SUNVIC CHEMICAL HOLDINGS LIMITED (Registration Number: E)

Transcription

1 SUNVIC CHEMICAL HOLDINGS LIMITED (Registration Number: E) Full Year Financial Statement and Dividend Announcement for the Year Ended 31 December 2013 INFORMATION REQUIRED FOR ANNOUNCEMENTS OF FULL YEAR RESULTS 1(a) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year. Statement of Comprehensive income Q Q /(-) FY2013 FY2012 +/(-) RMB 000 RMB 000 % RMB 000 RMB 000 % Revenue 1,838,859 1,385, ,325,799 4,321, Cost of sales (1,512,961) (1,142,340) 32.4 (5,391,444) (3,790,402) 42.2 Gross profit 325, , , , Other operating income 11,543 10, ,128 31, Distribution expenses (43,558) (42,441) 2.6 (163,247) (129,163) 26.4 Administrative expenses (46,956) (50,012) (6.1) (129,983) (127,309) 2.1 Other operating expenses (10,016) (29,132) (5,346) Results from operating activities 236, , , , Finance expenses (33,226) (49,292) (32.6) (146,908) (171,502) (14.3) Profit before income tax 203, , , , Income tax expense (67,943) (36,243) 87.5 (130,044) (41,227) Profit for the period/year 135,742 75, ,169 87, Other comprehensive income Translation differences relating to financial statements of subsidiaries with functional currencies other than RMB (2,580) (3,345) (22.9) (7,541) 5,331 (241.5) Total comprehensive income for the period/year 133,162 72, ,628 92, Attributable to: Owners of the Company 135,422 74, ,871 96, Non-controlling interest (2,260) (2,949) (23.4) (2,243) (3,926) (42.9) Total comprehensive income for the period/year 133,162 72, ,628 92,

2 The following items have been included in arriving at profit before taxation:- Q Q /(-) FY2013 FY2012 +/(-) RMB 000 RMB 000 % RMB 000 RMB 000 % Interest income (4,524) (7,053) (35.9) (20,380) (28,330) (281.) Exchange (gain)/loss, net (10,168) (114) NM (12,161) 9, Depreciation of property, plant and equipment 75,721 74, , , Amortisation of lease prepayments (101) (2,503) (96.0) 1, Amortisation of intangible assets Interest paid and payable to banks 33,226 51, , ,090 (15.6) Provision/(Reversal) for write down of inventories 996 (1,084) (191.9) 996 (1,084) (191.9) Property, plant and equipment written off 11, , Fair value of financial derivatives - (2,588) (100.0) - (2,588) (100.0) 2

3 1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year. Group Company December 2013 December 2012 December 2013 December 2012 RMB 000 RMB 000 RMB 000 RMB 000 Non-current assets Property, plant and equipment 2,952,280 2,815, Intangible assets 2,431 2, Lease prepayments 42,891 38, Subsidiaries , ,946 Deposits paid for property, plant and equipment and land use rights 225, , ,222,894 3,161, , ,946 Current assets Inventories 329, , Trade and other receivables 2,394,419 1,435,280 28,735 29,066 Pledged deposits 441, , Cash and bank balances 341, ,610 2,787 1,640 3,506,535 2,721,410 31,522 30,706 Total assets 6,729,429 5,882, , ,652 Equity Share capital 291, , , ,516 Reserves 1,955,437 1,585, , ,156 Total equity attributable to equity holders of the Company 2,246,953 1,877, , ,672 Non-controlling interest 54,939 57, Total equity 2,301,892 1,934, , ,672 Non-current liabilities Interest bearing liabilities 383, , Deferred tax liability 7,500 7, Total non-current liabilities 390, , Current liabilities Trade and other payables 1,424,517 1,430,338 27,202 26,419 Interest-bearing liabilities 2,507,409 2,150, Current tax payable 105,076 20, Total liabilities 4,037,002 3,601,226 28,018 26,980 Total equity and liabilities 6,729,429 5,882, , ,652 3

4 1(b)(ii) Aggregate amount of group s borrowings and debt securities Amount repayable in one year or less, or on demand December 2013 December 2012 Secured Unsecured Secured Unsecured RMB 000 RMB 000 RMB 000 RMB 000 1,641, ,004 1,661, ,000 Amount repayable after one year December 2013 December 2012 Secured Unsecured Secured Unsecured RMB 000 RMB 000 RMB 000 RMB , ,000 - Details of any collateral The secured bank borrowings are secured by certain of the Group s leasehold buildings, plant and machinery, land use rights and trade receivables. Unsecured bank loans are guaranteed by Mr and Mrs Sun Liping, Mr Sun Liping s son, Jiangsu Yinyan Specialty Chemicals Co., Ltd, a company in which Mr Sun Liping is deemed to have significant interest, and certain unrelated third parties. 4

5 1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year. Q Q FY2013 FY2012 RMB 000 RMB 000 RMB 000 RMB 000 Operating activities Profit before taxation 203, , , ,839 Adjustments for: Interest expense 33,226 51, , ,090 Interest income (4,524) (7,053) (20,380) (28,330) Amortisation of intangible assets Amortisation of lease prepayments (101) (2,503) 1, Depreciation of property, plant and equipment 75,721 74, , ,587 Property, plant and equipment written off 11,678-26,536 - Gain on disposal of land use right (1,093) - (1,093) - Provision/(reversal) of inventories written-down 996 (1,084) 996 (1,084) Fair value of financial instruments - (2,588) - (2,588) Operating profit before working capital changes 319, , , ,428 Changes in working capital: Inventories 88,878 (182,487) 181,490 (227,393) Trade and other receivables (367,290) (201,679) (959,139) (522,892) Trade and other payables (127,683) 302, , ,342 Cash generated from operations (86,196) 143, ,173 31,485 Income taxes refunded/(paid) 31,942 (18,707) (44,985) (25,994) Cash flows (used in)/from operating activities (54,254) 125, ,188 5,491 Investing activities Interest received 4,524 7,053 20,380 28,330 Purchase of property, plant and equipment (177,435) (47,651) (476,009) (109,386) Payment of lease prepayments (1,620) - (1,620) (138) Purchase of intangible assets (174) - (174) (500) Proceeds from disposal of land use right 19,583-19,583 - Deposits paid for property, plant and equipment - (51,325) - (264,364) Cash flows used in investing activities (155,122) (91,923) (437,840) (346,058) Financing activities Proceeds from bank loans 1,005, ,133 4,369,222 4,051,482 Repayments of bank loans (991,293) (862,921) (3,968,915) (3,985,455) Repayments to factoring facilities 15,608 (145) (734) (43,517) Proceeds from issuance of bonds - 250, ,000 Redemption of bonds - - (250,000) - Interest paid (33,226) (51,880) (146,908) (174,090) Deposits pledged (44,073) (11,416) 6, ,242 Cash flows from financing activities (47,093) 17, , ,662 Net increase in cash and cash equivalents (256,469) 50,900 22,237 81,095 Cash and cash equivalents at beginning of the period/year 600, , , ,184 Effect of exchange rate fluctuations (2,580) (3,345) (7,541) 5,331 Cash and cash equivalents at end of the period/year 341, , , ,610 5

6 1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year. Statement of Changes in Equity The Group Foreign Share capital Treasury shares Merger reserve Other reserves currency translation reserve Accumulated profits Total Noncontrolling interest Total equity RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 At 1 January ,254 (40,738) (499) 213,844 (15,676) 1,291,028 1,780,213 61,108 1,841,321 Total comprehensive income for the year ,331 91,538 96,869 (3,926) 92,943 Cancellation of treasury shares (40,738) 40, Transfer to/(from) reserve ,388 - (31,388) At 31 December ,516 - (499) 245,232 (10,345) 1,351,178 1,877,082 57,182 1,934,264 At 1 January ,516 - (499) 245,232 (10,345) 1,351,178 1,877,082 57,182 1,934,264 Total comprehensive income for the year (7,541) 377, ,871 (2,243) 367,628 Transfer to/(from) reserve ,452 - (55,452) At 31 December ,516 - (499) 300,684 (17,886) 1,673,138 2,246,953 54,939 2,301,892 Notes: Included in other reserves are capital reserve and special safety reserve amounted to RMB261,138,000 and RMB39,546,000 (2002: RMB225,247,000 and RMB19,985,000) respectively. 6

7 Statement of Changes in Equity The Company Share capital Treasury shares Accumulated profits Total equity RMB 000 RMB 000 RMB 000 RMB 000 At 1 January ,254 (40,738) 102, ,236 Total comprehensive income for the year - - 8,436 8,436 Cancellation of treasury shares (40,738) 40, At 31 December , , ,672 At 1 January , , ,672 Total comprehensive income for the year - - (222) (222) At 31 December , , ,450 1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles as well as the numbers of shares held as treasury shares, if any, against the number of issued shares excluding treasury shares of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. The Company did not buy back any shares for the financial year ended 31 December The Company does not have any treasury shares as at 31 December December 2013 December 2012 ( 000) ( 000) Number of issued shares 553, ,451 Less: treasury shares cancelled - (19,800) Number of issued shares excluding treasury shares 533, ,651 7

8 1(d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year. December 2013 Company December 2012 Number of shares excluding treasury shares at the end of the year ( 000) 533, ,651 1(d)(iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on. There are no sales, transfers, disposal, and/or use of treasury shares as at end of 31 December Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice. The figures have not been audited or reviewed by our auditors. 3. Where the figures have been audited or reviewed, the auditors report (including any qualifications or emphasis of a matter). Not applicable. 4. Whether the same accounting policies and methods of computation as in the issuer s most recently audited annual financial statements have been applied. The Group has applied the same accounting policies and methods of computation in the preparation of the financial statements for the current reporting period and the previous financial year. 5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change. Please refer to Point 4 above. 8

9 6. Earnings per ordinary share of the group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends. Earnings per share (RMB cents):- Q Q FY2013 FY2012 Basic and diluted Q Q FY2013 FY2012 RMB 000 RMB 000 RMB 000 RMB 000 Basic earnings per share is based on: Net profit attributable to ordinary shareholders 138,002 78, ,412 91,538 Number of shares Q Q FY2013 FY2012 ( 000) ( 000) ( 000) ( 000) Weighted average number of ordinary shares at 31 December 533, , , , Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the:- (a) Current financial period reported on; and (b) Immediately preceding financial year. Group Company December 2013 December 2012 December 2013 December 2012 Net assets attributable to the shareholders (RMB 000) 2,246,953 1,877, , ,672 Net asset value per ordinary share (RMB cents) Number of shares at the end of the period ( 000) 533, , , ,651 9

10 8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group s business. It must include a discussion of the following:- (a) Any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and The Group improved its results significantly with a net profit of RMB135.4 million in Q Higher average selling prices coupled with higher sale volume in Q attributed to the better results. Revenue Revenue in FY2013 increased by RMB2.0 billion to RMB6.3 billion compared to RMB4.3 billion in FY2012. This was mainly due to an increase in revenue from acrylic acid ( AA ) & acrylate esters ( AE ), PMIDA & glyphosate as well as other chemical products by RMB1,557.1 million, RMB149.6 million and RMB297.7 million respectively. The increase in revenue from AA & AE was mainly attributable to higher sale volume which increased from 347,700 tonnes in FY2012 to 512,200 tonnes in FY2013. Sale volume for glyphosate also increased in FY2013 compared to FT2012. Gross profit Total gross profit for FY2013 amounted to RMB934.4 million compared to RMB531.0 million in FY2012. Sale of AA & AE, PMIDA & glyphosate as well as other chemical products contributed RMB811.3 million, RMB94.0 million and RMB29.0 million to the total gross profit in FY2013. Overall gross profit margin increased from 12.3% in FY2012 to 14.8% in FY2013 mainly due to higher average selling prices for AA & AE. Other operating income Other operating income increased by RMB9.0 million to RMB40.1 million in FY2013 from RMB31.1 million in FY2012. Distribution expenses In FY2013, distribution expenses increased by RMB34.1 million to RMB163.2 million compared to RMB129.2 million in FY2012. This was mainly due to an increase in freight and transportation charges as a result of increase in sales volume. Distribution expenses consisted of transportation charges and packaging costs as well as other sales related expenses. Administrative expenses In FY2013, administrative expenses increased by RMB2.7 million to RMB130.0 million compared to RMB127.3 million in FY2012. Other operating expenses In FY2013, other operating expenses increased by RMB23.8 million to RMB29.1 million compared to RMB5.3 million in FY

11 Finance expenses Finance costs decreased by RMB24.6 million to RMB146.9 million in FY2013 compared to RMB171.5 million in FY2012. Income tax expense Income tax expense increased by RMB88.8 million to RMB130.0 million in FY2013 compared to RMB41.2 million in FY2012. This was mainly due to higher profit in FY (b) Any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on. Balance sheet Property, plant and equipment increased by RMB136.4 million to RMB2,952.3 million as at 31 December 2013 compared to RMB2,815.9 million as at 31 December This was mainly due to additions of property, plant and equipment in FY2013 as a result of upgrading of our AA & AE plants in Yancheng City and Phase III AA plants in Taixing City, which was partially offset by depreciation charge in the same period. Deposits paid for property, plant and equipment decreased by RMB79.5 million to RMB225.3 million as at 31 December 2013 compared to RMB304.8 million as at 31 December This was mainly due to transfer of deposits to property, plant and equipment upon delivery of assets. Inventories decreased by RMB182.5 million to RMB329.8 million as at 31 December 2013 compared to RMB512.3 million as at 31 December This was mainly due to a decrease in inventories at our Yancheng plants due to upgrading works carried out. Trade and other receivables increased by RMB959.1 million to RMB2,394.4 million as at 31 December 2013 compared to RMB1,435.3 million as at 31 December This was mainly due to an increase in notes receivable which have maturity dates ranging from 30 days to 180 days. In addition, trade receivables increased due to higher sales revenue generated in Q These receivables from sales in Q are not due as at 31 December Trade and other payables decreased by RMB5.8 million to RMB1,424.5 million as at 31 December 2013 compared to RMB1,430.3 million as at 31 December Total non-current and current interest-bearing liabilities increased by RMB399.6 million to RMB2,890.4 million as at 31 December 2013 compared to RMB2,490.9 million as at 31 December This was mainly due to drawn down of banking facilities for working capital purposes. 11

12 Cash Flow Statement Our Group generated positive operating cash flow of RMB201.2 million in FY2013 mainly due to profit before income tax, depreciation charge, interest expense, property, plant & equipment written off as well as an increase in trade and other payables and a decrease in inventories. These were partially offset by interest income, income tax paid as well as an increase in trade and other receivables. Financing activities resulted in positive cash flow of RMB258.9 million in FY2013 mainly due to proceeds from bank loans and issuance of bonds as well as a decrease in pledged deposits. These were partially offset by repayments of bank loans as well as interest paid. There was a net cash outflow of RMB437.8 million in FY2013 from the Group s investing activities mainly due to acquisitions of property, plant and equipment, which were partially offset by interest received and proceeds from disposal of land use right. Cash and cash equivalents increased from RMB326.6 million as at 31 December 2012 to RMB341.3 million as at 31 December 2013 due to the above reasons. 9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months. Sales of our main products, AA & AE as well as PMIDA & glyphosate, are expected to remain robust with selling prices staying firm. Our AA plants have been running at near maximum utilisation for the past year due to long term sales contracts signed with certain major customers. We expect this high utilisation to continue. Our sales and profit margins for AA are secured for the next few years. Our proposed joint-venture and divestment with Euronext Paris-listed Arkema SA on our new Taixing plants are expected to contribute positively to our financial position in the coming year. This will allow us to lower our gearing and provide us with abundant cash reserve to continue expanding our chemical businesses and to take advantage of opportunities. The conversion and modification works on our catalyst-assisted cracking plant is on track to be operational by Q

13 11. Dividend (a) Current Financial Period Reported On No dividend has been declared or recommended. (b) Corresponding Period of the Immediately Preceding Financial Year No dividend has been declared or recommended in FY2012. (c) Date payable Not applicable. (d) Books closure date Not applicable. 12. If no dividend has been declared/recommended, a statement to that effect. No dividend has been declared or recommended. 13

14 PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT 13. Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer s most recently audited annual financial statements, with comparative information for the immediately preceding year. The Group has four reportable segments, as described below, which are the Group s strategic business units. The strategic business units offer different products and services, and are managed separately because they require different technology and marketing strategies. The Group s CEO reviews internal management reports for each of the strategic business units on at least quarterly basis. The four reportable segments are: AA and AE - manufacture and sale of acrylic acid ( AA ) and acrylate esters ( AE ); PMIDA and glyphosate - manufacture and sale of N-(phosphonomethyl) Iminodiacetic Acid ( PMIDA ) and glyphosate; Petroleum related products; and Others - purchase and sale of other chemical products. Information regarding the results of each reportable segments is included below. Performance is measured based on segment profit before income tax, as included in the internal management reports reviewed by the Group s CEO. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm s length basis. AA & AE PMIDA and glyphosate Petroleum related products Others Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 External revenues 5,485,913 3,940, , , ,539 30,332 6,325,799 4,321,430 Interest income ,380 28,330 20,380 28,330 Interest expense (127,403) (158,737) (11,620) (14,131) - - (7,885) (1,222) (146,908) (174,090) Depreciation and amortisation (233,053) (182,116) (28,593) (9,134) (688) (1,146) (990) (464) (263,324) (192,860) Reportable segment profit/(loss) before income tax 425, ,839 57,925 18,186 (9,957) (18,837) 44,685 33, , ,839 Reportable segment assets 5,564,356 4,708,175 62, ,288 1,065,984 1,034,060 36,525 37,467 6,729,429 5,882,990 Capital expenditures 411, , , , ,121 Reportable segment liabilities 4,344,819 3,654, , ,617 8,999 15,049 4,427,537 3,948,726 14

15 Reconciliations of reportable segment revenues, profit or loss, assets and liabilities and other material items are as follows: RMB 000 RMB 000 Revenues Total revenue for reportable segments 5,986,260 4,291,098 Other revenue 339,539 30,332 Consolidated revenue 6,325,799 4,321,430 Profit or loss Total profit for reportable segments 473, ,188 Other profit 44,685 33, , ,839 Unallocated amounts: - Other corporate expenses (13,367) (14,000) Consolidated profit before income tax 505, ,839 Assets Total assets for reportable segments 6,692,904 5,845,523 Other assets 36,525 37,467 Consolidated assets 6,729,429 5,882,990 Liabilities Total liabilities for reportable liabilities 4,418,538 3,933,677 Other liabilities 8,999 15,049 Consolidated liabilities 4,427,537 3,948,726 15

16 Segmental information is presented in respect of the Group s geographical segments. In presenting information on the basis of geographical segments, segment revenue and trade receivables are based on the geographical location of customers. Segment capital expenditure and other assets are based on the geographical location of the assets South North Asia Europe America America Others Consolidated RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Revenue from external customers 6,094, ,849 8, ,223 5,210 6,325,799 Segment assets 6,708,375 6,165 1,224 13, ,729,429 Capital expenditure 2012 Revenue from external customers 4,064,393 66,915 80, ,582 4,947 4,321,430 Segment assets 5,833,284 3,545 4,041 6,577-5,847,447 Capital expenditure 343, , , In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments. Please refer to Point 8 above. 16

17 15. A breakdown of sales 2013 RMB RMB 000 +/(-) % Sales reported for the first half year 2,883,289 1,855, Operating profit after taxation but before minority interests reported for the first half year 153,170 16, Sales reported for the second half year 3,442,510 2,466, Operating profit after taxation but before minority interests reported for the second half year 221,999 70, A breakdown of the total annual dividend (in dollar value) for the issuer s latest full year and its previous full year. No dividend has been declared or recommended in FY2013 and FY

18 17. Interested Person Transactions Pursuant to Rule 920(1)(a)(ii) of the Listing Manual, the Company discloses the aggregate value of interested person transactions as follows: Name of Interested Person Aggregate value of all interested person transactions during financial year under review (excluding transactions less than $100,000 and transactions conducted under shareholders mandate pursuant to Rule 920) RMB 000 Aggregate value of all interested person transactions conducted under shareholders mandate pursuant to Rule 920 (excluding transactions less than $100,000) RMB 000 Sales of chemical products:- - Jiangsu Yinyan Specialty Chemical Co., Ltd Sales of chemical products:- - Jiangsu Jurong Petrochemicals Co., Ltd Purchase of inventories:- - Jiangsu Yinyan Specialty Chemical Co., Ltd - 139,873-23,672-11,666 Purchase of inventories:- - Jiaxing Jinyan Chemical Co., Ltd - 61,496 Purchase of property, plant and equipment:- - Jiangsu Jurong Petrochemicals Co., Ltd 14,752-18

19 The Company refers to the announcement released on 30 April 2013 in relation to Interested Person Transactions ( IPTs ) entered into with Yixing Danson Technology Co., Ltd ( Yixing Danson ). Sales of chemical products to Yixing Danson for the financial year ended 31 December 2013 amounted to RMB530.9 million. The Group also has new IPTs with Taixing Jinyan Chemical Technology Co., Ltd ( Taixing Jinyan ). For the financial year ended 31 December 2013, the Group entered into the following IPTs with Taixing Jinyan:- - Purchase of equipment on behalf: RMB59.7 million; - Purchase of raw material on behalf: RMB179.9 million; and In addition, the Group sold a piece of land to Taixing Jinyan in FY2013 for a consideration of RMB19.6 million, resulting in a profit of RMB1.1 million. The transactions with Yixing Danson and Taixing Jinyan are regarded as IPTs within the meaning of the listing manual (the Listing Manual ) of Singapore Exchange Securities Trading Limited. The Company is in the process of seeking ratification from its shareholders (the Shareholders ) of such transactions in accordance with the requirements of Chapter 9 of the Listing Manual. As such, the Audit Committee shall be seeking advice from an Independent Financial Advisor (to be appointed) in relation to the Past Recurring IPTs and the Company will be convening the extraordinary general meeting (the EGM ) in due course to seek Shareholders ratification for the Past Recurring IPTs. In addition, the Group anticipates that as those IPTs with Yixing Danson and Taixing Jinyan will continue in the future and thus proposes to seek Shareholders approval for a general mandate for this purpose at the EGM. 18. Disclosure of person occupying a managerial position in the issuer or any of its principal subsidiaries who is a relative of a director or chief executive officer or substantial shareholder of the issuer pursuant to Rule 704(13) Pursuant to Rule 704(13) of the Listing Manual, we confirm that there was no person occupying a managerial position in the Company or its principal subsidiaries who is a relative of a director or chief executive officer or substantial shareholder of the Company. BY ORDER OF THE BOARD Sun Xiao Executive Director and Chief Executive Officer 1 March