ChatDOC/OCRFlux-bench-single huggingface dataset:
# 5. OPERATING SEGMENTS (Continued)

# Geographical information

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

5. 經營分部（續）

地區資料

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

Continuing operations
Revenue from
external customers
持續經營業務
從對外客戶而來之收益	Discontinued operation
Revenue from
external customers
已終止經營業務
從對外客戶而來之收益	Continuing operations
N*on-current assets
持續經營業務
非流動資產*	Discontinued operation
N*
on-current assets已終止經營業務
非流動資產*
2018
二零一八年	2017
二零一七年	2018
二零一八年	2017
二零一七年	2018
二零一八年	2017
二零一七年	2018
二零一八年	2017
二零一七年
HK$’000
千港元	HK$’000
千港元	HK$’000
千港元	HK$’000
千港元	HK$’000
千港元	HK$’000
千港元	HK$’000
千港元	HK$’000
千港元
Australia 澳洲	21	68	—	—	—	—	—	—
Europe 歐洲	10,437	10,218	—	—	—	—	—	—
Hong Kong 香港	144,595	(1,493)	—	—	665,778	432,895	—	—
The Middle East 中東	—	705	—	—	—	—	—	—
The PRC 中國	32,777	44,412	—	—	1,465,511	2,386,289	—	—
The United States of America 美利堅合眾國	207	79	—	—	—	—	—	—
188,037	53,989	—	—	2,131,289	2,819,184	—	—

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

\* 非流動資產不包括遞延稅項資產、其他應收款項及應收貸款。
# 5. OPERATING SEGMENTS (Continued)

# Information about major customers

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

5. 經營分部（續）

有關主要客戶之資料

於相關年度向本集團總收益貢獻10% 以上之來自客戶之收益如下：

For the year ended
31 December
截至十二月三十一日止年度
2018
二零一八年	2017
二零一七年
HK$’000
千港元	HK$’000
千港元
Customer 11 客戶11	N/A不適用4	18,549
Customer 21 客戶21	19,901	13,303
Customer 32 客戶32	21,264	20,809
Customer 42 客戶42	N/A不適用4	9,159
Customer 53 客戶53	N/A不適用4	16,200
Customer 63 客戶63	N/A不適用4	12,191
Customer 73 客戶73	N/A不適用4	10,560

1 Revenue from sale of jewelry products.

2 Revenue from property investment.

3 Revenue from money lending.

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

1 來自銷售珠寶產品之收益。

2 來自物業投資之收益。

3 來自借貸之收益。

4 相關收益並無向本集團總收益貢獻 10% 以上。
# 9 Preparation

# Report Overview

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

# Reference Basis

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

# Scope of Report

Organizational scope:	The Company as defined. This Report by the Company, Hua Hong Semiconductor Limited,
includes all subsidiaries of the Company.
Reporting period:	From 01 January 2018 to 31 December 2018
Release cycle:	This is an annual report

# Data Descriptions

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

釋義	85
主要財務指標	88
致股東的信	89
公司資料	91
董事及高級管理層	94
企業管治報告	101
董事會報告	112
2018年環境、社會及管治報告	139
獨立核數師報告	167
綜合損益表	175
綜合全面收益表	176
綜合財務狀況表	177
綜合權益變動表	179
綜合現金流量表	181
財務報表附註	183
五年財務概覽	296
# INDEBTEDNESS

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

As at
31 December	As at
30 April
2017
2015	2016
HK$(’000)	HK$(’000)	HK$(’000)
(Unaudited)
Non-current
Other liability ...........................	11,282	–	–

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

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

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

# Contingent liabilities

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

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

# OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENT

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

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

# KEY FINANCIAL RATIOS

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

For the year ended 31 December
2015	2016
Profitability ratios
(1)Net Profit Marign (%) ................................	91.2	12.9
(2)Return on equity (%) .................................	238.0	10.7
(3)Return on total assets (%) .............................	112.0	8.7

As at/year ended 31 December
2015	2016
Liquidity ratio
(4)Current ratio (times) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5.5	2.5
Cailpta sufficiency ratio
(5)Interest coverage (times) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	N/A	23.1
(6)Gearing ratio (%) ...................................	71.3	–
(7)Net debt to equity ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Net cash	Net cash

Notes:

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

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

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

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

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

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

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

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

(Unit: Thousand Baht)

Consolidated
financial statements	Separate
financial statements
2018	2017	2018	2017
Inventories at net realisable value (NRV)*	10,411,061	15,979,154	5,886,610	7,773,263
Inventories at lower of cost or net
realisable value (NRV) - as measured and
included in the financial statements	10,201,733	15,394,383	5,793,784	7,467,859
Difference	209,328	584,771	92,826	305,404

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

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

# 10. Derivative financial instruments

(Unit: Thousand Baht)

Consolidated financial statements
2018	2017
Assets	Liabilities	Assets	Liabilities
Cross currency swaps	-	(4,479)	23,778	(55,844)
Foreign exchange options	641	(14,483)	-	(65,293)
Rubber options	127	(157)	14,161	(58,646)
Forward foreign exchange contracts	10,642	(45,743)	113,261	(5,183)
Rubber futures	45,413	(106,524)	256,739	(45,338)
Physical forward contracts	2,778	(17)	-	(939)
Total derivative financial instruments	59,601	(171,403)	407,939	(231,243)
(Unit: Thousand Baht)

Separate financial statements
2018	2017
Assets	Liabilities	Assets	Liabilities
Cross currency swaps	-	(4,479)	23,778	(55,844)
Foreign exchange options	641	(11,394)	-	(48,665)
Rubber options	127	(157)	14,161	(58,646)
Forward foreign exchange contracts	1,569	-	64,804	(971)
Rubber futures	30,742	(95,302)	153,777	(34,004)
Total derivative financial instruments	33,079	(111,332)	256,520	(198,130)

# 11. Restricted bank deposits

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

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

# 12. Investments in subsidiaries

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

(Unit: Million Baht)

Company’s name	Paid-up capital	Shareholding
percentage	Cost	Dividend received
during the year
2018	2017	2018	2017	2018	2017	2018	2017
(%)	(%)
Subsidiaries
Sri Trang USA, Inc.	179	114	100.00	100.00	179	114	-	-
PT Sri Trang Lingga Indonesia	359	359	90.00	90.00	330	330	-	-
Anvar Parawood Co., Ltd.	10	10	99.94	99.94	26	26	-	-
Rubberland Products Co., Ltd.	1,600	1,600	99.99	99.99	1,935	1,935	500	500
Namhua Rubber Co., Ltd.	500	500	99.99	99.99	560	560	-	-
Sadao P.S. Rubber Co., Ltd.	40	40	99.99	99.99	54	54	-	-
Startex Rubber Co., Ltd.	2,198	2,115	99.99	99.99	2,196	2,113	-	-
Premier System Engineering Co., Ltd.	50	50	82.00	82.00	100	100	-	-
Starlihgt Express Transport Co., Ltd.	15	15	76.67	76.67	39	39	23	25
Sri Trang Rubber & Plantation Co., Ltd.	6,495	6,298	99.99	99.99	6,495	6,297	-	-
Shi Donhg Shangai Rubber Co., Ltd.	155	155	100.00	100.00	155	155	-	-
Sri Trang Gloves (Thailand) Co., Ltd.	200	200	81.50	81.50	6,430	6,430	408	2,707
Total	18,499	18,153	931	3,232
FINANCIAL STATEMENTS

# 32. INTANGIBLE ASSETS (CONTINUED)

(in RMB million)	2016
Goodwill (i)	Expressway
operating
rights	Prepaid land
premiums	Core
Deposits	Trademarks	Software
and others	Total
Cost
As at 1 January 2016	12,460	11,232	8,331	15,082	2,442	5,091	54,638
Acquisitions of subsidiaries	–	–	914	–	7,113	2,427	10,454
Additions	8,468	–	830	–	–	1,234	10,532
Disposals of subsidiaries	–	–	–	–	(287)	(75)	(362)
Disposals	(289)	–	–	–	–	(124)	(413)
As at 31 December 2016	20,639	11,232	10,075	15,082	9,268	8,553	74,849
Accumulated amortization
As at 1 January 2016	–	2,231	679	3,393	245	3,174	9,722
Acquisitions of subsidiaries	–	–	–	–	28	49	77
Charge for the year	–	486	58	754	73	752	2,123
Disposals of subsidiaries	–	–	–	–	–	(30)	(30)
Disposals	–	–	–	–	–	(60)	(60)
As at 31 December 2016	–	2,717	737	4,147	346	3,885	11,832
Net book value
As at 31 December 2016	20,639	8,515	9,338	10,935	8,922	4,668	63,017
As at 1 January 2016	12,460	9,001	7,652	11,689	2,197	1,917	44,916

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

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

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

# (I) GOODWILL

(in RMB million)	2017
As at
1 January 2017	Additions	Disposals	As at
31 December 2017
Ping An Bank	8,761	–	–	8,761
Shanghai Jahwa	2,502	–	–	2,502
Mabyorn Group Limited	2,106	–	(275)	1,831
Ping An Securities	328	–	–	328
Shenzhen Ping An Commercial Property
Investment Co., Ltd.	66	–	–	66
Beijing Shuangronghui Investment Co., Ltd.	134	–	–	134
Shanghai Gezhouba Yangming Property
Co., Ltd.	241	–	–	241
Ping An E-wallet	1,073	–	–	1,073
Autohome Inc.	5,265	–	–	5,265
Other	163	143	–	306
Total	20,639	143	(275)	20,507
Less: Impairment losses	–	–	–	–
Net book value	20,639	143	(275)	20,507

(in RMB million)	2016
As at
1 January 2016	Increase	Decrease	As at
31 December 2016
Ping An Bank	8,761	–	–	8,761
Shanghai Jahwa	2,502	–	–	2,502
Mabyorn Group Limited	–	2,106	–	2,106
Ping An Securities	328	–	–	328
Shenzhen Ping An Commercial Property
Investment Co., Ltd.	66	–	–	66
Beijing Shuangronghui Investment Co., Ltd.	134	–	–	134
Shanghai Gezhouba Yangming Property
Co., Ltd.	239	2	–	241
Ping An E-wallet	–	1,073	–	1,073
Autohome Inc.	–	5,265	–	5,265
Other	430	22	(289)	163
Total	12,460	8,468	(289)	20,639
Less: Impairment losses	–	–	–	–
Net book value	12,460	8,468	(289)	20,639

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

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

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

# Outlook

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

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

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

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

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

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

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

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

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

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

# Gearing ratio

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

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

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

# Deferred tax assets

Amortization
of operating
lease
HK$’000
At 1 January 2017	2,142
Credited to the consolidated income statement	178
Exchange differences	156
At 31 December 2017 and 1 January 2018	2,476
Credited to the consolidated income statement	41
Disposal of a subsidiary	(2,573)
Exchange differences	56
At 31 December 2018	–

# Deferred tax liabilities

Unrealized
earning	Amortization
of operating
lease	Total
HK$’000	HK$’000	HK$’000
At 1 January 2017	−	(1,003)	(1,003)
Charged to the consolidated income statement	(241)	(301)	(542)
Exchange differences	(12)	(81)	(93)
At 31 December 2017 and 1 January 2018	(253)	(1,385)	(1,638)
Charged to the consolidated income statement	(42)	(129)	(171)
Disposal of a subsidiary	–	1,547	1,547
Exchange differences	13	(33)	(20)
At 31 December 2018	(282)	–	(282)

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