Rare Earth Magnesium Technology : 2020 ANNUAL RESULTS ANNOUNCEMENT

ɚཧɚཧϋ 2020 ɷಥʩ

HK$'000 €຾ᄲࣨ

(Audited)

ɚཧɓɘϋ 2019 ɷಥʩ

ɚཧɓɞϋ 2018 ɷಥʩ

HK$'000 €຾ᄲࣨ

HK$'000 €຾ᄲࣨ

(Audited)

(Audited)

ϗɝ

Revenue

744,836

1,515,291

1,537,781

ˣл

Gross profit

130,171

416,206

409,483

ˣлଟ

Gross profit margin

17.5%

27.5%

26.6%

ࢹ೼ᛅቖұᔚۃлᆗ

EBITDA

133,220

447,150

428,905

ࢹ೼ᛅቖұᔚۃлᆗଟ

EBITDA margin

17.9%

29.5%

27.9%

ٰ؇ᏐЦ€ᑦฦŊ๐л

(Loss)/profit attributable to

(74,011)

209,732

217,691

owners of the Company

ॱлଟ

Net profit margin

N/A

13.8%

14.2%

༟ପࠋවڌ Balance sheet

༟ପᐼᕘ

Total asset

2,556,832

2,554,324

2,372,218

ᛆूᐼᕘ

Total equity

1,451,922

1,387,887

1,271,217

ვБତږ€ܼ̍ʊתץ

Cash at banks (including

46,289

271,690

156,008

ვБπಛ

pledged bank deposits)

ܸᅺ Indicators

࠾൲ˢଟ

Gearing ratio

34.1%

34.2%

30.6%

лࢹᔧႊˢଟ

EBITDA/Interest

1.36

6.20

5.87

ٰ͉ϗूଟ

Return on equity

N/A

15.1%

17.1%

໨ԫආБᗇՎʹ׸ʘᅺ๟ςۆ

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

͉ʮ̡ʊમॶɪ̹஝ۆڝ፽10ה༱Ϟᗫ

The Company has adopted the Model Code for Securities

໨ԫආБᗇՎʹ׸ʘᅺ๟ςۆ€˜ᅺ๟ς

Transactions by Directors (the "Model Code") set out in

ۆ™d͉ණྠϞᗫ͉ʮ̡໨ԫ€˜໨ԫ™

Appendix 10 to the Listing Rules as the code of conduct of the

ආБᗇՎʹ׸ʘБމςۆૢಛԨʔჅ

Group regarding securities transactions of the directors of

׵ᅺ๟ςۆה஝֛ʘᅺ๟f຾ΣΌ᜗

the Company (the "Directors") on terms no less exactly than

໨ԫЪ̈Ո᜗ݟ༔ܝdΌ᜗໨ԫᆽႩ

required standard set out in the Model Code. Having made

ʊ׵࿚Їɚཧɚཧϋɤɚ˜ɧɤɓ˚˟

specific enquiry of all Directors, all Directors confirmed that

ϋܓ፭ςᅺ๟ςۆ஝֛ʘᅺ๟f

they have complied with the required standard set out in the

Model Code throughout the year ended 31 December 2020.

໨ԫึ

THE BOARD

໨ԫึତࣛ͟ɨΐʬΤ໨ԫଡ଼ϓj

Currently, the Board comprises the following six Directors:

ੂБ໨ԫ

Executive Directors

ӏ˰ઠ €˴ࢩࡒБ݁ᐼ൒

Shum Sai Chit (Chairman and Chief Executive Officer)

ϫ᎑൴

Chi Jing Chao

ڢੂБ໨ԫ

Non-executive Director

֗਄઺બ

Professor Meng Jian

ዹͭڢੂБ໨ԫ

Independent Non-executive Directors

⿼ފ˖

Kwong Ping Man

ੵ޲͉

Cheung Sound Poon

ᗫᆇ௫

Kwan Ngai Kit

໨ԫึᔖঐ

Functions of the Board

໨ԫึࠋபՓ֛͉ණྠʘ዆᜗ഄଫʿ

The Board is responsible for formulating the overall strategies

݁ഄeᏨীʿ္࿀͉ණྠʘৌਕڌତd

and policies of the Group, reviewing and monitoring its

ܼ̍ᇜႡʿᄲҭৌਕజڌʿ္၍၍ଣ

financial performance, including preparing and approving

ᄴʘ˚੬ᐄ༶ʈЪdϽᅇ͉ණྠίึࠇ

financial statements and overseeing operational matters of

ʿৌਕිజᔖঐ˙ࠦٙ༟๕eࡰʈ༟

the management, considering the adequacy of resources,

ዝʿ຾᜕݊щԑ੄d˸ʿ־ഃהટա

qualifications and experience of staff of the Group's accounting

ʘ੃৅ሙ೻ʿཫၑ݊щ̂ԑf͉ණྠ

and financial reporting function and their training programmes

ʘ˚੬ุਕ༶ЪʿБ݁ԫ֝ʹ͟၍ଣ

and budget. Daily business operations and administrative

ᄴஈଣf

functions of the Group are delegated to the management.

໨ԫึึᙄʿ੬஝

Board meetings and practices

໨ԫึ֛ಂᑘБึᙄd໨ԫึึᙄӊ

The Board meets regularly and board meetings are held at

ϋ௰ˇ̜ක̬ϣdɽߒӊ֙ɓϣf̜ක

least four times a year at approximately quarterly intervals.

໨ԫึ֛ಂึᙄʘஷѓʿᙄ೻ѩ׵ึ

Notices and agenda of regular board meetings are served to

ᙄۃЇˇɤ̬˂೯̈ʚהϞ໨ԫd˸ک

all Directors at least fourteen days before the meetings to

הϞ໨ԫѩঐᙜ٤̈ࢩʿ̋૴ᙄ೻ධ

ensure that all Directors are given the opportunity to attend

ͦf໨ԫึ֛ಂึᙄʘึᙄ˖΁Їˇ

and to include matters in the agenda. Discussion materials

׵ึᙄᑘБۃɧ˂೯৔ʚΌ᜗໨ԫd

of regular board meetings are sent to all Directors for their

˸Զ־ഃ୚ቡf໨ԫึึᙄা፽ʘڋ

study at least three days prior to the meetings. Draft minutes

ᇃѩ׵ึܝʘΥଣࣛݬʫ೯৔ЇΌ᜗

of board meetings are circulated to all Directors for review and

໨ԫᄲቡʿ౤ԶจԈd˙֐Ъྼfึ

comments within a reasonable time after the meetings prior

ᙄা፽ʊ̂΅ʿ༉୚ήা༱໨ԫ׵ึ

to confirmation. Minutes are recorded in sufficient detail of the

ɪהϽᅇʘԫධʿ༺ߧʘӔ֛f

matters considered by the Board and decisions reached.

ܲɪ̹஝ۆୋ 3.10(1) ʿ (2) d˸ʿ3.10Aૢ

Pursuant to Rules 3.10(1) and (2), and 3.10A of the Listing

ʘ஝֛d͉ʮ̡ʊ։΂ԑ੄ᅰͦʘዹͭ

Rules, sufficient number of Independent Non-executive

ڢੂБ໨ԫdϾዹͭڢੂБ໨ԫʕ͵

Directors have been appointed and at least one of the

ЇˇϞɓΤՈ௪ቇ຅ึࠇאϞᗫৌਕ

remaining Independent Non-executive Directors has

၍ଣਖ਼ڗf໨ԫึʊϗՑ΢ዹͭڢੂ

appropriate accounting or related financial management

Б໨ԫ࣬ኽɪ̹஝ۆୋ 3.13ૢఱՉዹͭ

expertise The Board has received annual confirmation of

׌ϾࡈйЪ̈ʘϋܓᆽႩՌf

independence from each of its Independent Non-executive

Directors as required under Rule 3.13 of the Listing Rules.

໨ԫึϓࡰʘගԨೌπίܼ̍ৌਕeุ

There is no financial, business, family or other material/

ਕe࢕᙮אՉ˼ࠠɽŊ޴ᗫٙᗫڷf

relevant relationships among members of the Board.

໨ԫึ €ᚃ

THE BOARD (continued)

໨ԫʘܵᚃਖ਼ุ೯࢝

Directors' Continuous Professional Development

͉ʮ̡ʔࣛΣ໨ԫ౤ԶϞᗫɪ̹஝ۆe

The Company updates the Directors of the latest changes

ʮ̡ૢԷʿՉ˼ቇ္͜၍஝֛ʘ௰อ

in the Listing Rules, Companies Ordinance and other

ᜊਗઋرfৰོᎸ໨ԫਞၾܵᚃਖ਼ุ

applicable regulatory requirements from time to time. Apart

೯࢝ʘሙ೻d˸һอʿ౤ʺ־ഃʘٝ

from encouraging the Directors to participate in continuous

ᗆʿҦঐ̮d͉ʮ̡͵މ໨ԫτરၾ

professional development ("CPD") courses to refresh and

БุϞᗫʘʫ௅޼ীึd˸ʿΣ־ഃ

enhance their knowledge and skills, the Company also

౤ԶϞᗫ໨ԫப΂ʘቡᛘҿࣘfהϞ

arranged an industry-related in-house seminar for the

໨ԫʊΣ͉ʮ̡౤Զ־ഃ׵࿚Їɚཧ

Directors and provided them with reading materials relating to

ɚཧϋɤɚ˜ɧɤɓ˚˟ϋʫʊટաʘ

the directors' duties. All Directors have provided the Company

੃৅ߏ፽f

with their records of training they received during the year

ended 31 December 2020.

໨ԫ׵࿚Їɚཧɚཧϋɤɚ˜ɧɤɓ˚

A summary of the trainings participated by the Directors during

˟ϋʫಀਞၾʘ੃৅฿ࠑνɨj

the year ended 31 December 2020 is as follows:

ܵᚃਖ਼ุ೯࢝੃৅၇ᗳڝൗ

Types of continuous professional

A:

̈ࢩᑺࢭא੃৅ሙ೻

A:

Attending seminar(s) or training session(s)

Bj

ቡᛘజ௝e̊يʿϞᗫ͉ʮุ̡ਕא໨ԫᔖப

B:

Reading newspaper, journals and updates relating to the Company's business

ʿப΂eɪ̹஝ۆʿՉ˼ቇ္͜၍஝֛௰อ೯

or directors' duties and responsibilities, the latest development of the Listing

࢝ഃ˙ࠦٙ௰อ༟ࣘ

Rules and other applicable regulatory requirements, etc.

Άุ၍طజѓ€ᚃ

CORPORATE GOVERNANCE REPORT (CONTINUED)

໨ԫึ €ᚃ

THE BOARD (continued)

Άุ၍طᔖঐ

Corporate Governance Functions

໨ԫึࠋபܲՉ˜Άุ၍طᔖঐʘᔖᛆ

The Board is responsible for performing the following

ᇍఖ™ᄵБ͉ʮ̡ɨΐΆุ၍طᔖਕj

corporate governance duties of the Company in accordance

with the "Terms of Reference of Corporate Governance

Function" adopted by it:

Άุ၍طజѓ€ᚃ

CORPORATE GOVERNANCE REPORT (CONTINUED)

˴ࢩʿБ݁ᐼ൒

CHAIRMAN AND CHIEF EXECUTIVE OFFICER

ၡટϫ၀ځɾɻ׵ɚཧɓɘϋৗ΂Б

Subsequent to the retirement of Ms. Chi Bi Fen as Chief

݁ᐼ൒ܝd˴ࢩࡒੂБ໨ԫӏ˰ઠ΋

Executive Officer in 2019, Mr. Shum Sai Chi, the chairman

͛ᐏ։΂މ͉ʮ̡ʘБ݁ᐼ൒f

and an executive Director, has been appointed as the Chief

Executive Officer of the Company.

ӏ˰ઠ΋͛၍ଣ͉ʮ̡εϋԨᆞ઄͉

Mr. Shum Sai Chit has numerous years of experience in the

ණྠᐄ༶ٙ΢ࡈᐑືf໨ԫึႩމӏ

management of the Company and is familiar with all aspects

˰ઠ΋̙͛௷΂Б݁ᐼ൒ɓᔖf

of the Group's operations and the Board considers that Mr.

Shum Sai Chit is well qualified to take up the role of the Chief

Executive Officer.

׵ӏ΋͛஗΂նމБ݁ᐼ൒ܝd͉ʮ̡

Following the appointment of Mr. Shum as Chief Executive

Ԩೌਜʱ˴ࢩʿБ݁ᐼ൒dϾӏ΋͛

Officer, the Company does not have a separate chairman and

Νࣛዄ΂ϤՇධᔖਕdΪϤၾɪ̹஝

Chief Executive Officer and Mr. Shum holds both positions, in

ۆڝ፽ɤ̬ה༱ʘ˜Άุ၍طςۆ™ς

which there is deviation to code provision A.2.1 of Corporate

ۆ˖˖ୋ A.2.1 ૢϞה਋ᕎf࣬ኽ༈ς

Governance Code as set out in Appendix 14 of the Listing Rules,

ۆૢ˖d˴ࢩၾБ݁ᐼ൒ٙԉЍᏐʚ

which provides (among other matters) that the roles of the

ਜʱdʔᏐ͟ɓɛΝࣛࡒ΂fӏ΋͛І

chairman and the chief executive officer should be separate

2015 ϋৎɓٜߧɢࠋபʮ̡ٙ዆᜗၍ଣ

and should not be performed by the same individual. Mr.

ʈЪdϾତࣛʘτર̙˸౤৷͉ʮ̡

Shum Sai Chit had been in charge of the overall management

ٙΆุӔഄʿੂБࣖଟdϞп͉ʮ̡

of the Company since 2015 and the Company considered that

׵ତචݬһ৷ࣖή೯࢝f໨ԫึਗ਼ʔ

such arrangement would promote the efficient formulation

ࣛᄲቡତϞݖ࿴dԨ׵໨ԫึႩމቇ

and implementation of the Company's strategies which would

຅ࣛЪ̈̀ࠅτરf

enable the Group to further develop its businesses effectively

at this stage. The Board will review the current structure from

time to time and shall make necessary arrangements when

the Board considers appropriate.

ڢੂБ໨ԫ

NON-EXECUTIVE DIRECTORS

ڢੂБ໨ԫʿዹͭڢੂБ໨ԫʘ։΂

The terms of appointment of the Non-executive Directors and

ѩމϞܸ֛΂ಂdԨ඲࣬ኽ͉ʮ̡ʘ

the Independent Non-executive Directors are fixed for a specific

ʮ̡୚ۆ€˜ʮ̡୚ۆ™ቃ࠽ৗ΂ʿࠠ

term, and shall be subject to retirement by rotation and re-

፯f

election in accordance with the Bye-laws of the Company (the

"Bye-laws").

Άุ၍طజѓ€ᚃ

CORPORATE GOVERNANCE REPORT (CONTINUED)

໨ԫึᒍɨʘ։ࡰึ

BOARD COMMITTEES

ͦۃd͉ʮ̡ʊϓ̬ͭࡈ։ࡰึdʱй

Currently, the Company has set up four committees, namely

މᄲࣨ։ࡰึeᑚཇ։ࡰึe౤Τ։ࡰ

the Audit Committee, the Remuneration Committee, the

ึʿੂБ၍ଣ։ࡰึf΢։ࡰึʊᐏ

Nomination Committee and the Executive Management

໨ԫึᔷબत֛ᛆɢ˸՘п໨ԫึᄵ

Committee respectively. Each committee is delegated with

БՉᔖਕʿ္છ͉ණྠत֛ᇍᖚʘԫ

specific authorities by the Board in assisting the Board to

ਕf΢։ࡰึʘԉЍʿᔖঐ฿ࠑνɨj

discharge its duties and to administer particular aspects of the

Group's activities. The roles and functions of each committee

are summarized below:

ᄲࣨ։ࡰึ

Audit Committee

ᄲࣨ։ࡰึ׵ɓɘɘɘϋϓͭf͉ʮ̡

The Audit Committee was established in 1999. The Company

ʊ࣬ኽ༈ςۆʘςۆૢ˖ୋ C.3.3 ૢમ

has adopted Terms of Reference of the Audit Committee in

ॶᄲࣨ։ࡰึʘᔖᛆᇍఖfᄲࣨ։ࡰ

compliance with code provision C.3.3 of the Code. The Audit

ึ͟ɧΤዹͭڢੂБ໨ԫଡ଼ϓdу⿼

Committee comprises three Independent Non-executive

ފ˖΋͛€ᄲࣨ։ࡰึ˴ࢩeੵ޲͉΋

Directors, namely Mr. Kwong Ping Man (chairman of the Audit

͛ʿᗫᆇ௫΋͛f

Committee), Mr. Cheung Sound Poon and Mr. Kwan Ngai Kit.

ᄲࣨ։ࡰึʘ˴ࠅᔖபމ౤Զዹͭʿ

The principal responsibilities of the Audit Committee is to

ਖ਼ุʘৌਕිజจԈe൙П͉ණྠʫ

provide an independent and professional advice on financial

௅္છʘϓࣖ€ܼ͉̍ʮ̡ίึࠇʿৌ

reporting, to evaluate the effectiveness of internal control

ਕිజᔖঐ˙ࠦʘ༟๕eࡰʈ༟ዝʿ

(including the adequacy of resources, qualifications and

຾᜕d˸ʿ־ഃהટաʘ੃৅ሙ೻ʿ

experience of staff of the Company's accounting and financial

ཫၑ݊щԑ੄ʿ̮௅ၾʫ௅ᄲࣨ݊щ

reporting function, and their training programmes and budget)

̂ԑf

and the sufficiency of external and internal audits of the Group.

ᄲࣨ։ࡰึ˴ࢩ׵ӊϣึᙄܝdѩึ

After each Audit Committee meeting, the chairman of the Audit

Σ໨ԫึිజ༈։ࡰึীሞཀʘࠠࠅ

Committee will report to the Board of the significant issues

ԫධd˸Զ໨ԫึٝ઄ʿ ŊאЪϽᅇf

discussed by the Committee for the Board's information and/or

consideration.

ᄲࣨ։ࡰึ׵࿚Їɚཧɚཧϋɤɚ˜ɧ

The Audit Committee has held four meetings in the year ended

ɤɓ˚˟ʘϋܓ΍ᑘБཀ̬ϣึᙄdՉ

31 December 2020. The major tasks accomplished by it during

׵ಂʫҁϓʘ˴ࠅʈЪ฿ࠑνɨj

the year are summarized below:

Άุ၍طజѓ€ᚃ

CORPORATE GOVERNANCE REPORT (CONTINUED)

໨ԫึᒍɨʘ։ࡰึ €ᚃ

BOARD COMMITTEES (continued)

ᄲࣨ։ࡰึ €ᚃ

Audit Committee (continued)

• ၾࣨᅰࢪᆻਠ࿚Їɚཧɚཧϋɤ

• Discussed with the auditors on the scope of audit for the

ɚ˜ɧɤɓ˚˟ϋܓʘᄲࣨᇍఖi

year ended 31 December 2020; and

ʿ

ᄲࣨ։ࡰึʊᄲቡ͉ණྠ࿚Їɚཧɚ

The Audit Committee has reviewed the annual results of the

ཧϋɤɚ˜ɧɤɓ˚˟ϋܓʘΌϋุ

Group for the year ended 31 December 2020.

ᐶf

ᑚཇ։ࡰึ

Remuneration Committee

ᑚཇ։ࡰึ׵ɓɘɘʬϋϓͭf͉ʮ̡

The Remuneration Committee was established in 1996. The

ʊ࣬ኽ༈ςۆʘςۆૢ˖ୋ B.1.2 ૢમ

Company has adopted Terms of Reference of the Remuneration

ॶᑚཇ։ࡰึʘᔖᛆᇍఖfᑚཇ։ࡰ

Committee in compliance with code provision B.1.2 of the

ึϓࡰܼ̍ੂБ໨ԫϫ᎑൴΋͛ʿՇ

Code. The Remuneration Committee comprises an Executive

ΤዹͭڢੂБ໨ԫdу⿼ފ˖΋͛€ᑚ

Director, namely Mr. Chi Jing Chao and two Independent Non-

ཇ։ࡰึ˴ࢩʿੵ޲͉΋͛f

executive Directors, namely Mr. Kwong Ping Man (chairman of

the Remuneration Committee) and Mr. Cheung Sound Poon.

ᑚཇ։ࡰึਖ਼பఱ͉ʮ̡໨ԫʿ৷ᄴ၍

The Remuneration Committee is responsible for making

ଣɛࡰʘᑚཇ݁ഄʿݖ࿴Σ໨ԫึ౤

recommendations to the Board on the Company's policy

̈ܔᙄfՉӊϋ௰ˇᑘБɓϣึᙄ˸

and structure in relation to remuneration of the Directors

Ꮸীʿᔾ֛ੂБ໨ԫʿ৷ᄴ၍ଣɛࡰ

and senior management of the Company. It schedules to

ʘᑚཇʿ၅лd˸ʿΣ໨ԫึܔᙄڢ

meet at least once a year to review and determine the

ੂБ໨ԫʘཇږfίᔾ֛ʿҭࡘ͉ʮ

remuneration packages of the Executive Directors and senior

̡໨ԫʿ৷ᄴ၍ଣɛࡰʘᑚཇࣛdᑚ

management and to make recommendation to the Board of

ཇ։ࡰึਗ਼Ͻᅇ΢˙ࠦΪ९ܼ̹̍ఙ

the remuneration of Non-executive Director. In determining

ᘩنɢeࡈɛڌତʿ͉ʮ̡ၾՉุਕఊ

and approving the remuneration of Directors and senior

Зʘޮлঐɢഃf

management of the Company, the Remuneration Committee

will take into consideration of various factors such as market

competitiveness, individual performance and profitability of the

Company and its business units.

ᑚཇ։ࡰึ׵࿚Їɚཧɚཧϋɤɚ˜ɧ

The Remuneration Committee has held one meeting in the year

ɤɓ˚˟ϋܓʫᑘБཀɓϣึᙄd˸Ꮸ

ended 31 December 2020 to review the existing remuneration

ী͉ʮ̡໨ԫʿ৷ᄴ၍ଣɛࡰʘᑚཇ

policies of the Directors and senior management of the

ܙ༾ഃԫ֝f

Company, etc.

Άุ၍طజѓ€ᚃ

CORPORATE GOVERNANCE REPORT (CONTINUED)

໨ԫึᒍɨʘ։ࡰึ €ᚃ

BOARD COMMITTEES (continued)

౤Τ։ࡰึ

Nomination Committee

౤Τ։ࡰึ׵ɚཧɓɚϋϓͭd͉ʮ̡

The Nomination Committee was established in 2012. The

ʊਞϽ༈ςۆʘςۆૢ˖ୋ A.5.2 ૢમ

Company has adopted Terms of Reference of the Nomination

ॶ౤Τ։ࡰึʘᔖᛆᇍఖf౤Τ։ࡰึ

Committee with reference to code provision A.5.2 of the Code.

ϓࡰܼ̍ੂБ໨ԫӏ˰ઠ΋͛€౤Τ։

The Nomination Committee comprises an Executive Director,

ࡰึ˴ࢩʿՇΤዹͭڢੂБ໨ԫdу

namely Mr. Shum Sai Chit (chairman of the Nomination

⿼ފ˖΋͛ʿᗫᆇ௫΋͛f

Committee) and two Independent Non-executive Directors,

namely Mr. Kwong Ping Man and Mr. Kwan Ngai Kit.

౤Τ։ࡰึࠋபᏨী໨ԫึʘݖ࿴eɛ

The Nomination Committee is responsible for reviewing the

ᅰʿଡ଼ϓdيЍՈ௪Υቇ༟̙ࣸ̈΂

structure, size and composition of the Board, identifying

໨ԫʘɛɻԨఱ໨ԫʘ։΂אᚃ΂Σ

individuals suitably qualified to become Directors and making

໨ԫึЪ̈ܔᙄd൙ПዹͭڢੂБ໨

recommendations to the Board on the appointment or

ԫʘዹͭ׌d˸ʿ္࿀͉ʮ̡໨ԫึϓ

reappointment of Directors, assessing the independence of

ࡰεʩʷ݁ഄʘੂБഃԫ֝f

the Independent Non-executive Directors and monitoring the

implementation of the Board Diversity Policy of the Company.

౤Τ։ࡰึ׵࿚Їɚཧɚཧϋɤɚ˜ɧ

The Nomination Committee has held one meeting in the year

ɤɓ˚˟ʘϋܓʫᑘБཀɓϣึᙄdஹ

ended 31 December 2020, together with by means of written

Ν˸ࣣࠦӔᙄ˙όdᏨীʿஈଣ˸ɨ˴

resolutions, to review and deal with the following major issues:

ࠅԫධj

ੂБ၍ଣ։ࡰึ

Executive management Committee

ੂБ၍ଣ։ࡰึ׵ɚཧཧʞϋϓͭdࠈ

The Executive Management Committee was established in

ϞࣣࠦᔖᛆᇍఖԨᐏ໨ԫึબᛆ˸˚

2005 with written terms of reference to operate as a general

੬၍ଣ։ࡰึҖό༶ЪfͦۃdੂБ၍

management committee under the authority of the Board.

ଣ։ࡰึ͟ՇΤੂБ໨ԫଡ଼ϓdуӏ

Currently, the Executive Management Committee comprises

˰ઠ΋͛€ੂБ၍ଣ։ࡰึ˴ࢩʿϫ

two Executive Directors, namely Mr. Shum Sai Chit (chairman

᎑൴΋͛f

of the Executive Management Committee) and Mr. Chi Jing

Chao.

؂ਕᗳй

Types of services

HK$'000

ᄲࣨ؂ਕ

Audit services

1,000

ᐼࠇ

Total

1,000

໨ԫᇜႡৌਕజڌʘப΂

DIRECTORS' RESPONSIBILITIES FOR PREPARATION OF THE

FINANCIAL STATEMENTS

໨ԫᆽႩ־ഃϞப΂ᇜႡ̙ॆྼʿʮ

The Directors acknowledge their responsibilities for preparing

̻ήˀ݈͉ණྠԫਕًرʿุᐶʘৌ

the financial statements which give a true and fair view of the

ਕ జ ڌ f ࿚ Їɚཧɚཧ ϋɤɚ˜ɧɤ ɓ

state of the Group's affairs and results. The Group recorded a

˚˟ϋܓd͉ණྠ፽੻ၝΥଋᑦฦߒ

consolidated net loss of approximately HK$74,011,000 for the

74,011,000 ಥʩf

year ended 31 December 2020.

͉ʮ̡ࣨᅰࢪఱՉ࿁ৌਕజڌʘజѓ

The statement of the auditors of the Company about their

ப΂ᑊ׼༱׵͉඄ϋజѓୋ 53 Їୋ 57

reporting responsibilities on the financial statements is set out

ࠫʘ˜ዹͭࣨᅰࢪజѓ™ʫf

in the "Independent Auditor's Report" on pages 53 to 57 of this

annual report.

Άุ၍طజѓ€ᚃ

CORPORATE GOVERNANCE REPORT (CONTINUED)

ʮ̡।ࣣ

COMPANY SECRETARY

Іɚཧɓʞϋɞ˜ɚɤ˚ৎdᅾ਷͏΋

Since 20 August 2015, Mr. Fan Kwok Man, Raymond has been

͛ᐏ։΂މʮ̡।ࣣfᅾ΋͛ܵϞ࠰

appointed as the Company Secretary. Mr. Fan holds a Bachelor

ಥʕ˖ɽኪ཯બʘʈਠ၍ଣኪɻኪЗd

of Business Administration in Insurance, Financial and

Ԩ˴ࡌڭᎈৌਕၾၚၑኪd־͵މ࠰

Actuarial Analysis from the Chinese University of Hong Kong

ಥึࠇࢪʮึึࡰdՈ௪གྷɤϋᄲࠇe

and he is member of the Hong Kong Institute of Certified Public

ึࠇeৌਕ၍ଣʿΆุፄ༟຾᜕f

Accountants and has over 10 years of experience in auditing,

accounting, financial management and corporate finance.

࣬ኽɪ̹஝ۆୋ3.29ૢdᅾ΋͛׵࿚Ї

According to Rule 3.29 of the Listing Rules, Mr. Fan has taken

ɚཧɚཧϋɤɚ˜ɧɤɓ˚˟ϋܓʫʊ

no less than 15 hours of relevant professional training during

ਞၾʔˇ׵ 15 ʃࣛٙ޴ᗫਖ਼ุ੃৅f

the year ended 31 December 2020.

ٰ؇ᛆл

SHAREHOLDERS' RIGHTS

ٰ؇̜කٰ؇तйɽึ

Convention of Special General meeting

࣬ኽʮ̡୚ۆୋ58ૢd׵౤̈කึࠅӋ

Pursuant to Bye-law 58 of the Bye-laws, Shareholders holding

຅˚ܵϞϞᛆί͉ʮٰ̡؇ɽึҳୃ

at the date of deposit of the requisition not less than 10% of

ʘ͉ʮ̡ྼᖮٰ͉ʔˇ׵10% ʘٰ؇d

the paid up capital of the Company carrying the right of voting

ϞᛆᎇࣛΣ໨ԫึא͉ʮ̡।ࣣ೯̈

at general meetings of the Company shall at all times have the

ࣣࠦࠅӋdࠅӋ໨ԫึ̜කٰ؇तй

right, by written requisition to the Board or the Secretary of

ɽึ˸ஈଣࣣࠦࠅӋʫܸ֛ʘ΂Оԫ

the Company, to require a special general meeting to be called

ਕdϾ༈ഃึᙄ඲׵ϞᗫࠅӋ೯̈Ї

by the Board for the transaction of any business specified in

͉ʮ̡ʘൗ̅፬ԫஈܝՇࡈ˜ʫᑘБf

such requisition; and such meeting shall be held within two

ν໨ԫึ͊ঐ׵ટᐏϞᗫࠅӋܝɚɤ

months after the deposit of such requisition to the Company's

ɓ˚ʫ̜කึᙄd೯̈ࠅӋ٫͉Ԓ̙ܲ

registered office. If within 21 days of such deposit the Board

๫ϵᅉ༺ɓɘɞɓϋʮ̡ج€˜ʮ̡ج™

fails to proceed to convene such meeting, the requisitionists

ୋ74(3) ૢʘ஝֛̜කึᙄf

themselves may do so in accordance with the provisions

of Section 74(3) of the Bermuda Companies Act 1981 (the

"Companies Act").

Άุ၍طజѓ€ᚃ

CORPORATE GOVERNANCE REPORT (CONTINUED)

ٰ؇ᛆл €ᚃ

SHAREHOLDERS' RIGHTS (continued)

׵ٰ؇ɽึɪ౤яᙄࣩ

Putting Forward Proposals at General meetings by Shareholders

࣬ኽʮ̡جୋ79ʿ80ૢʘ஝֛d೮াٰ

Pursuant to Sections 79 and 80 of the Companies Act,

؇Ϟᛆ׵ٰ؇ɽึɪ౤яᙄࣩࡊ߰־

registered Shareholders are entitled to put forward a proposal

ഃj

at a general meeting if they:

Άุ၍طజѓ€ᚃ

CORPORATE GOVERNANCE REPORT (CONTINUED)

ࠬᎈ၍ଣʿʫ௅္છ

RISK MANAGEMENT AND INTERNAL CONTROLS

໨ԫึΌᛆࠋபၪ͉ܵණྠʘࠬᎈ၍

The Board has overall responsibilities for risk management

ଣʿʫ௅္છfʫ௅္છӻ୕݊މ၍

and internal control of the Group. The system of internal

ଣʿಯЭ͊ঐᄵБ຾ᐄͦᅺʘࠬᎈd

control is designed to manage and mitigate the risk of failure to

Ԩ࿁ࠠɽ፹Ⴌ௓ࠑאฦ̰౤ԶΥଣڭ

achieve business objectives with reasonable assurance against

ᗇf

material misstatement or loss.

໨ԫึʊఱ͉ණྠʘʫ௅္છӻ୕ʘ

The Board has conducted annual review of the effectiveness

Ϟࣖ׌ආБϋܓᏨীdᏨীᇍఖ଄ႊ

of the internal control system of the Group which covers the

ࠬᎈ၍ଣ̌ঐeৌਕeᐄ༶ʿΥ஝ʘ

review of risk management functions, financial, operational and

္છe͉ʮ̡ίึࠇʿৌਕිజᔖঐ

compliance controls, the adequacy of resources, qualifications

˙ࠦٙ༟๕eࡰʈ༟ዝʿ຾᜕d˸ʿ־

and experience of staff of the Company's accounting and

ഃהટաʘ੃৅ሙ೻ʿཫၑ݊щ̂ԑ

financial reporting function and their training programmes and

ഃf໨ԫึႩމ͉ණྠʘʫ௅္છӻ

budget, etc.. The Board considered the internal control system

୕ϞࣖϾԑ੄f

of the Group effective and adequate.

͉ʮ̡ʊՓࠈʫ࿇ऊࢹ݁ഄ˸ఱஈଣ

The Company have formulated an inside information policy

ʫ࿇ऊࢹ౤Զܸˏf͉ʮ̡֛ಂ౤፴

providing guideline on handling inside information. The

໨ԫʿ྇ࡰਕ඲፭ς͉ʮ̡ఱʫ࿇ऊ

Company regularly reminds the directors and employees

ࢹהમॶٙהϞ݁ഄdܼ̍ఱ൯ር͉

about compliance with all policies adopted by the Company

ʮ̡ᗇՎϾ፭ςɪ̹஝ۆڝ፽ 10ה༱ʘ

regarding inside information including the Model Code set out

ᅺ๟ςۆf

in Appendix 10 of the Listing Rules in relation to dealings in

securities of the Company.

ҳ༟٫ᗫڷ

INVESTOR RELATIONS

͉ණྠߧɢ̋੶ၾҳ༟٫ʘᗫڷdᄣ

The Group is committed to enhance investor relationship by

͉̋ණྠ׵ҳ༟ޢٙீ׼ܓf

increasing its transparency to the investment community.

͉ʮ̡ீཀ˸ɨ˙όΣҳ༟٫೯׳Ϟ

The following measures have been taken by the Company to

ᗫ͉ණྠʘ௰อ೯࢝ਗΣʿऊࢹd˸

keep investors informed of the latest developments and news of

ʿڮආ͉ʮ̡ၾٰ؇ʘගٙʝ޴๖ஷj

the Group and to facilitate a two-way communication between

the Company and its Shareholders:

ί͉ʮ̡׵ɚཧɚཧϋʬ˜ɧɤ˚ᑘБ

At the Company's last AGM held on 30 June 2020, all the

ʘɪٰ֣؇඄ϋɽึɪdהϞᗫ׵મ

resolutions relating to the adoption of financial statements,

ॶৌਕజڌeࠠ፯໨ԫeᚃ໌ࣨᅰࢪ

re-election of Directors, reappointment of auditors and grant

ʿબʚ೯БʿᒅΫٰ΅ʘɓছબᛆഃ

of general mandates to issue and repurchase shares have

Ӕᙄࣩѩᐏ੻ஷཀf͉ʮ̡ਗ਼ࠈ׵ɚ

been duly passed. The forthcoming AGM of the Company is

ཧɚɓϋʬ˜ɧɤ˚א͉ʮ̡ၣ१ʿᑌ

scheduled to be held on 30 June 2021 or any other dates as

ʹהܝᚃ̊೯ʘආɓӉٰ؇඄ϋɽึ

specified in further notice of AGM meeting to be published on

ஷѓההࠈ׼ʘ΂ОՉ˼˚ಂᑘБʦ

the websites of the Company and the Stock Exchange later.

ٰ֣؇඄ϋɽึf

ੂБ໨ԫ

EXECUTIVE DIRECTORS

ӏ˰ઠ΋͛ dʬɤɧ๋d͉ණྠ˴ࢩࡒ

Mr. SHUM Sai Chit, age 63, Chairman and Chief Executive

Б݁ᐼ൒fӏ΋͛ಀމ̙อϞࠢʮ̡໨

Officer of the Group. Prior to joining the Group, Mr. Shum

ԫᐼ຾ଣf̙อϞࠢʮ̡˴ࠅ੽ԫ५

was the Managing Director of Go Modern Limited which was

ᔌۜႡிձ൱׸ุਕfӏ΋͛׵ɓɘ

principally engaged in manufacturing of textile products and

ɞ̬ϋ̋ɝ၅ܔ޲५ᔌۜආ̈ɹʮ̡d

trading activities. In 1984, Mr. Shum joined Fujian Textiles

̈΂຾ଣdࠋப५ᔌۜٙආ̈ɹุਕ f

Import and Export Corporation as a Manager to oversee

ӏ΋͛ଭุ׵ऊ൬ۜᄆࣸʿ୕ࠇਖ਼ุf

importing and exporting of textile products. Mr. Shum is a

ӏ΋͛ତࣛ͵މ˰ߏජΈණྠછٰϞ

graduate of Consumer Product Pricing and Statistics. Mr. Shum

ʮ̡€ٰ΅˾໮j509 ʘੂБ໨ԫf

is currently an executive director of Century Sunshine Group

Holdings Limited (stock code: 509).

ϫ᎑൴΋͛dɧɤɞ๋d׵ɚཧɓɘϋ

Mr. CHI Jing Chao, aged 38, was appointed as an executive

ʬ˜ɚɤɖ˚ᐏ։΂މ͉ʮ̡ੂБ໨

director of the Company on 27 June 2019. Prior to his

ԫf׵ᐏ։΂ۃd־މ˰ߏජΈණྠ

appointment, he was the chief corporate affairs officer of

છٰϞࠢʮ̡€ٰ΅˾໮j 509 ٙΆุ

Century Sunshine Group Holdings Limited (stock code: 509).

ԫਕᐼ္dࠋப዆᜗Άุԫਕfϫ΋

He was responsible for the overall corporate activities. Mr. Chi

͛ኹϞགྷ 10 ϋΆุԫਕʈЪ຾᜕fϫ

has more than 10 years of experience in corporate affairs. Mr.

΋͛ଭุ׵ৌਕၾБ݁၍ଣਖ਼ุfϫ

Chi is a graduate of Financial and Administrative Management.

΋͛׵ɚཧཧ̬ϋɞ˜̋ɝ˰ߏජΈ

Mr. Chi has joined Century Sunshine Group Holdings Limited

ණྠછٰϞࠢʮ̡fϫ΋͛މ͉ʮ̡

since August 2004. Mr. Chi is the nephew of Mr. Chi Wen Fu,

છٰٰ؇ϫ˖బ΋͛ٙ᣾ɿf־ତࣛ

the substantial shareholders of the Company. He is currently an

މ˰ߏජΈණྠછٰϞࠢʮ̡ੂБ໨

executive director of Century Sunshine Group Holdings Limited.

ԫf

ڢੂБ໨ԫ

NON-EXECUTIVE DIRECTOR

֗਄઺બ dʬɤ๋̬dତ΂ʕ਷߅ኪ

Professor MENG Jian, age 64, is a professor of State Key

৫ڗ݆Ꮠ͜ʷኪ޼Ӻה೽ɺ༟๕л͜

Laboratory for Rare Earth Resource Utilisation, Changchun

਷࢕ࠠᓃྼ᜕܃઺બiʕ਷೽ɺኪึո

Institute of Applied Chemistry of Chinese Academy of Science.

᜗߅ኪၾอҿࣘਖ਼ุ։ࡰึਓ˴΂iʕ

He is a deputy officer of Professional Committee of Solid

਷೽ɺኪึʿʕ਷ϞЍږ᙮ኪึଣԫf

Science and New Materials of Chinese Society of Rare Earth.

֗઺બމʕ਷೽ɺБุ՘ึʿʕ਷ᒝ

He is also a director of Chinese Society of Rare Earth and

՘ਖ਼࢕f֗઺બڗಂ੽ԫ೽ɺᒝΥږ

Nonferrous Metals Society of China. He is an expert of the

อҿࣘක೯޼Ӻd࿁ʕ਷೽ɺᒝΥږ

Association of China Rare Earth Industry and China Magnesium

ٙක೯ၾᏐ͜Ϟ߉্̈ٙᘠf֗઺બ

Association. Professor Meng has been engaging in research

׵Λ؍ɽኪ̒ኬ᜗ਖ਼ุଭุdܵϞʕ

and development of rare earth magnesium alloys and new

਷߅ኪ৫ʷኪ௅၂ɻኪЗdԨ׵˚͉

materials. He has contributed to the development and

ᔮ዗Ҧஔ߅ኪɽኪଉிdᐏʈ೻௹ɻ

application of rare earth magnesium alloys in China. Professor

ኪЗf֗઺બତࣛ͵މ˰ߏජΈණྠ

Meng majored in semiconducting from Jilin University, and

છٰϞʮ̡€ٰ΅˾໮j 509 ʘ೽ɺᒝ

holds a master's degree from the chemistry department of

Υږਖ਼ࣩᚥਪf

Chinese Academy of Science. He holds a degree of doctor of

Engineering from Toyohashi University of Technology, Japan.

Professor Meng is currently a consultant of Century Sunshine

Group Holdings Limited (stock code: 509) for rare earth

magnesium alloys projects.

໨ԫʿ৷ॴ၍ଣɛࡰᔊʧ€ᚃ

DIRECTORS AND SENIOR MANAGEMENT PROFILES (CONTINUED)

ዹͭڢੂБ໨ԫ

INDEPENDENT NON-EXECUTIVE DIRECTORS

⿼ފ˖΋͛dʞɤʬ๋dତމዦ䇐Άุ

Mr. KWONG Ping Man, age 56, is a director of O'Park Corporate

؂ਕϞࠢʮ̡ʘ໨ԫf༈ʮ̡੽ԫΆ

Services Limited which provides corporate advisory services.

ุፔ༔؂ਕf⿼΋͛׵εගʮ̡ዄ΂

Mr. Kwong had served as the chief financial officer of various

ৌਕᐼ္ટڐ7ϋf⿼΋͛׵ึࠇeৌ

companies for almost seven years. Mr. Kwong has over 15

ਕʿБ݁˙ࠦϞགྷ 15 ϋ຾᜕f⿼΋͛

years of experience in accounting, finance and administration.

͵՟੻࠰ಥଣʈɽኪ཯બʘਖ਼ุึࠇ

He obtained a master's degree in Professional Accounting

ኪ၂ɻኪЗf⿼΋͛މዦݲੂุึࠇ

from the Hong Kong Polytechnic University. He is a member

ࢪʮึึࡰʿ࠰ಥึࠇࢪʮึ༟ଉึ

of the Australian Society of Certified Practising Accountants,

ࡰd͵މ࠰ಥʮ̡।ࣣʮึึɻf⿼΋

fellow member of the Hong Kong Institute of Certified Public

͛ତࣛމࡥࢗ€ʕ਷છٰϞࠢʮ̡€ٰ

Accountants, and associate member of the Hong Kong Institute

΅˾໮j 1181eᎲެණྠછٰϞࠢʮ̡

of Company Secretaries. Mr. Kwong is currently an independent

€ٰ΅˾໮j 8493ʿ੿ԳછٰϞࠢʮ̡

non-executive director of Tang Palace (China) Holdings Limited

€ٰ΅˾໮j 3789 ʘዹͭڢੂБ໨ԫf

(Stock Code: 1181), Dragon King Group Holdings Limited (Stock

Code: 8493) and Royal Deluxe Holdings Limited (Stock Code:

3789).

ੵ޲͉΋͛ dʬɤ๋dତ΂ெ੦ึࠇ

Mr. CHEUNG Sound Poon, age 60, is currently a senior audit

ࢪБ৷ॴࣨᅰ຾ଣfੵ΋͛ಀ΂ Gary

manager at Chui & Kwok (CPA). He was an audit senior at

W.K. Yam & Co. (CPA)ʘ৷ॴࣨᅰࢪf

Gary W. K. Yam & Co. (CPA). Mr. Cheung has over 35 years

ੵ΋͛ኹϞགྷ 35 ϋึࠇʿࣨᅰ຾᜕f

of experience in accounting and auditing. He is currently an

ੵ΋͛ତࣛމ˰ߏජΈණྠછٰϞʮ̡

independent non-executive director of audit committee of

€ٰ΅˾໮j 509 ʘዹͭڢੂБ໨ԫࡒ

Century Sunshine Group Holdings Limited (stock code: 509).

ᄲࣨ։ࡰึϓࡰf

ᗫᆇ௫΋͛d̬ɤɓ๋dତމତ˾˫߅

Mr. KWAN Ngai Kit, aged 41, is currently the chief financial

ණྠϞࠢʮ̡€ٰ΅˾໮j 3600 ٙৌਕ

officer and the company secretary of Modern Dental Group

ᐼ္ʿʮ̡।ࣣfᗫ΋͛׵ᄲࠇ˙ࠦ

Limited (Stock Code: 3600). Mr. Kwan has over 10 years'

ጐགྷ 10 ϋ຾᜕f־ಀމτ͑ึࠇࢪԫ

experience in auditing. He was a senior manager in assurance

ਕהᄲࠇ௅ژٙ৷ॴ຾ଣf־މ࠰ಥ

department of Ernst & Young. He is a member of the Hong

ึࠇࢪʮึึࡰʿत஢ʮႩึࠇࢪʮ

Kong Institute of Certified Public Accountants and a fellow

ึ༟ଉึࡰfᗫ΋͛ܵϞ࠰ಥʕ˖ɽ

member of the Association of Chartered Certified Accountants.

ኪٙʈਠ၍ଣ၂ɻኪЗʿ࠰ಥଣʈɽ

Mr. Kwan holds a MBA degree from The Chinese University

ኪึࠇኪኪɻኪЗfᗫ΋ٜ͛Їɚཧ

of Hong Kong and a Bachelor's degree in Accountancy from

ɚཧϋɤɚ˜ɧɤ˚ۃዄ΂ᆀ༷߅Ҧછ

The Hong Kong Polytechnic University. Mr. Kwan was an

ٰϞࠢʮ̡€ٰ΅˾໮j 1089 ʘዹͭڢ

independent non-executive director of Leyou Technologies

ੂБ໨ԫfᗫ΋͛ତࣛމԭݲྼุණ

Holdings Limited (Stock Code: 1089) until 31 December 2020.

ྠ€છٰϞࠢʮ̡€ٰ΅˾໮j1737ʿ

Mr. Kwan is currently an independent non-executive director

ᓿܔᅃණྠછٰϞࠢʮ̡€ٰ΅˾໮j

of A & S Group (Holdings) Limited (Stock Code: 1737) and Lai

8455f

Group Holding Company Limited (Stock Code: 8455).

৷ॴ၍ଣɛࡰ

SENIOR MANAGEMENT

ኁ˂ʩ΋͛dʞɤʬ๋dਖ਼ப͉ණྠΆ

Mr. LU Tianyuan, age 56, is responsible for the corporate

ุԫਕ၍ଣdኁ΋͛ଭุ׵ဏႧԊ˖

affairs management of the Group. Mr. Lu is a graduate of

ኪਖ਼ุd຾᏶ࢪf־׵Άุԫਕ၍ଣ

Chinese Language and Literature and is an economist. He

˙ࠦኹϞགྷ15 ϋ޴ᗫ຾᜕d̋ɝ͉ණྠ

has over 15 years of relevant experience in corporate affairs

ۃdಀ׵ݔ᚛ΥږɽۨΆุʈЪགྷ 25

management. Prior to joining the Group, he has worked in a

ϋf׵ɚཧɓʞϋ̋ɝ͉ණྠf

large alloy enterprise for over 25 years. He joined the Group

in 2015.

ϡอᎲ΋͛d̬ɤ๋̬dࠋப͉ණྠᒝ

Mr. ZHU Xinlong, age 44, is responsible for production,

ପۜ͛ପ຾ᐄձପۜ޼೯fϡ΋͛ί

operation, and research and development of the products.

ږ᙮ᒝБุՈϞ൴ཀ 20ϋྼስ຾᜕dኸ

Mr. Zhu has more than 20 years of experience in magnesium

ڗ׵ږ᙮ᒝձᒝΥږ͛ପʈᖵձଡ଼ᔌ

industry, specializing in the production process and

၍ଣdڗಂ؂ਕ׵ږ᙮ᒝձᒝΥږٙ

organization management of magnesium and magnesium

ʕ਷Άุf׵ɚཧɓɘϋ̋ɝ͉ණྠf

alloys. He has long served in magnesium and magnesium

alloys enterprises in China. He joined the Group in 2019.

ኽ໨ԫึהə༆d͉ʮ̡ʘ໨ԫeՉᑌ

According to the understanding of the Board, none of the

ᖩɛɻʿ΂ОኹϞ͉ʮٰ̡͉൴ཀ 5%

Directors, their associates or any Shareholders who owned

ʘٰ؇ԨೌܵϞۃʞɽ܄˒ʿۃʞɽ

more than 5% of the Company's share capital had any interest

ԶᏐਠʘ΂Оᛆूf

in the five largest customers or the five largest suppliers.

ৌਕ༟ࣘ࿜ࠅ

SUMMARY FINANCIAL INFORMATION

࿜፽І຾ᄲࣨʘৌਕజڌdϞᗫཀ̘ʞ

A summary of the published results and assets, liabilities, and

ࡈৌ݁ϋܓʮбʘุᐶʿ༟ପeࠋවe

non-controlling interests of the Group for the last five financial

ʿڢછՓ׌ᛆूٙ࿜ࠅ༱ΐ׵ୋ 163Ї

years, as extracted from the audited financial statements

164 ࠫf༈࿜ࠅԨʔ࿴ϓ຾ᄲࣨৌਕజ

and restated as appropriate, is set out on page 163 to 164.

ڌٙɓ௅ʱf

This summary does not form part of the audited financial

statements.

ٰ͉

SHARE CAPITAL

ৰৌਕజڌڝൗ 29 ڝהמᚣ٫̮d͉

Except as disclosed in the note 29 to the financial statements,

ʮٰ̡͉׵ϋʫ฿ೌᜊਗf

there were no movements in the Company's share capital

during the year.

̙ԶʱݼᎷ௪

DISTRIBUTABLE RESERVES

׵ɚཧɚཧϋɤɚ˜ɧɤɓ˚d͉ʮ

As at 31 December 2020, the Company's reserves available for

̡̙ԶʱݼᎷ௪€࣬ኽϵᅉ༺ɓɘɞɓ

distribution, calculated in accordance with the Companies Act

ϋ ʮ ̡ ج€ ຾ ࡌ ࠈ€˜ʮ ̡ ج ™ࠇ ၑމ

1981 of Bermuda (as amended) ("Companies Act") amounted to

1,003,291,000 ಥʩf࣬ኽʮ̡جd͉ʮ

HK$1,003,291,000. Under the Companies Act, the Company's

̡ٙྼᖮޮቱ͵̙Զʱݼʚٰ؇fνึ

contributed surplus is also available for distribution to the

ኬߧ͉ʮ̡ೌجᎵᒔՑಂࠋවאՉ༟

Shareholders. No dividend shall be paid or distribution made

ପ̙ٙᜊତᄆ࠽ΪϤЭ׵Չࠋවdۆʔ

out of contributed surplus if to do so would render the

ึ˸ྼᖮޮቱݼ˹ٰࢹאЪ̈ʱݼf

Company unable to pay its liabilities as they become due or

the realisable value of its assets would thereby become less

than its liabilities.

໨ԫึజѓ€ᚃ

REPORT OF THE DIRECTORS (CONTINUED)

໨ԫʿ໨ԫ؂ਕΥߒ

DIRECTORS AND DIRECTORS' SERVICE CONTRACTS

׵͉ϋʫʿ࿚Ї͉జѓ˚ಂ˟d͉ʮ̡

The directors of the Company during the year and up to the

ʘ໨ԫνɨj

date of this report were as follows:

ੂБ໨ԫj

Executive Directors:

ӏ˰ઠ €˴ࢩࡒБ݁ᐼ൒

Shum Sai Chit (Chairman and Chief Executive Officer)

ϫ᎑൴

Chi Jing Chao

ڢੂБ໨ԫj

Non-executive Directors:

֗਄઺બ

Professor Meng Jian

ᗈਃႴ˄̻୛ɻ#

Tam Wai Ho, Samson JP#

ዹͭڢੂБ໨ԫj

Independent Non-executive Directors:

⿼ފ˖

Kwong Ping Man

ੵ޲͉

Cheung Sound Poon

ᗫᆇ௫

Kwan Ngai Kit

࣬ኽʮ̡୚ۆୋ 87 ૢd֗਄઺બʿ⿼

Pursuant to Bye-law 87 of the Bye-laws, Professor Meng Jian

ފ˖΋͛ਗ਼׵ٰ؇඄ϋɽึɪৗ΂d

and Mr. Kwong Ping Man will retire by rotation and, being

ઓ־ѩୌΥ༟ࣸԨᗴจᑐ፯ஹ΂f

eligible, offer himself for re-election at the AGM.

ᐏܔᙄ׵ٰ؇඄ϋɽึɪᑐ፯ஹ΂ʘ

None of the Directors being proposed for re-election at the

໨ԫ฿ೌၾ͉ණྠࠈ͉ͭණྠʔ̙׵

AGM has a service contract with the Group which is not

ɓϋʫˡ඲ሦᎵ€ج֛ሦᎵৰ̮Ͼ୞

determinable by the Group within one year without payment of

˟ʘ؂ਕΥߒf

compensation, other than statutory compensation.

ዹͭڢੂБ໨ԫʘዹͭ׌

INDEPENDENCE OF INDEPENDENT NON-EXECUTIVE DIRECTORS

͉ʮ̡ʊ຾ϗՑՉዹͭڢੂБ໨ԫd

The Company has received from each of its Independent Non-

у⿼ފ˖΋͛eੵ޲͉΋͛ʿᗫᆇ௫

executive Directors, namely Mr. Kwong Ping Man, Mr. Cheung

΋͛࣬ኽɪ̹஝ۆୋ 3.13ૢఱᆽႩ־ഃ

Sound Poon and Mr. Kwan Ngai Kit, an annual confirmation

ʘዹͭ׌Ͼࡈй೯̈ٙϋܓᆽႩՌf

confirming their independence pursuant to Rule 3.13 of the

Listing Rules.

ΪϤd͉ʮ̡Ⴉމ΢ዹͭڢੂБ໨ԫ

Accordingly, the Company considers all the Independent Non-

ѩމዹͭɛɻf

executive Directors are independent.

໨ԫึజѓ€ᚃ

REPORT OF THE DIRECTORS (CONTINUED)

໨ԫኹϞʘᗇՎᛆू €ᚃ

DIRECTORS' INTERESTS IN SECURITIES (continued)

׵͉ʮٰ̡΅e޴ᗫٰ΅ʿවՎ

Interests in the Shares, underlying shares and debenture of the

ʘᛆू €ᚃ

Company (continued)

ڝ ൗj

Notes:

໨ԫึజѓ€ᚃ

REPORT OF THE DIRECTORS (CONTINUED)

໨ԫኹϞʘᗇՎᛆू €ᚃ

DIRECTORS' INTERESTS IN SECURITIES (continued)

׵޴ᑌجྠٰ΅ʘᛆू€λࡑ €ᚃ

Interests in the shares of associated corporations (long position)

(continued)

ڝ ൗj

Notes:

ৰɪ˖המᚣ٫̮d׵ɚཧɚཧϋɤɚ

Save as disclosed above, at 31 December 2020, none of

˜ɧɤɓ˚d΢໨ԫא־ഃʘᑌᖩɛɻ

the Directors or their associates had any interests or short

฿ೌί͉ʮ̡אՉ΂Оᑌᖩʮ̡€່֛

positions in the shares and underlying shares of the Company

ԈᗇՎʿಂ஬ૢԷʘٰ΅ʿ޴ᗫٰ΅

or any of its associated corporations as defined in the SFO.

ʕኹϞ΂Оᛆूא૱ࡑf

ᒅٰᛆࠇྌ

SHARE OPTION SCHEME

މіˏʿ࣐व௰ᎴӸ྇ࡰ˸˕͉ܵණ

In order to attract and retain the best quality employees for

ྠʘุਕ೯࢝dԨΣᐏ፯ʘΥ༟ࣸਞ

the development of the Group's businesses and to provide

ၾ٫౤Զᕘ̮ዧᎸאᆤᎸd͉ʮ̡׵

additional incentives or rewards to selected qualifying

ɚཧɓɖϋɤɚ˜̬˚મॶᒅٰᛆࠇྌ

participants, the Company adopted a share option scheme on

€˜༈ࠇྌ™fΥ༟ࣸਞၾ٫˴ࠅܼ̍މ

4 December 2017 (the "Scheme"). The qualifying participants

͉ණྠЪ্̈ᘠʘ͉ණྠʿ΂О˴ࠅ

mainly include employees and directors of the Group and

ٰ؇ʘ྇ࡰא໨ԫʿ͉ණྠᚥਪאፔ

any substantial shareholders, and the consultants or adviser,

༔ɛɻeʱቖਠeו̍ਠeԶᏐਠe؂

distributors, contractors, suppliers, service providers, agent,

ਕԶᏐਠe˾ଣe܄˒ʿุਕྫМfৰ

customer and business partner of the Group who have

ڢ̤Бൗቖאࡌࠈd༈ࠇྌʘϞࣖಂ

contribution to the Group. The Scheme, unless otherwise

މІՉϓͭ˚ಂৎࠇ10 ϋf༈ࠇྌʘ௵

cancelled or amended, will remain in force for 10 years since

ቱϋಂߒމ 7ϋ€׵ɚཧɚɖϋɤɚ˜̬

its establishing date. The remaining life of the Scheme is

˚ ֣ တf

approximately 7 years (expiry on 4 December 2027).

໨ԫึజѓ€ᚃ

REPORT OF THE DIRECTORS (CONTINUED)

ᒅٰᛆࠇྌ €ᚃ

SHARE OPTION SCHEME (Continued)

׵ɚཧɚཧϋɤɚ˜ɧɤɓ˚d༈ࠇྌ

As at 31 December 2020, options to subscribe for a total of

ධɨ̙Ⴉᒅᐼᅰ 356,400,000 ٰٰ΅ʘ

356,400,000 Shares were outstanding under the Scheme (the

ᒅٰᛆ€˜ᒅٰᛆ™֠͊БԴf

"Options").

໨ԫึజѓ€ᚃ

REPORT OF THE DIRECTORS (CONTINUED)

໨ԫʿ৷ॴ၍ଣᄴʘᄵዝ༉ઋ

DIRECTORS' AND SENIOR MANAGEMENT'S BIOGRAPHIES

͉ʮ̡໨ԫʿ͉ණྠ৷ॴ၍ଣᄴʘᄵ

Biographical details of the directors of the Company and the

ዝ༉ઋ༱׵ϋజୋ 40 Їୋ 42ࠫf

senior management of the Group are set out on pages 40 to

42 of the annual report.

໨ԫᒅɝٰ΅אවՎʘᛆл

DEBENTURES

ৰʊ׵˜໨ԫኹϞʘᗇՎᛆू™מᚣ̮d

Save as disclosed in "Directors' interests in securities", at no

͉ʮ̡אՉ΂Оછٰʮ̡eڝ᙮ʮ̡ʿ

time during the year was the Company, or any of its holding

Νӻڝ᙮ʮ̡׵͉ಂʫ΂Оࣛග฿ೌ

companies, subsidiaries and fellow subsidiaries a party to any

Ъ̈΂Оτરdߧ˿໨ԫ̙ᔟᒅɝ͉

arrangements to enable the Directors to acquire benefits by

ʮ̡אՉ˼جɛྠ᜗ʘٰ΅אවՎϾ

means of the acquisition of shares in, or debentures of, the

ᐏूf

Company or any other body corporate.

໨ԫཇږ

DIRECTORS' REMUNERATION

໨ԫʘཇږɗٰ͟؇׵ٰ؇ɽึҭࡘf

The directors' fees are subject to shareholders' approval at

Չ˼ཇږ͉͟ʮ̡ਞ๫໨ԫٙᔖபdப

general meetings. Other emoluments are determined by the

΂ʿڌତd˸ʿ͉ණྠุٙᐶ͟໨ԫึ

Company's board of directors with reference to directors'

ᔾ֛f

duties, responsibilities and performance and the results of the

Group.

ᐏࡘ஢ʘᏎᎵૢ˖

PERMITTED INDEMNITY PROVISION

ఱ໨ԫʘப΂ʘᐏࡘ஢ʘᏎᎵૢ˖€࣬

During the year ended 31 December 2020, a permitted

ኽʮ̡ૢԷ່֛׵࿚Їɚཧɚཧϋɤ

indemnity provision as defined in the Hong Kong Companies

ɚ˜ɧɤɓ˚˟ϋܓʫ͛ࣖf

Ordinance was in force for an indemnity against liability

incurred by the Directors.

໨ԫ׵ʹ׸eτરאΥߒʘᛆ

DIRECTORS' INTERESTS IN TRANSACTIONS, ARRANGEMENTS OR

ू

CONTRACTS

׵ಂʫd฿ೌ໨ԫא໨ԫʘϞᗫஹྼ᜗

No Directors nor a connected entity of Directors had a material

׵΂О͉ණྠϞᗫุਕʘࠠࠅʹ׸e

interest, either directly or indirectly, in any transactions,

τરאΥߒ€Չʕ͉ʮ̡ʘ΂Оછٰʮ

arrangements or contracts of significance to the business of

̡eڝ᙮ʮ̡אΝӻڝ᙮ʮ̡މᖦߒ

the Group to which any of the Company's holding companies,

˙ٜટאගટήኹϞࠠɽлूf

subsidiaries or fellow subsidiaries was a party during the year.

ᒅ൯ëਯאᛙΫ͉ʮ̡ʘɪ

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED

̹ᗇՎ

SECURITIES

࿚ Їɚཧɚཧ ϋɤɚ˜ɧɤ ɓ˚˟ϋܓd

Neither the Company nor any of its subsidiaries has purchased,

͉ʮ̡אՉ΂Оڝ᙮ʮ̡฿ೌᒅ൯ë

sold or redeemed any listed securities of the Company during

ਯאᛙΫ͉ʮ̡΂Оɪ̹ᗇՎf

the year ended 31 December 2020.

˴ࠅٰ؇

SUBSTANTIAL SHAREHOLDERS

ৰɪ˖מᚣϞᗫ߰ʍ໨ԫʘᛆू̮d

At 31 December 2020, the register of substantial shareholders

׵ɚཧɚཧ ϋɤɚ˜ɧɤ ɓ˚d࣬ ኽ ͉

kept by the Company pursuant to Section 336 of the SFO shows

ʮ̡ܲᗇՎʿಂ஬ૢԷୋ 336 ૢϾπໄ

that other than the interests disclosed above in respect of

ʘ˴ࠅٰ؇Τ̅הা༱dɨΐٰ؇ಀٝ

certain Directors, the following Shareholder had notified the

ึ͉ʮ̡ኹϞ͉ʮ̡ʊ೯Бٰ͉ʕٙᛆ

Company of relevant interests and short positions in the issued

ूձ૱ࡑj

share capital of the Company:

Цʊ೯Б

ٰ͉ʘϵʱˢ

% of issued

share capital

Ming Xin Developments Limited €ڝൗ 1ʿ5(note 1 and 5)

4,761,117,434

(L)

72.31

200,000,000

(S)

3.04

New Bright Group Limited €ڝൗ 2 ʿ5(note 2 and 5)

4,761,117,434

(L)

72.31

200,000,000

(S)

3.04

˰ߏජΈණྠછٰϞࠢʮ̡€ڝൗ 3ʿ5

4,761,117,434

(L)

72.31

Century Sunshine Group Holdings Limited (note 3 and 5)

200,000,000

(S)

3.04

ϫ˖బ€ڝൗ 4ʿ5

4,761,117,434

(L)

72.31

Chi Wen Fu (note 4 and 5)

200,000,000

(S)

3.04

ߧ

To the Shareholders of

೽ᒝ߅ҦණྠછٰϞࠢʮٰ̡؇

Rare Earth Magnesium Technology Group Holdings Limited

€ᑗࣛ૶ᆵʕ

(In Provisional Liquidation)

€׵කਟ໊ࢥൗ̅ϓͭٙϞࠢʮ̡

(Incorporated in Bermuda with limited liability)

ʔ೯ڌจԈ

DISCLAIMER OF OPINION

Ңࡁʊᄲࣨΐ༱׵೽ᒝ߅Ҧණྠછٰ

We were engaged to audit the consolidated financial statements

Ϟ ࠢ ʮ ̡€˜൮ ʮ ̡™ʿ Չ ڝ ᙮ ʮ ̡€୕

of Rare Earth Magnesium Technology Group Holdings Limited

၈˜൮ ණ ྠ™ୋ 58 ࠫЇୋ 162ࠫ࿚ Їɚཧ

(the "Company") and its subsidiaries (collectively referred to as

ɚཧϋɤɚ˜ɧɤɓ˚ʘၝΥৌਕً

the "Group") set out on pages 58 to 162, which comprise the

رڌၾ࿚Ї༈˚˟ϋܓʘၝΥฦूʿ

consolidated statement of financial position as at 31 December

Չ˼ΌࠦϗूڌeၝΥᛆूᜊਗڌʿ

2020, and the consolidated statement of profit or loss and other

ၝΥତږݴඎڌd˸ʿၝΥৌਕజڌ

comprehensive income, the consolidated statement of changes

ʘڝൗdܼ̍˴ࠅึࠇ݁ഄ฿ࠅf

in equity and the consolidated statement of cash flows for

the year then ended, and notes to the consolidated financial

statements, including a summary of significant accounting

policies.

Ңࡁ࿁ ൮ණྠʘၝΥৌਕజڌʔ೯

We do not express an opinion on the consolidated financial

ڌจԈf͟׵Ңࡁజѓʕʔ೯ڌจԈ

statements of the Group. Because of the significance of the

ʘਿ๟ɓືʫהࠑԫධʘࠠࠅ׌dҢ

matter described in the Basis for Disclaimer of Opinion section

ࡁԨ͊ঐ੄՟੻̂ԑቇ຅ᄲࣨኯኽ˸

of our report, we have not been able to obtain sufficient

ఱ༈ഃၝΥৌਕజڌ೯ڌʘᄲࣨจԈ

appropriate audit evidence to provide a basis for an audit

౤Զ౤Զਿ๟fҢࡁႩމdίהϞࠠ

opinion on these consolidated financial statements. In all other

ɽ˙ࠦd༈ഃৌਕజڌʊ࣬ኽ࠰ಥʮ

respects, in our opinion, the consolidated financial statements

̡ૢԷѼމᇜႡf

have been properly prepared in compliance with the disclosure

requirements of the Hong Kong Companies Ordinance.

ʔ೯ڌจԈʘਿ๟

BASIS FOR DISCLAIMER OF OPINION

ၾܵᚃ຾ᐄਿ๟Ϟᗫʘࠠɽʔ׼

Material uncertainties relating to the going concern basis

ࣦΪ९

༐νၝΥৌਕజڌڝൗ 1 ה༆ᙑd׵ɚ

As explained in Note 1 to the consolidated financial statements,

ཧɚཧϋɖ˜ɧ˚d ൮ʮ̡ʮб(i) ൮

on 3 July 2020, the Company announced (i) Century Sunshine

ʮ̡છٰٰ؇˰ߏජΈණྠછٰϞࠢ

Group Holding Limited ("CS"), the controlling shareholder of

ʮ̡€˜˰ߏජΈ™ʊ༼ߒᛙΫ͉ږږ

the Company, defaulted on the redemption of the SGD101.75

ᕘމ 101.75 ϵຬอ̋սʩʘɪ̹ܝᎵୃ

million in principal amount of subordinated notes (the "CS

ኽ€˜˰ ߏ ජ Έ ༼ ߒ ˕ ˹™i (ii) ൮ʮ̡

Payment Default"); (ii) the Company had received demand from

ટᐏՉʕɓΤვБවᛆɛࠅӋ ൮ʮ

one of the bank creditors for the repayment of borrowings of

̡ᎵᒔՉߒ 22.87 ϵຬಥʩ࠾ಛ̤̋Ꮠ

the Company or its subsidiaries of approximately HK$22.87

ࠇлࢹԨ޴ڦՉܘϞ̙ঐաՑՉවᛆ

million plus interest accrued and believed it was likely to

ɛʘළᖮi˸ʿ (iii) ɓ΅૶ᆵяሗஹΝ

receive further calls from its creditors; and (iii) a winding up

։΂΍Νᑗࣛ૶ᆵɛ€˜΍Νᑗࣛ૶ᆵ

petition has been submitted on 3 July 2020 to the Supreme

ɛ™ʘ͡ሗʊ׵ɚཧɚཧϋɖ˜ɧ˚Σ

Court of Bermuda together with the application for the

ϵᅉ༺௰৷ج৫౤ʹdᔟϤ˸˜ڢ੶Փ

appointment of the joint provisional liquidators ("JPLs") on a

׌™˙όࠠଡ଼fᑗࣛ૶ᆵɛʊʱй׵ɚ

"light touch" basis for debt restructuring purpose. The JPLs

ཧɚཧϋɖ˜ɤʬ˚ᐏϵᅉ༺։΂Ԩ

were appointed pursuant to an order granted by the Supreme

׵ɚཧɚཧϋɞ˜ɚɤʞ˚ᐏ࠰ಥ৷ഃ

Court of Bermuda on 16 July 2020 and granted by the High

ج৫બʚն˿։΂f

Court in Hong Kong on 25 August 2020.

Ϥ̮d༐νၝΥৌਕజڌڝൗ 3 ה༆

Further, as explained in Note 3 to the consolidated financial

ᙑd ൮ණྠ࿚Їɚཧɚཧϋɤɚ˜ɧɤ

statements, the Group incurred a net loss of approximately

˚ପ͛ଋᑦฦߒ 74,011,000 ಥʩd˸ʿ

HK$74,011,000 for the year ended 31 December 2020, and,

࿚Ї༈˚d ൮ණྠʘݴਗࠋව൴ཀՉ

as of that date, the Group's current liabilities exceeded its

ݴਗ༟ପߒ180,801,000 ಥʩfՉ࿚Їɚ

current assets by approximately HK$180,801,000. Its current

ཧɚཧ ϋɤɚ˜ɧɤ˚ݴ ਗʿ ڢ ݴ ਗ ࠾

and non-current borrowings amounted to HK$796,938,000 and

ʱйߒމ 796,938,000 ಥʩʿ 75,381,000

HK$75,381,000 as at 31 December 2020 respectively, while its

ಥʩdϾ ൮ණྠසၪܵՉତږʿତ

cash and cash equivalents amounted to only HK$36,104,000.

ږഃᄆيߒ 36,104,000 ಥʩfϤ̮d࿚

In addition, the Group could not fulfil certain covenants

Їɚཧɚཧϋɤɚ˜ɧɤ˚d ൮ණྠ

relating to certain borrowings of the Group amounting to

͊ঐတԑၾ߰ʍ࠾ಛϞᗫʘ߰ʍ۰ፕ

HK$760,580,000 as at 31 December 2020, which have become

ߒ 760,580,000 ಥʩf׵ɚཧɚɓϋɚ˜

immediately repayable on demand of the lenders. Included

ɚɤɚ˚d൲˙ʊఱࠇɝ͉ණྠ࿚Їɚ

in the other borrowings of the Group as at 31 December

ཧɚཧϋɤɚ˜ɧɤɓ˚Չ˼࠾ಛʕߒ

2020 are borrowings of HK$154,686,000 which the lender

154,686,000 ಥʩ࠾ಛ࿁͉ණྠ೯ৎൡ

have commenced litigations against the Group to repay the

தdࠅӋᎵᒔ͊Ꮅ˹ഐቱf

outstanding balances on 22 February 2021.

ዹͭࣨᅰࢪజѓ€ᚃ

INDEPENDENT AUDITORS' REPORT (CONTINUED)

࿚Їɚཧɚཧϋɤɚ˜ɧɤɓ˚˟ϋܓ For the year ended 31 December 2020

ɪ˖הࠑૢ΁ڌͪπί̙ঐ࿁ ൮ණྠ

The conditions described above indicate the existence of

ܵᚃ຾ᐄঐɢପ͛ࠠɽဲᅇʘࠠɽʔ

material uncertainties that may cast significant doubt on the

׼ࣦΪ९f༐νၝΥৌਕజڌڝൗ 3ה

Group's ability to continue as a going concern. The directors

༱d໨ԫ͍ίમ՟߰ʍણ݄ҷഛ ൮

have been undertaking certain measures to improve the

ණྠʘݴਗ༟ږʿৌਕًرf༈ഃၝ

Group's liquidity and financial position, as set out in Note 3

Υৌਕజڌɗܲܵᚃ຾ᐄਿ๟ᇜႡd

to the consolidated financial statements. The consolidated

ՉϞࣖ೻ܓൖ˷༈ഃણ݄ʘഐ؈d࿚

financial statements have been prepared on a going concern

Ї͉జѓ˚ಂʔঐ˸Υଣଣ͟ᆽ֛Ԩ

basis, the validity of which depends on the successful eventual

աεධʔ׼ࣦΪ९ʘ஝ࠢdܼ̍€ iί

outcome of these measures, which as at the date of this report

ၾ ൮ණྠɓছවᛆɛ՘ਠܝd΍Νᑗ

cannot be ascertained with reasonable certainty and are still

ࣛ૶ᆵɛʿ ൮ʮ̡݊щঐ੄ໝྼܔ

subject to multiple uncertainties, including whether (i) the

ᙄࠠଡ଼ࠇྌ˸࿁ ൮ණྠʘවਕʿࠋ

JPLs and the Company will be able to finalise the Proposed

වආБࠠଡ଼Ԩ՟੻޴ᗫج৫ఱྼ݄ໝ

Restructuring Plan for the restructuring of the debts and

ྼܔᙄࠠଡ଼ࠇྌʘτરࠇྌʘՓ൒iʿ

liabilities of the Group after consultations with the creditors

€ii ൮ණྠ݊щঐ੄࿁༟͉ҳ༟e͛

of the Group and obtain the sanctions of the relevant courts

ପʿБ݁຾ᐄੂБආɓӉϓ͉છՓણ

for the Schemes of Arrangement for the implementation of

݄d˸ಯˇ͉ණྠʘ዆᜗༶ᐄϓ͉f

the finalised Proposed Restructuring Plan; and (ii) the Group

is able to implement further cost control measures on capital

investments, production and administrative operations to

reduce overall operating costs of the Group.

ࡊ͉ණྠʔঐІɪࠑࠇྌʿણ݄՟੻

Should the Group fail to achieve successful outcomes from the

ϓ̌ഐ؈dՉ̙ঐʔึܲܵᚃਿ๟຾

above-mentioned plans and measures, it might not be able to

ᐄdΪϤ̀඲Ъ̈ሜ዆ਗ਼ ൮ණྠ༟

continue to operate as a going concern, and adjustments would

ପʘሪࠦ࠽࿛ಯЇՉ̙Ϋϗږᕘd˸

have to be made to write down the carrying value of the Group's

މ̙ঐආɓӉପ͛ʘࠋවЪ̈ᅡ௪d

assets to their recoverable amounts, to provide for further

Ԩਗ਼ڢݴਗ༟ପʿڢݴਗࠋවʱйࠠ

liabilities which might arise and to reclassify non-current

อʱᗳЇݴਗ༟ପʿݴਗࠋවfϤഃ

assets and non-current liabilities as current assets and current

ሜ዆ʘᅂᚤ֠͊ˀ݈׵ၝΥৌਕజڌ

liabilities respectively. The effects of these adjustments have

ʫf

not been reflected in these consolidated financial statements.

Ңࡁ͊ᐏ౤Զԑ੄ቇ຅ʘᄲࣨኯᗇԸ

We have not been provided with sufficient appropriate

પᓙ၍ଣᄴίᇜႡၝΥৌਕజڌࣛʊ

audit evidence to conclude on the appropriateness of

Դܵ͜ᚃ຾ᐄึࠇਿᓾ݊щܦ຅dவ

management's use of the going concern basis of accounting

݊͟׵၍ଣᄴϞᗫՉܵᚃ຾ᐄ൙Пʘ

in the preparation of the consolidated financial statements

͊ԸБਗ֠͊ໝྼfࡊ೯ତცࠅЪ̈

because management's plans for future actions in relation to

΂Оሜ዆d̙ঐึ࿁ ൮ණྠ׵ɚཧɚ

its going concern assessment could not be finalized yet. Any

ཧϋɤɚ˜ɧɤɓ˚ʘၝΥ༟ପଋ࠽

adjustments found to be required may have consequential

ʿ ൮ණྠ׵࿚Їɚཧɚཧɚཧϋɤɚ

significant effects on the consolidated net assets of the

˜ɧɤɓ˚˟ϋܓʘၝΥᑦฦʿՉ˼

Group as at 31 December 2020 and the consolidated loss and

Όࠦᑦฦʿତږݴඎ˸ʿՉίၝΥৌ

other comprehensive income or loss and cash flows of the

ਕజڌʕʘ޴ᗫמᚣପ͛ࠠɽᅂᚤf

Group for the year ended 31 December 2020, and the related

elements and disclosures thereof presented or disclosed in the

consolidated financial statements.