the establishment of offshore special purpose companies by the PRC residents may subject our PRC resident shareholders or our PRC subsidiary to liability or penalties, limit our ability to inject capital into our PRC subsidiary, limit our PRC subsidiary’s ability to increase their registered capital or distribute profit to us, or may otherwise adversely affect us
– A shortage of electricity and water supply in the PRC would affect our production and affect our business and financial performance
# Risks relating to the Global Offering
– Shareholders’ interests in the share capital of our Company may be diluted in the future
– Lack of liquidity of our Shares and volatility of the market price may be resulted
– Fluctuation of RMB may affect value of our dividends (if any) and our financial condition
– Investors may experience difficulties in effecting service of legal process and enforcing judgments against our Company and our management
– We cannot guarantee the accuracy of facts and other statistics with respect to the global steel industry, the PRC economy, the PRC steel industry and the PRC steel flow control products industry in the continuous casting process contained in this prospectus
– Forward-looking statements contained in this prospectus are subject to risks and uncertainties
– We strongly caution you not to place any reliance on any information contained in press articles or media regarding us or the Global Offering |
20755419_19.pdf | en | which can be taken as smoking-gun signals of DM scattering, can further increase an exper-iment’s constraining power. For DM–nucleon interactions, although the elastic scattering is the best channel, however, for light DM particles which can not deposit observable energies in detectors, one has to rely on the high energy part of ionization processes.
The energy and momentum transfers involved in sub-GeV DM scattering overlap typ-ical atomic scales, so studies of issues such as binding effects and electron/nuclear recoil mechanism, which play important roles in interpreting experimental data, require detailed many-body calculations. This case study of hydrogen, where both binding and recoil can be taken into account most simply, therefore provides useful qualitative understanding of what to be anticipated in sub-GeV DM scattering off practical detector materials such as germanium and xenon.
# ACKNOWLEDGMENTS
We acknowledge the support from the Ministry of Science and Technology of Republic of China under Grants No. 102-2112-M-002-013-MY3 (J.-W. C., C.-L. W., and C.-P. W.) and No. 103-2112-M-259-003 (H.-C. C. and C.-P. L.); the Center for Theoretical Sciences and Center of Advanced Study in Theoretical Sciences of National Taiwan University (J.-W. C., C.-L. W., and C.-P. W.); and the National Center for Theoretical Sciences. J.-W. C. was also supported in part by the Deutsche Forschungsgemeinschaft and National Natural Science Foundation of China (CRC 110).
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2538811_7.pdf | en | # OUTLOOK
Notwithstanding the rapid recovery in coal price in Guizhou province in late 2016, the fundamentals of coal demand have not changed significantly. As the coal demand shortage and overcapacity are still prominent, the Group believes that the government will continue adhering to the supply-side reform policy to resolve excess coal production capacity. The Group will continue adopting the existing business strategy through the expansion of existing shipping port, transport belts and coal beneficiation plant, and strengthening the effective coal quality management through coal washing and coal blending in order to meet different requirements of various customers and penetrate the surrounding coal market.
The status of coal as the primary energy in China is expected to remain unchanged for a considerable length of time in the future. Therefore the Company is cautiously positive about the coal industry in the longer term. The Company will also consider other potential business projects that can provide the Shareholders with promising returns and benefit the Group as a whole as and when suitable opportunities arise.
# APPRECIATION
On behalf of the Board, I would like to take this opportunity to express my appreciation to the staff and management team of the Group for their hard work and dedication during the year. I would also like to express my sincere gratitude to the Shareholders for their continuous support.
HAN Weibing
Chairman and Chief Executive Officer
Hong Kong, 31 March 2017 |
2538811_8.pdf | en | # BUSINESS REVIEW
In early 2016, the Group re-formulated its business strategy to enhance the Group’s overall competitiveness in the downturn of the coal industry by adopting the following measures.
First of all, in addition to the existing coal beneficiation plant, the Group managed to complete the construction of another simple coal washing facility within three months as well as putting two high sieving systems into operation. Coal washing and efficient coal blending could be performed with the Group’s own coal beneficiation plant, coal washing facility and high sieving systems. To meet the demands of power plants and other customers with lower coal specification, the Group blended raw coal, lignite (the by-product of coal washing), middling coal and coal residue stone. The sales of blended coal not only met customers’ specific requirements but also generated additional revenue for the Group and reduced the treatment cost of lignite and coal residue stone. Therefore the Group was in a better position to segment the coal market by providing customised coal products of different specifications and stable quality to various customers.
Secondly, the Group improved the logistics and transportation so that its coal products could be transported to the downstream chemical plants, cement plants and other customers waterway at a lower cost and a shorter time through the Group’s own shipping port.
Thirdly, the Group adhered to establish a strategic customer-oriented management system, which not only provided customers with a variety of customised specifications of coal products but also enhanced the quality of customer service. As a result, longer term customer relationship has been built up.
Fourthly, the Group adopted optimised mining plan, took advantage of water transport, stringent cost control and other means to reduce production and logistics costs. The Group also closely adhered to the stringent cash flow management by securing alternative financing for mine tunnel construction. Furthermore, the Group managed to negotiate “payment before delivery” term for non-power plant customers to minimise potential credit risk and reduce working capital cycle.
As a result of the effective implementation of the above strategies and the surge of coal price in the fourth quarter of 2016, the Group’s loss attributable to owners of the parent from continuing operations substantially declined from approximately CNY488.4 million in 2015 to approximately CNY205.7 million in 2016. |
20794684_76.pdf | en | # 13. INVESTMENT IN ASSOCIATED COMPANY
<table><tr><td rowspan="3"></td><td colspan="2">The Group</td><td colspan="2">The Company</td></tr><tr><td>2016</td><td>2015</td><td>2016</td><td>2015</td></tr><tr><td>$’000</td><td> $’000</td><td> $’000</td><td> $’000</td></tr><tr><td>Investment in associated company</td><td>4,313</td><td>3,859</td><td>2,895</td><td>2,895</td></tr></table>
The Group’s investment in an associated company (Note 29) is not material to the Group. There are no contingent liabilities relating to the Group’s interest in the associated company.
In 2015, the Group’s equity accounting/gains on associated companies recognised in the income statement included a gain of \$47,570,000 arising from the partial disposal and reclassification of an associated company to available-for-sale financial assets.
# 14. FINANCIAL ASSETS (FVOCI) / AVAILABLE-FOR-SALE FINANCIAL ASSETS
As disclosed in Note 2(a), the Group has early adopted FRS 109 effective 1 January 2016 and elected, at initial adoption, to present in other comprehensive income changes in the fair value of all its equity investments previously classified as available-for-sale financial assets. In accordance with the transitional provisions in FRS 109, comparative figures have not been restated.
# (a) For 2016, equity investments at fair value through other comprehensive income (FVOCI) mainly comprise the following:
<table><tr><td rowspan="2"></td><td>Group</td></tr><tr><td>2016</td></tr><tr><td></td><td>$’000</td></tr><tr><td>Shares of a financial institution</td><td>1,467,127</td></tr><tr><td>Shares of two real estate companies</td><td>460,203</td></tr></table>
These investments comprise mainly quoted investments and were previously classified as available-for-sale financial assets in 2015.
# (b) During the financial year, the Group elected to receive \$33,246,000 (2015: \$22,398,000) of dividend income as non-cash financial assets (FVOCI) / available-for-sale financial assets in lieu of cash dividends.
(c) Certain financial assets (FVOCI) / available-for-sale financial assets valued at \$169,307,000 (2015: \$175,441,000) are pledged as security for bank credit facilities (Note 20).
(d) There are no material investments held by the Company in 2016 and 2015. |
20794684_77.pdf | en | # 15. INTANGIBLE ASSETS
<table><tr><td rowspan="3"></td><td colspan="2">The Group</td><td colspan="2"> The Company</td></tr><tr><td>2016</td><td>2015</td><td>2016</td><td>2015</td></tr><tr><td>$’000</td><td>$’000</td><td> $’000</td><td> $’000</td></tr><tr><td>Goodwill on consolidation</td><td>11,116</td><td>11,116</td><td>–</td><td>–</td></tr><tr><td>Trademarks and deferred expenditure</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td></td><td>11,116</td><td>11,116</td><td>–</td><td>–</td></tr></table>
# (a) Goodwill on consolidation
<table><tr><td rowspan="3"></td><td colspan="2">The Group</td></tr><tr><td>2016</td><td>2015</td></tr><tr><td>$’000</td><td> $’000</td></tr><tr><td>Cost</td><td></td><td></td></tr><tr><td>Balance at beginning and end of financial year</td><td>11,116</td><td>11,116</td></tr></table>
# Impairment test for goodwill
The goodwill is allocated to the healthcare division of the Group, which is regarded as a cash-generating unit (“CGU”).
During the financial year, the Group has determined that there was no impairment of its CGU containing the goodwill. The recoverable amount (i.e. higher of value-in-use and fair value less costs to sell) of the CGU is determined on the basis of value-in-use calculations. These calculations incorporate cash flow projections by management covering a five-year period.
Key assumptions used for value-in-use calculations:
Discount rate 5.6% (2015: 5.5%)
Growth rate 0.0% (2015: 0.0%)
These assumptions have been used for the analysis of the CGU. The discount rate used is pre-tax and reflects specific risks relating to the healthcare division. Based on the sensitivity analysis performed, any reasonable change in the key assumptions would not result in any impairment adjustments. |
20742022_9.pdf | en | to the case of several functions and several constraints. In all cases, the \( \mu \) s are to be regarded as independent functions just like the xs.
There are two parameterizations that we are going to discuss in this appendix: parame-terization of the path by arc length and by time. In the first case, the integral to minimize is
\[ T = { \frac { 1 } { c } } \int n ( \mathbf { x } ( \ell ) ) d \ell , \eqno { ( \mathrm { A 3 } ) } \]
while in the second case
\[ T = \int d t . \eqno ( \mathrm { A 4 } ) \]
As we will see, there are constraints to be appended to these integrals. But before doing that, there is another subtlety that we should discuss first. It is related to the fact that in these integrals the domain of integration is not a priori known and fixed. (For example, if we knew the domain of integration in parameterization with time, then we already knew T.) This is very important, since the standard results we quoted above are usually derived under the assumption that there is a fixed domain of integration and the variations vanish at its boundary.16 So in the rest of this appendix we first address the issue of variable domain in Subsection A 1, and then turn to the length and time parameterizations in Subsections A 2 and A 3, respectively.
# 1. Variation with Variable Domain
In Section II our parametererization was over a fixed domain, namely: 0 \( < s < \) 1. This meant fixed lower and upper limits (0 and 1) in the integral (3) and hence we were eligible to use the Euler-Lagrange equations. However, we may equally well describe the path connecting \( \mathbf { x } _ { 1 } \) and \( \mathbf { x } _ { 2 } \) by a function x(s) on an arbitrary domain \( \sigma _ { 1 } < s < \sigma _ { 2 } \). The travel time is still given by the same integral except for the lower and upper limits of integration:
\[ T = \frac { 1 } { c } \int _ { \sigma _ { 1 } } ^ { \sigma _ { 2 } } n ( { \bf x } ( s ) ) \sqrt { \dot { \bf x } ( s ) \cdot \dot { \bf x } ( s ) } d s . \eqno ( \mathrm { A 5 } ) \]
We wish to find such general parameterizations of the path that minimize T. This appears to be a harder problem in calculus of variations, since: (i) we have to search among a larger class of functions; and (ii) the domain of integration is not fixed as before, but variable.
Our search will be among functions
\[ \mathbf { x } : [ \sigma _ { 1 } , \sigma _ { 2 } ] \to \mathbb { R } ^ { 3 } , \qquad { \mathrm { ~ s u c h ~ t h a t ~ } } \mathbf { x } ( \sigma _ { 1 } ) = \mathbf { x } _ { 1 } { \mathrm { ~ a n d ~ } } \mathbf { x } ( \sigma _ { 2 } ) = \mathbf { x } _ { 2 } . \eqno ( \mathrm { A } 6 ) \] |
20742022_10.pdf | en | This is to be contrasted with our previous search scope, \( \mathbf { x } : [ 0 , 1 ] \to \mathbb { R } ^ { 3 } \). Under a variation \( \delta \mathbf { x } \) in the function and \( \delta \sigma _ { 1 , 2 } \) in the domain, the boundary conditions imply
\[ \left( \mathbf { x } + \delta \mathbf { x } \right) \big | _ { \sigma _ { 1 } + \delta \sigma _ { 1 } } = \mathbf { x } _ { 1 } , \qquad \left( \mathbf { x } + \delta \mathbf { x } \right) \big | _ { \sigma _ { 2 } + \delta \sigma _ { 2 } } = \mathbf { x } _ { 2 } , \qquad \qquad \qquad \qquad ( \mathrm { A T } ) \big ( \mathrm { A T } ) \big ( \mathrm { B T } ) \circ \mathrm { A T } . \]
which means
\[ ~ \delta { \bf x } ( \sigma _ { 1 } ) = - \dot { \bf x } ( \sigma _ { 1 } ) \delta \sigma _ { 1 } , \qquad \delta { \bf x } ( \sigma _ { 2 } ) = - \dot { \bf x } ( \sigma _ { 2 } ) \delta \sigma _ { 2 } . \eqno ( \mathrm { A 8 } ) \]
Now the variation of \( \begin{array} { r } { T = \int _ { \sigma _ { 1 } } ^ { \sigma _ { 2 } } L d s } \end{array} \) becomes
\[ \delta T = \int _ { \sigma _ { 1 } } ^ { \sigma _ { 2 } } \left[ { \frac { \partial L } { \partial x _ { i } } } - { \frac { d } { d s } } { \frac { \partial L } { \partial { \dot { x } } _ { i } } } \right] \delta x _ { i } d s + \left[ L - { \dot { x } } _ { i } { \frac { \partial L } { \partial { \dot { x } } _ { i } } } \right] _ { \sigma _ { 2 } } \delta \sigma _ { 2 } - \left[ L - { \dot { x } } _ { i } { \frac { \partial L } { \partial { \dot { x } } _ { i } } } \right] _ { \sigma _ { 1 } } \delta \sigma _ { 1 } , \qquad { \mathrm { ( A 9 ) } } \]
where summation over i is implied. By inspecting (A5) it is clear that L is a homogeneous function of \( \dot { \mathbf { x } } \) and hence the last two terms in \( \delta T \) vanish. Thus we are again left with the standard Euler-Lagrange equation and the result Eq. (5). Again we observe the non-uniqueness in the solutions: If \( \mathbf { x } ( s ) : [ \sigma _ { 1 } , \sigma _ { 2 } ] \to \mathbb { R } ^ { 3 } \) satisfies Eq. (5), then
\[ \mathbf { x } ( \bar { s } ( s ) ) : [ \bar { \sigma } _ { 1 } , \bar { \sigma } _ { 2 } ] \to \mathbb { R } ^ { 3 } \qquad \qquad \qquad \qquad \qquad ( \mathrm { A 1 0 } ) \]
is also a solution, for any monotonic function \( \bar { s } ( s ) \) satisfying \( \bar { s } ( \sigma _ { 1 } ) = \bar { \sigma } _ { 1 } \) and \( \bar { s } ( \sigma _ { 2 } ) = \bar { \sigma } _ { 2 } \).
We could have guessed that the Euler-Lagrange equations remain untouched: A function that minimizes the integral among all functions with variable domains, also does so among the smaller class of functions which share its own domain. So in general, the Euler-Lagrange equations provide a necessary condition for variable-domain problems. The boundary terms that appear in Eq. (A9) may provide additional conditions, although in our case they don’t.
# 2. Parameterization with Length
We are now in a position to perform the variational analysis with length parameterization. So we choose to set the arc length \( \ell \) run from zero to \( \lambda \), the total length of the path, and work with \( { \bf x } ( \ell ) \). This choice corresponds to the constraint \|dx/d\`\| = 1, to handle which we need to employ a Lagrange multiplier function \( \mu ( \ell ) \). Therefore, the quantity to minimize is
\[ \frac { 1 } { c } \int _ { 0 } ^ { \lambda } n ( { \bf x } ( \ell ) ) d \ell + \int _ { 0 } ^ { \lambda } \mu ( \ell ) \left[ \dot { \bf x } ( \ell ) \cdot \dot { \bf x } ( \ell ) - 1 \right] d \ell , \eqno { ( \mathrm { A 1 1 } ) } \]
where dot now means \( d / d \ell \). Again we have a variable domain of integration, since we don’t know the length \( \lambda \) of the desired trajectory before solving for it. Requiring \( \mathbf { x } ( \lambda ) = \mathbf { x } _ { 2 } \) implies
\[ \delta { \bf x } ( \lambda ) = - \dot { \bf x } ( \lambda ) \delta \lambda , \eqno ( \mathrm { A 1 2 } ) \] |
7473410_99.pdf | en | # 11. TAXATION
<table><tr><td rowspan="2"></td><td>2020</td><td>2019</td></tr><tr><td>RMB’000</td><td>RMB’000</td></tr><tr><td>The charge comprises:</td><td></td><td></td></tr><tr><td>Current tax</td><td></td><td></td></tr><tr><td>– PRC Enterprise Income Tax (“EIT”)</td><td>38,040</td><td>35,995</td></tr><tr><td>– Withholding tax levied on interest income of Hong Kong subsidiaries</td><td>4,572</td><td>4,820</td></tr><tr><td>– Withholding tax levied on dividend declared of a PRC subsidiary</td><td>–</td><td>1,625</td></tr><tr><td></td><td>42,612</td><td>42,440</td></tr><tr><td>Deferred tax (note 19)</td><td>7,080</td><td>24,927</td></tr><tr><td></td><td>49,692</td><td>67,367</td></tr></table>
No provision for Hong Kong Profits Tax has been made in the consolidated financial statements as the Group’s operation in Hong Kong had no assessable profit during both years.
Under the Law of the PRC on EIT (the “EIT Law”) and Implementation Regulation of the EIT Law, the tax rate of the PRC subsidiaries is 25% for both years. Certain PRC subsidiaries enjoy preferential tax rate according to approval from local tax bureau, including (i) a PRC subsidiary which enjoys preferential tax rate of 15% since year 2016 and applies a further preferential tax rate of 12.5% for the year 2020; (ii) a PRC subsidiary, located in Khorgos city in the PRC, was exempted from EIT in the first 5 years since set up in year 2018, according to “關於新疆喀什霍爾果斯兩個特殊經濟開發區企業所得稅優惠政策的通知” (Caishui [2011] 112) issued by the State Administration of Taxation and the Ministry of Finance of the PRC.
The tax charge for the year can be reconciled to the profit before taxation per the consolidated statement of profit or loss and other comprehensive income as follows:
<table><tr><td rowspan="2"></td><td>2020</td><td>2019</td></tr><tr><td>RMB’000</td><td>RMB’000</td></tr><tr><td>Profit before taxation</td><td>387,088</td><td>362,492</td></tr><tr><td>Tax at the domestic EIT rate of 25%</td><td>96,772</td><td>90,623</td></tr><tr><td>Tax effect of share of profit of a joint venture and associates</td><td>(3,676)</td><td>(1,444)</td></tr><tr><td>Tax effect of expenses not deductible for tax purposes</td><td>10,731</td><td>19,288</td></tr><tr><td>Effect of different tax rates of the subsidiaries</td><td>(23,527)</td><td>(8,950)</td></tr><tr><td>Effect of tax exemption granted to a PRC subsidiary</td><td>(50,229)</td><td>(50,475)</td></tr><tr><td>Tax effect of tax losses not recognised</td><td>4,618</td><td>3,869</td></tr><tr><td>Utilisation of tax losses previously not recognised</td><td>–</td><td>(1,740)</td></tr><tr><td>Tax benefit on research and development expenses</td><td>(2,660)</td><td>(1,976)</td></tr><tr><td>Withholding tax on distributable earnings of the PRC subsidiaries</td><td>17,663</td><td>18,172</td></tr><tr><td>Tax charge for the year</td><td>49,692</td><td>67,367</td></tr></table> |
7473410_100.pdf | en | # 12. PROFIT FOR THE YEAR/OTHER COMPREHENSIVE (EXPENSE) INCOME
# (a) Profit for the year
Profit for the year has been arrived at after charging (crediting):
<table><tr><td rowspan="2"></td><td>2020</td><td>2019</td></tr><tr><td>RMB’000</td><td>RMB’000</td></tr><tr><td>Directors’ emoluments (note 13)</td><td>6,503</td><td>5,536</td></tr><tr><td>Other staffs costs (excluding directors’ emoluments)</td><td></td><td></td></tr><tr><td>– Salaries, allowances and other staff benefits, including share
option expenses</td><td>116,194</td><td>82,630</td></tr><tr><td>– Staffs’ retirement benefit scheme contributions</td><td>656</td><td>4,201</td></tr><tr><td>Total staff costs</td><td>123,353</td><td>92,367</td></tr><tr><td>Less: amount capitalised in development costs</td><td>(5,581)</td><td>(9,188)</td></tr><tr><td>Less: st aff costs recognised as research and development costs in
other expenses</td><td>(22,577)</td><td>(13,596)</td></tr><tr><td>Staff costs recognised in administrative expenses</td><td>95,195</td><td>69,583</td></tr><tr><td>Total depreciation of property and equipment</td><td>2,310</td><td>1,694</td></tr><tr><td>Less: amount capitalised in development costs</td><td>(56)</td><td>(131)</td></tr><tr><td>Depreciation of property and equipment recognised in
administrative expenses</td><td>2,254</td><td>1,563</td></tr><tr><td>Depreciation of right-of-use assets recognised in
administrative expenses</td><td>9,970</td><td>7,202</td></tr><tr><td>Amortisation of intangible assets recognised in
administrative expenses</td><td>5,494</td><td>3,641</td></tr><tr><td>Auditor’s remuneration recognised in administrative expenses</td><td>2,900</td><td>2,520</td></tr><tr><td>Covid-19-related rent concessions (note 18)</td><td>(224)</td><td>–</td></tr><tr><td>Other expenses</td><td></td><td></td></tr><tr><td>– Research and development costs</td><td>23,466</td><td>14,269</td></tr><tr><td>– Donation</td><td>1,060</td><td>1,964</td></tr><tr><td>Total other expenses</td><td>24,526</td><td>16,233</td></tr></table> |
9242015_390.pdf | en | # Prepayments and other receivables
Our prepayment and other receivables included value-added tax recoverable, interest receivables, amounts due from shareholders, amounts due from related parties, IPO cost capitalization, prepayments and other receivables. Value-added tax recoverable represented value-added taxes incurred in procurement. Interest receivables mainly represented interests from time deposits. The table below sets forth a breakdown of our prepayments and other receivables as of the dates indicated:
<table><tr><td rowspan="3"></td><td colspan="2">As of December 31,</td><td>As of
June 30,</td></tr><tr><td>2018</td><td>2019</td><td>2020</td></tr><tr><td colspan="3">(RMB in thousands)</td></tr><tr><td>Value-added tax recoverable</td><td>1,587</td><td>3,809</td><td>4,012</td></tr><tr><td>Interest receivables</td><td>37</td><td>3,006</td><td>7,268</td></tr><tr><td>Amounts due from shareholders during
Reorganization</td><td>8,738</td><td>–</td><td>–</td></tr><tr><td>Amounts due from shareholders</td><td>700</td><td>755</td><td>269</td></tr><tr><td>Amounts due from related parties</td><td>44</td><td>35</td><td>53</td></tr><tr><td>IPO cost caiiptalzation</td><td>–</td><td>–</td><td>545</td></tr><tr><td>Prepayments</td><td>458</td><td>458</td><td>1,141</td></tr><tr><td>Other receivables</td><td>309</td><td>745</td><td>2,341</td></tr><tr><td>Total</td><td>11,873</td><td>8,808</td><td>15,629</td></tr></table>
Our prepayments and other receivables decreased from RMB11.9 million as of December 31, 2018 to RMB8.8 million as of December 31, 2019. The decrease was primarily attributable to a decrease in amounts due from shareholders as a result of the completion of the Reorganization, partially offset by (i) an increase in value-added tax recoverable, as a result of our increased purchase of pre-clinical and clinical research and development related services and (ii) an increase in interest receivables primarily attributable to the increased amount of time deposits in 2019 as we received the funding from our series B financing. Our prepayments and other receivables increased from RMB8.8 million as of December 31, 2019 to RMB15.6 million as of June 30, 2020, mainly due to an increase in interest receivables as a result of the accrual of the interest generated by our time deposits. |
9242015_391.pdf | en | # Cash and bank balances
Our cash and bank balances primarily consisted of cash at bank and short-term time deposits. Our cash and bank balances increased from RMB65.3 million as of December 31, 2018 to RMB746.8 million as of December 31, 2019. The increase was mainly attributable to the funds from our series B financing and the government subsidies we received. Our cash and bank balances decreased to RMB616.7 million as of June 30, 2020, mainly because of the RMB82.9 million payment we made in relation to the amendment of the Karyopharm Agreement, and payment of employment expenses and fees to CROs, CDMOs and SMOs. As of September 30, 2020, our cash and cash equivalents and time deposits was RMB957.7 million. For further information regarding our cash and bank balances, please see Note 16 to the Accountants’ Report set out in Appendix I.
The table below sets forth a breakdown of our cash and bank balances as of the dates indicated:
<table><tr><td rowspan="3"></td><td colspan="2">As at December 31,</td><td>As at
June 30,</td></tr><tr><td>2018</td><td>2019</td><td>2020</td></tr><tr><td colspan="3">(RMB in thousands)</td></tr><tr><td>(1)Pledged deposits</td><td>15,935</td><td>2,625</td><td>2,625</td></tr><tr><td>Bank deposits with oriilgna maturity of
more than three months when
(2)acquired</td><td>–</td><td>453,383</td><td>389,302</td></tr><tr><td>Cash and cash equivalents</td><td>49,322</td><td>290,787</td><td>224,731</td></tr><tr><td>Total</td><td>65,257</td><td>746,795</td><td>616,658</td></tr></table>
Notes:
(1) This represents pledged deposits in commercial banks for bank loans and bank overdraft. None of these deposits are either past due or impaired.
(2) This represents time deposits with initial terms of over three months when acquired in commercial banks with annual return rates ranging from 2.70% to 3.25%. None of these deposits are either past due or impaired. None of these deposits are pledged. |
20746715_147.pdf | en | On August 18, 2017, Elite Bond transferred its entire remaining holding of 190,063,207 Class A Shares to WP OCIM, together with its entitlement under the Pre-IPO Tier 1 ESOP, for a total consideration of US\$186,671,734 (determined with reference to the Company’s fair market value at the time of transfer and duly paid in cash upon completion) pursuant to a share purchase agreement dated July 20, 2017.
On January 19, 2018, Goldman Sachs exercised all its warrants granted pursuant to warrant instruments dated January 9, 2014 (as amended and restated on August 27, 2015) and August 27, 2015, respectively, which were granted in Goldman Sachs’ favor in consideration of the performance of its obligations under a facility agreement dated December 4, 2013 (as amended and restated on August 19, 2015) resulting in an issuance of 54,684,608 Class B2 Shares. The loan facility under such facility agreement was fully repaid.
In September 2018, Redwood Consulting exercised a portion of its options under the Pre-IPO Tier 1 ESOP, pursuant to exercise option letters dated September 7, 2018 and September 14, 2018, respectively, and nominated that 13,838,797 Class B4 Shares and 18,633,334 Class B4 Shares be allotted to WP OCIM and SK, respectively, pursuant to sale and purchase agreements dated September 7, 2018 and September 14, 2018, respectively. The consideration paid to our Company was US\$18,959,152 and US\$25,527,668 by WP OCIM and SK, respectively, and was determined with reference to the exercise price of US\$0.46 per Share as set out in the Pre-IPO Tier 1 ESOP and duly settled in cash on September 10, 2018 and September 20, 2018 by WP OCIM and SK, respectively.
On September 21, 2018, APG-Stichting transferred 41,257,634 and 55,975,003 Class B3 Shares to WP OCIM and SK, respectively, in return for US\$56,522,959 and US\$76,685,754 from WP OCIM and SK, respectively, determined with reference to the Company’s fair market value at the time of transfer, and duly settled in cash on the date of the transfers.
Since our Company’s incorporation and subsequent to each of the Pre-IPO financing rounds, we effected further changes to our authorized share capital, further information on which is set out in the section headed “Statutory and General Information—A. Further information about our Group—2. Changes in the share capital of our Company” in Appendix VIII to this Prospectus.
Pursuant to the terms of the Pre-IPO Shareholders’ Agreement, subject to the Global Offering becoming unconditional, all the issued Class C Preference Shares may either be converted to Class C Shares or redeemed upon the Global Offering becoming unconditional (“Share Conversion”). After this change is effected, the Company will have no Class C Preference Shares in issue. The holders of the Class C Preference Shares have each exercised their redemption right, except Emerald Ewood (Cayman) Limited, which has elected to redeem 50% of its shareholding and convert the remaining 50% of its shareholding to Class C Shares (in accordance with the Pre-IPO Shareholders’ Agreement).
Pursuant to the terms of the IPO Implementation Deed, subject to the Global Offering becoming unconditional, all the issued, unissued and authorized Class A Shares, Class B Shares and Class C Shares will be reclassified and re-designated as ordinary Shares (“Share Redesignation”) immediately following the Share Conversion. Immediately after these changes are effected, the authorized share capital of the Company shall be US\$4,400,000 divided into 4,400,000,000 Shares of US\$0.001 par value each, and the issued share capital shall be 2,717,894,514 Shares of US\$0.001 par value each. For further details of the IPO Implementation Deed, please refer to the paragraph headed“—IPO Implementation Arrangements” in this section of the Prospectus. |
20746715_148.pdf | en | # PRE-IPO EMPLOYEE SHARE OPTION PLANS
# Pre-IPO KM ESOP
The Pre-IPO KM ESOP was adopted by our Board on November 24, 2017. As of the Latest Practicable Date, the current number of options granted to 163 grantees of the Pre-IPO KM ESOP, allow for the aggregate subscription of 63,558,343 Shares, representing approximately 2.09% of the share capital of our Company immediately following the completion of the Global Offering. No additional options will be granted under the Pre-IPO KM ESOP. For further information, a summary of the principal terms of the Pre-IPO KM ESOP is set out in the section headed “Statutory and General Information—D. Pre-IPO KM ESOP, Pre-IPO Tier 1 ESOP and Post-IPO Share Option Scheme—1. Pre-IPO KM ESOP” in Appendix VIII to this Prospectus.
ESOP Shareholders have entered into arrangements with our Company under which the ESOP Shareholders agreed to transfer an aggregate of up to 15,246,949 Class A and/or Class B1 Shares to our Company, or make cash payments, upon exercise of certain options over shares in our Company (the “Relevant Options”) by the relevant participants under the Pre-IPO KM ESOP. Pursuant to the IPO Implementation Deed, these arrangements will be terminated on the date of Listing in consideration of an adjustment to the number of Shares that Laurels is issued upon exercise of certain vested and unexercised options under the Pre-IPO Tier 1 ESOP, certain cash payments from our Company to Laurels and WP OCIM and cancellation of certain vested and unexercised options under the Pre-IPO Tier 1 ESOP held by WP OCIM (the “ESOP Unwind”). Our Company will, after Listing, make cash payments to the ESOP Shareholders based on the then market value of the Shares if any Relevant Options expire or lapse on or after the Listing Date. For further details of the IPO Implementation Deed, please see the paragraph headed “—IPO Implementation Arrangements” in this section below.
# Pre-IPO Tier 1 ESOP
The Pre-IPO Tier 1 ESOP was adopted by our Board pursuant to a shareholders’ agreement dated November 3, 2015. As of the Latest Practicable Date, each of WP OCIM and Laurels hold unexercised options to subscribe for a total of 15,800,325 Shares each and Redwood Consulting holds unexercised options to subscribe for a total of 35,995,945 Shares, representing in aggregate approximately 2.2% of the share capital of our Company immediately following the completion of the Global Offering. Under the terms of the IPO Implementation Deed, the Company and the holders of the Pre-IPO Tier 1 ESOP have agreed: (i) not to exercise any vested options under the Pre-IPO Tier 1 ESOP until the Listing Date; and (ii) to exercise or cancel all the vested and unexercised options under the Pre-IPO Tier 1 ESOP on the Listing Date on a cashless basis based on the Offer Price, such that the option holders will not be required to make payment of the strike price of the options being exercised save for the nominal value of such Shares (the “Strike Amount”) and instead, the number of Shares to be issued on such exercise will be reduced by an amount whose value would equal the Strike Amount (the “Tier 1 Exercise”). For further information, a summary of the principal terms of the Pre-IPO Tier 1 ESOP is set out in the section headed “Statutory and General Information—D. Pre-IPO KM ESOP, Pre-IPO Tier 1 ESOP and Post-IPO Share Option Scheme—2. Pre-IPO Tier 1 ESOP” in Appendix VIII to this Prospectus.
As a result of the Tier 1 Exercise and taking into account agreements related to the ESOP Unwind and the Incentivization Unwind, Laurels and Redwood Consulting will be issued 1,606,449 Shares and 11,010,870 Shares, respectively, on the Listing Date, assuming the Offer Price is determined to be HK\$16.80, the mid-point of the Offer Price range and the Listing Date is determined to be Thursday, June 20, 2019. |
11707812_528.pdf | en | <table><tr><td rowspan="2"></td><td>Patents and
trademarks</td><td> Software</td><td>Non-
competition
agreement</td><td>Customer
relationships</td><td> Total</td></tr><tr><td>RMB’000</td><td>R MB’000</td><td> RMB’000</td><td> RMB’000</td><td> RMB’000</td></tr><tr><td>Accumulated amortisation:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>At 1 January 2017 </td><td>(168)</td><td>(1,324)</td><td> –</td><td> –</td><td>(1,492)</td></tr><tr><td>Charge for the year </td><td>(58)</td><td>(492)</td><td> –</td><td> –</td><td>(550)</td></tr><tr><td>At 31 December 2017</td><td>(226)</td><td>(1,816)</td><td> –</td><td> –</td><td>(2,042)</td></tr><tr><td>Charge for the year </td><td>(60)</td><td>(793)</td><td> –</td><td> –</td><td>(853)</td></tr><tr><td>At 31 December 2018</td><td>(286)</td><td>(2,609)</td><td> –</td><td> –</td><td>(2,895)</td></tr><tr><td>Charge for the year </td><td>(56)</td><td>(1,586)</td><td>(378)</td><td>(355)</td><td>(2,375)</td></tr><tr><td>Exchange adjustments </td><td>–</td><td>–</td><td>3</td><td>3</td><td>6</td></tr><tr><td>At 31 December 2019</td><td>(342)</td><td>(4,195)</td><td>(375)</td><td>(352)</td><td>(5,264)</td></tr><tr><td>Charge for the period </td><td>(38)</td><td>(1,868)</td><td>(3,295)</td><td>(3,094)</td><td>(8,295)</td></tr><tr><td>Exchange adjustments </td><td>–</td><td> –</td><td>9</td><td>8</td><td>17</td></tr><tr><td>At 30 September 2020 </td><td>(380)</td><td>(6,063)</td><td>(3,661)</td><td>(3,438)</td><td>(13,542)</td></tr><tr><td>Net book value:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>At 31 December 2017</td><td>383</td><td>3,455</td><td> –</td><td> –</td><td>3,838</td></tr><tr><td>At 31 December 2018</td><td>323</td><td>9,662</td><td> –</td><td> –</td><td>9,985</td></tr><tr><td>At 31 December 2019</td><td>267</td><td>14,013</td><td>13,126</td><td>41,910</td><td>69,316</td></tr><tr><td>At 30 September 2020 </td><td>229</td><td>16,182</td><td>9,519</td><td>37,818</td><td>63,748</td></tr></table>
The amortisation of intangible assets is included in cost of services and general and administrative expenses in the consolidated statement of profit or loss and other comprehensive income.
The useful lives of patents and trademarks of 10 years are determined based on terms of expiry of related legal rights.
The useful lives of software are around 5-10 years which are determined based on technological obsolescence.
Non-competition agreement is amortised over the shorter of the unexpired term of the agreement and its estimated useful lives, which is 3 years.
The useful life of the customer relationship recognised in acquisition of Biomere is 10 years, which is determined based on the factor of the attrition rate. |
11707812_529.pdf | en | # 14 GOODWILL
<table><tr><td></td><td>RMB’000</td></tr><tr><td>Cost</td><td></td></tr><tr><td>At 1 January 2017, 31 December 2017 and 31 December 2018 </td><td>–</td></tr><tr><td>Acquisition of Biomere (Note 34) </td><td>135,187</td></tr><tr><td>Exchange adjustments </td><td>(1,225)</td></tr><tr><td>At 31 December 2019 </td><td>133,962</td></tr><tr><td>Exchange adjustments </td><td>(3,190)</td></tr><tr><td>At 30 September 2020 </td><td>130,772</td></tr></table>
# Impairment tests for cash-generating units containing goodwill
The goodwill arose from the acquisition of Biomere in 2019 (Note 34).
The recoverable amounts of the cash-generating unit was determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by management covering a 5-year period. Cash flows beyond the 5-year period are extrapolated using estimated nil growth rate at 31 December 2019 and 30 September 2020.
<table><tr><td></td><td>As at
31 December
2019</td><td>As at
30 September
2020</td></tr><tr><td>Annual growth rate of revenue during the 5-year forecast
period</td><td>3.0%-10.0%</td><td>0.2%-9.8%</td></tr><tr><td>Pre-tax discount rate </td><td>12.6%</td><td>13.9%</td></tr></table>
The headroom calculated based on the recoverable amounts deducting the carrying amount of the cash-generating unit as at 31 December 2019 and 30 September 2020 is RMB10,038,000 and RMB5,901,000 respectively.
Management have undertaken sensitivity analysis on the impairment test of goodwill. The following table sets out the hypothetical changes to annual growth rate and pre-tax discount rate that would, in isolation, have removed the remaining headroom respectively as at 31 December 2019 and 30 September 2020:
<table><tr><td></td><td>As at
31 December
2019</td><td>As at
30 September
2020</td></tr><tr><td>Decrease in annual growth rate </td><td>0.2%</td><td>0.1%</td></tr><tr><td>Increase in pre-tax discount rate </td><td>3.5%</td><td>2.2%</td></tr></table>
As a result of the above impairment tests, the directors of the Company are of the view that there was no impairment of goodwill as at 31 December 2019 and 30 September 2020. |
2592163_42.pdf | en | # BOARD COMPOSITION
The Board currently comprises eight members, including two executive Directors, three non-executive Directors and three independent non-executive Directors.
The list of all Directors is set out under “Corporate Information” on page 81 and the independent non-executive Directors are expressly identified in all corporate communications pursuant to the Hong Kong Listing Rules.
As at 31 December 2017, the board of directors of the Company comprises the following Directors:
# Executive Directors
Li Chaochun, Chairman
Li Faben, General Manager (also the chief executive within the meaning of the Corporate Governance Code)
# Non-Executive Directors
Ma Hui, Vice Chairman
Yuan Honglin
Cheng Yunlei
# Independent Non-Executive Directors
Bai Yanchun
Xu Shan
Cheng Gordon
The list of Directors (by category) is also disclosed in all corporate communications issued by the Company from time to time pursuant to the Hong Kong Listing Rules. There is no relationship among members of the Board (including financial, business, family or other material or relevant relationship).
For the year ended 31 December 2017, the Board, at all times, met the requirements of the Hong Kong Listing Rules relating to the appointment of at least three independent non-executive Directors, and at least one-third of the Board with at least one independent non-executive Director possessing appropriate professional qualifications, or accounting or related financial management expertise.
The Company has received an annual confirmation from each independent non-executive Director of his independence pursuant to the requirements of the Hong Kong Listing Rules. The Company considers all independent non-executive Directors to be independent in accordance with the independence guidelines set out in Rule 3.13 of the Hong Kong Listing Rules.
Non-executive Directors (including independent non-executive Directors) bring a wide range of business and financial expertise, experience and independent judgment to the Board. Through active participation in Board meetings or meetings of Board committees, supervising management issues involving potential conflict of interests and serving on Board committees, all non-executive Directors (including independent non-executive Directors) make various contributions towards the direction of the Company. |
2592163_43.pdf | en | # CHAIRMAN AND GENERAL MANAGER
The roles and duties of the Chairman and the General Manager are carried out by different individuals and their respective responsibilities have been clearly specified in writing.
The Chairman, Mr. Li Chaochun, provides leadership for the Board and is also responsible for chairing the meetings, leading the operations of the Board and ensuring that all major and appropriate issues are discussed by the Board in a timely and constructive manner.
The General Manager, Mr. Li Faben, is responsible for running the Company’s business operations and implementing the Group’s strategic plans and business goals.
# APPOINTMENT AND RE-ELECTION OF DIRECTORS
In accordance with the Company’s articles of association (the “Articles of Association”), all Directors of the Company are subject to retirement by rotation at least once every three years and any new Director appointed by the Board to fill a casual vacancy or as an addition to the Board shall submit himself/herself for election by shareholders at the first general meeting after appointment.
Each Director of the Company is appointed for a term commencing from the date on which the resolution regarding his appointment/re-election is passed until the conclusion of the annual general meeting of the Company to be held in 2018, and will retire and be re-elected at such annual general meeting. According to the Detailed Working Rules for Independent Directors adopted on 9 October 2012, the term of office for independent non-executive Directors shall be the same as that of other Directors of the Company, and they may stand for re-election upon expiry of their term, but the re-appointment shall not exceed six years. Mr. Bai Yanchun, Mr. Xu Shan and Mr. Cheng Gordon, who were appointed as the independent non-executive Directors on 17 August 2012, will not offer themselves for re-election at the annual general meeting to be held in 2018. The Board proposed a special resolution at the 2015 annual general meeting regarding the amendment to the Articles of Association, fixing the number of the Board members at 7 to 11 so that the number and composition of the Board of Directors of the Company are in compliance with the requirements under the Company Law and the Hong Kong Listing Rules.
The Nomination Committee and the Board selected candidates of Directors with reference to major shareholders’ recommendations and certain criteria and procedures. The relevant criteria mainly include the candidate’s professional background, especially his or her experience in the industry where the Group operates, his or her financial and past track record with other similar companies and the recommendations from management and other knowledgeable individuals. The procedures and process of appointment, re-election and removal of Directors are laid down in the Articles of Association. The Nomination Committee of the Company is responsible for reviewing the Board composition, monitoring the appointment, nomination and succession plan of Directors and assessing the independence of independent non-executive Directors.
# INDUCTION AND CONTINUING PROFESSIONAL DEVELOPMENT FOR DIRECTORS
Each newly appointed Director receives a comprehensive, formal and tailored induction on the first occasion of his/her appointment so as to ensure that he/she has an appropriate understanding of the business and operations of the Company and that he/she is fully aware of his/her responsibilities and obligations under the Hong Kong Listing Rules and relevant regulatory requirements.
The Directors are regularly updated with legal and regulatory developments as well as business and market changes to facilitate the discharge of their responsibilities. Briefings and continual professional development schemes for Directors will be arranged whenever necessary.
The Company encourages all Directors to participate in continuous professional development to develop and refresh their knowledge and skills in order to ensure that their contribution to the Board remains fully informed and relevant. For the year ended 31 December 2017, all Directors attended the training courses organized by the Company on corporate governance and regulatory development, and obtained and read relevant materials presented to them by the Office of the Board of the Company, including updates of laws and regulations. |
11780998_314.pdf | en | # XVII. NOTES TO MAJOR ITEMS IN FINANCIAL STATEMENTS OF THE PARENT (Continued)
# 2. Other receivables (Continued)
# (9). Provision for bad debts (Continued)
# 2019
Unit: Yuan Currency: RMB
<table><tr><td rowspan="2">Provision for bad debt</td><td>Stage 1</td><td>Stage 2</td><td>Stage 3</td><td rowspan="2">Total</td></tr><tr><td>12-months
ECL</td><td>Lifetime ECL
(non-credit
impaired)</td><td>Lifetime ECL
(credit
impaired)</td></tr><tr><td>Amount as at 1 January 2019</td><td>420,451.00</td><td>69,160.92</td><td>–</td><td>489,611.92</td></tr><tr><td>Amounts due for the period as
at 1 January 2019</td><td></td><td></td><td></td><td></td></tr><tr><td>– Transferred to stage 2</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td>– Transferred to stage 3</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td>– Reversed to stage 2</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td>– Reversed to stage 1</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td>Provision for the period</td><td>–</td><td>93,632.41</td><td>–</td><td>93,632.41</td></tr><tr><td>Reversal for the period</td><td>-16,400.00</td><td>–</td><td>–</td><td>-16,400.00</td></tr><tr><td>Write-off for the period</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td>Cancellation for the period</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td>Other changes</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td>Amount as at 31 December 2019</td><td>404,051.00</td><td>162,793.33</td><td>–</td><td>566,844.33</td></tr></table> |
11780998_315.pdf | en | # XVII. NOTES TO MAJOR ITEMS IN FINANCIAL STATEMENTS OF THE PARENT (Continued)
# 2. Other receivables (Continued)
# (9). Provision for bad debts (Continued)
The significant changes in the gross carrying amount of other receivables that affected the changes in loss provisions in the current period are as follows:
# For the six months ended 30 June 2020
Unit: Yuan Currency: RMB
<table><tr><td rowspan="2">Book Value</td><td>Stage 1</td><td>Stage 2</td><td>Stage 3</td><td rowspan="2">Total</td></tr><tr><td>12-months ECL</td><td>Lifetime ECL
(non-credit
impaired)</td><td>Lifetime ECL
(credit
impaired)</td></tr><tr><td>Amount as at 1 January 2020</td><td>6,188,654,816.55</td><td>269,937.32</td><td>–</td><td>6,188,924,753.87</td></tr><tr><td>Amounts due for the period as
at 1 January 2020</td><td></td><td></td><td></td><td></td></tr><tr><td>– Transferred to stage 2</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td>– Transferred to stage 3</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td>– Reversed to stage 2</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td>– Reversed to stage 1</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td>Provision for the period</td><td>4,471,396,255.93</td><td>–</td><td>–</td><td>4,471,396,255.93</td></tr><tr><td>Reversal for the period</td><td>-3,638,533,099.32</td><td>–</td><td>–</td><td>-3,638,533,099.32</td></tr><tr><td>Write-off for the period</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td>Cancellation for the period</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td>Other changes</td><td>–</td><td>–</td><td>–</td><td>–</td></tr><tr><td>Amount as at 30 June 2020</td><td>7,021,517,973.16</td><td>269,937.32</td><td>–</td><td>7,021,787,910.48</td></tr></table> |
7570943_19.pdf | en | # 12 CAPITAL, RESERVES AND DIVIDENDS
# (a) Movements in components of equity
The reconciliation between the opening and closing balances of each component of the Group’s consolidated equity is set out in the consolidated statement of changes in equity. Details of the changes in the Company’s individual components of equity between the beginning and the end of the year are set out below:
<table><tr><td rowspan="2"></td><td>Share cailpta</td><td>Cailpta
reserve</td><td>PRC statutory
reserve</td><td>Retained
profits</td><td>Total</td></tr><tr><td>RMB’000</td><td>RMB’000</td><td>RMB’000</td><td>RMB’000</td><td>RMB’000</td></tr><tr><td>Balance at 1 January
2019</td><td>1,074,358</td><td>3161,02</td><td>57,606</td><td>212,868</td><td>1,660,934</td></tr><tr><td>Changes in equity for
2019</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total comprehensive
income for the year</td><td>–</td><td>–</td><td>–</td><td>38141,</td><td>38141,</td></tr><tr><td>Transfer to statutory
reserve</td><td>–</td><td>–</td><td>3,814</td><td>(3,814)</td><td>–</td></tr><tr><td>Dividends approved
in respect of the
previous year</td><td>–</td><td>–</td><td>–</td><td>(91,320)</td><td>(91,320)</td></tr><tr><td>Balance at 31
December 2019 and
1 January 2020</td><td>1,074,358</td><td>3161,02</td><td>6142,0</td><td>155,875</td><td>1,607,755</td></tr><tr><td>Changes in equity for
2020</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total comprehensive
income for the year</td><td>–</td><td>–</td><td>–</td><td>167,084</td><td>167,084</td></tr><tr><td>Transfer to statutory
reserve</td><td>–</td><td>–</td><td>16,708</td><td>(16,708)</td><td>–</td></tr><tr><td>Dividends approved
in respect of the
previous year</td><td>–</td><td>–</td><td>–</td><td>(1074,36)</td><td>(1074,36)</td></tr><tr><td>Balance at 31
December 2020</td><td>1,074,358</td><td>3161,02</td><td>7812,8</td><td>198,815</td><td>1,6674,03</td></tr></table> |
7570943_20.pdf | en | # (b) Dividends
# (i) Dividends payable to equity shareholder of the Company attributable to the year:
<table><tr><td rowspan="2"></td><td>2020</td><td>2019</td></tr><tr><td>RMB’000</td><td>RMB’000</td></tr><tr><td>Final dividend proposed after the end of
the year of RMB0.12 per ordinary share
(2019: RMB0.1 per ordinary share)</td><td>128,923</td><td>107,436</td></tr></table>
On 24 March 2021, a dividend for the year ended 31 December 2020 of approximately RMB128,923 thousand, representing RMB0.12 per share was proposed by the Board of Directors of the Company. Such dividend is to be approved by the shareholders at the Annual General Meeting of the Company. The final dividend proposed after the end of the reporting period has not been recognised as a liability at the end of the reporting period.
# (ii) Dividends payable to equity shareholder of the Company attributable to the previous financial year, approved and paid during the year:
<table><tr><td rowspan="2"></td><td>2020</td><td>2019</td></tr><tr><td>RMB’000</td><td>RMB’000</td></tr><tr><td>Final dividend in respect of the previous
financial year, approved and paid during
the year</td><td>107,436</td><td>91,320</td></tr></table>
On 17 June 2020, a dividend for the year ended 31 December 2019 of approximately RMB107,436 thousand, representing RMB0.1 per share was approved by the shareholders at the Annual General Meeting of the Company. |
2548718_11.pdf | en | # D. APPOINTMENT AND SUCCESSION PLANNING OF DIRECTORS
The procedures and process of appointment, re-election and removal of Directors are laid down in the code provisions A.4 set out in the Code contained in Appendix 15 of the GEM Listing Rules throughout the year ended 31 March 2018.
Code A.4.1 stipulates that Non-executive Directors should be appointed for a specific term, subject to re-election and Code A.4.2 stipulates that all Directors appointed to fill a casual vacancy should be subject to election by shareholders at the first general meeting after their appointment.
All Independent Non-executive Directors appointed has entered into a letter of appointment with the Company for a term of one year and renewable automatically for successive terms of another year unless terminated by three-month notice in writing served by either party. Pursuant to the Code A.4.2, the Directors, regardless of his/her term of appointment, if any, are subject to retirement by rotation at least once every three years and any new director appointed to fill a casual vacancy is subject to re-election by shareholders at the first general meeting after his/her appointment. The Company in practice will observe Code A.4.2 and will ensure that any new director appointed to fill a casual vacancy shall submit himself/herself for re-election by shareholders at the first general meeting after his/her appointment.
# E. CHAIRMAN AND CHIEF EXECUTIVE
Code A.2.1 stipulates that the roles of Chairman and Chief Executive should be separate and should not be performed by the same individual.
Mr. Shiu Yeuk Yuen is the Chairman and Chief Executive Officer of the Company. In view of the scale of operations of the Company and the fact that daily operations of the Group’s business is delegated to the senior executives and department heads, the Board considers that vesting the roles of both Chairman and Chief Executive Officer in the same person will not impair the balance of power and authority between the Board and the management of the Company. The Board also believes that the current structure provides the Company with strong and consistent leadership and allows for effective and efficient planning and implementation of business decisions and strategies. It is in the best interest of the Group to maintain the current practice for continuous efficient operations and development of the Group.
# F. REMUNERATION COMMITTEE
A remuneration committee (the “Remuneration Committee”), consisting of three Independent Non-executive Directors and two Executive Directors, was set up by the Company in accordance with the Code. The Remuneration Committee has adopted written terms of reference in compliance with Code Provision B.1.3. The primary duties of the Remuneration Committee include the following:
– evaluating the performance and making recommendations to the Board on the remuneration packages of the individual executive directors and senior management;
– making recommendations to the Board on the Company’s policy and structure for all Directors’ and senior management remuneration and on the establishment of a formal and transparent procedure for developing remuneration policy;
– reviewing and approving the management’s remuneration proposals with reference to the board’s corporate goals and objectives.
During the year ended 31 March 2018, the Remuneration Committee held three meetings with presence of all eligible members and reviewed and made recommendations on the remunerations packages of the Directors of the Group. |
2548718_12.pdf | en | None of the Directors participated in the determination of his/her own remuneration. Attendance of the members of the Remuneration Committee is set out below:
<table><tr><td>Name of Directors</td><td>Number of meeting
attended/Number of
meeting held</td></tr><tr><td>Mr. Kam Tik Lun, CPA, FCCA, LL.M (ICFL)</td><td>3/3</td></tr><tr><td>Mr. Shiu Yeuk Yuen</td><td>3/3</td></tr><tr><td>Mr. Leung Ge On, Andy</td><td>3/3</td></tr><tr><td>Dr. Siu Yim Kwan, Sidney, S.B.St.J.</td><td>3/3</td></tr><tr><td>Mr. Ho Siu King, Stanley, BEng (Civ E-Law) (HKU), LLB (HKU) and LLM (LSE)</td><td>3/3</td></tr></table>
# G. AUDIT COMMITTEE
The Company established an Audit Committee with written terms of reference in compliance with the GEM Listing Rules. The primary duties of the Audit Committee are to review the Company’s annual report and financial statements, half-yearly report and quarterly reports and to provide advice and comment thereon to the Board. The Audit Committee is also responsible for reviewing and supervising the financial reporting process and internal control procedures of the Group. Currently, it consists of three Independent Non-executive Directors, Mr. Kam Tik Lun, chairman of the Audit Committee, Dr. Siu Yim Kwan, Sidney and Mr. Ho Siu King, Stanley. Four meetings were held during the financial year ended 31 March 2018. Attendance of the members of the Audit Committee is set out below:
<table><tr><td>Name of Directors</td><td>Number of meeting
attended/Number of
meeting held</td></tr><tr><td>Mr. Kam Tik Lun, CPA, FCCA, LL.M (ICFL)</td><td>4/4</td></tr><tr><td>Dr. Siu Yim Kwan, Sidney, S.B.St.J.</td><td>4/4</td></tr><tr><td>Mr. Ho Siu King, Stanley, BEng (Civ E-Law) (HKU), LLB (HKU) and LLM (LSE)</td><td>4/4</td></tr></table>
The Company’s annual results for the year ended 31 March 2018, have been reviewed by the Audit Committee.
# H. NOMINATION COMMITTEE
A nomination committee (the “Nomination Committee”) consisting of three Independent Non-executive Directors and two Executive Directors was set up by the Company in accordance with the Code. The Nomination Committee has adopted written terms of reference, which have been amended by the Board in compliance with Code Provision A.5.3. The primary duties of the Nomination Committee include:
– reviewing the structure, size and composition (including the skills, knowledge and experience) of the Board at least annually and making recommendations on any proposed changes to the Board to complement the issuer’s corporate strategy;
– identify individuals suitably qualified to become board members and select or make recommendations to the board on the selection of, individuals nominated for directorships;
– reviewing the nomination of Directors and making recommendations to the Board on terms of such appointment;
– assessing the independence of Independent Non-executive Directors.
The Company has adopted a board diversity policy (the “Board Diversity Policy”), which sets out its approach to achieve and maintain diversity on the Board in order to enhance the effectiveness of the Board. |
20792103_230.pdf | en | # 33. OTHER NON-CURRENT LIABILITIES
<table><tr><td rowspan="2"></td><td>2020</td><td>2019</td></tr><tr><td>RMB’000</td><td>RMB’000</td></tr><tr><td>Consideration payable for acquisition of a portfolio of assets
and liabilities (note (a))</td><td>32,881</td><td>42,351</td></tr><tr><td>Payable for mining rights (note (c))</td><td>566,896</td><td>433,677</td></tr><tr><td>Provision for legal claims (note (b))</td><td>8,506</td><td>8,777</td></tr><tr><td>Others</td><td>3,565</td><td>5,601</td></tr><tr><td></td><td>611,848</td><td>490,406</td></tr><tr><td>Less: current portion</td><td>(72,383)</td><td>(65,911)</td></tr><tr><td></td><td>539,465</td><td>424,495</td></tr></table>
(a) On 26 September 2017, SDG Xinhui, Qingdao Pingdu Jinxing Gold Mining Co. Ltd. (“Jinxing”), an independent third party of the Group, and Dazhuangzi Villagers’ Committee of Pingdu Xinhe Town (平度市新河鎮大莊子村民委員會), the former shareholder of Jinxing, entered into an asset reorganisation agreement (the “Agreement”). Pursuant to the Agreement, SDG Xinhui acquired a portfolio of assets and liabilities of Jinxing, including part of the receivables and payables, property, plant and equipment and exploration rights at a total consideration of approximately RMB174,180,000.
During the year ended 31 December 2018, the Group has settled part of consideration of approximately RMB114,180,000 and the remaining non-interest bearing consideration of approximately RMB60,000,000 (the “Remaining Consideration”) will be paid by 8 instalments until 31 January 2026.
As at 31 December 2020, the carrying amount of the Remaining Consideration included as “other non-current liabilities” amounted to approximately RMB32,881,000 (2019: RMB42,351,000) and the current portion of which to be settled within the next twelve months amounted to approximately RMB7,500,000 (2019: RMB7,792,000).
(b) As at 31 December 2020, the provision for legal claim of approximately US\$1,304,000, equivalent to approximately RMB8,506,000 (2019: US\$1,258,000, equivalent to approximately RMB8,777,000) is recognised in connection with certain outstanding labour claims of MAS.
(c) During the year ended 31 December 2020, the Group acquired of a mining right from Shandong Gold Group at a cash consideration of approximately RMB232,863,000 (note 43(a)). Approximately RMB160,656,000 (note 43(a)) has been paid during the year ended 31 December 2020.
During the year ended 31 December 2020, the Group acquired of certain mining rights from independent third parties at a total cash consideration of approximately RMB162,650,000 (2019: RMB533,677,000). |
20792103_231.pdf | en | # 34. DEFERRED TAXATION
The analysis of deferred income tax assets and deferred income tax liabilities is as follows:
<table><tr><td rowspan="2"></td><td>2020</td><td>2019</td></tr><tr><td>RMB’000</td><td>RMB’000</td></tr><tr><td>Deferred income tax assets</td><td>170,877</td><td>130,000</td></tr><tr><td>Deferred income tax liabilities</td><td>(3,928,100)</td><td>(4,262,779)</td></tr><tr><td>Deferred income tax liabilities, net</td><td>(3,757,223)</td><td>(4,132,779)</td></tr></table>
The gross movement on the deferred income tax is as follows:
<table><tr><td rowspan="2"></td><td>2020</td><td>2019</td></tr><tr><td>RMB’000</td><td>RMB’000</td></tr><tr><td>At the beginning of the year</td><td>(4,132,779)</td><td>(4,141,760)</td></tr><tr><td>Credited to profit or loss (note 10)</td><td>226,273</td><td>46,406</td></tr><tr><td>Currency translation differences</td><td>149,283</td><td>(37,425)</td></tr><tr><td>At the end of the year</td><td>(3,757,223)</td><td>(4,132,779)</td></tr></table>
The following are the major deferred tax assets (liabilities) and movements thereon during the current and prior years:
<table><tr><td rowspan="2"></td><td>Property,
plant and
equipment</td><td>Mining and
exploration
rights</td><td>Financial
assets/
liabilities
at fair value
through profit
or loss</td><td> Others</td><td> Total</td></tr><tr><td>RMB’000</td><td> RMB’000</td><td> RMB’000</td><td> RMB’000</td><td> RMB’000</td></tr><tr><td>At 1 January 2019</td><td>(2,124,740)</td><td>(1,934,735)</td><td>(129,951)</td><td>47,666</td><td>(4,141,760)</td></tr><tr><td>Credited (charged) to profit or loss</td><td>116,072</td><td>121,065</td><td>(47,099)</td><td>(143,632)</td><td>46,406</td></tr><tr><td>Currency translation differences</td><td>(36,942)</td><td> –</td><td> –</td><td>(483)</td><td>(37,425)</td></tr><tr><td>At 31 December 2019 and at 1 January 2020</td><td>(2,045,610)</td><td>(1,813,670)</td><td>(177,050)</td><td>(96,449)</td><td>(4,132,779)</td></tr><tr><td>Credited (charged) to profit or loss</td><td>145,478</td><td>231,768</td><td>(45,540)</td><td>(105,433)</td><td>226,273</td></tr><tr><td>Currency translation differences</td><td>142,910</td><td> –</td><td> –</td><td>6,373</td><td>149,283</td></tr><tr><td>At 31 December 2020</td><td>(1,757,222)</td><td>(1,581,902)</td><td>(222,590)</td><td>(195,509)</td><td>(3,757,223)</td></tr></table> |
3444464_100.pdf | en | # Note 19. Debt
Long-term debt was comprised of the following at December 31, 2016 and 2015:
<table><tr><td></td><td>December 31,
2016</td><td>December 31,
2015</td></tr><tr><td>Long-term debt:</td><td></td><td></td></tr><tr><td>Senior secured term loan ........................................</td><td> $ 1,372</td><td> $ 1,493</td></tr><tr><td>Senior unsecured notes:</td><td></td><td></td></tr><tr><td>6.625%, due May 2023 ........................................</td><td>1,158</td><td>1,350</td></tr><tr><td>7.00%, due May 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</td><td>750</td><td>750</td></tr><tr><td>6.125%, due May 2023 (€295 at December 31, 2016;€ 360 at December 31, 2015)</td><td>308</td><td>395</td></tr><tr><td>Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</td><td>3</td><td>26</td></tr><tr><td>Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</td><td>3,591</td><td>4,014</td></tr><tr><td>Less: Unamortized issue discount on senior secured term loan ...............</td><td>5</td><td>7</td></tr><tr><td>Less: Unamortized debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</td><td>42</td><td>53</td></tr><tr><td>Less: Short-term borrowings and current maturities . . . . . . . . . . . . . . . . . . . . . . .</td><td>15</td><td>39</td></tr><tr><td>Long-term debt, net .............................................</td><td> $ 3,529</td><td> $ 3,915</td></tr></table>
# Senior Secured Credit Facilities
On May 12, 2015, Chemours enteredi nto a credit agreement that provides for a seven-year senior secured terml oan (the Term Loan Facility) in a principal amount of \$1,500 repayablei n equal quarterlyi nstallments at a rate of one percent of the original principal amount per year, with the balance payable on the final maturity date. The Term Loan Facility wasi ssued with a \$7 original issue discount and bearsi nterest at a rate of LIBOR plus 3.00%, with a 0.75% LIBOR floor. The proceeds from the Term Loan Facility were used to fund a portion of the distribution to DuPont, along with related fees and expenses.
The credit agreement also provided for a five-year senior secured revolving credit facility (the Revolving Credit Facility), which has been reduced to \$750 as part of the amendment completed on February 19, 2016 (discussed below). The proceeds of anyl oans made under the Revolving Credit Facility can be used for capital expenditures, acquisitions, working capital needs and other general corporate purposes. No borrowings were outstanding under our Revolving Credit Facility but had \$132 and \$129i nl etters of credit issued and outstanding under this facility at December 31, 2016 and 2015, respectively. The Revolving Credit Facility bears variablei nterest of a range based on our total net leverage ratio between (a) 0.50% and 1.25% for base ratel oans and (b) 1.50% and 2.25% for LIBOR loans. The applicable margins were 1.00% for base ratel oans and 2.00% for LIBORl oans as of December 31, 2016 and 1.25% for base ratel oans and 2.25% for LIBORl oans as of December 31, 2015. In addition, we are required to pay a commitment fee on the average daily unused amount of the Revolving Credit Facility at a rate based on our total netl everage ratio, between 0.20% and 0.35%. As of December 31, 2016 and 2015, commitment fees were assessed at a rate of 0.30% and 0.35%, respectively.
In September 2015, in connection with the Company’s transformation plan announcedi n August 2015, Chemours andi ts Revolving Credit Facilityl enders enteredi nto an amendment to the Revolving Credit Facility that modified the consolidated EBITDA definitioni n the covenant calculation toi nclude pro forma benefits from future cost savingsi nitiativesi n the calculation of financial covenants that rely on consolidated EBITDA beginning from the quarter ended September 30, 2015. Since the revolver availabilityi n any quarteri s determined by the cushion remainingi n the financial maintenance covenants at the end of the previous quarter, this amendment increased the Company’s access to the revolving credit facility.
In February 2016, Chemours andi ts Revolving Credit Facilityl enders enteredi nto a second amendment to the Revolving Credit Facility that (a) replaced the total netl everage ratio financial covenant with senior secured netl everage ratio; (b) reduced the minimum required levels of interest expense coverage ratio covenant; (c)i ncreased thel imits and extended the time horizon fori nclusion of pro forma benefits of announced cost reductioni nitiatives into consolidated EBITDA definition for the purposes of calculating financial maintenance covenants; and (d) reduced the revolver availability from \$1,000 to \$750. As a result of this amendment, the Company recorded a charge of approximately \$4 to write off a proportionate amount of unamortized debt issuance costs attributable to the reductioni n revolver commitment, which wasi ncludedi n “Interest expense, net”. |
3444464_101.pdf | en | In December 2016, Chemours enteredi nto a third amendment to the credit agreement to change certain covenants and allow the Company to enter into a sale andl easeback transaction for the sale of its corporate headquarters buildingl ocatedi n Wilmington, Delaware. The amendment requires the Company to use the proceeds from sale to repay portion of the terml oans. These transactions are expected to be completedi n the first quarter of 2017, and the Company expects to receive approximately \$32 proceeds, subject to customary closing adjustments.
Fees and expensesi ncurredi n connection with the amendments were approximately \$3 and \$1 for the years ended December 31, 2016 and 2015, respectively, which were primarily capitalizedi n “Other assets” of the Consolidated Balance Sheets and will be amortized to interest expense on a straight-line basis over the remaining term of the Revolving Credit Facility.
The credit agreement, as amended, contains financial covenants which, solely with respect to the Revolving Credit Facility, require Chemours not to exceed a maximum senior secured netl everage ratio of 3.50 to 1.00 each quarter through December 31, 2016, 3.00 to 1.00 through June 30, 2017 and further decreasing by 0.25 to 1.00 every subsequent six months to 2.00 to 1.00 by January 1, 2019 and thereafter. Chemoursi s also required to maintain a minimumi nterest coverage ratio of 1.75 to 1.00 each quarter through June 30, 2017 and furtheri ncreasing by 0.25 to 1.00 every subsequent six months to 3.00 to 1.00 by January 1, 2019 and thereafter. In addition, the credit agreement contains customary affirmative and negative covenants that, among other things,l imit or restrict Chemours andi ts subsidiaries’ ability, subject to certain exceptions, toi ncurl iens, merge, consolidate or sell, transfer orl ease assets, makei nvestments, pay dividends, transact with subsidiaries andi ncuri ndebtedness. The credit agreement also contains customary representations and warranties and events of default. Chemours wasi n compliance withi ts debt covenants as of December 31, 2016.
Chemours’ obligations under the senior secured credit facilities are guaranteed on a senior secured basis by all of its material domestic subsidiaries, subject to certain agreed upon exceptions. The obligations under the senior secured credit facilities are also, subject to certain agreed upon exceptions, secured by a first priorityl ien on substantially all of Chemours andi ts material wholly-owned domestic subsidiaries’ assets,i ncluding 100% of the stock of domestic subsidiaries and 65% of the stock of certain foreign subsidiaries.
# Senior Unsecured Notes
On May 12, 2015, Chemoursi ssued senior unsecured notes (the “Notes”) with an aggregate principal of approximately \$2,503i n a private placement, which comprise of \$1,350 aggregate principal amount issued at ani nterest rate of 6.625% per annum and will mature on May 15, 2023 (the “2023 Notes”), \$750 aggregate principal amounti ssued at ani nterest rate of 7.000% per annum and will mature on May 15, 2025 (the “2025 Notes”) and €360 aggregate principal amounti ssued at ani nterest rate of 6.125% and will mature on May 15, 2023 (the “Euro Notes”). The Notes require payment of principal at maturity andi nterest semi-annuallyi n cash andi n arrears on May 15 and November 15 of each year.
The proceeds from the Notes were used to fund the cash andi n-kind distributions to DuPont and to pay related fees and expenses. The in-kind distribution to DuPont of \$507 aggregate principal amount of Chemours 2025 Notes were exchanged by DuPont with third parties for certain DuPont notes.
In connection with thei ssuance of the Notes, Chemours enteredi nto a registration rights agreement,i n which Chemours agreed to file with the SEC, a registration statement for the exchange of the Notes for new registered notes withi dentical terms. On March 18, 2016, Chemours filed a registration statement on Form S-4 with respect to the exchange offer. The registration statement was declared effective on April 12, 2016, and the exchange offer was completed on May 19, 2016. In addition, on May 5, 2016, the Euro Notes were listed for trading on the Global Exchange Market of the Irish Stock Exchange.
Each series of Notesi s or will be fully and unconditionally guaranteed, jointly and severally, by Chemours’ existing and future domestic subsidiaries that guarantee (the Guarantors) the Senior Secured Credit Facilities or that guarantee other indebtedness of Chemours or any guarantor in an aggregate principal amount in excess of \$75 (the Guarantees). The Notes are unsecured and unsubordinated obligations of Chemours. The Guarantees are unsecured and unsubordinated obligations of the Guarantors. The Notes rank equallyi n right of payment to all of Chemours’ existing and future unsecured unsubordinated debt and seniori n right of payment to all of Chemours’ existing and future debt thati s byi ts terms expressly subordinatedi n right of payment to the Notes. The Notes are subordinated toi ndebtedness under the Senior Secured Credit Facilities as well as any future secured debt to the extent of the value of the assets securing such debt. Chemours’ is obligated to offer to purchase the Notes at a price of (a) 101 percent of their principal amount, together with accrued and unpaidi nterest, if any, to the date of purchase, upon the occurrence of certain change of control events and (b) 100 percent of their principal amount, together with accrued and unpaidi nterest,i f any, to the date of purchase, with the proceeds from certain asset dispositions. These restrictions and prohibitions are subject to certain qualifications and exceptions set |
11766989_26.pdf | en | # Business Segment Disclosure
See Note 21 to the consolidated financial statements for additional information regarding our business segments.
# Americas
The Americas segment serves customers in the U.S., Canada, the Caribbean Islands and Latin America with a portfolio of integrated architecture, furniture and technology products marketed to corporate, government, healthcare, education and retail customers through the Steelcase, Coalesse, Turnstone, Smith System, AMQ and Orangebox brands.
<table><tr><td rowspan="2">Statement of Operations Data—
Americas</td><td colspan="6">Year Ended</td></tr><tr><td colspan="2">February 22,
2019</td><td colspan="2">February 23,
2018</td><td colspan="2">February 24,
2017</td></tr><tr><td>Revenue</td><td>$ 2,470.2</td><td>100.0%</td><td>$ 2,193.8</td><td>100.0%</td><td>$ 2,231.9</td><td>100.0%</td></tr><tr><td>Cost of sales</td><td>1,673.5</td><td>67.7</td><td>1,450.8</td><td>66.1</td><td>1,456.2</td><td>65.3</td></tr><tr><td>Restructuring costs</td><td>—</td><td>—</td><td>—</td><td>—</td><td>2.6</td><td>0.1</td></tr><tr><td>Gross profit</td><td>796.7</td><td>32.3</td><td>743.0</td><td>33.9</td><td>773.1</td><td>34.6</td></tr><tr><td>Operating expenses</td><td>586.8</td><td>23.8</td><td>561.6</td><td>25.6</td><td>534.2</td><td>23.9</td></tr><tr><td>Operating income</td><td>$ 209.9</td><td>8.5%</td><td>$ 181.4</td><td>8.3%</td><td>$ 238.9</td><td>10.7%</td></tr></table>
<table><tr><td rowspan="2">Organic Revenue Growth (Decline)—Americas</td><td colspan="2">Year Ended</td></tr><tr><td>February 22,
2019</td><td>February 23,
2018</td></tr><tr><td>Prior year revenue</td><td>$ 2,193.8</td><td>$ 2,231.9</td></tr><tr><td>Acquisitions</td><td>84.4</td><td>4.5</td></tr><tr><td>Divestiture</td><td>(13.6)</td><td>(8.3)</td></tr><tr><td>Currency translati*on effects</td><td>(2.3)</td><td>2.0</td></tr><tr><td> Prior year revenue, adjusted</td><td>2,262.3</td><td>2,230.1</td></tr><tr><td>Current year revenue</td><td>2,470.2</td><td>2,193.8</td></tr><tr><td>Organic growth (decline) $</td><td>$ 207.9</td><td>$ (36.3)</td></tr><tr><td>Organic growth (decline) %</td><td>9%</td><td>(2)%</td></tr></table>
\* Currency translation effects represent the net effect of translating prior year foreign currency revenues using the average exchange rate on a monthly basis during the current year.
# 2019 compared to 2018
Operating income in the Americas increased by \$28.5 in 2019 compared to the prior year. The comparison was negatively impacted by \$8.4 related to the pension charge and favorably impacted by a \$5.0 gain on the sale of property, net of the related variable compensation effects. The increase in 2019 operating income was driven by higher revenue and lower operating expenses as a percentage of revenue, partially offset by higher cost of sales as a percentage of revenue.
The Americas revenue represented 71.7% of consolidated revenue in 2019. Revenue for 2019 of \$2,470.2 represented an increase of \$276.4 or 13% compared to 2018. The growth in 2019 was driven primarily by overall industry growth and increased project opportunities, improvements in our competitive win rates, recent acquisitions and benefits from recent list price adjustments. After adjusting for an \$84.4 year-over-year impact of acquisitions, a\$13.6 unfavorable impact of a divestiture and \$2.3 of unfavorable currency translation effects, the organic revenue growth in 2019 was \$207.9 or 9% compared to the prior year. |
11766989_27.pdf | en | Cost of sales in 2019 was 67.7% of revenue which compared to 66.1% of revenue in 2018. Cost of sales as a percentage of revenue increased by 160 basis compared to the prior year, with 40 basis points attributable to the pension charge. The year-over-year comparison reflected the following:
• unfavorable shifts in business mix,
• approximately \$43 of higher commodity, freight and labor (other than annual merit increases) costs, partially offset by approximately \$32 of benefits from pricing actions,
• approximately \$9 of benefits associated with cost reduction efforts, net of additional overhead investments and annual merit labor cost increases, and
• higher absorption of fixed costs.
Operating expenses in 2019 increased by \$25.2, but decreased 180 basis points as a percentage of revenue, compared to the prior year. The increase was due to \$27.2 from acquisitions (including \$9.4 of amortization expense), net of a divestiture and \$8.9 of higher variable compensation expense, partially offset by a \$7.5 gain on the sale of property, \$3.7 of lower severance costs and \$2.6 of lower product development expenses.
# 2018 compared to 2017
Operating income in the Americas decreased by \$57.5 in 2018 compared to the prior year. The decline was driven by lower sales volume, higher cost of sales as a percentage of revenue and higher operating expenses.
The Americas revenue represented 71.8% of consolidated revenue in 2018. Revenue for 2018 of \$2,193.8 represented a decrease of \$38.1 or 2% compared to 2017, reflecting ongoing shifts in demand patterns. The decrease in revenue was driven by subdued demand from large customers. Growth from our new products and solutions was partially offset by a decline in demand for legacy furniture applications. After adjusting for an \$8.3 unfavorable impact of a divestiture, a \$4.5 impact of an acquisition and \$2.0 of favorable currency translation effects, the organic revenue decline in 2018 was \$36.3 or 2% compared to the prior year.
Cost of sales in 2018 was 66.1% of revenue which compared to 65.3% of revenue in 2017. The year-over-year comparison reflected the following:
• approximately \$10 of higher commodity costs,
• higher investments in support of product development and manufacturing agility,
• unfavorable shifts in business mix,
• approximately \$17 of benefits associated with ongoing cost reduction efforts,
• favorability related to improvements in negotiated customer pricing, and
• approximately \$5 of lower warranty costs compared to the prior year.
Operating expenses in 2018 increased by \$27.4, or 170 basis points as a percentage of revenue, compared to the prior year. The increase was driven by approximately \$34 of higher investments in product development, sales, marketing and information technology that support our growth strategies, \$3.8 of severance costs in 2018 and a \$1.5 impairment related to an asset held for sale, partially offset by approximately \$9 of lower variable compensation expense. |
11707394_133.pdf | en | # 44. PARTLY-OWNED SUBSIDIARY WITH MATERIAL NON-CONTROLLING INTERESTS (CONTINUED)
Details of the Group’s subsidiaries that have material non-controlling interests are set out below: (Continued)
# (ii) Parkway
<table><tr><td></td><td>2021</td><td>2020</td></tr><tr><td>Percentage of equity interest held by non-controlling
interest of Parkway:</td><td>30%</td><td>30%</td></tr></table>
The following table illustrates the summarised financial information of Parkway. The amounts disclosed are before any inter-company eliminations:
<table><tr><td rowspan="2"></td><td>2021</td><td>2020</td></tr><tr><td>HK$’000</td><td>HK$’000</td></tr><tr><td>Total expenses for the year</td><td>(301)</td><td>(5,059)</td></tr><tr><td>Loss for the year</td><td>(301)</td><td>(3,732)</td></tr><tr><td>Total comprehensive loss for the year</td><td>(301)</td><td>(3,732)</td></tr><tr><td>Loss for the year allocated to non-controlling
interest of Parkway</td><td>(90)</td><td>(1,120)</td></tr><tr><td>Current assets</td><td>287</td><td>391</td></tr><tr><td>Non-current assets</td><td>–</td><td>171</td></tr><tr><td>Current liabilities</td><td>(2,266)</td><td>(2,356)</td></tr><tr><td>Non-current liabilities</td><td>(2,231)</td><td>(2,115)</td></tr><tr><td>Net liabilities</td><td>(4,210)</td><td>(3,909)</td></tr><tr><td>Accumulated loss of non-controlling interest of
Parkway at the reporting date</td><td>(1,920)</td><td>(1,830)</td></tr><tr><td>Net cash flows generated from operating activities</td><td>83</td><td>41</td></tr><tr><td>Net increase in cash and cash equivalents</td><td>83</td><td>41</td></tr></table> |
11707394_134.pdf | en | # 45. INTERESTS IN SUBSIDIARIES
Particulars of the subsidiaries as at 30 June 2021 and 2020 are as follows:
<table><tr><td>Name of subsidiary</td><td>Place of
incorporation/
registration/
operations</td><td>Issued and
fully paid
share capital</td><td colspan="2">Percentage of
ownership interest</td><td>Principal activities</td></tr><tr><td></td><td></td><td></td><td>2021</td><td>2020</td><td></td></tr><tr><td>New Smart International Creation
Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Production and
distribution of film</td></tr><tr><td>Champion Peak Corporation Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Production of film</td></tr><tr><td>China 3D Digital Products Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Production of film</td></tr><tr><td>Eastern Master Corporation Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Production of film</td></tr><tr><td>Fantastic Union Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Production of film</td></tr><tr><td>Good Lead Corporation Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Production of film</td></tr><tr><td>Good Time Investment Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Production of film</td></tr><tr><td>Joyful Excellence Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Production of film</td></tr><tr><td>Go Up Zone Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Production of film</td></tr><tr><td>New Modern Corporation Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Production of film</td></tr><tr><td>New Noble Corporation Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Production of film</td></tr><tr><td>New Pioneer Corporation Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Production of film</td></tr><tr><td>Cream Digital Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Production of film</td></tr><tr><td>Source Hunter Corporation Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Production of film</td></tr><tr><td>China 3D Digital Distribution Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Distribution of films</td></tr><tr><td>Red Rich Investment Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Distribution of films</td></tr><tr><td>Smooth Success Development
Limited</td><td>Hong Kong</td><td>HK$1</td><td>100%</td><td>100%</td><td>Distribution of films</td></tr></table> |
9280341_24.pdf | en | # 11. TOTAL DISTRIBUTABLE INCOME
Total distributable income is the (loss) profit for the period, before distribution to unitholders as adjusted to eliminate the effects of Adjustments (as defined and set out in the Trust Deed) which have been recorded in the condensed consolidated income statement for the relevant period. The Adjustments to arrive at total distributable income for the period are set out below:
<table><tr><td rowspan="2"></td><td>2020</td><td>2019</td></tr><tr><td>HK$'000
(unaudited)</td><td>HK$'000
(unaudited)</td></tr><tr><td>(Loss) profit for the period, before distribution to unitholders</td><td>(8,491,803)</td><td>3,186,527</td></tr><tr><td>Adjustments:</td><td></td><td></td></tr><tr><td>M'anagers fees payable in units</td><td>71,660</td><td>75,757</td></tr><tr><td>Decrease (increase) in fair value of investment properties</td><td>9,172,565</td><td>(2,455,700)</td></tr><tr><td>Fair value changes on financial assets at fair value
through profit or loss</td><td>1,939</td><td>-</td></tr><tr><td>Non-cash finance costs</td><td>12,434</td><td>20,955</td></tr><tr><td>Deferred tax</td><td>37,277</td><td>41,384</td></tr><tr><td>Total distributable income</td><td>804,072</td><td>868,923</td></tr></table>
# 12. DISTRIBUTION STATEMENT
<table><tr><td rowspan="2"></td><td>2020</td><td>2019</td></tr><tr><td>HK$'000
(unaudited)</td><td>HK$'000
(unaudited)</td></tr><tr><td>Total distributable income (note 11)</td><td>804,072</td><td>868,923</td></tr><tr><td>Percentage of distributable income for distribution (note (i))</td><td>90%</td><td>90%</td></tr><tr><td>Total distribution amount to be paid</td><td>723,665</td><td>782,031</td></tr><tr><td>Distribution per unit to unitholders (note (ii))</td><td>HK$0.1229</td><td>HK$0.1332</td></tr></table>
Notes:
(i) It is the policy of the Manager to distribute 90% (six months ended 30 June 2019: 90%) of available distributable income as the distributions for the six months ended 30 June 2020 (the "Interim Distribution Period").
(ii) The interim distribution per unit of HK\$0.1229 for the six months ended 30 June 2020 is calculated based on the interim distribution to be paid of HK\$723,665,000 for the period and 5,888,833,523 units in issue as at 30 June 2020. Such interim distribution will be subject to further adjustments upon the issuance of units on or before 25 September 2020, which is the record date set for such period. The interim distribution will be paid to unitholders on 9 October 2020.
The interim distribution per unit of HK\$0.1332 for the six months ended 30 June 2019 was calculated based on the interim distribution paid of HK\$782,031,000 for the period and 5,872,789,311 units as of 20 September 2019, which was the record date for the period. The interim distribution was paid to unitholders on 4 October 2019. |
9280341_25.pdf | en | # 13. BASIC (LOSS) EARNINGS PER UNIT
The basic (loss) earnings per unit during the six months ended 30 June 2020 is calculated by dividing the loss for the period before distribution to unitholders of HK\$8,491,803,000 (2019: profit for the period before distribution to unitholders of HK\$3,186,527,000) by the weighted average number of units of 5,892,170,575 (2019: 5,860,193,423) in issue during the period, taking into account the units issuable as manager's fee for its service for each of the six months ended 30 June 2020 and 2019.
There were no diluted potential units in issue during the six months ended 30 June 2020 and 2019, therefore the diluted earnings per unit has not been presented.
# 14. TRADE AND OTHER RECEIVABLES
<table><tr><td rowspan="2"></td><td>At
30 June
2020</td><td>At
31 December
2019</td></tr><tr><td>HK$'000
(unaudited)</td><td>HK$'000
(audited)</td></tr><tr><td>Trade receivables</td><td>37,322</td><td>10,467</td></tr><tr><td>Deferred lease receivables</td><td>183,545</td><td>166,052</td></tr><tr><td>Deposits, prepayments and other receivables</td><td>81,466</td><td>82,845</td></tr><tr><td></td><td>302,333</td><td>259,364</td></tr></table>
Aging analysis of the Group's trade receivables presented based on the invoice date at the end of the reporting period is as follows:
<table><tr><td rowspan="2"></td><td>At
30 June
2020</td><td>At
31 December
2019</td></tr><tr><td>HK$'000
(unaudited)</td><td>HK$'000
(audited)</td></tr><tr><td>0 - 3 months</td><td>30,838</td><td>10,467</td></tr><tr><td>3 - 6 months</td><td>4,179</td><td>-</td></tr><tr><td>Over 6 months</td><td>2,305</td><td>-</td></tr><tr><td></td><td>37,322</td><td>10,467</td></tr></table> |
9324296_242.pdf | en | # Six months ended 30 June 2010 compared to six months ended 30 June 2009
Turnover. Our turnover increased by 53.0% from RMB 2,045.0 million for the six months ended 30 June 2009 to RMB 3,127.9 million for the six months ended 30 June 2010, primarily due to an increase in sales of new automobiles by 55.8% from RMB 1,723.1 million for the six months ended 30 June 2009 to RMB 2,684.6 million for the six months ended 30 June 2010.
Turnover increased by 90.2% from sales of premium and ultra premium branded automobiles from RMB 871.0 million for the six months ended 30 June 2009 to RMB 1,656.3 million for the six months ended 30 June 2010. We attribute this increase primarily to the growth of the PRC premium and ultra premium brands market in general, the continued expansion of our dealership operations, particularly our sales from two new BMW dealership stores in Baotou and Beijing that commenced operations in February and June 2010 respectively and one Porsche dealership store in Dongguan that commenced operation in May 2010, as well as the continued ramp-up of two BMW dealership stores in Nanchang and Zhuhai that commenced operations in October 2008 and March 2009 respectively. The three new dealership stores in Baotou, Beijing and Dongguan generated RMB 213.1 million in sales for the six months ended 30 June 2010. The BMW dealership stores in Nanchang and Zhuhai generated RMB 230.7 million in sales for the six months ended 30 June 2010, compared to RMB 67.6 million for the six months ended 30 June 2009. The increase in turnover from sales of premium and ultra premium branded automobiles was also attributable to the increased sales volumes as well as the average sales prices of our premium and ultra premium branded automobiles as we adjusted our sales strategies to market and sell higher-priced models of premium and ultra premium branded automobiles that were introduced by automobile manufacturers. Turnover from sales of middle market automobiles increased by 20.7% from RMB 852.1 million for the six months ended 30 June 2009 to RMB 1,028.4 million for the six months ended 30 June 2010, primarily due to the growth of the overall PRC automobile market and the continued expansion of our dealership operations, particularly our sales from one new middle market brand dealership store in Inner Mongolia that commenced operations in March 2010. The dealership store in Inner Mongolia generated RMB 29.0 million in sales for the six months ended 30 June 2010. Turnover from sales of new automobiles also increased as a result of the growth of the overall PRC automobile market. According to ACMR, sales values of automobiles increased by 49.6% from the six months ended 30 June 2009 to the six months ended 30 June 2010.
In addition, turnover from provision of after-sales services increased by 45.7% from RMB 166.7 million for the six months ended 30 June 2009 to RMB 242.9 million for the six months ended 30 June 2010, which was primarily attributable to our expanded customer base and our adjustments in sales strategies for automobile accessories to offer expanded range of selection and higher priced products. Turnover from provision of logistics services and sales of lubricant oil increased by 29.1% from RMB 155.2 million to RMB 200.4 million, which was primarily due to the increase in demand from our customers as a result of the increased sales of automobiles.
Cost of sales. Our cost of sales increased by 50.0% from RMB 1,892.3 million for the six months ended 30 June 2009 to RMB 2,838.7 million for the six months ended 30 June 2010. This increase was due primarily to the increase in cost of sales for new automobiles, which increased by 52.1% from RMB 1,667.7 million to RMB 2,536.6 million for the same period as our sales of new automobiles increased. |
9324296_243.pdf | en | Cost of sales increased by 83.6% from RMB 843.7 million for the six months ended 30 June 2009 to RMB 1,549.0 million for the six months ended 30 June 2010 for premium branded automobiles and increased by 19.8% from RMB 824.1 million to RMB 987.6 million for middle market branded automobiles in the same period. The increase in cost of sales of new automobiles was generally in line with the increased turnover from sales of new automobiles. The increase in our cost of sales was also due in part to an increase in cost of sales of after-sales services, which increased by 37.7% from RMB 102.9 million to RMB 141.7 million during the same period, and was generally in line with the increased turnover from after-sales services. In addition, our cost of sales of our logistics services and lubricant oil trading business increased by 31.8% from RMB 121.7 million to RMB 160.4 million during the same period, which was generally in line with the increased turnover from our logistics services and lubricant oil trading business.
Gross profit. Our gross profit increased by 89.4% from RMB 152.7 million for the six months ended 30 June 2009 to RMB 289.2 million for the six months ended 30 June 2010.
Gross profit from our dealership business increased from RMB 119.2 million for the six months ended 30 June 2009 to RMB 249.2 million for the six months ended 30 June 2010, primarily due to an increase in gross profit from sales of new automobiles. Gross profit from sales of premium and ultra premium branded automobiles increased from RMB 27.4 million to RMB 107.2 million for the same period and gross profit from sales of middle market branded automobiles increased from RMB 28.0 million to RMB 40.8 million for the same period. In addition, gross profit from after-sales services increased from RMB 63.8 million to RMB 101.2 million in the same period.
Gross profit from our logistics services and lubricant oil trading business increased from RMB 33.5 million to RMB 40.0 million in the same period.
Our gross margin increased from 7.5% for the six months ended 30 June 2009 to 9.2% for the six months ended 30 June 2010. This increase was primarily due to the increased proportion of our sales of premium and ultra premium branded automobiles, which generally have higher gross margin than sales of middle market branded automobiles, as well as increased sales of higher priced premium branded automobile models and accessories which have higher margins as a result of our adjustments in the sales strategies.
Other revenue and other net income. Our other revenue and other net income increased by 82.7% from RMB 12.7 million for the six months ended 30 June 2009 to RMB 23.2 million for the six months ended 30 June 2010, primarily due to the increase in our commission income received from financial institutions and insurance companies as we brokered more loans and insurance policies in connection with our increased sales of new automobiles. In addition, interest income from bank deposits also increased as a result of the increased balance of our pledged bank deposits. |
20735750_74.pdf | en | We communicate with Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with Audit Committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Ng Ping Fai.
PricewaterhouseCoopers
Certified Public Accountants
Hong Kong, 22 November 2017 |
20735750_75.pdf | en | <table><tr><td></td><td></td><td colspan="2">Year ended 31 August</td></tr><tr><td></td><td>Note</td><td>2017</td><td>2016</td></tr><tr><td></td><td></td><td>RMB’000</td><td>RMB’000</td></tr><tr><td>Revenue</td><td>5</td><td>846,222</td><td>781,331</td></tr><tr><td>Cost of revenue</td><td>8</td><td>(410,464)</td><td>(375,133)</td></tr><tr><td>Gross profit</td><td></td><td>435,758</td><td>406,198</td></tr><tr><td>Selling expenses</td><td>8</td><td>(3,755)</td><td>(4,196)</td></tr><tr><td>Administrative expenses</td><td>8</td><td>(147,203)</td><td>(70,421)</td></tr><tr><td>Other income</td><td>6</td><td>22,870</td><td>6,442</td></tr><tr><td>Other gains/(losses) — net</td><td>7</td><td>1,060</td><td>(337)</td></tr><tr><td>Operating profit</td><td></td><td>308,730</td><td>337,686</td></tr><tr><td>Finance income</td><td>10</td><td>15,527</td><td>1,376</td></tr><tr><td>Finance expenses</td><td>10</td><td>(10,456)</td><td>(27,386)</td></tr><tr><td>Finance income/(expenses) — net</td><td></td><td>5,071</td><td>(26,010)</td></tr><tr><td>Profit before income tax</td><td></td><td>313,801</td><td>311,676</td></tr><tr><td>Income tax expense</td><td>11</td><td>—</td><td>—</td></tr><tr><td>Profit attributable to equity holders of the Company</td><td></td><td>313,801</td><td>311,676</td></tr><tr><td>Earnings per share attributable to equity holders
of the Company (RMB Yuan)</td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>12</td><td>0.12</td><td>0.14</td></tr><tr><td>Diluted</td><td>12</td><td>0.12</td><td>0.14</td></tr></table> |
9313970_167.pdf | en | abovementioned. Accordingly, our Directors are of the view that, it is expected that the downward fluctuations, if any, in number of SMILE surgeries conducted should stabilize gradually and will not have material adverse impact on our Group’s operation and financial performance.
Revenue generated from treatment for other eye problems had increased during the Track Record Period, from approximately HK\$36.3 million for the year ended 31 March 2019 to approximately HK\$36.8 million which for the year ended 31 March 2020 which was generally consistent with an increase in total number of patient visits, and then further increased to HK\$44.8 million for the year ended 31 March 2021 which was mainly due to the increase in revenue recorded for our standard cataract surgeries and laser procedures. Revenue generated from treatment for other eye problems had increased during the Track Record Period, from approximately HK\$12.3 million for the four months ended 31 July 2020 to approximately HK\$22.1 million for the four months ended 31 July 2021, which was mainly due to the increase in revenue recorded for each of our standard cataract surgeries, laser procedures, PPV surgeries and other treatments/surgeries. As the majority of our Medical Practitioners had been providing ophthalmic services under our brand ‘‘Clarity’’ for more than three years, we were able to build up our patient base by word-of-mouth referrals from existing patients and as a result, our Directors are of the view that it had contributed to the increase in revenue generated from treatments for other eye problems during the four months ended 31 July 2021.
Revenue generated from our consultation and examination service decreased from approximately HK\$9.2 million for the year ended 31 March 2019 to HK\$8.5 million for the year ended 31 March 2020 and had subsequently increased to HK\$9.1 million for the year ended 31 March 2021. Revenue generated from the sales of prescription remained relatively stable during the Track Record Period, which amounted to approximately HK\$6.3 million, HK\$6.2 million and HK\$6.9 million, respectively. Revenue generated from our consultation and examination service increased from approximately HK\$2.7 million for the four months ended 31 July 2020 to HK\$3.8 million for the four months ended 31 July 2021 which was mainly due to the growth of member of patient visits. Revenue generated from the sales of prescription increased by approximately HK\$0.8 million, or 39.4%, from approximately HK\$2.0 million for the four months ended 31 July 2020 to HK\$2.8 million for the four months ended 31 July 2021. The increase in revenue generated from sales of prescriptions and others was generally in line with our overall increase in consultation and examination services provided during the period.
The table below sets forth the breakdown of our revenue by refractive treatments for the Track Record Period:
<table><tr><td rowspan="4"></td><td colspan="6">For the year ended 31 March</td><td colspan="4"> For the four months ended 31 July</td></tr><tr><td colspan="2">2019</td><td colspan="2">2020</td><td colspan="2">2021</td><td colspan="2">2020</td><td colspan="2">2021</td></tr><tr><td>HK$’000</td><td>%</td><td> HK$’000</td><td>%</td><td> HK$’000</td><td>%</td><td> HK$’000</td><td>%</td><td> HK$’000</td><td>%</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="2">(Unaudited)</td><td></td><td></td></tr><tr><td>Refractive treatments</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>(a) SMILE surgeries</td><td>97,822</td><td>63.2</td><td>112,424</td><td>67.4</td><td>100,104</td><td>61.9</td><td>29,786</td><td>61.4</td><td>26,964</td><td>54.6</td></tr><tr><td>(b) LASIK surgeries</td><td>2,735</td><td>1.8</td><td>2.808</td><td>1.7</td><td>3,654</td><td>2.3</td><td>1,067</td><td>2.3</td><td>1,119</td><td>2.2</td></tr><tr><td>(c) Multifocal IOL relpacements</td><td>49,227</td><td>31.8</td><td>43,343</td><td>26.0</td><td>49,064</td><td>30.3</td><td>14,962</td><td>30.9</td><td>17,833</td><td>35.6</td></tr><tr><td>(d) ICL imlpantations</td><td>4,970</td><td>3.2</td><td>8,226</td><td>4.9</td><td>8,846</td><td>5.5</td><td>2,660</td><td>5.4</td><td>3,760</td><td>7.6</td></tr><tr><td>Total</td><td>154,754</td><td>100.0</td><td>166,801</td><td>100.0</td><td>161,668</td><td>100.0</td><td>48,475</td><td>100.0</td><td>49,676</td><td>100.0</td></tr></table> |
9313970_168.pdf | en | The table below sets forth the breakdown of our revenue by treatments for other eye problems for the Track Record Period:
<table><tr><td rowspan="4"></td><td colspan="6">For the year ended 31 March</td><td colspan="4"> For the four months ended 31 July</td></tr><tr><td colspan="2">2019</td><td colspan="2">2020</td><td colspan="2">2021</td><td colspan="2">2020</td><td colspan="2">2021</td></tr><tr><td>HK$’000</td><td>%</td><td> HK$’000</td><td>%</td><td> HK$’000</td><td>%</td><td> HK$’000</td><td>%</td><td> HK$’000</td><td>%</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="2">(Unaudited)</td><td></td><td></td></tr><tr><td>Treatments for other eye problems</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>(a) Standard cataract surgeries</td><td>16,826</td><td>46.4</td><td>16,326</td><td>44.3</td><td>18,658</td><td>41.7</td><td>5,482</td><td>44.7</td><td>6,453</td><td>36.4</td></tr><tr><td>(b) Laser procedures</td><td>8,151</td><td>22.4</td><td>7,364</td><td>20.0</td><td>10,302</td><td>23.0</td><td>2,801</td><td>27.8</td><td>5,424</td><td>24.5</td></tr><tr><td>(c) PPV surgeries</td><td>7,246</td><td>20.0</td><td>8,795</td><td>23.9</td><td>10,369</td><td>23.2</td><td>2,619</td><td>21.0</td><td>6,799</td><td>29.2</td></tr><tr><td>(d) Other treatments/ surgeries</td><td>4,060</td><td>11.2</td><td>4,356</td><td>11.8</td><td>5,422</td><td>12.1</td><td>1,359</td><td>11.5</td><td>3,421</td><td>9.9</td></tr><tr><td>Total</td><td>36,283</td><td>100.0</td><td>36,841</td><td>100.0</td><td>44,751</td><td>100.0</td><td>12,261</td><td>100.0</td><td>22,097</td><td>100.0</td></tr></table>
# Consultation and Examination Services
We provide medical consultation and examination services to our patients through our Medical Practitioners and optometrists, with support from our registered and enrolled nurses and/or nursing staff. Consultation and examination services mainly include assessments on eye conditions, such as visual acuity, refraction, anterior segment examination, fundal examination and intraocular pressure measurement. After the completion of consultation, examination and diagnosis based on our patients’ specific conditions, needs and concerns, Medication may be prescribed and/or treatments may be recommended to the patients by our Medical Practitioners. Follow-up consultation and examination services may be provided depending on the condition of the patients after taking the recommended Medication and/or completion of treatment.
# Treatment Services
We provide a range of ophthalmic treatments at our Surgery Centres or in the Private Hospitals, depending on the complexity of the treatment, the need of general anaesthesia and/or the choice of our patients. Treatment services may be recommended to our patients after the diagnosis through consultation and examination, taking into consideration a number of factors, in particular, the age and condition of the patient, the safety, effectiveness, risks and possible side-effects of the relevant treatment. One or more types of treatments may be recommended, depending on patients’ eye problems. Our Medical Practitioners will explain to patients the associated benefits and potential risks of each recommended treatment and any alternative treatment choices. We record the details of patients’ drug allergy information into our Medical Centre Management System and arrange relevant checks to ascertain the degree of myopia or hyperopia, or the curvature of corneas, before the provision of treatment services. All our patients are required to sign an operation consent form in the presence of the responsible Medical Practitioner and at least one nursing staff. Our treatment services are performed by our Medical Practitioners with assistance from frontline staff. |
11686939_412.pdf | en | # XV. Notes to Key Items of the Company Financial Statements (Continued)
# 6. Investment income/(loss)
十五、公司主要財務報表項目註釋（續）
6. 投資收益╱（損失）
RMB
人民幣元
<table><tr><td>Item 項目</td><td>Incurred during
the year
本年發生額</td><td>Incurred in
previous year
上年發生額</td></tr><tr><td>Gain on long-term equity investments under 權益法核算的長期股權
the equity method 投資收益</td><td>112,997,281.78</td><td>109,875,033.76</td></tr><tr><td>Investment income arising from disposal of 處置長期股權投資產生的
long-term equity investments 投資收益</td><td>(2,344,493,792.76)</td><td>74,160,285.25</td></tr><tr><td>Gain on long-term equity investments under 成本法核算的長期股權
the cost method 投資收益</td><td>1,097,259,790.25</td><td>1,080,565,077.90</td></tr><tr><td>Other 其他</td><td>4,159,314.24</td><td>–</td></tr><tr><td>Total 合計</td><td>(1,130,077,406.49)</td><td>1,264,600,396.91</td></tr></table> |
11686939_413.pdf | en | # XV. Notes to Key Items of the Company Financial Statements (Continued)
# 7. Supplement to cash flow statement
十五、公司主要財務報表項目註釋（續）
7. 現金流量表補充資料
RMB
人民幣元
<table><tr><td>Item 項目</td><td>Incurred during
the year
本年發生額</td><td>Incurred in
previous year
上年發生額</td></tr><tr><td>Net profit 淨利潤</td><td>6,565,148,557.00</td><td>7,359,913,863.60</td></tr><tr><td>Add: Impairment loss of assets 加：資產減值損失</td><td>1,961,966.02</td><td>351,958,827.88</td></tr><tr><td>Impairment gain of credit 信用減值利得</td><td>(1,404,072.48)</td><td>(34,059,926.00)</td></tr><tr><td>Increase in special reserve 專項儲備的增加</td><td>22,218,884.94</td><td>20,031,981.23</td></tr><tr><td>Depreciation of fixed assets and 固定資產及投資性
investment properties 房地產折舊</td><td>811,862,399.51</td><td>601,008,663.22</td></tr><tr><td>Amortization of intangible assets 無形資產攤銷</td><td>19,100,027.48</td><td>8,315,630.37</td></tr><tr><td>Losses (gains) on disposal of fixed 處置或報廢固定資產、
assets, intangible assets and 無形資產和其他
other long-term assets 長期資產的損失（收益）</td><td>(20,413,802.94)</td><td>3,472,164.55</td></tr><tr><td>Finance expenses 財務費用</td><td>(526,532.67)</td><td>3,439,623.10</td></tr><tr><td>Investment loss (income) 投資損失（收益）</td><td>1,130,077,406.49</td><td>(1,264,600,396.91)</td></tr><tr><td>Profit or loss on change of fair value 公允價值變動損益</td><td>(64,160,277.02)</td><td>–</td></tr><tr><td>Increase in deferred tax assets 遞延所得稅資產的增加</td><td>(444,742,582.70)</td><td>(30,320,212.07)</td></tr><tr><td>Increase in deferred tax liabilities 遞延所得稅負債的增加</td><td>6,653,805.68</td><td>–</td></tr><tr><td>Increase in inventories 存貨的增加</td><td>(1,200,231,375.10)</td><td>(1,172,939,628.20)</td></tr><tr><td>(Increase) decrease in operating 經營性應收項目的
receivables （增加）減少</td><td>(2,859,763,693.10)</td><td>1,850,840,404.39</td></tr><tr><td>Increase in operating payables 經營性應付項目的增加</td><td>7,251,942,122.41</td><td>5,190,664,425.45</td></tr><tr><td>Net cash flow from operating activities 經營活動產生的現金流量淨額</td><td>11,217,722,833.52</td><td>12,887,725,420.61</td></tr></table> |
9297688_1.pdf | en | # TABLE OF CONTENTS
<table><tr><td>APPROACH</td><td>2</td></tr><tr><td>ABOUT THIS REPORT</td><td>3</td></tr><tr><td>ABOUT GAMEONE</td><td>5</td></tr><tr><td>OUR STAKEHOLDERS</td><td>6</td></tr><tr><td>ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT</td><td>7</td></tr><tr><td>SECTION A: ENVIRONMENTAL</td><td>7</td></tr><tr><td>Emissions</td><td>7</td></tr><tr><td>Use of Resources</td><td>9</td></tr><tr><td>The Environmental and Natural Resources</td><td>10</td></tr><tr><td>SECTION B: SOCIAL</td><td>11</td></tr><tr><td>Employment</td><td>11</td></tr><tr><td>Health and Safety</td><td>12</td></tr><tr><td>Development and Training</td><td>13</td></tr><tr><td>Labour Standard</td><td>13</td></tr><tr><td>Supply Chain Management</td><td>13</td></tr><tr><td>Product Responsibility</td><td>14</td></tr><tr><td>Anti-corruption</td><td>16</td></tr><tr><td>Community investment</td><td>16</td></tr><tr><td>ENVIRONMENTAL DATA</td><td>17</td></tr><tr><td>SOCIAL DATA</td><td>19</td></tr></table> |
9297688_2.pdf | en | # APPROACH
Gameone Holdings Limited (hereafter called “Gameone” or the “Company”) and its subsidiaries (collectively, the “Group” or “we”) are committed to improving business performance to maximize stakeholders’ value without compromising the environmental and social aspect, in the hope that it can bring positive impact on both the Group and the community. Aiming to be the market leader in Hong Kong and Taiwan mobile game industry, the Group focuses on developing a wide game product portfolio, ranging from self/co-developed to licensed games as well as leveraging third-party distribution platforms to enrich customer base. The strong relationship with renowned game developers and operators contributed to the success of the business.
We always thrive for meeting the expectation of our stakeholders. Our main stakeholders, including customers, potential investors and shareholders, employees, suppliers, non-governmental organizations (“NGOs”) and local community, post significant impact on the Group’s daily operations. Building on the insight gained from the stakeholders, we roll out a sustainability strategy, management and reporting system.
We constantly hope to mitigate emerging risks and explore new business opportunities. Riding on the current mobile game trend, we are hoping to refine our products to meet the escalating customers’ needs.
To implement sustainability strategies which apply to all levels of the Group, the top-down approach is adopted for the following sustainability strategies:
1. To minimize the burden on the environment
2. To identify and priorities the environmental and social issues
3. To foster the innovative culture
4. To respond to the crisis and market changes in a timely manner
5. To safeguard human rights and social culture
6. To actively engage stakeholders in the decision-making process
7. To nurture and empower our employees
8. To support the local community
Hard work lies ahead as we continue to grow and operate sustainably, yet, together as a whole, there is nothing to stop us reaching more milestones. |
20787494_184.pdf | en | # 29. TRADE AND OTHER RECEIVABLES (CONT’D)
Impairment loss on trade receivables, term loans and other receivables is recognised in profit or loss after review by the management of the relevant group companies, based on the latest status of trade receivables, term loans and other receivables, and the latest announced or available information about the underlying collateral held.
The following is an aged analysis of the trade and other receivables that were past due at the end of the reporting period but not impaired:
29. 貿易及其他應收款項（續）
經相關集團公司之管理層審視應收貿易賬款、有期貸款及其他應收款項的情況後（根據應收貿易賬項、有期貸款及其他應收款項的最新情況及最新公佈或得到的有關抵押品的資料）之減值虧損於損益中確認。
以下為於報告期末之已逾期但無減值之貿易及其他應收款項之賬齡分析：
<table><tr><td rowspan="2"></td><td>2016
二零一六年</td><td>2015
二零一五年</td></tr><tr><td>HK$ Million
百萬港元</td><td>HK$ Million
百萬港元</td></tr><tr><td>Less than 31 days 少於31日</td><td>10.6</td><td>12.4</td></tr><tr><td>31 to 60 days 31至60日</td><td>5.2</td><td>4.0</td></tr><tr><td>61 to 90 days 61至90日</td><td>3.7</td><td>5.1</td></tr><tr><td>91 to 180 days 91至180日</td><td>2.2</td><td>3.8</td></tr><tr><td>Over 180 days 180日以上</td><td>0.1</td><td>0.9</td></tr><tr><td></td><td>21.8</td><td>26.2</td></tr></table>
The carrying amounts of the trade and other receivables at amortised cost approximate their fair values.
Further details on financial risk management of trade and other receivables are disclosed in note 40.
按攤銷成本計值之貿易及其他應收款項的賬面值與其公平價值相若。
貿易及其他應收款項之金融風險管理之進一步詳情載於附註40。 |
20787494_185.pdf | en | # 30. AMOUNTS DUE FROM ASSOCIATES AND JOINT VENTURES
# (i) Amounts due from associates
30. 聯營公司及合營公司欠款
(i) 聯營公司欠款
<table><tr><td rowspan="2"></td><td>2016
二零一六年</td><td>2015
二零一五年</td></tr><tr><td>HK$ Million
百萬港元</td><td>HK$ Million
百萬港元</td></tr><tr><td>Advances 墊款</td><td>395.5</td><td>323.9</td></tr><tr><td>Less: impairment allowance 減：減值撥備</td><td>(17.1)</td><td>(17.1)</td></tr><tr><td></td><td>378.4</td><td>306.8</td></tr><tr><td>Analysed for reporting purposes as: 為呈報目的所作之分析：</td><td></td><td></td></tr><tr><td>Non-current assets 非流動資產</td><td>257.4</td><td>73.5</td></tr><tr><td>Current assets 流動資產</td><td>121.0</td><td>233.3</td></tr><tr><td></td><td>378.4</td><td>306.8</td></tr><tr><td>Gross amount of impaired 聯營公司有減值
advances to associates 墊款總額</td><td>17.3</td><td>17.3</td></tr><tr><td>Individually assessed 個別評估
impairment allowances 減值撥備</td><td></td><td></td></tr><tr><td>At 1st January and 於一月一日及
31st December 於十二月三十一日</td><td>(17.1)</td><td>(17.1)</td></tr><tr><td>Net carriynig amount of mpaired 聯營公司已減值墊款
advances to associates 賬面淨值</td><td>0.2</td><td>0.2</td></tr></table> |
11749087_4.pdf | en | # 3 Proof of Theorem 1.2
For the rest of this section, we fix a separable topological group H, and assume that \( \phi : { \mathrm { H o m e o } } ( M ) \to H \) is a homomorphism. For simplicity, we first treat only the case where M is closed; modifications for the case where \( \partial M \ne \emptyset \) and the relative case of \( \mathrm { H o m e o } _ { 0 } ( M \, \mathrm { r e l } \, N ) \) are discussed in Section 4.1, along with a comment for noncompact M.
The proof is somewhat involved, so we have divided it into three major steps. The first is general set-up; the second a “localized” version of continuity (for homeomorphisms with support in a small ball), and the third step improves this local result to a global version by careful use of the fragmentation property. There is a delicate balancing act between steps 2 and 3; in particular, it will be necessary to construct a particular kind of efficient cover of the manifold M to use in the fragmentation argument.
# Step 1: set-up for the proof
Since \( \phi \) is a group homomorphism, it suffices to show continuity at the identity. In other words, we need to prove the following.
3.1. For any neighborhood V of the identity in H, there exists a neighborhood U of the identity in \( \operatorname { H o m e o } _ { 0 } ( M ) \) such that \( U \subset \phi ^ { - 1 } ( \breve { V } ) \).
We first use the Baire category theorem to extract an “approximate” version of condition 3.1.
Lemma 3.2. Let V be a neighborhood of the identity in H. There exists a neighborhood U of the identity in \( \operatorname { H o m e o } _ { 0 } ( M ) \) such that U is contained in the closure of \( \phi ^ { - 1 } ( V ) \).
Remark 3.3. The proof given below works generally for homomorphisms from any Polish group to a separable group; see e.g. [4] for one instance of this (where it is called “Baire category continuity”) and [14] for another in the context of groups with the “Steinhaus property”.
Proof of Lemma 3.2. Take a smaller neighborhood of the identity \( V _ { 0 } \subset V \) such that \( V _ { 0 } \) is symmetric (i.e. \( v \in V _ { 0 } \Leftrightarrow v ^ { - 1 } \in V _ { 0 } ) \), and such that \( V _ { 0 } ^ { 4 } \subset V \). Let \( \{ h _ { i } \} \) be a countable dense subset of H, so that
\[ H = \bigcup _ { i } h _ { i } V _ { 0 } . \]
Let \( W = \phi ^ { - 1 } ( V _ { 0 } ^ { 2 } ) . \). For each translate \( h _ { i } V _ { 0 } \) that intersects the image of \( \mathrm { H o m e o } _ { 0 } ( M ) \), choose an element \( \phi ( g _ { i } ) \in h _ { i } V _ { 0 } \). Then \( \phi ( g _ { i } ) = h _ { i } v _ { i } \) for some \( v _ { i } \in V \), and so
\[ h _ { i } V _ { 0 } = \phi ( g _ { i } ) v _ { i } ^ { - 1 } V _ { 0 } \subset \phi ( g _ { i } ) V _ { 0 } ^ { 2 } . \]
Thus
\[ H = \bigcup _ { i } \phi ( g _ { i } ) V _ { 0 } ^ { 2 } \]
and, taking pre-images, we have
\[ { \mathrm { H o m e o } } ( M ) = \bigcup _ { i } g _ { i } W \]
Since \( { \mathrm { H o m e o } } _ { 0 } ( M ) \) is a Baire space, it cannot be covered by countably many nowhere dense sets. Thus, W is dense in the neighborhood of some \( g \in { \mathrm { H o m e o } } _ { 0 } ( M ) \), so |
11749087_5.pdf | en | \[ W W ^ { - 1 } = \phi ^ { - 1 } ( V _ { 0 } ^ { 4 } ) \subset \phi ^ { - 1 } ( V ) \]
is dense in some neighborhood of the identity in \( \mathrm { H o m e o } _ { 0 } ( M ) \). This proves the lemma.
Of course, improving “dense in a neighborhood of the identity” to “contains a neighborhood of the identity” is a nontrivial matter and the main goal of this work!
# Step 2: A localized version (after Rosendal)
As in Step 1, assume that we have fixed a homomorphism \( \phi : { \mathrm { H o m e o } } ( M ) \to H \), and a neighborhood V of the identity in H, with the aim of showing that \( \phi \) satisfies condition 3.1.
The “localized version” of Condition 3.1 that we aim to prove here states, loosely speaking, that a homeomorphism \( f \in { \mathrm { H o m e o } } _ { 0 } ( M ) \) with sufficiently small support lies in \( \phi ^ { - 1 } ( V ) \). The precise statement that we will use in the next step is given in Lemma 3.8 below. Our strategy is to build up to this statement gradually, using a series of lemmata guided by Rosendal’s work in [13].
Notation 3.4. As in Lemma 3.2, we start by fixing a smaller, symmetric neighborhood of the identity \( V _ { 0 } \subset V \) such that \( V _ { 0 } ^ { 8 } \subset V \). Let \( W = \phi ^ { - 1 } ( V _ { 0 } ) \).
The first lemma is a very rough version of our end goal. It states that in any neighborhood of any point of M, we can find an open ball so that all diffeomorphisms supported on that ball are restrictions of elements in \( \phi ^ { - 1 } ( V _ { 0 } ^ { 2 } ) \subset \phi ^ { - 1 } ( V ) \).
Lemma 3.5. Let \( B \subset M \) be an embedded ball. There exists a ball \( B ^ { \prime } \subset B \) such that for every \( f \in { \mathrm { H o m e o } } _ { 0 } ( M ) \) with \( \operatorname { s u p p } ( f ) \subset B ^ { \prime } \), there is an element \( w _ { f } \in W ^ { 2 } \) with \( \operatorname { s u p p } ( w ) \subset B \) and such that the restriction of \( w _ { f } \) to \( B ^ { \prime } \) agrees with f.
Proof. Let \( B \subset M \) be an embedded ball. The argument from the proof of Lemma 3.2 implies that there exists a countable set \( \{ g _ { i } \} \subset { \mathrm { H o m e o } } _ { 0 } ( M ) \) such that
\[ { \mathrm { H o m e o } } ( M ) = \bigcup _ { i } g _ { i } W . \]
We first prove a related claim for these translates of W.
Claim 3.6. There exists a ball \( B ^ { \prime } \subset B \), and a left translate \( g _ { i } W \) such that if \( \operatorname { s u p p } ( f ) \subset B ^ { \prime } \), then there exists \( w _ { f } \in g _ { i } W \) such that
i) \( \operatorname { s u p p } ( w _ { f } ) \subset B \), and
ii) the restriction of \( w _ { f } \) to \( B ^ { \prime } \) agrees with f.
Proof of claim. Let \( B _ { i } \), \( i = 1 , 2 , \dots \). be a sequence of disjoint balls with disjoint closures and with the closure of \( \bigcup _ { i = 1 } ^ { \infty } B _ { i } \) contained in B.
We will show that for some i, every \( f \in { \mathrm { H o m e o } } _ { 0 } ( M ) \) with \( \operatorname { s u p p } ( f ) \subset B _ { i } \) agrees with the restriction of an element of \( g _ { i } W \) supported on B.
Suppose for contradiction that this is not the case. Then there is a sequence \( f _ { i } \in \)\( \mathrm { H o m e o } _ { 0 } ( M ) \) with \( \operatorname { s u p p } ( f _ { i } ) \subset B _ { i } \) and such that \( f _ { i } \) does not agree with the restriction to |
11758678_105.pdf | en | # NOTE 10 — OTHER ASSETS
<table><tr><td>(In thousands)</td><td>March 2019</td><td>March 2018</td><td>December 2017</td></tr><tr><td>Computer software, net of accumulated amortization of: March 2019 -
$215,491; March 2018 - $183,200; December 2017 - $171,147</td><td>$ 224,601</td><td>$ 239,935</td><td>$ 232,237</td></tr><tr><td>Investments held for deferred comlpensation Npans (ote 15)</td><td>206,633</td><td>201,870</td><td>203,780</td></tr><tr><td>Deferred income taxes (Note 18)</td><td>109,551</td><td>105,493</td><td>103,601</td></tr><tr><td>Pension assets (Note 15)</td><td>117,405</td><td>76,671</td><td>82,296</td></tr><tr><td>Deposits</td><td>53,602</td><td>45,321</td><td>45,225</td></tr><tr><td>Partnership stores and shop-in-shop costs, net of accumulated
amortization of: March 2019 - $100,125; March 2018 - $123,812;
December 2017 - $118,643</td><td>31,655</td><td>33,161</td><td>34,149</td></tr><tr><td>Derivative financial instruments (Note 23)</td><td>9,189</td><td>4,659</td><td>2,199</td></tr><tr><td>Other investments</td><td>13,071</td><td>12,433</td><td>12,697</td></tr><tr><td>Deferred line of credit issuance costs</td><td>2,121</td><td>961</td><td>1,078</td></tr><tr><td>Other</td><td>79,071</td><td>82,537</td><td>66,413</td></tr><tr><td>Other assets</td><td>$ 846,899</td><td>$ 803,041</td><td>$ 783,675</td></tr></table>
# NOTE 11 — SHORT-TERM BORROWINGS
<table><tr><td>(In thousands)</td><td>March 2019</td><td>March 2018</td><td>December 2017</td></tr><tr><td>Commercial paper borrowings</td><td>$ 650,000</td><td>$ 1,500,000</td><td>$ 705,000</td></tr><tr><td>International borrowing arrangements</td><td>15,055</td><td>25,106</td><td>24,384</td></tr><tr><td>Short-term borrowings</td><td>$ 665,055</td><td>$ 1,525,106</td><td>$ 729,384</td></tr></table>
In December 2018, VF entered into a \$2.25 billion senior unsecured revolving line of credit (the “Global Credit Facility”) that expires December 2023. The Global Credit Facility replaced VF's \$2.25 billion revolving facility which was scheduled to expire in April 2020. VF may request an unlimited number of one year extensions so long as each extension does not cause the remaining life of the Global Credit Facility to exceed five years, subject to stated terms and conditions. The Global Credit Facility may be used to borrow funds in both U.S. dollar and certain non-U.S. dollar currencies, and has a \$50.0 million letter of credit sublimit. In addition, the Global Credit Facility supports VF’s U.S. commercial paper program for short-term, seasonal working capital requirements and general corporate purposes, including share repurchases and acquisitions. Borrowings under the Global Credit Facility are priced at a credit spread of 81.0 basis points over the appropriate LIBOR benchmark for each currency. VF is also required to pay a facility fee to the lenders, currently equal to 6.5 basis points of the committed amount of the facility. The credit spread and facility fee are subject to adjustment based on VF’s credit ratings. The prior revolving credit facility was priced at a credit spread of 80.5 basis points over the appropriate LIBOR benchmark for each currency and VF was required to pay a facility fee to the lenders equal to 7.0 basis points of the committed amount of the facility.
The Global Credit Facility contains certain restrictive covenants, which include maintenance of a consolidated indebtedness to consolidated capitalization ratio, as defined therein, equal to or below 60%. If VF fails in the performance of any covenants, the lenders may terminate their obligation to make advances and declare any outstanding obligations to be immediately due and payable. As of March 2019, VF was in compliance with all covenants.
VF’s commercial paper program allows for borrowings of up to \$2.25 billionto the extent it has borrowing capacity under the Global Credit Facility. Outstanding commercial paper borrowings totaled \$650.0 million, \$1.50 billion and \$705.0 million at March 2019, March 2018 and December 2017, respectively. The Global Credit Facility also had \$15.3 million of outstanding standby letters of credit issued on behalf of VF as of March 2019, March 2018 and December 2017, leaving \$1.58 billion, \$734.7 million and \$1.53 billion as of March 2019, March 2018 and December 2017, respectively, available for borrowing against this facility.
VF has \$179.5 million of international lines of credit with various banks, which are uncommitted and may be terminated at any time by either VF or the banks. Total outstanding balances under these arrangements were \$15.1 million, \$25.1 million and \$24.4 million at March 2019, March 2018 and December 2017, respectively. Borrowings under these arrangements had a weighted average interest rate of 24.6%, 12.0% and 9.9% at March 2019, March 2018 and December 2017, respectively, excluding accepted letters of credit which are non-interest bearing to VF. The interest-bearing borrowings include short-term borrowings in Argentina. |
11758678_106.pdf | en | # NOTE 12 — ACCRUED LIABILITIES
<table><tr><td>(In thousands)</td><td>March 2019</td><td>March 2018</td><td>December 2017</td></tr><tr><td>Compensation</td><td>$ 341,988</td><td>$ 135,247</td><td>$ 249,929</td></tr><tr><td>Customer discounts and allowances</td><td>225,484</td><td>28,604</td><td>46,169</td></tr><tr><td>Other taxes</td><td>153,355</td><td>160,173</td><td>155,969</td></tr><tr><td>Income taxes</td><td>68,054</td><td>67,417</td><td>134,837</td></tr><tr><td>Restructuring</td><td>86,602</td><td>42,757</td><td>32,438</td></tr><tr><td>Advertising</td><td>40,938</td><td>40,322</td><td>48,554</td></tr><tr><td>Freihgt, duties and postage</td><td>40,703</td><td>46,281</td><td>43,584</td></tr><tr><td>Deferred compensation (Note 15)</td><td>18,226</td><td>33,590</td><td>38,885</td></tr><tr><td>Interest</td><td>23,250</td><td>25,483</td><td>16,317</td></tr><tr><td>Derivative financial instruments (Note 23)</td><td>18,590</td><td>96,087</td><td>87,205</td></tr><tr><td>Insurance</td><td>15,634</td><td>18,867</td><td>17,814</td></tr><tr><td>Product warranty claims (Note 14)</td><td>12,618</td><td>12,862</td><td>12,833</td></tr><tr><td>Pension liabilities (Note 15)</td><td>10,260</td><td>32,814</td><td>27,277</td></tr><tr><td>Other</td><td>240,851</td><td>197,923</td><td>234,724</td></tr><tr><td>Accrued liabilities</td><td>$ 1,296,553</td><td>$ 938,427</td><td>$ 1,146,535</td></tr></table>
# NOTE 13 — LONG-TERM DEBT
<table><tr><td>(In thousands)</td><td>March 2019</td><td>March 2018</td><td>December 2017</td></tr><tr><td>3.50% notes, due 2021</td><td>$ 498,450</td><td>$ 497,852</td><td>$ 497,705</td></tr><tr><td>0.625% notes, due 2023</td><td>949,049</td><td>1,041,577</td><td>1,015,500</td></tr><tr><td>6.00% notes, due 2033</td><td>292,982</td><td>292,648</td><td>292,568</td></tr><tr><td>6.45% notes, due 2037</td><td>346,534</td><td>346,346</td><td>346,300</td></tr><tr><td>Caillpta eases</td><td>34,132</td><td>40,397</td><td>41,881</td></tr><tr><td>Total long-term debt</td><td>2,121,147</td><td>2,218,820</td><td>2,193,954</td></tr><tr><td>Less current portion</td><td>5,263</td><td>6,265</td><td>6,165</td></tr><tr><td>Long-term debt, due beyond one year</td><td>$ 2,115,884</td><td>$ 2,212,555</td><td>$ 2,187,789</td></tr></table>
Interest payments are due annually on the 2023 notes and semiannually on all other notes.
All notes, along with any amounts outstanding under the Global Credit Facility (Note 11), rank equally as senior unsecured obligations of VF. All notes contain customary covenants and events of default, including limitations on liens and sale-leaseback transactions and a cross-acceleration event of default. The cross-acceleration provision of the 2033 notes is triggered if more than \$50.0 million of other debt is in default and has been accelerated by the lenders. For the other notes, the cross-acceleration trigger is \$100.0 million. If VF fails in the performance of any covenant under the indentures that govern the respective notes, the trustee or lenders may declare the principal due and payable immediately. As of March 2019, VF was in compliance with all covenants. None of the long-term debt agreements contain acceleration of maturity clauses based solely on changes in credit ratings. However, if there were a change in control of VF and, as a result of the change in control, the 2021, 2023 and 2037 notes were rated below investment grade by recognized rating agencies, then VF would be obligated to repurchase those notes at 101% of the aggregate principal amount plus any accrued interest.
VF may redeem its notes, in whole or in part, at a price equal to the greater of (i) 100% of the principal amount, plus accrued interest to the redemption date, or (ii) the sum of the present value of the remaining scheduled payments of principal and interest discounted to the redemption date at an adjusted treasury rate, as defined, plus 20 basis points for the 2021 notes, 15 basis points for the 2023 and 2033 notes, and 25 basis points for the 2037 notes, plus accrued interest to the redemption date. In addition, the 2021 and 2023 notes can be redeemed at 100% of the principal amount plus accrued interest to the redemption date within the three months prior to maturity.
The 2021 notes have a principal balance of \$500.0 million and are recorded net of unamortized original issue discount and debt issuance costs. Interest expense on these notes is recorded at an effective annual interest rate of 4.69%, including amortization of a deferred loss on an interest rate hedging contract (Note 23), original issue discount and debt issuance costs.
The 2023 notes have a principal balance of €850.0 million and are recorded net of unamortized original issue discount and debt issuance costs. Interest expense on these notes is recorded at an |
20782837_219.pdf | en | Institution Practicing License issued by Yinchuan Approval Service Administration (銀川市審批服務管理局). The license stipulates that the licensed diagnostic and treatment services shall be provided via the Internet. Our PRC Legal Adviser has advised that it remains uncertain whether the foreign investment restrictions applicable to “medical institutions” would apply to Yinchuan Yimaitong.
On February 2, 2021, our PRC Legal Adviser and the PRC legal adviser of the Joint Sponsors conducted an interview with the director of Yinchuan Data Industrial Development Service Center(銀川市大數據產業發展服務中心) as the examination and verification authority responsible for the online precondition review for the application of the Medical Institution Practicing License. Yinchuan Data Industrial Development Service Center confirmed that they would not issue the Certificate of the City-level Internet Hospital Regulatory Platforms (市級互聯網醫院監管平台證明) (the “Certificate”) if there is any foreign investor investing in Yinchuan Yimaitong. Without the Certificate from Yinchuan Data Industrial Development Service Center, Yinchuan Approval Service Administration (銀川市審批服務管理局), the ultimate authority to approve applications for the operation of Internet hospital service, will not proceed with the issuance of the Medical Institution Practicing License. On February 3, 2021, our PRC Legal Adviser and the PRC legal adviser of the Joint Sponsors conducted an interview with the division deputy director of Yinchuan Approval Service Administration. Yinchuan Approval Service Administration confirmed that the establishment of sino-foreign equityj oint venture Internet hospitals is prohibited, and there is no precedent for any sino-foreignj oint venture of Internet hospitals.
Our PRC Legal Adviser confirmed that (i) each of Yinchuan Data Industrial Development Service Center and Yinchuan Approval Service Administration is a competent authority on the basis that (a) according to the Provisions on the Function Configuration and Internal Organizations of Yinchuan Approval Service Administration (《銀川市審批服務管理局職能配置和內設機構規定》) promulgated on July 13, 2020, the responsibilities of Yinchuan Approval Service Administration include approving the establishment and operation of medical institutions and Yinchuan Approval Service Administration confirmed during the interview that it is the approval department for the establishment of Internet hospitals, and (b) Yinchuan Data Industrial Development Service Center is the approval authority with respect to the issuance of the Certificate, being a prerequisite and necessary document without which Yinchuan Approval Service Administration will not proceed with the issuance of the Medical Institution Practicing License, and (ii) the interviewees are the director of Yinchuan Data Industrial Development Service Center and the division deputy director of Yinchuan Approval Service Administration and they are competent authorities to give the confirmation above-mentioned, and, based on such confirmation, our Company is currently unable to establish a sino-foreign equityj oint venture to obtain the Medical Institution Practicing License for Internet hospital. |
20782837_220.pdf | en | # (iii) “Restricted” — Foreign-Related Investigation Service
Under precision marketing and corporate solutions, Yimaihutong provides digital market research solutions to overseas pharmaceutical companies under eSurvey on our Medlive platform, which is considered to be engaged in foreign-related market investigation business, and as such, Yimaihutong is required to hold a Foreign-Related Investigation License. According to the Measures for the Administration of Foreign-related Investigation (涉外調查管理辦法) issued by the National Bureau of Statistics of China (國家統計局) on October 13, 2004, (i) the National Bureau of Statistics shall be in charge of the qualification evaluation for institutions applying for Foreign-Related Investigation License and (ii) no overseas organization or individual may directly conduct any market or social investigation in China or conduct any market or social investigation through any institution without the foreign-related investigation license. In addition, the Negative List requires market investigation shall only be limited to the form of equityj oint venture; for radio and television ratings survey therein, controlling stake shall be held by the Chinese Party.
Based on consultations on March 29, 2021 and June 9, 2021, in both cases with the duty officer of Civilian and Foreign-related Investigation Management Office of the Law Enforcement Supervision Bureau under the National Bureau of Statistics of China (國家統計局執法監督局民間和涉外調查管理處) which is the relevant competent authority, (i) companies that engages in market investigation shall only be limited to the form of sino-foreign equityj oint venture and the National Bureau of Statistics of China has discretion over the specific proportion of equities held by foreign investors, (ii) foreign investments in companies that engages in social investigation are prohibited, and (iii) given the nature of the business of Yimaihutong and the types of investigations that it conducts or may conduct, we will not be granted a Foreign-Related Investigation License through any sino-foreign equityj oint venture. Based on the aforesaid, it is concluded that foreign investment in Yimaihutong is prohibited. The consultations were conducted in the form of telephone consultation, through the consultation telephone hotline posted on the official website of National Bureau of Statistics of China, regarding the foreign-related investigation license approval. As advised by our PRC Legal Adviser, the National Bureau of Statistics of China is the competent authority.
The provision of digital market research solutions to overseas pharmaceutical companies by Yimaihutong is part of our precision marketing and corporate solutions which forms an integral part of the operations of our Medlive platform. Given that Yimaihutong also engages in value-added telecommunications services and plans to engage in radio and television program production business and Internet culture business, which are subject to foreign investment restrictions or prohibitions as disclosed in this prospectus and highly integrated, corelated and inseparable from each other, we are restricted from holding direct interests in Yimaihutong, despite the fact that foreign investors may engage in market investigation through sino-foreign equityj oint ventures. |
2613503_119.pdf | en | # 31. STATEMENT OF FINANCIAL POSITION OF THE COMPANY (CONTINUED)
# (a) Reserves
The amounts of the Group’s reserves and the movements therein for the current and prior years are presented in the consolidated statement of changes in equity of the financial statements. Movements in the Company’s reserves during the current and prior years are as follows:
<table><tr><td rowspan="3"></td><td>Share
premium</td><td>Contributed
surplus</td><td>Capital
reserve</td><td>Accumulated
losses</td><td>Total</td></tr><tr><td>HK$’000</td><td>HK$’000</td><td>HK$’000</td><td>HK$’000</td><td>HK$’000</td></tr><tr><td></td><td></td><td>(Note)</td><td></td><td></td></tr><tr><td>At 31 March 2016 and
1 April 2016
Loss for the year</td><td>23,811
–</td><td>22,968
–</td><td>7,453
–</td><td>(18,557)
(6,924)</td><td>35,675
(6,924)</td></tr><tr><td>As at 31 March 2017</td><td>23,811</td><td>22,968</td><td>7,453</td><td>(25,481)</td><td>28,751</td></tr><tr><td>Loss for the year</td><td>–</td><td>–</td><td>–</td><td>(5,730)</td><td>(5,730)</td></tr><tr><td>Issue of shares upon
subscription</td><td>180,600</td><td>–</td><td>–</td><td>–</td><td>180,600</td></tr><tr><td>Transaction costs
attributable to subscription
of shares</td><td>(725)</td><td>–</td><td>–</td><td>–</td><td>(725)</td></tr><tr><td>As at 31 March 2018</td><td>203,686</td><td>22,968</td><td>7,453</td><td>(31,211)</td><td>202,896</td></tr></table>
Note:
Pursuant to a written confirmation on 23 March 2015, two of the Company’s shareholders, Fortune Decade and Twilight Treasure, agreed to bear the listing expenses in connection with 120,000,000 sales shares sold through the placing of the Company’s shares took place during the year ended 31 March 2015 and reimburse their share of these expenses to the Company upon the listing of shares of the Company on the GEM of the Stock Exchange. The reimbursement of approximately HK\$7,453,000 by these shareholders in their capacity as shareholders was accounted for as capital contribution to the Company. |
2613503_120.pdf | en | # 32. PARTICULARS OF PRINCIPAL SUBSIDIARIES OF THE COMPANY
# (i) General information of subsidiaries
Details of the Company’s principal subsidiaries at 31 March 2018 and 2017 are as follows:
<table><tr><td>Name of subsidiaries</td><td>Place of
incorporation
or registration/
operation</td><td>Issued
and fully
paid share
capital/
registered
capital</td><td colspan="2">Percentage of nominal
value of issued ordinary
share capital held by
the Company</td><td>Forms of
legal entity</td><td>Principal
activities</td></tr><tr><td></td><td></td><td></td><td>Directly</td><td>Indirectly</td><td></td><td></td></tr><tr><td></td><td></td><td></td><td>%</td><td>%</td><td></td><td></td></tr><tr><td>Win Vision</td><td>BVI</td><td>US$1</td><td>100</td><td>–</td><td>Wholly- owned
foreign company</td><td>Investment holding,</td></tr><tr><td>Kwan on Construction
Company Limited
(“Kwan On”)</td><td>Hong Kong</td><td>HK$1</td><td>–</td><td>100</td><td>Private limited
company</td><td>Civil engineering
construction</td></tr><tr><td>Univic Engineering Limited
(“UEL”)</td><td>Hong Kong</td><td>HK$100</td><td>–</td><td>100</td><td>Private limited
company</td><td>Provision of contracting
work on civil
plumbing, fire
protection, insulation,
concrete repairs and
related activities</td></tr><tr><td>Univic Engineering &
Construction Limited</td><td>Hong Kong</td><td>HK$1</td><td>–</td><td>100</td><td>Private limited
company</td><td>Provision of civil,
plumbing and
fire protection
engineering contract
services</td></tr><tr><td>Univic Earthworks Limited</td><td>Hong Kong</td><td>HK$1</td><td>–</td><td>100</td><td>Private limited
company</td><td>Provision of civil and
plumbing engineering
contract services</td></tr><tr><td>Univic Building Contractors
Limited</td><td>Hong Kong</td><td>HK$1</td><td>–</td><td>100</td><td>Private limited
company</td><td>Provision of
construction site
workmen services</td></tr><tr><td>Univic Construction
Resources Limited
(“UCRL”)</td><td>Hong Kong</td><td>HK$1</td><td>–</td><td>100</td><td>Private limited
company</td><td>Provision of
construction site
workmen services</td></tr><tr><td>Univic Fireproofing &
Construction Limited
(“UFCL”)</td><td>Hong Kong</td><td>HK$1</td><td>–</td><td>100</td><td>Private limited
company</td><td>Trading of diesel
and provision of
construction site
workmen services</td></tr></table> |
20792081_60.pdf | en | In response to our findings, and evidence from other supervisory work, in September 2010 we published proposed changes to complaints handling rules in CP10/21.22 We expect to publish a Policy Statement in this area in Q2 2011. As set out in the CP, we propose to:
• abolish the two-stage complaints handling process;
• require firms to identify a senior individual responsible for complaints handling; and
• set out how firms can meet existing requirements to undertake root cause analysis and have regard to decisions made by the ombudsman service.
We also propose increasing the ombudsman service’s award limit to \( \mathcal { E } \) 150,000 to reflect its fall in real terms since the limit was last raised.
Regulated firms currently report to us that they receive around four million complaints from customers each year. New rules now require firms to publish their own complaints data.
We published this firm-specific data for the first time in September 2010, enabling customers to compare and contrast the way firms deal with their complaints.
# 2.2 Unfair terms in mortgage contracts
A number of mortgage lenders have proposed, or taken, action in their standard mortgage contracts which is to the detriment of consumers. While firms may have prudential reasons for taking these actions, and may wish to balance the interests of savers and borrowers, they need to handle the whole process carefully to not breach FSA rules and principles (including Treating Customers Fairly) or the law.
Some firms are seeking to boost their revenues by including terms that move consumers from their discounted initial rate deal to the firms’ Standard Variable Rate (SVR) in particular situations. We have come across firms using terms to change a consumer’s mortgage to the firm’s SVR if the consumer breaches any of the conditions of the mortgage, regardless of the significance of the breach. This could result in the consumer paying a significantly higher interest rate than they had originally expected.
We have seen some lenders use contractual terms including terms that demand immediate repayment of the mortgage if, in their opinion, the consumer’s circumstances have only changed to a minor degree or the consumer has committed a minor breach of the terms and conditions of the mortgage. It would appear that such terms could give firms wide discretion to demand repayment of the mortgage, to the detriment of consumers.
To address these matters, we have published undertakings under the Unfair Terms in Consumer Contracts Regulations 1999 from firms agreeing not to apply such terms unfairly. We have also reminded firms with similar terms in their contracts of the messages contained in these undertakings.
# 2.3 Treatment of mortgage customers in arrears
As we showed in Chapter A, the combination of very low interest rates, an unemployment increase less than feared, and a fall in house prices less than some commentators had predicted has so far limited the impact of the financial crisis on homeowners. This has meant that after rising arrears and repossessions in 2008/9, numbers fell back slightly in the first half of 2010. Regulatory action to require appropriate forbearance has also had an effect.
---
22 CP10/21 Consumer complaints: The ombudsman award limit and changes to complaints-handling rules, September 2010, The ombudsman service and FSA. |
20792081_61.pdf | en | While most mainstream lenders are treating customers in arrears fairly, we have seen a number of problems, primarily with specialist lenders. These problems include:
• Unfair charges – Information provided to customers on arrears charges is often unclear, charges are sometimes applied in circumstances that do not appear to be compatible with treating customers fairly, and there is little evidence that firms are ensuring arrears charges overall reflect the additional cost of administering these cases.
• Inadequate controls in outsourcing arrangements – Some lenders do not have adequate controls in place to ensure that, where they outsource arrears handling, the third party is treating customers fairly. Frontline staff in third party administrators (TPAs) often lacked the training and competence to deliver the fair customer outcomes required under MCOB 13, and TPAs’ own oversight of their business was inadequate to detect and deal with the detriment customers suffered as a result.
• Impaired credit lenders are much more inclined than mainstream lenders to impose a ‘one size fits all’ policy and move swiftly to take possession, without establishing borrowers’ individual circumstances. Their internal controls and training and competence arrangements are also noticeably less developed than those of mainstream lenders. There is anecdotal evidence that the terms of securitisation covenants are restricting their ability to treat customers in arrears fairly.
We have taken enforcement action against mortgage firms where we identified breaches in our rules or principles. Some of the lenders we visited more recently are taking steps to rectify earlier failings, in particular by collecting more information on customers’ income and expenditure when they fall into arrears, and tailoring their response in each case to the individual’s circumstances. But this is an area that will require continuing vigilance, particularly if there is a deterioration in the general economic environment or interest rates start to rise.
# 2.4 Payment Protection Insurance (PPI)
PPI mis-selling has been a significant issue in recent years, giving rise to consumer detriment, and has been covered in previous FROs.
Since we took over the regulation of PPI we have, amongst other things, carried out three thematic reviews and reports, issued warnings, visited over 200 firms and taken enforcement action against 24 firms. In addition, the PPI market was subject to a Competition Commission enquiry which began in 2007.
In August 2010, we published a Policy Statement, PS10/12, The assessment and redress of PPI complaints. This set out a package of measures designed to ensure that firms handle PPI complaints more fairly and consistently, and deliver fairer outcomes to customers who may have been mis-sold PPI but who have not complained.
The latest development is the judicial review of PS10/12, launched by the British Bankers’ Association (with Nemo Personal Finance subsequently joining as an interested party) on 8 October 2010. This challenge was considered by the Administrative Court in late January 2011 and a decision will follow. |
9327202_279.pdf | en | # Financial assets
The Group’s financial assets are classified into loans and receivables and financial assets at fair value through profit or loss (‘‘FVTPL’’). The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
# Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Interest income is recognised on an effective interest basis for debt instrument other than those financial assets classified as at FVTPL, of which interest income is included in net gains or losses.
# Financial assets at FVTPL
Financial assets are classified as financial assets at FVTPL when it is a derivative that is not designated and effective as a hedging instrument; or it forms part of a contract containing one or more embedded derivatives, and HKAS 39 permits the entire combined contract to be designated as at FVTPL upon initial recognition.
Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in the profit or loss excludes any interest earned on the financial assets and is included in ‘‘other gains and losses’’ line item. Fair value is determined in the manner described in note 7.
# Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, loans and receivables (including trade and other receivables, amounts due from related parties and bank balances and cash) are carried at amortised cost using the effective interest method, less any impairment (see accounting policy on impairment loss on financial assets below).
Interest income is recognised by applying the effective interest rate, except for short-term receivables where the recognition of interest would be immaterial.
# Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial assets have been affected.
Objective evidence of impairment could include:
. significant financial difficulty of the issuer or counterparty; or
. breach of contract, such as a default or delinquency in interest or principal payments; or
. it becoming probable that the borrower will enter bankruptcy or financial re-organisation.
Impairment loss for loans and receivables are assessed on an individual basis. |
9327202_280.pdf | en | For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the financial asset’s original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to profit or loss.
For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
# Financial liabilities and equity instruments
Financial liabilities and equity instruments issued by an entity are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
# Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.
# Financial liabilities
Financial liabilities (including trade and other payables and accruals) are subsequently measured at amortised cost, using the effective interest method.
# Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition. Interest expense is recognised on an effective interest basis.
# Derivative financial instruments
Derivatives are initially recognised at fair value at the date when derivative contracts are entered into and are subsequently remeasured to their fair value at the end of the reporting period. The resulting gain or loss is recognised in profit or loss immediately.
# Derecognition
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire.
On derecognition of a financial asset, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. |
9251000_2.pdf | en | April 202041
(01333 HK)中国忠旺China Zhongwang
ReportCompany
of aluminum flat-rolled products to rise due to product mix improvement. The Company holds great competitive advantages in the production of aluminum extrusion and flat-rolled products. The Company is the largest producer of aluminum alloy formwork in China, with over 40% of total market share in 2019 according to Antaike, and confronts little competition in the domestic market. The Company is able to maintain the selling price of aluminum alloy formwork and collect considerable processing fees. In 2019, the ASP of aluminum alloy formwork rose slightly while aluminum price declined by about RMB400/t. We believe that the Company is able to maintain the ASP of aluminum alloy formwork. The average processing fees of industrial aluminum extrusion products also rose slightly in 2019. The average processing fees of industrial aluminum extrusion products were mainly determined by the product mix. The extrusion production lines of the Company are expected to run at full capacity and we expect the processing fees assumptions of industrial aluminum extrusion products to be maintained. We believe that newly installed extrusion capacity will be allocated to products with higher value. We expect the profitability of extrusion lines to continue to improve due to product mix change. However, we believe average processing fees of aluminum extrusion products of the Company to decline moderately in 2020 as downstream demand will be severely hit by the global outbreak of COVID-19 and consumers may require lower ASP of their products. The processing fees of flat-rolled products in 2019 decreased as the Company only produced standard products with lower processing fees. Although total output of aluminum flat-rolled products increased rapidly, they were still low-value standard products. We expect such situation to change in 2020. As the Company has acquired more authentication of high-end products, it will produce more flat-rolled products with higher processing fees. The Company has already been conducting authentication for 3 years and we believe that more authentication of high-end products will be acquired in the coming years, which will improve the profitability of its flat-rolled production lines. We believe that more high-end products will be put into production in the future and raise average processing fees of flat-rolled products.
Revise down TP of the Company to HK\$2.05, and downgrade to "Neutral". China Zhongwang is a leading processed aluminum product developer and manufacturer in Asia. The Company has established competitive advantages in the aluminum processing industry and we expect the Company to continue to lead in the aluminum processing industry. The commencement of production of high-value aluminum flat-rolled products will be the future profit driver of the Company and has complementary and synergistic effects with current industrial aluminum extrusion products. However, we expect total sale of aluminum extrusion products and flat-rolled products of the Company to be severely impacted by the global outbreak of the COVID-19 pandemic. We expect the output of aluminum alloy formwork and aluminum extrusion products of the Company to decrease by about 10%-20% in 2020 and total output of flat-rolled products to be around 500,000 tons. We expect processing fees assumptions of aluminum extrusion products to decline moderately, but processing fees of aluminum flat-rolled products to rise due to product mix improvement. We expect deep-processed products to grow fast in the next 3 years due to strong downstream consumption demand. The decline in net profit of the Company in 2019 was mainly due to business model adjustment and lower processing fees of flat-rolled products, the extrusion business of the Company still enjoys great competitive advantages. We believe that net profit of the Company holds great growth potential due to product mix change and output growth in the future. The operation of the Company is stable and we believe that the Company is able to get through the tough period of global COVID-19 pandemic. We revise down the TP of the Company to HK\$2.05 due to lower market valuation level during the COVID-19 pandemic, which is equivalent to 6.0x FY20 PE and 0.4x FY20 PB. We downgrade the investment rating of the Company to "Neutral". |
9251000_3.pdf | en | April 202041
(01333 HK)中国忠旺China Zhongwang
ReportCompany
# Table-1: Peers Comparison
<table><tr><td rowspan="2">Company</td><td rowspan="2">Stock Code</td><td rowspan="2">Currency</td><td rowspan="2">Last price</td><td colspan="4">PE (fiscal year)</td><td colspan="4">PB (fiscal year)</td><td>ROE(%)</td></tr><tr><td>18A</td><td>19A</td><td>20F</td><td>21F</td><td>18A</td><td>19A</td><td>20F</td><td>21F</td><td>20F</td></tr><tr><td>International Listed aluminum companies</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Alcoa Inc</td><td>AA US</td><td>USD</td><td>7.41</td><td>5.5</td><td>n.a.</td><td>n.a.</td><td>n.a.</td><td>0.2</td><td>0.3</td><td>0.4</td><td>0.4</td><td>(23.1)</td></tr><tr><td>Norsk Hydro Asa</td><td>NHY NO</td><td>NOK</td><td>21.70</td><td>10.4</td><td>n.a.</td><td>23.2</td><td>10.7</td><td>0.5</td><td>0.6</td><td>0.6</td><td>0.5</td><td>(2.2)</td></tr><tr><td>Aluar Aluminio</td><td>ALUA AR</td><td>ARS</td><td>23.40</td><td>31.7</td><td>9.7</td><td>10.5</td><td>6.1</td><td>2.4</td><td>2.4</td><td>n.a.</td><td>n.a.</td><td>24.7</td></tr><tr><td>Nippon Light Metal Holdings</td><td>5703 JP</td><td>JPY</td><td>164.00</td><td>5.6</td><td>4.9</td><td>9.5</td><td>7.0</td><td>0.6</td><td>0.5</td><td>0.5</td><td>0.5</td><td>11.4</td></tr><tr><td>Hindalco Industries Ltd</td><td>HNDL IN</td><td>INR</td><td>109.85</td><td>4.0</td><td>4.5</td><td>5.2</td><td>6.5</td><td>0.4</td><td>0.4</td><td>0.4</td><td>0.4</td><td>9.8</td></tr><tr><td>National Aluminium Co Ltd</td><td>NACL IN</td><td>INR</td><td>29.95</td><td>4.3</td><td>3.3</td><td>74.9</td><td>99.8</td><td>0.6</td><td>0.5</td><td>n.a.</td><td>n.a.</td><td>16.5</td></tr><tr><td>Simple Average</td><td></td><td></td><td></td><td>10.3</td><td>5.6</td><td>24.6</td><td>26.0</td><td>0.8</td><td>0.8</td><td>0.5</td><td>0.4</td><td>6.2</td></tr><tr><td>Weighted Average</td><td></td><td></td><td></td><td>9.1</td><td>5.3</td><td>18.6</td><td>14.8</td><td>0.6</td><td>0.6</td><td>0.5</td><td>0.5</td><td>3.3</td></tr><tr><td>PRC listed aluminum companies</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Aluminum Corp Of China Ltd-A</td><td>601600 CH</td><td>CNY</td><td>2.90</td><td>69.0</td><td>78.4</td><td>58.0</td><td>31.5</td><td>0.9</td><td>1.0</td><td>0.9</td><td>0.8</td><td>1.3</td></tr><tr><td>Shandong Nanshan Aluminum-A</td><td>600219 CH</td><td>CNY</td><td>2.10</td><td>12.8</td><td>15.0</td><td>13.1</td><td>17.5</td><td>0.7</td><td>0.6</td><td>0.6</td><td>0.6</td><td>4.2</td></tr><tr><td>Henan Shenhuo Coal & Power-A</td><td>000933 CH</td><td>CNY</td><td>4.19</td><td>32.2</td><td>6.9</td><td>12.1</td><td>6.9</td><td>1.3</td><td>1.0</td><td>n.a.</td><td>n.a.</td><td>n.a.</td></tr><tr><td>Jiangsu Asia Pacific Light-A</td><td>002540 CH</td><td>CNY</td><td>4.29</td><td>14.5</td><td>16.2</td><td>n.a.</td><td>n.a.</td><td>1.1</td><td>1.1</td><td>n.a.</td><td>n.a.</td><td>6.9</td></tr><tr><td>Simple Average</td><td></td><td></td><td></td><td>32.2</td><td>29.1</td><td>27.8</td><td>18.6</td><td>1.0</td><td>0.9</td><td>0.7</td><td>0.7</td><td>4.1</td></tr><tr><td>Weighted Average</td><td></td><td></td><td></td><td>44.8</td><td>48.1</td><td>36.1</td><td>22.8</td><td>0.9</td><td>0.9</td><td>0.6</td><td>0.6</td><td>2.4</td></tr><tr><td>HK listed aluminum companies</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Aluminum Corp Of China Ltd-H</td><td>2600 HK</td><td>HKD</td><td>1.67</td><td>33.5</td><td>39.8</td><td>23.9</td><td>13.8</td><td>0.5</td><td>0.5</td><td>0.5</td><td>0.4</td><td>1.3</td></tr><tr><td>China Hongqiao Group Ltd</td><td>1378 HK</td><td>HKD</td><td>3.54</td><td>4.8</td><td>4.4</td><td>4.9</td><td>4.1</td><td>0.4</td><td>0.4</td><td>0.4</td><td>0.4</td><td>9.9</td></tr><tr><td>China Zhongwang Holdings Ltd</td><td>1333 HK</td><td>HKD</td><td>1.99</td><td>2.8</td><td>4.1</td><td>n.a.</td><td>n.a.</td><td>0.3</td><td>0.3</td><td>n.a.</td><td>n.a.</td><td>8.9</td></tr><tr><td>Xingfa Aluminium Holdings</td><td>98 HK</td><td>HKD</td><td>6.36</td><td>4.5</td><td>3.9</td><td>n.a.</td><td>n.a.</td><td>0.9</td><td>0.8</td><td>n.a.</td><td>n.a.</td><td>21.9</td></tr><tr><td>Simple Average</td><td></td><td></td><td></td><td>11.4</td><td>13.0</td><td>14.4</td><td>8.9</td><td>0.5</td><td>0.5</td><td>0.4</td><td>0.4</td><td>10.5</td></tr><tr><td>Weighted Average</td><td></td><td></td><td></td><td>19.6</td><td>22.9</td><td>16.5</td><td>10.0</td><td>0.4</td><td>0.5</td><td>0.4</td><td>0.4</td><td>5.6</td></tr><tr><td>HK listed nonferrous companies</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Jiangxi Copper Co Ltd-H</td><td>358 HK</td><td>HKD</td><td>7.65</td><td>9.1</td><td>9.5</td><td>11.9</td><td>9.4</td><td>0.5</td><td>0.4</td><td>0.5</td><td>0.4</td><td>4.8</td></tr><tr><td>Mmg Ltd</td><td>1208 HK</td><td>HKD</td><td>1.42</td><td>21.3</td><td>n.a.</td><td>473.3</td><td>17.1</td><td>1.2</td><td>1.5</td><td>1.4</td><td>1.3</td><td>(20.3)</td></tr><tr><td>China Molybdenum Co Ltd-H</td><td>3993 HK</td><td>HKD</td><td>2.32</td><td>9.3</td><td>22.7</td><td>22.7</td><td>17.6</td><td>1.1</td><td>1.1</td><td>1.1</td><td>1.1</td><td>4.5</td></tr><tr><td>United Co Rusal Plc</td><td>486 HK</td><td>HKD</td><td>2.67</td><td>3.0</td><td>5.4</td><td>3.8</td><td>3.4</td><td>1.0</td><td>0.8</td><td>0.7</td><td>0.6</td><td>16.1</td></tr><tr><td>Simple Average</td><td></td><td></td><td></td><td>10.7</td><td>12.5</td><td>127.9</td><td>11.9</td><td>0.9</td><td>0.9</td><td>0.9</td><td>0.8</td><td>1.3</td></tr><tr><td>Weighted Average</td><td></td><td></td><td></td><td>8.6</td><td>13.9</td><td>45.9</td><td>12.2</td><td>0.9</td><td>0.9</td><td>0.9</td><td>0.8</td><td>5.7</td></tr></table>
Source: Bloomberg, Guotai Junan International. |
2896015_193.pdf | en | Changes in our accrued liabilities for severance expenses and leased real estate were as follows:
<table><tr><td rowspan="2"></td><td>Severance</td><td>Real
Estate</td></tr><tr><td colspan="2">(Dollars in millions)</td></tr><tr><td>Balance at December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . .</td><td colspan="2"> $ 14 80</td></tr><tr><td>Accrued to expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</td><td>173</td><td>4</td></tr><tr><td>Payments, net ......................................</td><td>(89)</td><td>(20)</td></tr><tr><td>Reversals and adjustments ............................</td><td> —</td><td>3</td></tr><tr><td>Balance at December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . .</td><td>98</td><td>67</td></tr><tr><td>Accrued to expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</td><td>42</td><td>4</td></tr><tr><td>Liabilities assumed in acquisition of Level 3 ..............</td><td>1</td><td>4</td></tr><tr><td>Payments, net ......................................</td><td>(108)</td><td>(13)</td></tr><tr><td>Reversals and adjustments ............................</td><td> —</td><td>2</td></tr><tr><td>Balance at December 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . .</td><td> $ 33</td><td>64</td></tr></table>
# (9) Employee Benefits
# Pension, Post-Retirement and Other Post-Employment Benefits
We sponsor various defined benefit pension plans (qualified and non-qualified) which, in the aggregate, cover a substantial portion of our employees including legacy CenturyLink, legacy Qwest Communications International, Inc. (“Qwest”) and legacy Embarq employees. On December 31, 2015, we merged our existing qualified pension plans, which included merging the Qwest Pension Plan and Embarq Retirement Pension Plan into the CenturyLink Retirement Plan. The CenturyLink Retirement Plan was renamed the CenturyLink Combined Pension Plan (“Combined Plan”). Pension benefits for participants of the new Combined Plan who are represented by a collective bargaining agreement are based on negotiated schedules. All other participants’ pension benefits are based on each individual participant’s years of service and compensation. We also maintain non-qualified pension plans for certain current and former highly compensated employees. We maintain post-retirement benefit plans that provide health care and life insurance benefits for certain eligible retirees. We also provide other post-employment benefits for certain eligible former employees. We use a December 31 measurement date for all our plans.
# Pension Benefits
In connection with the acquisition of Level 3 Communications, Inc. on November 1, 2017, we assumed defined benefit pension plans sponsored by various Level 3 companies for their employees. Based on a valuation analysis, we recognized a \$20 million liability on November 1, 2017 for the unfunded status of the Level 3 pension plans, reflecting projected benefit obligations of 167 million, in excess of the \$147 million fair value of plan assets.
Current funding laws require a company with a pension shortfall to fund the annual cost of benefits earned in addition to a seven-year amortization of the shortfall. Our funding policy for our Combined Plan is to make contributions with the objective of accumulating sufficient assets to pay all qualified pension benefits when due under the terms of the plan. The accounting unfunded status of our qualified pension plan was \$2.004 billion and\$2.352 billion as of December 31, 2017 and 2016, respectively.
We made a voluntary cash contribution to our qualified pension plan of \$100 million in both 2017 and 2016, and paid \$5 million and \$7 million of benefits directly to participants of our non-qualified pension plans in 2017 and 2016, respectively. Based on current laws and circumstances, we are not required to make any contributions to our qualified pension plan in 2018, but we currently expect to make a voluntary contribution of \$100 million to the trust for our qualified pension plan in 2018. We estimate that in 2018 we will pay \$5 million of benefits directly to participants of our non-qualified pension plans. |
2896015_194.pdf | en | As mentioned above, we assumed in the Level 3 acquisition certain contributory and non-contributory employee pension plans, both qualified and non-qualified plans (the “Level 3 Pensions”). At December 31, 2017, the fair value of the Level 3 Pensions’ plan assets was \$147 million, and the associated benefit obligation was\$167 million. We recognized the unfunded status of Level 3’s pension plans of \$20 million on our consolidated balance sheet as of December 31, 2017, and the net periodic benefit expense of less than \$1 million for the period November 1, 2017 to December 31, 2017, in our consolidated income statement for the year ended December 31, 2017. Due to the insignificant amount of these pension plans, we have predominantly excluded them from the remaining employee benefit disclosures in this Note.
# Post-Retirement Benefits
In connection with our acquisition of Level 3 Communications, Inc. on November 1, 2017, we assumed post-retirement benefit plans sponsored by Level 3 Communications, L.L.C. and Continental Level 3, Inc. for certain of its current and former employees. Based on a valuation analysis, we recognized less than \$1 million in liability for the unfunded status of Level 3’s post-retirement benefit plans.
Our post-retirement benefit plans provide post-retirement benefits to qualified retirees and allow (i) eligible employees retiring before certain dates to receive benefits at no or reduced cost and (ii) eligible employees retiring after certain dates to receive benefits on a shared cost basis. The post-retirement benefits not paid by the trusts are funded by us and we expect to continue funding these post-retirement obligations as benefits are paid. The accounting unfunded status of our qualified post-retirement benefit plan was \$3.352 billion and\$3.360 billion as of December 31, 2017 and 2016, respectively.
Assets in the post-retirement trusts have been substantially depleted as of December 31, 2016; however we will continue to pay certain post-retirement benefits through the trusts. No contributions were made to the post-retirement trusts in 2017 and 2016. Benefits not paid from the trusts are expected to be paid directly by us with available cash. In 2017, we paid \$237 million of post-retirement benefits, net of participant contributions and direct subsidies. In 2018, we expect to pay \$283 million of post-retirement benefits, net of participant contributions and direct subsidies. The increase in anticipated post-retirement benefit payments is the result of increased utilization coupled with a continued rise in the cost of care.
We expect our health care cost trend rate to range from 5.0% to 6.5% in 2018, 5.0% to 7.0% in 2019, 5.0% to 6.5% in 2020 and grading to 4.50% by 2025. Our post-retirement benefit cost, for certain eligible legacy Qwest retirees and certain eligible legacy CenturyLink retirees, is capped at a set dollar amount. Therefore, those health care benefit obligations are not subject to increasing health care trends after the effective date of the caps.
As mentioned above, we assumed in the Level 3 acquisition certain post-retirement plans. Though largely unfunded, these post-retirement plans, in the aggregate, are immaterial to our consolidated financial statements. Due to the insignificant amount of these post-retirement plans, we have predominantly excluded them from the remaining employee benefit disclosures in this Note.
A change of 100 basis points in the assumed initial health care cost trend rate would have had the following effects in 2017:
<table><tr><td rowspan="3"></td><td colspan="2">100 Basis
Points Change</td></tr><tr><td>Increase</td><td>(Decrease)</td></tr><tr><td colspan="2">(Dollars in millions)</td></tr><tr><td>Effect on the aggregate of the service and interest cost components of net periodic
post-retirement benefit expense (consolidated statement of operations) . . . . . . . . . .</td><td> . $ 2</td><td>(2)</td></tr><tr><td>Effect on benefit obligation (consolidated balance sheet) . . . . . . . . . . . . . . . . . . . . . . .</td><td> . 60</td><td>(57)</td></tr></table> |
11761055_65.pdf | en | The chart below sets forth the total sales value and sales volume of cigarettes in China from 2010 to 2015 and the forecast from 2016 to 2020:
Note:
(1) F refers to forecasted figures.
Sources: STMA; Ipsos research and analysis
The total sales volume of cigarettes in China grew steadily from approximately 2,342.1 billion sticks in 2010 to approximately 2,489.5 billion sticks in 2015 at a CAGR of 1.2%. The sales volume is forecasted to further grow from approximately 2,359.6 billion sticks in 2016 to approximately 2,413.0 billion sticks in 2020, at a CAGR of 0.6%. The total sales value of cigarettes in China steadily grew from RMB847.9 billion in 2010 to RMB1,422.3 billion in 2015 at a CAGR of 10.9%. The sales value is forecasted to further grow from RMB1,468.0 billion in 2016 to RMB1,749.6 billion in 2020, at a CAGR of 4.5%. |
11761055_66.pdf | en | The chart below sets forth the total sales value and sales volume of cigarettes in Hubei Province from 2010 to 2015 and the forecast from 2016 to 2020:
Note:
(1) F refers to forecasted figures.
# Sources: STMA; Ipsos research and analysis
From 2010 to 2015, the sales volume of cigarettes in Hubei Province decreased slightly from approximately 73.8 billion sticks in 2010 to approximately 73.1 billion sticks in 2015 at a CAGR of-0.2%. The total sales value of cigarettes experienced growth from RMB26.4 billion in 2010 to RMB39.9 billion in 2015 at a CAGR of 8.6%. Both sales volume and sales value of cigarettes in Hubei Province are expected to increase over the forecast period. The sales volume is expected to increase to approximately 71.9 billion sticks in 2020 from 70.2 billion sticks in 2016 with a CAGR of 0.6%, while the sales value is expected to reach RMB47.9 billion in 2020 from RMB41.5 billion in 2016 at a CAGR of 3.7%. The increase in sales value can be attributed to the STMA’s promotion of mid to high-end cigarettes and consumers’ increasing preference for mid to high-end cigarettes driven by the increasing income level and higher purchasing power of consumers. Despite the decrease in sales volume of cigarettes in 2015 and 2016 due to the slowdown of the Chinese GDP growth and the rise in specific tax from 5% to 11% in 2015 imposed by the government, the sales volume and value of cigarettes are expected to have a stable growth from 2016 to 2020. At the provincial level, Yunnan and Hunan Provinces were the top two in terms of cigarette production volume in 2015, with approximately 390.4 billion sticks and 175.7 billion sticks, respectively. Additionally, the sales of cigarettes are subject to seasonal variations. In general, the first and third quarters are the peak seasons for cigarettes during the year, partly driven by festivals such as the Lunar New Year and the Mid-Autumn Festival. |
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