EPI (Holdings) Ltd

Annual Report

Annual Report

Expanding our Horizons
New opportunities in China’s non-ferrous metals and mining investment

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Corporate Profi le

EPI is a high growth company that focuses on 
the non-ferrous metals and resource sector, with 
a business scope covering mining and resource 
investment, scrap metals sourcing and trading, 
copper anode production, and scrap metals 
financing and logistics. Through strategic mergers 
and acquisitions, the Group is accelerating 
its growth by providing Chinese state-owned 
enterprises with high quality services that add value 
to their operations and enterprise value. The Group 
also operates an OEM/ODM consumer electronics 
business supplying customers in the USA, Europe 
and Latin America. EPI’s mission is to achieve 
sustainable and high returns for its shareholders and 
to become a leading player in non-ferrous metals 
and resources in Asia.

 
 
 
 
 
 
(cid:129) 
Turnover (HK$’000) 
(cid:129)  Gross profi t margin (%) 
(cid:129) 

Earnings before interest, tax, depreciation and 
  amortization less interest income (EBITDA)* (HK$’000) 
Profi t for the year attributable to equity holders 
  of the Company* (HK$’000) 
Earnings per share (HK cents)* 
Final dividend per ordinary share (HK cents) 

(cid:129) 

(cid:129) 
(cid:129) 

2007 

2006 

  Change

2,053,000 
6.13 

264,803 
2.6 

675%
 3.53% pt

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75,929 

1,996 

  3,704%

63,511 
1.64 
0.25 

1,774 
0.19 
— 

  3,480%
763%
N/A

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* 

The exceptional gain on debts restructuring of HK$263,168,000 had been excluded from the earnings/profi t of 2006 for comparison to the results of 2007.

TURNOVER BY BUSINESS SEGMENT

GROSS PROFIT BY BUSINESS SEGMENT

HK$’000

HK$’000

5.6%   114,934

Consumer  
   Electronics
Metals Sourcing 
   and Trading
Copper Smelting   36.5%   749,133

57.9%  1,188,933

2.6%   3,298

Consumer  
   Electronics
Metals Sourcing 
   and Trading
Copper Smelting   13.8%   17,379

83.6%  105,134

Contents
Corporate Profi le 
Financial Summary 
Vision and Mission 
Corporate Structure 
List of Events 
Chairman Statement 
Management Discussion and Analysis 
Directors and Senior Management Profi le 
Corporate Governance Report 

1
2
3
4
7
11
17
21

29
Report of the Directors 
37
Independent Auditor’s Report 
40
Consolidated Income Statement 
41
Consolidated Balance Sheet 
42
Consolidated Statement of Changes in Equity 
43
Consolidated Cash Flow Statement 
44
Notes to the Consolidated Financial Statements 
Five Year Financial Summary 
85
Defi nitions and Conversions of Weights and Measures  86
91
Corporate Information 

Cover: close up of copper ore

 
 
 
 
 
 
 
 
 
 
 
 
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Vision and Mission

VISION   Our vision is to become a leading player in 
metals mining and resource investment in Asia. We 
aim to achieve this by investing in fi rst-class mining 
and resource projects while building a worldwide 
supply chain network covering scrap metals 
sourcing, copper anode production, scrap metals 
fi nancing, logistics and warehousing.

MISSION   Our mission is to develop strategic 
partnerships with major state-owned enterprises in 
China’s mining, resource and non-ferrous metals 
sector, using our global sourcing and fi nancing 
capabilities to provide them with high quality 
supply chain services. Leveraging on our fi nancial 
restructuring skills, we aim to maximize value and 
invest in cost-competitive businesses to provide 
long-term and sustainable returns to shareholders.

 
 
 
 
 
 
 
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The Corporate Structure as at 23 April 2008:

EPI (Holdings) Ltd.

100%

100%

100%

Innovision Enterprises Ltd.

EPI Metals Ltd. 

EPI Mines Investment Ltd.

100%

100%

100%

EPI Metals Inc.

Century Great Ltd.

EPI Aluminum Ltd.

57.92%

Vision Tech International
Holdings Ltd.

100%

Shenzhen Innovision
Trading Ltd.

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51%

Qingyuan JCCL EPI
Copper Ltd.

100%

Qingyuan JCCL EPI
Copper (HK) Ltd.

100%

JCCL EPI Resources Ltd.

 
 
 
 
 
 
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EPI Holdings Ltd. resumption of  trading 
press conference
From left to right, Mr. Xu Mingshe, 
Independent Non Executive Director, Mr. 
Cheng Hairong, Deputy Chairman and 
Executive Director, Mr. Joseph Wong, 
Chairman and CEO, Mr. Robert Chu, 
Executive Director and Mr. Edmond Poon, 
Independent Non Executive Director

Signing Ceremony of Qingyuan JCCL EPI 
From the signing table left to right, Mr. Fan 
Jixun, General Manager of Qingyuan JCCL 
EPI,  Mr He Changming, ex-President 
of Jiangxi Copper, Mr. Joseph Wong, 
Chairman and CEO of EPI

Mr. Li Yi Huang, President of Jiangxi Copper 
officiates the Opening Ceremony of smelting 
plant in Qingyuan

20 SEPTEMBER 2006

26 SEPTEMBER 2006

5 DECEMBER 2006

Completion of restructuring 

Resumption of trading in shares on 

Raised HK$172,087,000 via the 

agreement and Climax Associates 

the Stock Exchange of Hong Kong 

top-up subscription placement of 

Limited became the controlling 

Limited

605,000,000 shares to institutional 

shareholder of Great Wall Cybertech 

investors.

Limited. Through subscription 

26 NOVEMBER 2006

and placing of shares raised HK$ 

128,579,000.

22 SEPTEMBER 2006

Formation of joint venture company, 

12 FEBRUARY 2007

Qingyuan JCCL EPI Copper Limited, 

Signed a joint venture agreement 

with Jiangxi Copper for copper 

with Guangdong Guanghong 

anode production. EPI accounts 

International Trade Group Company 

Change of company name from 

for 51% paid up capital of the joint 

Limited to invest in Guangzhou 

Great Wall Cybertech Limited to EPI 

venture company.

(Foshan) Metals Company Limited to 

(Holdings) Limited

establish metals logistics and metals 

financing business.

 
 
 
 
 
 
 
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Copper Anode Machine

Signing Ceremony of Framework 
Agreement with Daye Non Ferrous Metals 
Company

Mr. Joseph Wong, Chairman and 
CEO received the award “Hong Kong 
Outstanding Enterprise Parade 2007” 
from Hon. Jeffrey Lam Kin Fung, SBS, JP, 
Legislative Councilor

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22 MAY 2007

14 JUNE 2007

11 DECEMBER 2007

Signed Framework Agreement to 

Raised total amount of 

EPI (Holdings) Limited awarded 

form joint venture company with 

HK$463,405,000 via top-

Economic Digest “Hong Kong 

Daye Non Ferrous Metals Company, 

up subscription placement of 

Outstanding Enterprises Parade 

which will inject four operating mines 

573,540,000 shares and placement 

2007”.

in Hubei, China into the joint venture 

of 143,380,000 warrants to 

company and EPI will contribute cash 

institutional investors.

7 MARCH 2008

for 25% interest in the equity of the 

joint venture company.

28 JUNE 2007

Vision Tech International Holdings 

Limited (HKSE Code: 922) resumed 

6 JUNE 2007

Announcement of Discloseable 

trading in shares on the Stock 

Transaction in relation to 

Exchange of Hong Kong Limited. 

Grand Opening of EPI and Jiangxi 

subscription of 750,000,000 new 

EPI is the largest shareholder with 

Copper joint venture company 

shares of HK$0.10 each in Vision 

holding interest of 57.92% of the 

Qingyuan JCCL EPI Copper Limited 

Tech International Holdings Limited 

enlarged issued share capital.

Smelting Plant.

(HKSE Code:922) conditional to 

completion of capital reorganization 

and resumption of trading.

 
 
 
 
 
 
 
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Mr. Joseph Wong Chi Wing Chairman and CEO

 
 
 
 
 
 
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Dear Shareholders,

OUR STRATEGY

I am pleased to report that the year 2007 saw positive 

results both in the establishment of our non-ferrous 

metal business, and in the formulation of a clear strategic 

platform for future high growth.

FINANCIAL PERFORMANCE

Our short-term strategy remains to build on the solid 

foundations laid within our scrap copper and non-ferrous 

metal supply chain business to provide us with a core 

stable revenue supply. While continuing to establish our 

goodwill and business network in the China market, we 

are also focusing our medium-and long-term strategy 

on expanding our investment projects in the mining 

For the year ended 31 December 2007, the Group 

and resources sector. Based on a prudent and careful 

recorded a remarkable sales turnover of HK$2,053 million, 

investment approach, we are identifying operational mines 

representing a 675% increase as compared to the same 

projects that provide immediate cash contributions with 

period last year. Net profit after tax for 2007 was 63.5 

a stable long-term cash inflow to the projects as well as 

million, representing year-on-year growth of 3,480% with 

contributions to the Group. We believe that the resource 

the exclusion of net gain of debts restructuring from the 

and commodity sector will be the main growth driver of our 

Net Profit after tax for 2006. In 2006, our turnover was 

business for many years to come.

derived solely from our consumer electronics business. 

In 2007, the turnover was generated from three sources: 

BUILDING SUSTAINABLE GROWTH

metals sourcing and trading, production of copper anode, 

and consumer electronics. The main revenue drivers were 

metals sourcing and trading and the production of copper 

anode, which together accounted for approximately 

94.4% of the total turnover. In light of this performance, I 

am delighted to announce on behalf of the Board a final 

dividend of HK cents 0.25 per share.

In addition to our core businesses of scrap metals 

sourcing, copper anode production and metals 

The year was dedicated to building awareness in the 

industry, and to becoming well known and accepted by 

both business partners and institutional investors for our 

ability to realize our strategies in terms of productive, 

efficient and sustainable daily operations. In this first year 

of full operations, the Group generated highly positive cash 

flows and returns, transforming itself from a company that 

was suspended from trading for three years on the Stock 

Exchange of Hong Kong into a well-recognized Hong 

financing, we focused on identifying high quality mining 

Kong listed company.

and resources investment opportunities as well as key 

institutional investors to raise capital for investment 

projects. Riding on Hong Kong’s robust capital markets, 

we successfully raised HK$463 million in the year 2007, 

establishing a healthy financial position and laying down 

a good foundation for our capital requirements in metals 

sourcing. Due to our strong cooperation and goodwill 

built together with our partner Jiangxi Copper in 2007 

in the copper industry, I am pleased to report that we 

have established over HK$1 billion bank line facilities with 

major China and Hong Kong banking financial institutions 

to meet the business working capital needs of our high 

growth expansion.

By leveraging the Group’s financial restructuring expertise 

and our professional investment team’s brand name, we 

gained the attention and respect of China state-owned 

enterprises as well as state and provincial government 

delegates. As a result, we greatly enhanced our potential 

for forming partnerships with high-quality enterprises in 

China and worldwide. In June 2007, just seven months 

after the initial joint venture agreement was signed with 

Jiangxi Copper Limited, our smelting joint venture – 

Qingyuan JCCL EPI Copper Limited – began production of 

a copper anode smelting plant with annual full capacity of 

50,000 tonnes per annum.

 
 
 
 
 
 
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In May 2007, we signed a framework agreement to form 

During the year, the Group continued to build a solid and 

a joint venture company with Hubei Daye Non Ferrous 

efficient infrastructure and operational platform ready 

Metals Company (Daye Non Ferrous). Daye Non Ferrous 

for further growth and expansion. We implemented the 

processes one of the oldest copper exploration mines in 

enterprise resources planning (ERP) – operational software 

China, with a history reaching back to the Zhou Dynasty 

system for management control, financial accounting, 

some 3,000 years ago. It has abundant resources and 

trading, shipping and delivery, purchasing order, logistics 

minerals yet to be explored. We are honored to be able 

tracking and human resources. The application began full 

to partner with Daye Non Ferrous in their restructuring 

operation on 1 January 2008.

process. With the full support of Daye Non Ferrous, we 

are now working diligently and closely together to achieve 

To fully support our well-structured business model, we 

approval from the relevant regulatory bodies in China as 

also implemented a comprehensive risk management 

well as from the due diligence process towards the signing 

system. Our risk management team has a stringent policy 

of a joint venture agreement. Upon the approval of this 

on marketing risk control, hedging risk control, operational 

agreement, which we expect to be within 2008, Daye Non 

risk control and currency risk control to ensure that our 

Ferrous will inject four of its copper mining assets and the 

set profit margin is maintained, especially in the volatile 

Group will contribute cash for a 25% interest in the equity 

environment of the commodity industry. All our business 

of the joint venture.

models take into account detailed risk assessments.

2007 was also marked by the successful restructuring 

A GREENER FUTURE

of Vision Tech International Holdings Limited (“Vision 

Tech”), a consumer electronics company that had been 

suspended from trading on the board of the Stock 

The EPI Group believes that sustainable growth cannot be 

achieved without integrating corporate social responsibility 

Exchange of Hong Kong for the last five years. Once again 

into all our business operations and strategies. Our 

our investment team demonstrated its core strength in 

finance restructuring and our experience in the consumer 

electronics market, enabling us to spend only nine months 

on the white knight rescue. Vision Tech resumed trading 

on the Stock Exchange of Hong Kong on 7 March 2008 

and is expected to provide a substantial investment return 

for our shareholders.

ENHANCING CORPORATE GOVERNANCE

corporate goal is to be a leader in the industry for metals 

recycling and green environment business. Our scrap 

metal business can not only help resolve the tight supply 

and high demand for copper experienced by the fast-

growing China State owned enterprises, but also our 

smelting operations can show the way for environmental 

compliance in China. Within one year of operation, our 

Qingyuan copper anode production plant has become a 

sample plant for the Qingyuan government to demonstrate 

green environmental social responsibility.

In addition to successfully starting up and expanding our 

core businesses of scrap metal sourcing and smelting 

FUTURE PROSPECTS

of copper anode, the Group established strong banking 

relationships during the year in both Hong Kong and on 

the Mainland to support our working capital requirements. 

These relationships fully recognized our commitment to 

excellence of management, our system of internal controls 

and risk management, and our culture of continuous 

improvement in corporate governance.

Looking ahead, we have laid a good foundation to build 

on existing operations to achieve a substantial increase 

in business scale and volume. We are working closely 

to finalize long-term scrap metal trading contracts with 

the top four copper players in China and we are further 

extending and deepening our partnerships to other areas 

 
 
 
 
 
 
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of cooperation within the supply chain. At the same time, 

to generate medium-to long-term sustainable revenue 

for the Group, we have placed considerable emphasis 

on our key growth driver investment business. We are 

concentrating our investments in precious metals, gold, 

iron ore, zinc and copper as well as in the oil resource and 

mining sector.

The Group’s resource and mining investment team 

provides a full service to resource and mining companies 

from asset restructuring and capital restructuring to 

finance investment. We add value to their mining and 

exploration facilities in order to increase profit efficiency 

and enhance total enterprise value, so that together we 

can prepare the company for the public offering market. 

We believe we will be able to complete at least one 

significant mining and investment agreement within 2008, 

which will provide a substantial investment return to our 

shareholders.

OUR PEOPLE: OUR TEAM

The successful performance of the Group in 2007 was 

due to the resourcefulness and dedication of my fellow 

directors and the staff at EPI. I would like to thank each and 

every one of them and all our shareholders for their hard 

work and support. Because of them, we are well on the 

way to becoming the leading player in mining and resource 

investment and global supplier of non-ferrous scrap metals 

in China.

Joseph Wong

Chairman and CEO, EPI Holdings Limited

Hong Kong

23 April 2008

 
 
 
 
 
 
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During 2007, the Group made significant progress towards 

standards, copper prices in 2007 were maintained at a 

our vision of becoming the leading supplier of non-ferrous 

high level while global stocks continued to remain low. 

metals, primarily scrap copper, in China.

Global copper prices rallied in the first half of 2007, surging 

to a level above US$8,300, benefiting from increasing 

Building on our core business of scrap metal sourcing, 

demand and low global inventories. Prices came under 

smelting and financing, we intensified our focus on mining 

pressure later in the year, dropping to as low as US$5,200, 

investment as a growth driver and continued to maintain 

due to global market concerns over the health of the US 

and expand our consumer electronics business. By further 

economy and the possible spillover effects. Global copper 

establishing ourselves and our business model in the 

prices are expected to remain volatile in the coming year.

market, the Group generated record profit and strong cash 

flows and has evolved a clear strategic platform to reach 

CRU statistical data indicate that China copper 

our future goals.

consumption in 2007 was at 4,621,000 tonnes, a 19.2% 

REVIEW OF OPERATIONS

During the period under review, the Group’s operations 

year-on-year increase, and continued to surpass the 

market supply of 3,457,000 tonnes, a 18.6% year-on 

year-increase. Overall, this represented a deficit supply of 

1,164,000 tonnes, reflecting significant growth in China 

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comprised our sourcing and trading of non-ferrous 

copper demand.

metals business; Qingyuan JCCL EPI Copper Limited — 

our copper smelting joint venture in Qingyuan; and our 

consumer electronics business.

Non-ferrous Metals Business

The Group’s non-ferrous metals business saw rapid 

progress in 2007, with the robust performance of metals 

sourcing and trading, the beginning of smelting operations 

and the signing of this framework agreement with Daye 

Non Ferrous Metals Company (Daye Non Ferrous).

The Copper Market

The global copper market was challenging in 2007, and is 

expected to remain tight in the coming year. By historical 

Due to unequal growth rates between concentrates 

capacity and smelter capacity, concentrate production has 

not been able to keep up with such demand growth. Rapid 

expansion of smelter capacity has triggered a deficit in the 

global concentrates market. As a consequence, refiners 

must enter into low treatment and refining charges (TC/

RCs), pressuring the least efficient smelters to reduce output 

or even shut down. For this reason, China’s refined output is 

expected to grow at a slower pace in the coming year.

The anticipated short supply of refined output from 

concentrates has led Chinese smelters to start looking for 

other solutions, which include the sourcing of alternative 

materials such as recycled scrap copper and other non-

ferrous metals from both domestic and overseas markets. 

Refined China copper consumption

Refined China copper supply/production

China supply/demand Balance 

Million/ton

4.621

Million/ton

3.457

3.781

3.876

3.456

2.916

2.587

2.198

Thousands/ton
(1258)

(1194)

(1164)

(960)

2003-04

2005

2006

2007

2003-04

2005

2006

2007

2003-04

2005

2006

2007

 
 
 
 
 
 
 
 
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Growing demand in the copper market in China has provided 

management were set in place to track every process of 

an enormous market growth opportunity for the Group.

the transaction to ensure that our set profit margin and 

processing cost were maintained.

Financial Performance

In 2007, EPI Metals committed to further providing direct 

The non-ferrous metals business made a major 

scrap copper to Jiangxi Copper Company Limited (“Jiangxi 

contribution to the Group’s sales revenue and net profit 

Copper”) in addition to copper anode. EPI Metals also 

in fiscal 2007. The majority of our metals business was 

began negotiations to expand our trading and sourcing 

concentrated in copper metal and the sales revenue mix 

services to other major copper market leaders in China in 

of the different segments was 57.9% metals sourcing and 

order to supply them with scrap copper.

trading, 36.5% production of copper anode and 5.6% 

consumer electronics. Total sales revenue for the Group 

Production of Copper Anode

was HK$2,053 million for the year, representing a year-on-

year increase of 675%. The reason for such a substantial 

The Group’s 51% joint venture with Jiangxi Copper, 

increase was that in 2006 the turnover derived solely from 

Qingyuan JCCL EPI Copper Limited (“Qingyuan JCCL 

the Group’s consumer electronics business. Profit for the 

EPI”), started production in June 2007. During the year, 

year attributable to equity holders of the Company for 

Qingyuan JCCL EPI produced and sold 24,457 tons of 

2007 was HK$63.51 million, representing year-on-year 

copper anode to Jiangxi Copper and recorded a sales 

growth of 3,480% with the exclusion of net gain of debts 

revenue of HK$749.1 million for EPI’s share, representing 

restructuring from the Net Profit after tax for 2006. These 

36.5% of the Group’s turnover and a segment profit of 

results fully demonstrate that the Group’s diversification 

HK$17.9 million.

from our consumer electronics business to non-ferrous 

metals as a core business focus was a successful strategy. 

While the Qingyuan JCCL EPI laid foundations and 

For the next few years, the Group foresees that our core 

developed supplier relationships with key local China scrap 

businesses will continue to be non-ferrous scrap metals 

yard dealers during the period, the joint venture company 

with mining investment projects as a further growth driver.

built credentials, goodwill and relationships with major 

China banks to provide banking facilities for future growth 

Metals Sourcing and Trading

and the provision of working capital funding for the joint 

venture company’s China sourcing and trading business.

EPI Metals Limited (“EPI Metals”), the overseas sourcing 

business of the Group, recorded sales revenue of 

In February 2007, the exclusive 15-year joint venture 

HK$1,188.9 million and a segment profit of HK$104.1 

acquired an existing smelting plant at Qingyuan in 

million. The Group sourced 24,779 tones of non-ferrous 

Guangdong Province and worked rapidly to refurbish 

metals in 2007, mainly from the USA, Europe and Asia. 

the plant. More than 26 high level engineers from Jiangxi 

Metals sourced were generally known as (according to 

Copper were sent to facilitate the construction of the 

ISRI guidelines), No.1 copper (97-99% copper content), 

copper anode smelting machine and to ensure all 

No.2 copper (94%-96%), as well as other Light copper 

environmental facilities were in compliance with the China 

(88%-92%) and scrap aluminum. (See Mining and 

Central Government’s standards. Within only four months 

Technical Definitions on page 86 of this report)

of establishment, the smelting plant was in operation. 

During the year, the Group adopted a prudent approach 

President, the management team, Qingyuan government 

to our copper purchasing through the London Metal 

officials and EPI management, the Qingyuan smelting plant 

Exchange (LME) to hedge against market price 

was inaugurated to produce copper anode from scrap 

fluctuations. Practical market risk and operational risk 

copper with an annual capacity of 50,000 tonnes.

On 6 June 2007, in the presence of the Jiangxi Copper 

 
 
 
 
 
 
 
 
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Consumer Electronics Business

leveraging on the goodwill of the existing Qingyuan scrap 

copper metal smelting business and infrastructure will give 

Sales revenue for the Group’s consumer electronics 

us a head start advantage in the scrap metal financing 

business, Innovision Enterprises Ltd. (“Innovision 

business, enabling us to grow more local sourcing capacity 

Enterprises”), recorded HK$114.9 million, representing a 

for our increasing demand for scrap metal supply.

56.6% year-on-year decrease, and net segment profit was 

HK$0.4 million. During the year under review, consumer 

Mining and Resource Investment

sentiment in the US market slowed down, thereby decreasing 

our sales turnover. However, the Group maintained a stable 

In 2007, the Group’s management and mining investment 

gross profit margin of 2.9% (2006: 2.6%).

team actively focused on identifying and accessing mining 

Innovision Enterprises sells DVD combo and home 

projects in copper, iron ore, zinc, precious metals such as 

and resource projects. The Group is exploring investment 

theatres to the USA, Latin America and European markets, 

gold, and oil resources.

outsourcing production on an OEM and ODM basis to 

our exclusive China manufacturers. During the period, the 

The Group’s mining investment team provides full value-

consumer electronics team leveraged on its sales network 

added services to mining and resource companies. These 

and business expertise to help in the restructuring and 

services include asset restructuring, capital restructuring, 

rescue of Vision Tech, as well as playing an important 

and investment funding for mining exploration production 

role in increasing sales turnover and obtaining overseas 

work and infrastructure facilities. Our aim is to increase 

business orders for Vision Tech.

production output capacity and revenue to enhance overall 

net asset value as well as to provide pre-IPO investment to 

The Group’s strategy is to focus our resources on the non-

maximise returns for shareholders.

ferrous metals business while maintaining the consumer 

electronics business at a stable level. As long as the 

EPI’s core competitive strength in competing with 

consumer electronics business maintains a profitable or a 

other investment projects lies in its strong financial 

self-sufficient financial position, we will continue to maintain 

restructuring capabilities, its Hong Kong listed company 

this strategy.

positioning, its local Chinese background, professional 

management team and goodwill in the China market. 

Warehousing, Logistics and Metals Financing

During the year, the group’s professional investment 

team received considerable recognition from China state-

Our vision for the future is to build a non-ferrous metal 

owned enterprises and was able to partner with first-class 

global supply chain network. During the year, the Group 

partners in China and worldwide.

undertook a feasibility study to commence scrap metals 

financing and warehousing operations in Qingyuan JCCL 

Daye Non Ferrous Framework Agreement

EPI. The scrap metal financing model is the first of its kind 

amongst listed companies in Hong Kong.

In May 2007, the Group signed a framework agreement 

with Daye Non Ferrous, China’s fourth largest copper 

We believe that this business not only provides a credible 

leader. EPI and Daye Non Ferrous will form a joint venture 

financing platform for local scrap yard dealers but also 

company whereby Daye Non Ferrous will inject four of 

provides a stable sourcing channel and revenue growth 

its copper mining assets into the joint venture company, 

potential for our Qingyuan JCCL EPI partnership with 

representing 75% of the shareholdings, and EPI will 

Jiangxi Copper. Qingyuan is a major metal recycling hub 

inject an estimated HK$500 million into the joint venture 

and active local sourcing and trading center for China, 

company, representing 25% of the shareholdings.

with over 4,000 scrap yard dealers. We believe that 

 
 
 
 
 
 
 
 
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The four mines, namely Tong Lu Shan Mine, Feng San 

Vision Tech is engaged in consumer electronics business 

Mine, Xin Tai Mine, Xin Ma operating mines, are located 

sales distribution and will further expand its business to 

in Hubei with a current annual production capacity of 

GPRS navigator systems and automobile Hi Fi sound 

20,000-23,000 tonnes of copper, 1 tonne of gold, and 

systems. The success of the restructuring and rescue of 

350,000 tonnes of iron ore. The four mines have over 30 

Vision Tech again demonstrated the financial restructuring 

years of mine life with total reserves of 787,374 tonnes 

capability of the Group. We believe that it will provide a high 

of copper, 29,564 kilograms of gold, 455,726 kilograms 

return investment for our shareholders.

of silver, 13,021 tonnes of molybdenum, and 19,602 

kilotonnes of iron ore. Copper ore grades are considered 

FINANCIAL REVIEW

very high in the country ranging from 0.91% to 1.46% 

copper content; gold grade has an average of 1.10 gram 

Turnover and Gross Profit Margin

per tonne; silver grade ranges from 7.10 gram per tonne 

to 19.93 gram per tonne; iron ore grade has an average 

of 36.28% iron content. The four copper mines are 

considered major copper mine reserves in China.

This project is now undergoing a due diligence review 

by EPI, Daye Non Ferrous and the China government 

regulatory bodies. Once regulatory approval is given by the 

relevant bodies, the Group aims to close the joint venture 

agreement during 2008.

Other Investment Projects

2007 was also marked by another restructuring success. 

Leveraging on our investment team’s core strength 

in finance, business restructuring and our consumer 

electronic business sales network, the Group spent nine 

months acting as a white knight to rescue Vision Tech 

International Holdings Limited (“Vision Tech”, stock code: 

0922HK), a consumer electronics company that had 

been suspended from trading on the board of the Stock 

Exchange of Hong Kong Limited for the last five years.

On 18 May 2007, EPI entered into a Subscription 

Agreement conditionally agreed to subscribe for 

750,000,000 new shares at a price of HK$0.10 per new 

share in Vision Tech at a total consideration of HK$75 

million. Upon completion on 3 March 2008, EPI held 

57.92% of the enlarged issued share capital of Vision 

Tech, which resumed trading on the Stock Exchange of 

The turnover from metals sourcing and trading business 

was HK$1,188.9 million, representing 57.9% of the 

Group’s turnover. Gross profit margin was 8.8%. The 

production of copper anode business originated from 

the Qingyuan JCCL EPI smelting joint venture. The joint 

venture plant began operations in June 2007. The sales 

for the period were HK$1,469 million, of which the Group 

accounted for 51% or HK$749.1 million, representing 

36.5% of the Group’s turnover. Gross profit margin was 

2.3%. Sales at the consumer electronics business were 

HK$114.9 million, representing 5.6% of the Group’s 

turnover, a decrease of 56.6% as compared to the same 

period last year. Gross profit margin was 2.9%. (margin 

maintained as compared to last year 2.6%).

Hedging against Commodities Price Fluctuations

The Group recognises the importance of hedging its 

risk exposure to commodities price fluctuations. The 

Group utilizes commodity forward contracts to hedge the 

forecasted purchase of copper concentrate and/or other 

related materials during the year. These arrangements are 

designed to address significant fluctuations in the price of 

copper concentrate and/or related materials, which move 

in line with the price of copper cathode. During the year the 

Group recognised a gain on commodity forward contracts 

of HK$53,346,000. The management viewed this gain as 

an adjustment to the cost of sales but the amount was 

taken to other income according to the generally accepted 

Hong Kong Limited on 7 March 2008.

accounting principles.

 
 
 
 
 
 
 
 
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As at 23 April 2008, the Group has approximately US$150 

143,380,000 warrants at HK$0.08 warrant price with 

million bank line facilities for commodity forward contracts, 

an exercise price at HK$0.94 per share for 365 days to 

which is adequate for the Group to hedge against future 

institutional investors. The proceeds will be applied to the 

commodities price fluctuations.

Daye investment and as working capital for the Group.

EBITDA and Profit

The Group has a strong net cash position as at 31 

December 2007, with approximately HK$172 million of 

The Group’s EBITDA (earnings before interest, tax, 

cash and bank balances, and approximately HK$126.5 

depreciation and amortization less interest income) for 

million of bank loans. The cash and bank balances, in US 

2006 was HK$265 million, which was mainly contributed 

dollars, HK dollars and Renminbi dollars, are mainly held at 

by a HK$263,168,000 gain on debt restructuring. This 

banks as short-term deposits. The Group only has short-

gain is non-recurrent in nature. The Group’s EBITDA 

term bank loans and overdrafts repayable within one year. 

for the year was HK$75.9 million. If the gain on debt 

The loan facility in Hong Kong bears interest calculated 

restructuring of HK$263,168,000 in 2006 were excluded 

with reference to prime rate or LIBOR. The working capital 

for comparison purposes, EBITDA margin rose strongly 

Renminbi loans bear interest calculated with reference to 

to HK$75.9 million from HK$2 million as a result of the 

the People’s Bank of China 3 to 12 months working capital 

successful diversification into the non-ferrous metals 

lending rate.

business and profit for the year attributable to equity 

holders of the Company also increased sharply, rising by 

The Group has established strong bank line facilities with 

763% to HK$63.5 million and the net profit margin based 

major banks and financial institutions in China and Hong 

on turnover improved from 0.7% to 3.1%.

Kong. As of 23 April 2008, the Group has approximately 

Finance Costs

HK$1 billion bank trade line facilities to fund and provide 

flexibility for our growth and expansion business working 

capital needs.

Finance costs of HK$3.5 million mainly comprised interest 

expenses on bank loans and overdraft repayable within 

Financial Position

one year. The increase in interest expense was mainly 

due to the increase in the utilization of bank trade facilities 

As compared to the Group’s financial position as at last 

for the metals sourcing and trading business and the 

year end, total assets increased by 3.9 times to about 

production of copper anode business.

HK$1,119.6 million (2006: HK$283.5 million) and net 

current assets increased by 2.9 times to about HK$704.5 

LIQUIDITY AND FINANCIAL RESOURCES

million (2006: HK$243.9 million). These changes were 

In view of its expansion plans and the prospects from the 

mainly attributable to the Group’s expansion via further 

equity financing and diversification into the non-ferrous 

completion of the Daye joint venture, the Group decided to 

metals business.

raise additional equity capital in the first half of 2007.

On 14 June 2007 the Company raised aggregate net 

proceeds of HK$463.03 million, of which HK$451.9 

million was in the form of shares and HK$11.1 million in 

the form of warrants, via a top up subscription placement 

Net cash outflow from operating activities was about 

HK$502.1 million, net cash outflow in respect of investing 

activities was about HK$98.7 million, net cash from 

financing activities was about HK$559.6 million, resulting 

in a net increase in available cash and cash equivalents of 

of 573,540,000 shares at HK$0.81 per share and 

about HK$145 million for the year.

 
 
 
 
 
 
 
 
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Contingent Liabilities

Copper Mines Investment Projects

As at 31 December 2007, the Group has no contingent 

The Group is working with the full support of Daye Non 

liabilities (2006: HK$NIL).

Ferrous Metals on the process of obtaining approval from 

Pledge of Assets

China government bodies and from a due diligence review 

of our joint venture partnership structure. We are expecting 

to obtain the China government bodies’ approval in the near 

At 31 December 2007, property, plant and equipment, 

future and to close the joint venture agreement in 2008.

prepaid lease payment, index-linked note and pledged bank 

deposits of approximately HK$8,763,000 (2006:HK$nil), 

Scrap Metals Sourcing and Trading

HK$19,098,000 (2006: HK$nil), HK$2,340,000 (2006: 

HK$nil) and HK$26,918,000 (2006: HK$5,000,000) 

Scrap metals trading is part of the Group’s well-structured 

respectively were pledged to secure certain of the Group’s 

business model for further partnership with China’s state-

bank borrowings and banking facilities.

owned enterprises. We will increase scrap metals sourcing 

Capital Commitments

volume and trading quantity by expanding our partnership 

with state-owned enterprises in the copper industry. We 

are working intensively to finalize long-term scrap metals 

As at 31 December 2007, the Group has a capital 

trading contracts with China’s leading top four copper 

expenditure of HK$13,467,000 (2006: HK$NIL) in respect 

players of Jiangxi Copper, Tongling Non Ferrous Metals 

of the acquisition of property, plant and equipment 

Group Holdings Co. Ltd. and Daye Non Ferrous, and we 

contracted for but not provided in the consolidated 

will further extend and deepen our network of relationships 

financial statements.

PROSPECTS

in scrap metals sourcing, trading and other areas of 

partnership. In line with this, we have signed a sale and 

purchase agreement with Jiangxi Copper for supply of 

75,000 metric tonnes a year of copper anode and scrap 

Going forward, the Group is laying a solid foundation to 

copper for 2008.

build on existing operational and business infrastructure 

to achieve a substantial increase in sales and business 

volume in our core businesses, from non-ferrous scrap 

metals to mining and resource investment projects.

These projects will assist the Group in its mission to 

become a leading player in metals mining and resource 

investment in Asia and to provide our strategic partners in 

China’s state-owned enterprises with high quality supply 

Mining and Resource Investment

chain services.

The mining and resource sector is the focus of 

considerable attention in the investment industry. With the 

goodwill built within this industry, our investment team has 

been able to identify attractive investment projects. The 

Group is expanding our mining investment from copper 

metal to other metal mixes such as iron ore, zinc and 

precious metals such as gold, and will consider investing 

in the resource sector of the oil industries. We aim to make 

other significant mining and resources investments in the 

medium term, thereby providing a substantial investment 

return for our shareholders.

 
 
 
 
 
 
 
 
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EXECUTIVE DIRECTORS

Mr. WONG Chi Wing, Joseph, Chairman and CEO 
of EPI, aged 47

Mr. Wong joined the Group in September 2006. He has 

over 20 years of investment banking experience in the 

Greater China region, including experience in Capital 

Markets, Corporate Finance, M&A, and Corporate 

Restructuring.

In 1990 Mr. Wong joined CEF Holdings, a financial 

investment group 50% owned by Canadian Imperial Bank 

of Commerce (CIBC) and 50% by Cheung Kong (Holdings) 

Limited. Initially appointed as Assistant Director of CEF 

Capital Limited, he was later made Managing Director in 

1995. He was also a Director of CEF (Capital Markets) 

Limited, and a member of CEF Holdings’ Undertaking 

Committee responsible for credit risk management. In 

2002, he left CEF Holdings to move to Canada.

In 2004, Mr. Wong returned to Hong Kong and assumed 

the role of a “White Knight”, rescuing Great Wall Cybertech 

Limited (HKEx: 689) by entering into an escrow and 

exclusivity agreement that saved the company from the 

threat of liquidation. On 26 September 2006, after Great 

Wall Cybertech had completed its restructuring, trading 

of its shares resumed on the Stock Exchange of Hong 

Kong Limited, and Mr. Wong was appointed as Chairman 

and CEO of the Group. The Group was then renamed EPI 

(Holdings) Limited.

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knowledge in China finance and investment in sectors 

such as life sciences, production of marine, biotech and 

herbal health products, energy saving, tourism, trading, 

finance and brokerage. Mr. Cheng brings extensive 

experience and wide China business connections to EPI 

(Holdings) Limited.

Mr. Cheng was appointed as the Executive Director of 

Vision Tech International Holdings Limited (HKSE stock 

code: 922) on 3 March 2008. He is the founder and 

Managing Director of China Point Stock Brokers Limited and 

founder, shareholder and President of ChinaXue Ling Ltd.

Mr. CHU Kwok Chi, Robert, Executive Director, aged 57

Mr. Chu has been a Sales Director for the Group since 

August 2004 and was appointed Executive Director for 

the Group in September 2006 heading the consumer 

electronics business. Mr. Chu has over 30 years of 

experience in the international trade and the electronics 

industry. Mr. Chu has been responsible for the marketing, 

sales, trading and production of various private and listed 

consumer electronics companies in Hong Kong. He 

was the Managing Director of Eltic Electronics Company 

Limited, a subsidiary of Greatwall Cybertech (former name 

of EPI (Holdings) Limited), from 1990 to 2000.

Mr. Chu was appointed as the Executive Director of Vision 

Tech International Holdings Limited (HKSE Stock Code: 

922) on 3 March 2008. He holds a Bachelor’s Degree in 

Business Administration.

Mr. Wong holds a Bachelor’s Degree in Social Science 

from the Chinese University of Hong Kong, with a major 

NON-EXECUTIVE DIRECTOR

in Economics.

Mr. LEUNG Hon Chuen, David, aged 56

Mr. CHENG, Hairong, Deputy Chairman and 
Executive Director of EPI, aged 48

Mr. Cheng joined the Group in September 2006. He has 

over 20 years of experience in establishing and managing 

listing companies in Hong Kong as an executive director 

and consultant. Mr. Cheng has extensive industry 

Mr. Leung joined the Group in October 2006 and is 

Chairman of the Remuneration Committee. Mr. Leung has 

had over 25 years of experience in the financial services 

industry in Canada and Asia. He worked for the Canadian 

Imperial Bank of Commerce in Canada and Asia for 

15 years, where he held senior management positions 

in investment banking, retail & corporate banking, and 

 
 
 
 
 
 
 
 
 
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private banking. From 1994 to 1997, he was the Director 

positions. He has extensive experience in banking, 

and General Manager of Essential Enterprises Company 

economy, finance and public listing. He has participated 

Limited (HKSE Code: 128). He is currently operating a 

in public listing issues in Hong Kong for more than 20 

financial and investment consultation company.

PRC enterprises, with total finance raised amounting 

to HK$ 85 billion. He has also been engaged in project 

Mr. Leung has a Bachelor of Arts degree with a 

financing, syndicated loans, debt restructuring and 

major in Economics from the University of Western 

acquisitions.

Ontario in Canada.

INDEPENDENT NON-EXECUTIVE 
DIRECTORS

Mr. POON Kwok Shin, Edmond, aged 55

Mr. Poon joined the Group in November 2005 and is 

Chairman of the Audit Committee. Mr. Poon is a founder 

and Executive Director of Compass Technology Holdings 

Limited. He has 30 years of experience in financial 

accounting and auditing. From 1990 to 1996 he served as 

an Executive Director of QPL International Holdings Limited, 

a Hong Kong-based manufacturer of lead frames and 

provider of semiconductor assembly and test services. Prior 

to this position he worked for 14 years with Kwan Wong 

Tan & Fong, which merged with Deloitte & Touche to form 

Deloitte Touche & Tohmatsu, an international accounting 

firm, and was a partner of that firm when he left.

Mr. Poon received a Higher Diploma in Electronic 

Engineering from Hong Kong Polytechnic University 

in 1976, and subsequently worked for international 

Dr. Xu is currently the independent Non-Executive 

Director of New Ocean Energy Holdings Limited (HKSE 

Stock code: 342). Dr. Xu obtained a doctoral degree 

in economics from Xiamen University and a Bachelor’s 

degree in English from the Guangzhou Institute of Foreign 

Languages. He is currently a senior economist. He has 

studied economics at the Institute of the International 

Monetary Fund in the USA and at the Beijing Institute of 

Economics and Management, where he also pursued his 

study of International Trade and International Law.

Dr. Wu, Xiaoke, aged 55

Mr. Wu joined the Group as an Independent Non-Executive 

Director in August 2002. He is a professional economist and 

a director of various companies in Hong Kong.

MANAGEMENT PROFILE

Mr. HONG Kin Choy, Bryan, Chief Financial Officer 
and Company Secretary, aged 43

accounting firm Touche Ross & Co. while obtaining his 

Mr. Hong joined the Group in October 2005. He oversees 

professional qualifications in accounting and auditing. 

the Group’s financials and carries out the role of Company 

He is a Fellow Member of the Association of Chartered 

Secretary. Mr. Hong is a practising certified public 

Certified Accountants and Hong Kong Institute of 

accountant in Hong Kong and a Fellow Member of both 

Certified Public Accountants.

Dr. XU, Mingshe, aged 52

the Association of Chartered Certified Accountants and the 

Hong Kong Institute of Certified Public Accountants. Mr. 

Hong has over 20 years of experience in the fields of audit, 

accountancy, business advisory services and corporate 

Dr. Xu has served as Deputy Executive Officer of ICEA 

finance. Mr. Hong received a Professional Diploma in 

Finance Holdings Limited, General Manager of the 

Accountancy from Hong Kong Polytechnic University 

International Business Department of the Industrial and 

in 1987, and subsequently worked for international 

Commercial Bank of China Head Office and President of 

accounting firm Deloitte Touche Tohmatsu for five years, 

its Shenzhen Branch, as well as holding other significant 

where he had extensive experience in accountancy, 

auditing and taxation.

 
 
 
 
 
 
 
 
 
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Mr. Hong has wide experience in the commercial sector 

Director of Asia-Pacific Regional Marketing, Beenz, which 

and has held Financial Controller and General Manager 

oversees nine countries in the Asia-Pacific Region.

positions for more than 10 years. Prior to joining the Group, 

Mr. Hong run a CPA firm in his own name.

Miss Cheung graduated from York University in Toronto, 

Canada with a Bachelor of Arts degree in Mass 

Mr. CHAN, Hon Wah, Joseph, Vice President, 
Operations, aged 56

Communication and Psychology. She was educated at 

Harvard University, Massachusetts, USA, gaining graduate 

Mr. Chan joined the Group as Vice President in August, 

2007. In his present position, Mr. Chan oversees the 

Group’s business operations, logistics and human 

resources management. Mr. Chan is a qualified 

credits in Banking, Finance and the Eurodollar.

Mr. YUE Yan Wai, John, Vice President of EPI 
Metals Ltd, aged 49

accountant with associate membership of the Certified 

Mr. Yue joined EPI Metals Ltd., a subsidiary of the Group, 

General Accountants of Canada, and holder of a MBA 

in January 2007. He is head of the Group’s metals 

degree in Finance and Investment from the University of 

sourcing team.

Hull, UK. Mr. Chan has over 30 years banking experience, 

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working in Asia and Canada, with substantial expertise in 

Mr. Yue has over 25 years of experience in sales, 

operations, finance and human resources management.

marketing and operations across the metal recycling and 

refinery business. From 2004 to 2007, Mr. Yue worked 

Prior to joining the Group, Mr. Chan held an executive level 

with Ecycle Tech International Ltd. in Hong Kong. As a 

position at The Bank of Nova Scotia, where he was the 

partner and Director of the company, he was responsible 

Vice President of its Pacific Regional Office in Hong Kong. 

for providing scrap refining services to many listed 

In this role he directed the Bank’s overall operational and 

companies in Hong Kong, China and Asia, such as Johnny 

administrative functions in the Asia-Pacific Region covering 

Electric, Philips Semiconductors, SAE Magnetics, and 

10 countries and 26 branches and operating units in Asia. 

Cooper Lighting.

Mr. Chan also served as director of the Bank’s subsidiaries 

in Hong Kong and Singapore.

Prior to that, Mr. Yue worked at QPL Group as Sales Vice 

President from 1987 to 2003, where he was responsible 

Miss CHEUNG, Siu Yuen, Rose, Vice President, aged 43

for Sales and Marketing activities for the Group in Asia. 

Miss Cheung joined the Group as Vice President in 

Mr. Yue also worked as a sales manager for Heraeus 

Zenith Refinery Ltd. and Truegold Refinery Ltd. Mr Yue is 

October 2006. She oversees for the Group’s corporate 

a graduate of RMIT University in Melbourne, Australia, and 

development and capital markets.

holds a Bachelor of Arts degree.

Miss Cheung has over 20 years of experience in business 

strategy, marketing and sales for listed companies involved 

in consumer electronics, telecommunications, and in 

financial institutions in Asia-Pacific and China markets. 

Prior to joining EPI (Holdings) Limited, Miss Cheung 

held executive positions as the Director of Corporate 

Development for FE Global China Ltd., General Manager 

of Investor Relations for Skyworth Digital Holdings, and 

 
 
 
 
 
 
 
 
 
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The Board recognizes the importance of incorporating 

standard set out in the Model Code for Securities 

elements of good corporate governance into the 

Transactions by Directors of Listed Issuers in Appendix 

management structure and the internal control procedures 

10 of the Listing Rules. Having made specific enquiry of 

of the Group so as to ensure that all business activities of 

all Directors, the Company confirms that all Directors have 

the Group and the decision making process are properly 

complied with the Model Code throughout the year.

regulated.

During the year under review, the Company has applied 

the principles and has complied with the code provisions 

The overall management of the Group’s business is vested 

set out in the Code on Corporate Governance Practices 

in the Board.

BOARD OF DIRECTORS

(the “CG Code”) in Appendix 14 of the Rules Governing the 

Listing of Securities on the Stock Exchange of Hong Kong 

Limited (the “Listing Rules”) with deviations from the code 

provision A.2.1 and A.4.1 of the CG Code as summarized 

below.

The Board is responsible for the promotion of the success 

of the Company by directing and guiding its affairs in an 

accountable and effective manner. Board members have a 

duty to act in good faith, with due diligence and care, and 

in the best interests of the Company and its shareholders.

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The code provision A.2.1 of the CG Code stipulates that 

the roles of chairman and chief executive officer should 

The types of decisions that are to be taken by the Board 

be separate and should not be performed by the same 

include:

individual. Mr. Wong Chi Wing Joseph is the Chairman 

and Chief Executive Officer of the company. The Company 

recognizes the importance of segregating the duties of the 

chairman and the chief executive officer and has tried its 

best in the past year to identify a high caliber executive to 

take up either one of these roles. A suitable candidate has 

not yet been identified but the Company will continue to 

look for the right person for the post.

The code provision A.4.1 of the CG Code stipulates that 

Non-executive Directors should be appointed for a specific 

term, subject to re-election. Currently the Non-executive 

Directors are not appointed for a specific term. However, 

1. 

2. 

Setting the Company’s mission and values

Formulating strategic directions of the Company

3.  Reviewing and guiding corporate strategy; 

setting performance objectives and monitoring 

implementation and corporate performance

4.  Monitoring and managing potential conflicts of 

interest of management and Board members; and

5. 

Ensuring the integrity of the Company’s accounting 

and financial reporting systems, including the 

independent audit, and that appropriate systems 

of control are in place, in particular, systems for 

monitoring risk, financial control, and compliance 

all Non-executive Directors are subject to retirement and 

with the law.

offer themselves for re-election at each Annual General 

Meeting in accordance with the Company’s Bye-laws.

MODEL CODE FOR SECURITIES 
TRANSACTIONS BY DIRECTORS

The Company has adopted a code of conduct rules 

(the “Model Code”) regarding securities transactions by 

Directors on terms no less exacting than the required 

The Board gives clear directions as to the powers 

delegated to the management for the management and 

administration functions of the Group, in particular, with 

respect to the circumstances where management should 

report back and obtain prior approval from the Board 

before making decisions or entering into any commitments 

on behalf of the Group. The Board will review these 

 
 
 
 
 
 
 
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arrangements on a periodic basis to ensure that they 

may affect the Group’s businesses, including relevant 

remain appropriate to the needs of the Group.

rules and regulations. Directors shall have full access 

For the year ended 31 December 2007, the Board:-

independent professional advice whenever deemed 

to information on the Group and are able to obtain 

1. 

reviewed and approved the annual results of the 

Director for such independent professional advice in 2007. 

Group for the year ended 31 December 2006 and the 

The Company Secretary shall prepare minutes and keep 

interim results of the Group for the period ended 30 

records of matters discussed and decisions resolved at all 

June 2007

Board meetings, which will be available for inspection by 

necessary by the Directors. No request was made by any 

2. 

reviewed and approved the general mandates to 

issue and repurchase shares of the Company

BOARD COMPOSITION

Directors upon request.

3. 

reviewed and approved the top up subscription 

placement of 573,540,000 shares and the issue of 

143,380,000 warrants to institutional investors

4. 

reviewed and approved the shares repurchase by the 

Company

The Board currently comprises three Executive Directors, 

one Non-executive Director and three Independent Non-

executive Directors, whose biographical details are set out 

in the section headed “Directors and Senior Management 

Profile” on page 17. The composition of the Board is well 

balanced with each Director having sound knowledge, 

experience and/or expertise relevant to the business 

5. 

reviewed the internal controls of the Group

operation and development of the Group.

6. 

reviewed the performance of the Group and 

formulated the business strategy of the Group.

All Directors are aware of their collective and individual 

responsibilities to the shareholders and have exercised 

their duties with care, skill and diligence, contributing to the 

7. 

reviewed and approved the diversification of 

successful performance of the Group.

business to non-ferrous metals

BOARD MEETING RECORDS

8. 

reviewed and approved the Framework Agreement 

with Daye Non Ferrous Metals Company to form a 

joint venture company holding four mines in China’s 

Hubei province.

There were eight meetings held for the year ended 31 

December 2007. The following is an attendance record of 

the Board Meetings held by the Board during the year:

9. 

reviewed and approved the price-sensitive 

transactions

Attendance at meetings

held for the year ended

Board Members 

31 December 2007

10. 

reviewed and approved the Subscription Agreement 

with Vision Tech International Holdings Limited 

(“Vision Tech”) to subscribe for 750,000,000 new 

shares at HK$0.10 per share in Vision Tech.

Regular Board meetings are scheduled in advance to 

give all Directors an opportunity to attend. All Directors 

are kept informed on a timely basis of major changes that 

Mr. Wong Chi Wing Joseph 

Mr. Cheng Hairong 

Mr. Chu Kwok Chi Robert 

Mr. Leung Hon Chuen 

Mr. Poon Kwok Shin Edmond 

Mr. Xu Mingshe 

Mr. Wu Xiaoke 

7/8

7/8

7/8

6/8

6/8

5/8

4/8

 
 
 
 
 
 
 
 
 
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CHAIRMAN AND CHIEF EXECUTIVE 
OFFICER

The Chairman’s responsibility is to provide leadership to 

the Board and formulate the Group’s business strategies. 

The Chief Executive Officer is responsible for the day-to-

day operation of the Company and implementation of the 

development strategy adopted by the Board. Mr. Wong 

Chi Wing Joseph is the Chairman and Chief Executive 

Officer of the Company. The Company recognizes the 

importance of segregating the duties of the Chairman and 

the Chief Executive Officer and when a capable executive 

can be identified, he will be invited to take up either one of 

these roles in the forthcoming year.

Each Board Committee makes decisions on matters 

within its term of reference and applicable limit of authority. 

The terms of reference as well as the structure and 

membership of each committee will be reviewed from time 

to time.

1)  Audit Committee

a)  Composition of Audit Committee 

members

Mr. Poon Kwok Shin Edmond (Chairman)

Mr. Leung Hon Chuen

Mr. Xu Mingshe

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INDEPENDENT NON-EXECUTIVE 
DIRECTORS

b)  Role and function

Independent Non-executive Directors serve the relevant 

function of bringing independent judgment on the 

development, performance and risk management of the 

Group. The Group’s Independent Non-executive Directors 

have been appointed to hold office until the next Annual 

General Meeting and shall retire and offer themselves for 

re-election according to the Company’s Bye-laws.

All Independent Non-executive Directors are financially 

independent from the Company and any of its subsidiaries.

Each of the Independent Non-executive Directors has 

given a written confirmation to the Company confirming 

that he has met the criteria set out in Rule 3.13 of the 

Listing Rules regarding the guidelines for the assessment 

of the independence of directors.

BOARD COMMITTEES

The Board has also established the following committees 

with defined terms of reference:-

1. 

Audit Committee

2.  Remuneration Committee

3.  Nomination Committee

The Audit Committee is mainly responsible for:

i. 

reviewing the financial statements and 

reports and considering any significant 

or unusual items raised by the qualified 

accountant or external auditors before 

submission to the Board.

ii. 

reviewing the relationship with the 

external auditors by reference to the 

work performed by the auditors, their 

fees and terms of engagement, and 

making recommendations to the Board 

on the appointment, re-appointment and 

removal of external auditors.

iii. 

reviewing the adequacy and effectiveness 

of the Company’s financial reporting 

system, internal control and risk 

management system and associated 

procedures.

 
 
 
 
 
 
 
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c)  Meeting records

2)  Remuneration Committee

Two meetings were held for the year ended 31 

December 2007 and the attendance of each 

committee member is set out as follows:

Attendance at meetings

held for the year ended

Committee Members 

31 December 2007

Mr. Poon Kwok Shin Edmond 

Mr. Leung Hon Chuen 

Mr. Xu Mingshe 

2/2

2/2

2/2

During the meeting, the Audit Committee 

discussed the following matters:-

i. 

Financial Reporting

The Audit Committee reviewed with the 

Chief Executive Officer, the Company 

Secretary and the Financial Controller of 

the Company the interim results.

ii. 

External Auditors

The Audit Committee reviewed the audit 

fee for the year ended 31 December 2006 

and recommended it to the Board.

The Audit Committee reviewed the 

requirements for the external auditors 

and proposed a change of auditors from 

Ting, Ho Kwan & Chan to Deloitte Touche 

Tohmatsu.

a)  Composition of Remuneration Committee 

members

Mr. Leung Hon Chuen (Chairman)

Mr. Poon Kwok Shin Edmond

Mr. Xu Mingshe

b)  Role and function

The Remuneration Committee is mainly 

responsible for:

i. 

reviewing any significant changes in 

human resources policies and structure 

made in line with prevailing trends and 

business developments.

ii.  making recommendations to the Board 

on the Company’s policy and the 

structure of all remuneration of Directors 

and senior management as well as on the 

establishment of formal and transparent 

procedures for developing policy on such 

remuneration;

iii. 

reviewing and approve the compensation 

payable to Executive Directors and 

senior management in connection 

with any loss or termination of their 

office or appointment to ensure that 

such compensation is determined in 

accordance with relevant contractual 

terms and that such compensation is 

otherwise fair and not excessive for the 

Company; and

iv. 

ensuring that no Director or any of his 

associates is involved in deciding his or 

her own remuneration.

 
 
 
 
 
 
 
 
 
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c)  Meeting Records

Board on a regular basis and making 

recommendations to the Board regarding 

One meeting was held for the year ended 31 

any proposed changes;

December 2007 and the attendance of each 

committee member is set out as follows:

ii. 

identifying individuals suitably qualified to 

Attendance at meetings

held for the year ended

become Board members and selecting or 

making recommendations to the Board 

on the selection of individuals nominated 

Committee Members 

31 December 2007

for Directorships;

Mr. Leung Hon Chuen 

Mr. Poon Kwok Shin Edmond 

Mr. Xu Mingshe 

1/1

1/1

1/1

iii. 

assessing the independence of 

Independent Non-executive Directors; 

and

During the year under review, the Remuneration 

iv.  making recommendations to the 

Committee reviewed the policies for the 

remuneration of Directors and senior 

Board on relevant matters relating to 

the appointment or re-appointment of 

management of the Group, the staff costs and 

Directors and succession planning for 

headcount of the Group. The Remuneration 

Directors, in particular the Chairman and 

Committee also reviewed the remuneration 

the Chief Executive Officer.

package of the Directors and the senior 

management and concluded that they were in 

 c)  Meeting Records

line with the market

3)  Nomination Committee

a)  Composition of Nomination Committee 

members

Mr. Wong Chi Wing Joseph (Chairman)

Mr. Leung Hon Chuen

Mr. Poon Kwok Shin Edmond

Mr. Xu Mingshe

Mr. Wu Xiaoke

b)  Role and function

The Nomination Committee is mainly 

responsible for:

i. 

reviewing the structure, size and 

composition (including the skills, 

knowledge and experience) of the 

One meeting was held for the year ended 31 

December 2007 and the attendance of each 

committee member is set out as follows:

Attendance at meetings

held for the year ended

Committee Members 

31 December 2007

Mr. Wong Chi Wing Joseph (Chairman) 

Mr. Leung Hon Chuen 

Mr. Poon Kwok Shin Edmond 

Mr. Xu Mingshe 

Mr. Wu Xiaoke 

1/1

1/1

1/1

1/1

1/1

During the meeting, the Nomination Committee 

discussed the need to segregate the duties of 

Chairman and the Chief Executive Officer and 

unanimously agreed to identify a high caliber 

executive to take up either one of the roles. A 

 
 
 
 
 
 
 
 
 
 
 
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suitable candidate has not yet been identified 

updating of the internal control system of the Group in 

but the Nomination Committee members will 

response to the changing business environment and 

continue to look for the right person for the 

regulatory requirements. The Board is also conducting a 

posts and make recommendations to the 

review of the internal controls of the Group to ensure that 

Board.

the policies and procedures in place are adequate.

ACCOUNTABILITY AND AUDIT

EXTERNAL AUDITORS

The Directors are responsible for preparing the accounts 

The Board acknowledges its responsibility for preparing 

of each financial period, which give a true and fair view 

the financial statements of the Group. In preparing the 

of the state of affairs of the Group and of the results and 

financial statements, the Hong Kong Financial Reporting 

cash flow for that period. The Directors also ensure that 

Standards issued by the Hong Kong Institute of Certified 

the financial statements of the Group are prepared in 

Public Accountants have been adopted. The principal 

accordance with the statutory requirements and applicable 

accounting policies adopted for the preparation of financial 

accounting policies.

statements of the Group, which have been consistently 

applied to all the years, are set out in note 3 to the financial 

In preparing the financial statements, the Directors 

statements.

consider that the financial statements of the Group are 

prepared on a going concern basis and appropriate 

It is the auditors’ responsibility to form an independent 

accounting policies have been consistently applied. The 

opinion, based on their audit, on those financial statements 

Directors have also made judgments and estimates that 

and to report their opinion solely to the Company, as a 

are prudent and reasonable in the preparation of the 

body, in accordance with section 141 of the Companies 

financial statements.

Ordinance, and for no other purpose. They do not assume 

responsibility towards or accept liability to any other person 

The statement of the auditors of the Company about their 

for the contents of the auditors’ report.

reporting responsibilities on the financial statements is set 

out in the Independent Auditors’ Report on page 37.

For the purpose of better support in audit and assurance 

INTERNAL CONTROL AND RISK 
MANAGEMENT

The Board is responsible for the Group’s system of internal 

control so as to maintain sound and effective controls to 

safeguard the shareholders’ investment and the assets of 

the Group.

The Board has established an on-going process for 

identifying, evaluating and managing the significant risks 

faced by the Group. This process includes continuous 

services as the Company has grown in size after the 

Completion of Restructuring Proposal on 20 September 

2006, the Board, upon receiving the proposal from the 

Audit Committee, considered that it was appropriate to 

appoint an external auditor with an international presence. 

On 10 January 2008, Messrs. Deloitte Touche Tohmatsu 

was appointed as auditors of the Company to fill the casual 

vacancy following the resignation, upon the request of the 

Board, of Ting Ho Kwan & Chan.

 
 
 
 
 
 
 
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During the year under review, the remuneration paid to 

shares in the Company conferring a right to vote at 

the Company’s external auditors, Messrs. Deloitte Touche 

the meeting being shares on which an aggregate 

Tohmatsu was as follows:

sum has been paid up equal to not less than one-

tenth of the total sum paid up on all the shares 

Nature of services 

HK$’000

Fee paid/payable

conferring that right.

Audit services 

Non-audit services 

VOTING BY POLL

The Company should count all proxy votes, and except 

1,600

where a poll is required, the chairman of a meeting should 

–

indicate to the meeting the level of proxies lodged on 

1,600

each resolution, and the balance for and against the 

resolution, after it has been dealt with on a show of hands. 

The Company should ensure that votes cast are properly 

counted and recorded.

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The Company informs the shareholders (in its circulars 

convening a general meeting) the procedures for voting 

by poll and the rights of shareholders to demand a poll 

to ensure compliance with the requirements on the poll 

voting procedures. In accordance with Bye-Law 70 of the 

The chairman of a meeting should at the commencement 

of the meeting ensure that an explanation is provided of:

(i) 

the procedure for demanding a poll by shareholders 

before putting a resolution to the vote on a show of 

Company, at any general meeting a resolution put to the 

hands; and

vote of the meeting shall be decided on a show of hands, 

unless a poll is demanded (before or on the declaration of 

the result of the show of hands or on the withdrawal of any 

other demand for a poll):-

(ii) 

the detailed procedures for conducting a poll and 

then answer any questions from shareholders 

whenever voting by way of a poll is required.

(i) 

by the Chairman of the Meeting; or

(ii) 

by at least three members present in person (or, in 

the case of a member being a corporation, by its duly 

authorized representative) or by proxy for the time 

being entitled to vote at the meeting, or

(iii)  by any member or members present in person 

(or, in case of a member being a corporation, by 

its duly authorized representative) or by proxy and 

representing not less than one-tenth of the total 

voting rights of all the members having the right to 

vote at the meeting; or

(iv)  by any member or members present in person (or, in 

the case of a member being a corporation, by its duly 

authorized representative) or by proxy and holding 

 
 
 
 
 
 
 
 
 
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Workers working in smelt plant

 
 
 
 
 
 
 
 
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The Directors have pleasure in presenting their annual 

cash flows for the year then ended in accordance with 

report and the audited financial statements for the year 

Hong Kong Financial Reporting Standards and have 

ended 31 December 2007.

been properly prepared in accordance with the disclosure 

DIRECTORS’ RESPONSE TO THE 
QUALIFICATION OPINION BY OUR AUDITOR

We would like to draw your attention that the qualifications 

requirements of the Hong Kong Companies Ordinance.

PRINCIPAL ACTIVITIES AND SEGMENT 
INFORMATION

in the auditor’s report for the year was related to 

The principal activity of the Company is investment holding 

the previous years’ comparative figures and these 

and the principal activities of its subsidiaries are sales, 

qualifications would not be carried forward to next year. 

marketing, product design of audio-visual products and 

Our auditor did not have any qualified opinions to the state 

trading of non-ferrous metals. The principal activity of the 

of affairs of the Group as at 31 December 2007 and the 

Group’s jointly controlled entity is the provision of copper 

Group’s profit and cash flows for the year then ended.

smelting and production of copper anode. Particulars of 

the Company’s principal subsidiaries are set out in note 38 

In accordance with the applicable auditing standards, our 

to the consolidated financial statements.

auditor has the responsibility for reporting on the current 

period financial statements as a whole, which include both 

An analysis of the Group’s performance for the year by 

current and prior period figures. The amounts and other 

business and geographical segments is set out in note 5 to 

disclosures for the preceding period are included as part of 

the consolidated financial statements.

the current period financial statements, and are intended 

to be read in relation to the amounts and other disclosures 

RESULTS AND DIVIDENDS

relating to the current period. These corresponding figures 

are not presented as complete financial statements 

capable of standing alone, but are an integral part of the 

The results of the Group for the year ended 31 December 

2007 (the “Year”) are set out in the consolidated income 

current period financial statements.

statement on page 40.

The auditor’s report issued by the previous auditor 

in respect of their audit of the consolidated financial 

statements for the year ended 31 December 2006 was 

qualified as a result of a number of limitations of scope. 

Details of which have been set out in our 2006 annual 

report dated 23 April 2007.

The Board recommend a payment of final dividend 

of HK cents 0.25 per share for the year ended 31 

December 2007, subject to Shareholders’ approval at 

the forthcoming Annual General Meeting, payable to the 

Shareholders whose names appear on the register of 

members of the Company at the close of business on 

Friday. 20 June 2008. The final dividend will be paid on or 

Accordingly, the audit report by our auditor in the current 

about Monday, 30 June 2008.

year includes a limitation of scope as a result of the 

qualification by our previous auditor as mention above. In 

respect of the year ended 31 December 2007 alone and 

The Board has also declared an interim dividend of HK 

cents 0.25 per share for the six months ended 30 June 

except for the matters addressed in the auditor report 

2007.

in respect of the year ended 31 December 2006, our 

auditor report that the consolidated financial statements 

give a true and fair view of the state of affairs of the Group 

as at 31 December 2007 and of the Group’s profit and 

 
 
 
 
 
 
 
 
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CLOSURE OF REGISTER OF MEMBERS

PURCHASE, SALES AND REDEMPTION OF 
SHARES

The register of members of the Company will be closed 

from Wednesday, 18 June 2008 to Friday, 20 June 2008 

During the year, the Company repurchased and redeemed 

(both days inclusive), during which period no transfer of 

the shares as follows:

Shares will be registered. In order to qualify for entitlement 

to the final dividend for the year ended 31 December 2007, 

all transfer of Shares accompanied by the relevant share 

certificates must be lodged with the Company’s share 

registrar in Hong Kong, Tricor Tengis Limited at 26/F., 

Tesbury Centre, 28 Queen’s Road East, Hong Kong, not 

later than 4:30 p.m. on Tuesday, 17 June 2008.

FINANCIAL SUMMARY

Number of Shares   Method of Shares 

Prices per Share

Date 

repurchased 

repurchase 

Highest  Lowest

HK$ 

HK$

5 January 2007 

5,900,000  On the Exchange 

0.210 

0.206

10 January 2007 

1,500,000  On the Exchange 

0.197 

0.192

11 January 2007 

1,440,000  On the Exchange 

0.195 

0.193

12 January 2007 

5,360,000  On the Exchange 

0.201 

0.193

15 January 2007 

3,000,000  On the Exchange 

0.202 

0.198

A summary of the results and the assets and liabilities of 

16 January 2007 

1,300,000  On the Exchange 

0.203 

0.201

the Group for the last five financial years is set out on page 

17 January 2007 

2,500,000  On the Exchange 

0.200 

0.194

85 of the Annual Report.

18 January 2007 

2,300,000  On the Exchange 

0.195 

0.190

PROPERTY, PLANT AND EQUIPMENT

7 August 2007 

6,000,000  On the Exchange 

0.600 

0.600

19 January 2007 

200,000  On the Exchange 

0.189 

0.189

Details of movements during the year in the property, 

plant and equipment are set out in note 17 to the financial 

statements.

SHARE CAPITAL

8 August 2007 

500,000  On the Exchange 

0.600 

0.600

10 August 2007 

6,000,000  On the Exchange 

0.600 

0.590

16 August 2007 

5,100,000  On the Exchange 

0.600 

0.590

17 August 2007 

18,000,000  On the Exchange 

0.590 

0.470

59,100,000

Details of movements during the year in the share capital 

RESERVES

of the Company are set out in note 29 to the financial 

statements.

Movements in reserves of the Group during the year are 

set out in the Consolidated Statement of Changes in Equity 

on page 42.

DIRECTORS

The Directors of the Company during the year and up to 

the date of this report were:

Executive Directors:

Mr. Wong Chi Wing Joseph

Mr. Cheng Hairong

Mr. Chu Kwok Chi Robert

 
 
 
 
 
 
 
 
 
 
 
 
 
Non-executive Director:

MANAGEMENT CONTRACTS

Mr. Leung Hon Chuen

Independent Non-executive Directors:

Mr. Poon Kwok Shin Edmond

Mr. Wu Xiaoke

Mr. Xu Mingshe

Biographical details of Directors of the Company are set 

out on page 17 under the section titled “Directors and 

Senior Management Profile”.

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No contract concerning the management and 

administration of the whole or any substantial part of the 

business of the Company and the Group was entered into 

or existed during the year.

COMPETING INTEREST

None of the Directors or their respective associates (as 

defined in the Listing Rules) had an interest in a business 

that competes or may compete with the business of the 

Group.

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The Company has received from each of the Independent 

Non-executive Directors an annual confirmation of 

his independence pursuant to Rule 3.13 of the Rules 

Governing the Listing of Securities on the Stock Exchange 

DIRECTORS’ AND CHIEF EXECUTIVE’S 
INTERESTS AND SHORT POSITIONS IN 
SHARES, UNDERLYING SHARES AND 
DEBENTURES

of Hong Kong Limited (the “Listing Rules”) and the 

As at 31 December 2007, the interests and short positions 

Company considers such Directors to be independent.

of the Directors and the Chief Executive of the Company 

in the shares, underlying shares and debentures of the 

In accordance with Article 99(A) of the Company’s Bye-

Company or any of its associated corporations (within 

laws, all Directors, except the Managing Director, shall 

the meaning of Part XV of the Securities and Futures 

retire and, being eligible, offer themselves for re-election 

Ordinance (“SFO”)) which were required to be notified 

at the Annual General Meeting of the Company in 

to the Company and the Stock Exchange pursuant to 

accordance with the Company’s Bye-laws.

Divisions 7 and 8 of Part XV of the SFO (including interests 

and short positions that were taken or deemed to have 

None of the Directors has a service contract with the 

been taken under such provisions of the SFO) or were 

Company or any of its subsidiaries that is not determinable 

required, pursuant to section 352 of the SFO, to be 

entered in the register referred to therein, or were required 

pursuant to the Model Code for Securities Transactions by 

Directors of Listed Issuers of the Listing Rules to be notified 

to the Company and the Stock Exchange, were as follows:

by the Group within one year without payment of 

compensation, other than statutory compensation.

DIRECTORS’ INTEREST IN CONTRACTS OF 
SIGNIFICANCE

No contract of significance, to which the Company, or any 

of its subsidiaries, its holding company, or any subsidiaries 

of its holding company was a party and in which a Director 

of the Company had a material interest, whether directly or 

indirectly, subsisted at the end of the year or at any time 

during the year.

 
 
 
 
 
 
 
 
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Number of Shares 

Beneficial 

Controlled 

Equity 

Approximate

  percentage of

the issued 

  share capital of 

SUBSTANTIAL SHAREHOLDERS

As at 31 December 2007, according to the register of 

Director 

owner 

corporation 

derivatives  Total interests 

the company

interests maintained by the Company pursuant to section 

(note 1) 

(note 2)

336 of the Securities and Futures Ordinance (“SFO”) 

Wong Chi Wing, Joseph 

6,000,000(L)  1,708,146,000(L) 

24,380,000(L) 1,738,526,000(L) 

42.04%

Cheng Hairong 

Chu Kwok Chi Robert 

Leung Hon Chuen 

Xu Mingshe 

Poon Kwok Shin, Edmond 

– 

– 

– 

– 

– 

– 

47,216,000(S) 

– 

47,216,000(S) 

– 

– 

– 

– 

– 

24,380,000(L) 

24,380,000(L) 

4,000,000(L) 

4,000,000(L) 

2,380,000(L) 

2,380,000(L) 

2,000,000(L) 

2,000,000(L) 

2,380,000(L) 

2,380,000(L) 

1.14%

0.59%

0.10%

0.06%

0.05%

0.06%

The Shares are held by Climax Associates Limited, which is a company 
incorporated in the British Virgin Islands and owned as to 51% by Rich 
Concept Worldwide Limited (a company beneficially wholly-owned by Mr. 
Wong Chi Wing Joseph), 29% by Mr. Cheng Hairong and 20% by Mr. Chu 
Kwok Chi Robert.

These interests represent the interests in underlying shares in respect of 
share options granted by the Company, the details of which are set out in the 
Section “Share Option Scheme” below.

and so far as is known to, or can be ascertained after 

reasonable enquiry by the Directors or Chief Executive 

of the Company, the following persons, other than the 

Directors and the Chief Executive of the Company, 

who had an interest or a short position in the shares 

or underlying shares of the Company that would fall to 

be disclosed to the Company under the provisions of 

Divisions 2 and 3 of Part XV of the SFO, or who were, 

directly or indirectly, deemed to be interested in 5% or 

more of the nominal value of any class of share capital 

carrying rights to vote in all circumstances at general 

meetings of any other member of the Group and the 

amount of each of such person’s interests in such 

“L” refers to the long position in the Shares held by such entity, while “S” refers 
to short position in the Shares held by such entity.

securities, together with particulars of any options in 

The short position represents the outstanding warrants not yet exercised by 
the warrant holders.

The calculation of percentages is based on 4,135,028,570 Shares of the 
Company in issue as at 31 December 2007.

respect of such capital, were as follows:

Notes

1. 

2. 

3. 

4. 

5. 

Save as disclosed above, as at 31 December 2007, no 

Directors or the Chief Executive Officer have any interests 

or short position in the shares, underlying shares and 

debentures of the Company or any of its associated 

corporations (within the meaning of Part XV of the SFO) 

that would have to be notified to the Company and the 

Stock Exchange pursuant to Divisions 7 and 8 of Part XV 

of the SFO (including interests or short positions that were 

taken or deemed to be have under such provisions) or 

that were required, pursuant to Section 352 of the SFO, 

to be entered in the register referred to therein or that 

were required in the Listing Rules pursuant to the Model 

Code for Securities Transactions by Directors of Listed 

Companies to be notified to the Company and the Stock 

Exchange.

Approximate

percentage of

the issued

Name of 

Number of  share capital of

Shareholders 

Capacity 

Shares held 

the Company

Climax Associates 

Beneficial owner 

1,708,146,000 (L) 

  Limited (Note 1) 

47,216,000(S) 

Rich Concept 

Interest of a 

1,708,146,000 (L) 

  Worldwide 

controlled 

47,216,000 (S) 

  Limited (Note 2) 

corporation

41.31%

1.14%

41.31%

1.14%

Notes
1. 

2. 

3. 

4. 

5. 

Climax Associates Limited is 51% owned by Rich Concept Worldwide 
Limited.

Rich Concept Worldwide Limited is beneficially wholly-owned by Mr. Wong 
Chi Wing, Joseph, a Chief Executive Officer and Chairman of the Company.

“L” refers to the long position in the Shares held by such entity, while “S” refers 
to short position in the Shares held by such entity.

The short position represents the outstanding warrants not yet exercised by 
the warrant holders.

The calculation of percentages is based on 4,135,028,570 Shares of the 
Company in issue as at 31 December 2007.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Saved as disclosed above, as at 31 December 2007, so 

Additionally, the Company may, from time to time, grant 

far as is known to, or can be ascertained after reasonable 

share options to eligible vendors, customers, advisors and 

enquiry by the Directors or the Chief Executive Officer of 

consultants to the Company and its subsidiaries at the 

the Company, no persons had interests or short positions 

discretion of the Board of Directors.

in the shares or underlying shares of the Company that 

would fall to be disclosed to the Company under the 

The total number of shares in respect of which options 

provisions of Divisions 2 and 3 of Part XV of the SFO, or 

may be granted under the Scheme is not permitted to 

who are, directly or indirectly, deemed to be interested 

exceed 10% of the shares of the Company in issue at any 

in 5% or more of the nominal value of any class of share 

point of time, without prior approval from the Company’s 

capital carrying rights to vote in all circumstances at 

shareholders. The number of shares issued and to be 

general meetings of any member of the Group or has any 

issued in respect of which options granted and may be 

options in respect of such capital.

granted to any individual in any one year is not permitted 

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EMOLUMENT POLICY

The emolument of the employees of the Group is set 

up by the human resources department and seeks to 

provide remuneration packages on the basis of the merit, 

qualifications and competence of the employees.

The emoluments of the Directors and senior management 

of the Company will be reviewed by the Remuneration 

Committee, having regard to factors including the Group’s 

to exceed 1% of the shares of the Company in issue 

at any point in time, without prior approval from the 

Company’s shareholders. Options granted to substantial 

shareholders, Independent Non-executive Directors, or 

any of their respective associates (including a discretionary 

trust whose discretionary objects include substantial 

shareholders, Independent Non-executive Directors, or 

any of their respective associates) in excess of 0.1% of 

the Company’s share capital or with a value in excess of 

HK$5,000,000 must be also approved by the Company’s 

operating results, responsibilities of the Directors and 

shareholders.

senior management and comparable market statistics.

The exercise price of the share options is determinable by 

the Directors, but may not be less than the higher of (i) the 

Stock Exchange closing price of the Company’s shares 

on the sate of the offer of the share options which must 

be a business day; (ii) the average Stock Exchange closing 

price of the Company’s shares for the five trading days 

immediately preceding the date of the offer; and (iii) the 

nominal value of the Company’s shares.

As at 31 December 2007, options to subscribe for an 

aggregate of 247,240,000 shares of the Company granted 

to the Directors and certain employees pursuant to the 

RETIREMENT BENEFITS SCHEME

Particulars of the retirement benefits schemes of the Group 

are set out in note 37 to the financial statements.

SHARE OPTION SCHEME

The Company’s share option scheme (the “Scheme”) was 

adopted for a period of 10 years commencing 6 November 

2006 pursuant to an Ordinary Resolution passed at the 

Special General Meeting of the Shareholders held on 6 

November 2006 for the purpose of providing incentives 

or rewards to selected employees and Directors for their 

contribution to the Group.

Under the Scheme, the Company may grant options to 

selected employees and Directors of the Company and 

its subsidiaries, to subscribe for shares in the Company. 

 
 
 
 
 
 
 
 
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0.205 

0.205

Mr. Xu  
  Mingshe 

– 

680,000 

Scheme remained outstanding, details of which were as 

Number of share options

follows:

Number of share options

Name of 
Director 

At 1 

Grant 
January  during the 
period 

2007 

  Cancelled/  Outstanding 
as at 31 
December 
 2007 

Lapsed 
Exercised 
during the  during the 
period 

period 

Mr. Poon Kwok 
  Shin, Edmond 

– 

1,200,000 

(1,200,000) 

– 

– 

Date of 
Grant 

31 January 
2007 

Name of 
Director 

At 1 

Grant 
January  during the 
period 

2007 

  Cancelled/  Outstanding 
as at 31 
December  
2007 

Lapsed 
Exercised 
during the  during the 
period 

period 

Mr. Wong Chi 
  Wing Joseph 

– 

8,380,000 

– 

8,000,000 

– 

8,000,000 

Mr. Cheng 
  Hairong 

– 

8,380,000 

– 

8,000,000 

– 

8,000,000 

Mr. Chu Kwok 
  Chi Robert 

– 

1,340,000 

– 

660,000 

– 

680,000 

– 

1,320,000 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

Date of 
Grant 

31 January 
2007 

– 

8,380,000 

– 

8,000,000 

31 January 
 2007 

– 

8,000,000 

31 January 
2007 

– 

8,380,000 

31 January 
2007 

– 

8,000,000 

31 January 
2007 

– 

8,000,000 

31 January 
2007 

– 

1,340,000 

31 January 
2007 

– 

660,000 

31 January 
2007 

– 

680,000 

21 February 
2007 

– 

1,320,000 

21 February 
2007 

Mr. Leung 
  Hon Chuen 

– 

1,200,000 

(1,200,000) 

– 

– 

31 January 
2007 

– 

800,000 

– 

400,000 

– 

1,180,000 

– 

– 

– 

– 

800,000 

31 January 
2007 

– 

400,000 

21 February 
2007 

– 

1,180,000 

21 February 
2007 

 Closing price
  immediately
  before the
date of 
grant

Exercise 
price 

0.205 

0.205

0.205 

0.205

0.205 

0.205

0.205 

0.205

0.205 

0.205

0.205 

0.205

0.205 

0.205

0.30 

0.27

0.30 

0.27

0.205 

0.205

0.205 

0.205

0.30 

0.27

0.30 

0.27

Exercisable 
period 
(both dates 
inclusive) 

21 February 
2007 to
31 December
2009

1 January 
2008 to
31 December
2009

1 January 
2009 to
31 December
2009

21 February 
2007 to
31 December
2009

1 January 
2008 to
31 December
2009

1 January 
2009 to
31 December
2009

21 February 
2007 to
31 December
2009

1 January 
2008 to
31 December
2009

1 January 
2008 to
31 December
2009

1 January 
2009 to
31 December
2009

21 February 
2007 to
31 December
2009

1 January 
2008 to
31 December
2009

1 January 
2008 to
31 December
2009

1 January 
2009 to
31 December
2009

 Closing price
  immediately
  before the
date of 
grant

Exercise 
price 

0.205 

0.205

0.205 

0.205

0.30 

0.27

0.30 

0.27

0.30 

0.27

0.30 

0.27

0.30 

0.27

0.205 

0.205

0.205 

0.205

0.205 

0.205

0.30 

0.27

0.30 

0.27

0.642 

0.64

0.642 

0.64

0.642 

0.64

Exercisable 
period 
(both dates 
inclusive) 

21 February 
2007 to 
31 December
2009

1 January 
2008 to
31 December
2009

1 January 
2008 to
31 December
2009

1 January 
2009 to
31 December
2009

28 February  
2008 to 
31 December
 2009

1 January 
 2009 to
 31 December 
2009

1 January  
2009 to 
31 December
 2009

21 February  
2007 to 
31 December
 2009

1 January  
2008 to 
31 December 
2009

1 January  
2009 to 
31 December 
2009

1 January  
2009 to 
31 December
 2009

1 January 
 2009 to 
31 December 
2009

15 August  
2008 – 15 
August 2011

15 August  
2009 – 15 
August 2011

15 August  
2010 – 15 
August 2011

– 

800,000 

– 

400,000 

– 

1,180,000 

– 

660,000 

– 

660,000 

– 

– 

– 

– 

– 

– 

– 

800,000 

31 January 
2007 

– 

400,000 

21 February 
2007 

– 

1,180,000 

21 February 
2007 

– 

680,000 

21 February  
2007 

– 

660,000 

21 February  
2007 

– 

660,000 

21 February  
2007 

Employees 

–  57,500,000 

(2,000,000) 

– 

55,500,000 

31 January  
2007 

–  57,500,000 

–  55,320,000 

– 

7,200,000 

– 

9,200,000 

– 

1,000,000 

– 

1,000,000 

– 

1,000,000 

– 

– 

– 

– 

– 

– 

– 

– 

57,500,000 

31 January  
2007 

– 

55,320,000 

31 January  
2007 

– 

7,200,000 

21 February  
2007 

– 

9,200,000 

21 February  
2007 

– 

1,000,000 

– 

1,000,000 

– 

1,000,000 

15 August  
2007 

15 August  
2007 

15 August  
2007 

Total 

–  251,640,000 

(4,400,000) 

–  247,240,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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MAJOR CUSTOMERS AND SUPPLIERS

Agreement therefore constitute continuing connected 

transactions for the Group under Chapter 14A of the 

The percentages of sales and purchases for the year 

Listing Rules.

attributable to the Group’s major customers and suppliers 

are as follows:

Sales

  – the largest customer 

  – five largest customers combined 

Purchases

  – five largest customers combined 

  – the largest supplier 

During the year, JCCL EPI sold a total of HK$1,469 million 

copper materials to JCCL. The copper materials’ annual 

cap for the sales of copper materials by JCCL EPI to 

JCCL under the Supply Framework Agreement is set at 

HK$3,214.3 million, HK$6,428.6 million and HK$7,714.3 

million for the three years ending 31 December 2007, 

2008 and 2009 respectively. If the amount to be paid by 

JCCL exceeds the said cap, independent shareholders’ 

approval would be required. The total sales under the 

Supply Framework Agreement were within the annual 

36%

88%

37%

11%

None of the Directors, their associates or any shareholder 

cap of HK$3,214.3 million as stipulated in the Company’s 

(which to the knowledge of the Directors owns more than 

announcement on 12 June 2007.

5% of the Company’s share capital) had an interest in the 

major customers or suppliers as noted above.

CONNECTED TRANSACTIONS

JCCL EPI’s Sales of Copper Materials and Use 

of Logistics Services (Continuing Connected 

Transactions)

On 22 May 2007, Qingyuan JCCL EPI Copper Limited 

(“JCCL EPI”), a 51% indirectly owned subsidiary of 

the Company, entered into (i) the Supply Framework 

Agreement with Jiangxi Copper Limited (“JCCL), pursuant 

to which JCCL EPI conditionally agreed to sell and JCCL 

conditionally agreed to purchase all the Copper Materials 

produced/processed by JCCL EPI during the three years 

ending 31 December 2009; and (ii) the Logistics Services 

Agreement, pursuant to which JCCL EPI has the right, 

but not the obligation to use the Logistics Services to be 

provided by JCC Logistics Limited (“JCC Logistics”) for the 

During the year, JCCL EPI paid a total of HK$1 million 

copper materials to logistics Services fees to JCC 

Logistics. The logistics Services fees’ annual cap for the 

use of logistic services of JCC Logistics by JCCL EPI under 

the Logistics Services Agreement is set at HK$11.7 million, 

HK$23.5 million and HK$28.2 million for the three years 

ending 31 December 2007, 2008 and 2009 respectively. If 

the amount to be paid by JCCL EPI exceeds the said cap, 

independent shareholders’ approval would be required. 

The total logistics services fee paid to JCC Logistics during 

the year under the Logistics Services Agreement was 

within the annual cap of HK$11.7 million as stipulated in 

the Company’s announcement on 12 June 2007.

PRE-EMPTIVE RIGHTS

There is no provision for pre-emptive rights under the 

Company’s Bye-laws or the laws of Bermuda that would 

oblige the Company to offer new shares on a pro rata basis 

three years ending 31 December 2009.

to existing shareholders.

By virtue of JCCL’s interest in 40% of JCCL EPI’s 

registered capital, JCCL and JCC Logistics (being 64% 

owned indirect subsidiary of JCCL) are connected persons 

of the Group and the transactions contemplated under 

the Supply Framework Agreement and Logistics Services 

 
 
 
 
 
 
 
 
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EMPLOYEES

As at 31 December 2007, the Group had a total of about 

30 employees in Hong Kong and 300 in the PRC

Employee’s costs (excluding Directors’ emoluments) 

amounted to approximately 26.7 million (2006: 2.9 million). 

The Group ensures that the pay levels of its employees 

are competitive according to market trends and its 

employees are rewarded on a performance-related basis 

within the general framework of the Group’s salary and 

bonus system.

SUFFICIENCY OF PUBLIC FLOAT

Based on information available to the Company and 

within the knowledge of the Directors, at least 25% of 

the Company’s total issued share capital was held by the 

Public as of the date of this report.

CAPITAL AND OTHER COMMITMENTS

Details of capital and other commitments are set out in 

note 36 to the financial statements.

SUBSEQUENT EVENT

Details of subsequent event are set out in note 39 to the 

financial statements.

AUDITORS

A resolution will be submitted to the Annual General 

Meeting to reappoint Messrs. Deloitte Touche Tohmatsu 

as auditors of the Company.

On behalf of the Board

Wong Chi Wong Joseph

Chairman

23 April 2008

 
 
 
 
 
 
 
 
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TO THE MEMBERS OF EPI (HOLDINGS) LIMITED

(Incorporated in Bermuda with limited liability)

We have audited the consolidated financial statements of EPI (Holdings) Limited (the “Company”) and its subsidiaries 

(collectively referred to as the “Group”) set out on pages 40 to 84, which comprise the consolidated balance sheet as at 

31 December 2007, and the consolidated income statement, the consolidated statement of changes in equity and the 

consolidated cash flow statement for the year then ended, and a summary of significant accounting policies and other 

explanatory notes.

DIRECTORS’ RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS

The directors of the Company are responsible for the preparation and the true and fair presentation of these consolidated 

financial statements in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of 

Certified Public Accountants (the “HKICPA”) and the disclosure requirements of the Hong Kong Companies Ordinance. This 

responsibility includes designing, implementing and maintaining internal control relevant to the preparation and the true and 

fair presentation of the consolidated financial statements that are free from material misstatement, whether due to fraud or 

error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the 

circumstances.

AUDITOR’S RESPONSIBILITY

Our responsibility is to express an opinion on these consolidated financial statements based on our audit and to report our 

opinion solely to you, as a body, in accordance with Section 90 of the Bermuda Companies Act and for no other purpose. 

We do not assume responsibility towards or accept liability to any other person for the contents of this report. Except as 

described in the basis for qualified opinion paragraphs, we conducted our audit in accordance with Hong Kong Standards 

on Auditing issued by the Hong Kong Institute of Certified Public Accountants. Those standards require that we comply 

with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the consolidated 

financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated 

financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks 

of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk 

assessments, the auditor considers internal control relevant to the entity’s preparation and true and fair presentation of the 

consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for 

the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating 

the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, 

as well as evaluating the overall presentation of the consolidated financial statements.

 
 
 
 
 
 
 
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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

BASIS FOR QUALIFIED OPINION

The auditor’s report issued by the previous auditor in respect of their audit of the consolidated financial statements for the 

year ended 31 December 2006 was qualified as a result of the following limitation of scope:

i) 

As set out in note 9 to the consolidated financial statements, the directors have been unable to obtain sufficient 

documentary  evidence  to  satisfy  themselves  as  to  whether  the  net  gain  on  debts  waived  of  approximately 

HK$277,844,000 arising from the debt restructuring carried out by the Company during the year ended 31 December 

2006 and included in the profit of the Group for the year ended 31 December 2006 was fairly stated.

ii) 

The  directors  are  unable  to  satisfy  themselves  as  to  the  completeness  of  recording  of  transactions  entered  into 

by the Group and of the completeness of disclosure of finance lease obligations, segment information, pledged of 

assets, commitments and contingent liabilities for the period from 1 January 2006 to 20 September 2006 (being the 

completion date of debt restructuring as detailed in note 9 to the financial statements) in the consolidated financial 

statements.  Furthermore,  the  directors  are  unable  to  determine  the  completeness  of  related  party  transactions, 

employee benefits and emoluments, and taxation and deferred taxation incurred for the period from 1 January 2006 

to 20 September 2006.

iii)  Certain subsidiaries were disposed of according to the debt restructuring scheme carried out by the Company during 

the year ended 31 December 2006. The directors were unable to obtain sufficient information to include the results of 

these subsidiaries up to the date of their disposals in the consolidated financial statements. Accordingly, the directors 

were unable to satisfy themselves as to the truth and fairness of the gain on disposal of these subsidiaries so included 

in the consolidated financial statements for the year ended 31 December 2006.

In  addition,  the  auditors’  report  issued  by  the  previous  auditors  in  respect  of  their  audit  of  the  consolidated  financial 

statements of the Group for the year ended 31 December 2005 was disclaimed in view of the pervasive nature of the 

limitations  of  audit  scope  and  disagreement  about  accounting  treatment  resulting  from  the  incompleteness  of  books 

and records of certain subsidiaries within the Group, insufficiency of information regarding the amount of other payables 

of approximately HK$293,807,000, and failure to consolidate certain subsidiaries within the Group in accordance with 

the  Hong  Kong  Accounting  Standard  27  “Consolidated  and  Separate  Financial  Statements”  issued  by  the  HKICPA. 

Accordingly, any adjustments found to be necessary may affect the opening net liabilities of the Group as at 1 January 2006 

and the results and cash flows and the related disclosures of the consolidated financial statements for the year ended 31 

December 2006.

There are no other satisfactory audit procedures that we could adopt to satisfy ourselves as to the matters set out in the 

previous paragraphs, and accordingly we are unable to conclude as to whether the profit and cash flows and related notes 

to the consolidated financial statements for the year ended 31 December 2006 were free from material misstatement.

 
 
 
 
 
 
 
QUALIFIED OPINION ARISING FROM LIMITATION OF AUDIT SCOPE

In our opinion, except for the effect on the corresponding figures for 2006 of such adjustments, if any, to the results of 

operations for the year ended 31 December 2006, which might have been determined to be necessary had we been able 

to satisfy ourselves as to the matters described in the basis for qualified opinion paragraphs, the consolidated financial 

statements give a true and fair view of the state of affairs of the Group as at 31 December 2007 and, of the Group’s profit 

and cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards and have been 

properly prepared in accordance with the disclosure requirements of the Hong Kong Companies Ordinance.

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Deloitte Touche Tohmatsu

Certified Public Accountants

Hong Kong

23 April 2008

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For the year ended 31 December 2007

Revenue 

Cost of sales 

Gross profi t 

Other income 

Distribution and selling expenses 

Administrative expenses 

Other expenses 

Net gain on debt restructuring 

Finance costs 

Profi t before taxation 

Taxation 

Profi t for the year attributable to equity

  holders of the Company 

Earnings per share

  – basic 

  – diluted 

Notes 

5 

6 

7 

8 

9 

10 

11 

12 

2007 

HK$’000 

2,053,000 

(1,927,189) 

125,811 

65,126 

(47,999) 

(50,255) 

(11,079) 

– 

(3,537) 

78,067 

(14,556) 

2006

HK$’000

264,803

(257,909)

6,894

8,064

(884)

(9,708)

(2,126)

263,168

(116)

265,292

(350)

63,511 

264,942

16 

1.64 HK cents 

28.3 HK cents

16 

1.59 HK cents 

N/A

 
 
 
 
 
 
 
 
 
 
 
 
 
 
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At 31 December 2007

Non-current assets

  Property, plant and equipment 

  Deposit for acquisition of property, plant and equipment 

  Prepaid lease payments 

  Loan receivables 

  Financial assets at fair value through profi t or loss 

Current assets

Inventories 

  Loan receivables 

  Trade and other receivables 

  Held-for-trading investments 

  Derivative fi nancial instruments 

  Trade receivable from a joint venture partner 

  Prepaid lease payments 

  Pledged bank deposits 

  Bank balances and cash 

Current liabilities

  Trade and other payables 

  Derivative fi nancial instruments 

  Bank borrowings 

  Taxation payable 

Net current assets 

Total assets less current liabilities 

Capital and reserves

  Share capital 

  Reserves 

Total equity 

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Notes 

2007 

HK$’000 

2006

HK$’000

17 

18 

21 

19 

20 

21 

22 

23 

24 

25 

18 

26 

26 

27 

24 

28 

29 

30,541 

815 

18,674 

24,933 

2,340 

77,303 

146,064 

24,000 

671,102 

9,673 

1,999 

17,057 

424 

26,918 

145,047 

779

–

–

20,933

–

21,712

–

–

70,462

–

–

–

–

5,000

186,344

1,042,284 

261,806

194,216 

1,126 

126,495 

15,898 

337,735 

15,832

–

–

2,038

17,870

704,549 

243,936

781,852 

265,648

41,350 

740,502 

36,082

229,566

781,852 

265,648

The consolidated fi nancial statements on pages 40 to 84 were approved and authorised for issue by the Board of Directors on 23 April 

2008 and are signed on its behalf by:

Wong Chi Wing Joseph 

Chairman 

Cheng Hairong

Deputy-chairman

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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For the year ended 31 December 2007

  Contributed 

Capital

surplus  redemption 

Share 

 Accumulated

Share 

Share 

reserve 

reserve  Translation 

options  Warrants 

capital 

premium 

(Note (1)) 

(Note (2)) 

reserve 

reserve 

reserve 

(losses)

profi ts 

Total

HK$’000 

HK$’000 

HK$’000 

HK$’000 

HK$’000 

HK$’000 

HK$’000 

HK$’000 

HK$’000

At 1 January 2006 

80,763 

792,011 

145,372 

9,924 

Profi t for the year and total recognised income for the year 

Capital reduction 

Issue of subscription and additional shares 

Open offer 

Share issued 

Capital reserve reduction (note (3)) 

Set off against the entire accumulated losses

  of the Company (note (3)) 

Share placing after debt restructuring 

Transaction costs attributable to issue of shares 

Shares repurchased and cancelled 

– 

– 

62,250 

6,851 

33,529 

– 

79,955 

(3,528) 

– 

– 

– 

– 

– 

– 

– 

(894,641) 

904,565 

(9,924) 

– 

(79,955) 

24,278 

1,453 

3,746 

– 

– 

– 

(1,066,042) 

6,050 

172,425 

– 

(253) 

(6,388) 

(5,330) 

– 

– 

– 

At 31 December 2006 and 1 January 2007 

36,082 

160,707 

60,322 

Exchange differences arising on translation of foreign operations,

representing total income recognised directly in equity 

Profi t for the year 

Total recognised income for the year 

Share issued 

Transaction costs attributable to issue of shares 

Shares repurchased and cancelled 

Issue of share option as share based payment 

Exercise of share option 

Exercise of warrants 

Issue of warrants 

Dividend paid 

At 31 December 2007 

– 

– 

– 

– 

– 

– 

5,735 

458,832 

– 

(591) 

(12,632) 

(24,275) 

– 

44 

80 

– 

– 

– 

1,105 

8,056 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

41,350 

591,793 

60,322 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

3,552 

– 

3,552 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

12,540 

(247) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

(638) 

11,470 

(1,322,447) 

(294,377)

264,942 

264,942

– 

– 

– 

– 

– 

1,066,042 

–

83,000

8,304

37,275

–

–

– 

– 

– 

178,475

(6,388)

(5,583)

8,537 

265,648

– 

63,511 

3,552

63,511

63,511 

67,063

– 

– 

– 

– 

– 

– 

– 

464,567

(12,632)

(24,866)

12,540

902

7,498

11,470

– 

(10,338) 

(10,338)

3,552 

12,293 

10,832 

61,710 

781,852

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

Notes:

(1) 

(2) 

(3) 

The contributed surplus reserve represents the credit arising from capital reduction.

The capital redemption reserve represented the transfer of nominal value of shares repurchased in prior years.

As part of the Group’s restructuring, the Company carried out a cancellation of the entire amount standing to the credit of its share premium account, capital redemption 
reserve account and capital reserve account. Details of which were disclosed in the Company’s 2006 annual report.

Upon completion of capital reorganisation, the remaining contributed surplus would then be used to set off against the entire accumulated losses of the Company.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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For the year ended 31 December 2007

Operating activities
  Profi t before taxation 
Adjustments for:
  Depreciation of property, plant and equipment 
  Share based payment expense 
  Amortisation of prepaid lease payment 
  Gain on debt restructuring 
  Write-down of inventories 
  Bank interest income 
  Finance costs 

Operating cash fl ows before movements in working capital 
Increase in inventories 
Increase in trade and other receivables 
Increase in trade receivable from a joint venture partner 
Decrease in amounts due to subsidiaries not consolidated 
Increase in investments of held-for-trading fi nancial assets 
Increase in trade and other payables 
Increase in derivative fi nancial instruments 

Cash used in operations 
Hong Kong Profi t Tax paid 

Net cash used in operating activities 

Investing activities
  Purchases of property, plant and equipment 

Interest received 

  Purchase of index-linked note 
  Deposit paid for acquisition of property, plant and equipment 
  Additions of prepaid lease payments 

Increase in loan receivables 
Increase in pledged bank deposits 

Net cash used in investing activities 

Financing activities
  Dividend paid 
  New bank borrowings raised 
  Repayment of bank borrowings 
  Proceeds from issue of shares upon exercise of warrants 
  Proceeds from issue of warrants 
  Proceeds from issue of shares upon exercise of share options 
  Payment to schemes’ creditors 
  Settlement of restructuring expenses 
  Proceeds from issue of shares 
  Expenses on issue of shares 
  Payment on repurchase of shares 

Interest paid 

Net cash from fi nancing activities 

Net (decrease) increase in cash and cash equivalents 
Cash and cash equivalents at beginning of the year 

Cash and cash equivalents at end of the year,
  representing bank balances and cash 

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2007 
HK$’000 

2006
HK$’000

78,067 

265,292

1,204 
12,540 
212 
– 
1,479 
(4,613) 
3,537 

92,426 
(147,543) 
(597,088) 
(17,057) 
– 
(9,673) 
178,384 
(873) 

(501,424) 
(696) 

(502,120) 

(30,966) 
4,613 
(2,340) 
(815) 
(19,310) 
(28,000) 
(21,918) 

(98,736) 

(10,338) 
369,925 
(243,430) 
7,498 
11,470 
902 
– 
– 
464,567 
(12,632) 
(24,866) 
(3,537) 

559,559 

(41,297) 
186,344 

58
–
–
(263,168)
–
(302)
116

1,996
–
(56,606)
–
(7,885)
–
16,569
–

(45,926)
(179)

(46,105)

(770)
302
–
–
–
(20,933)
(5,000)

(26,401)

–
–
–
–
–
–
(21,500)
(14,676)
307,054
(6,388)
(5,583)
(116)

258,791

186,285
59

145,047 

186,344

 
 
 
 
 
 
 
 
 
 
 
 
 
 
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For the year ended 31 December 2007

1.  GENERAL

The Company is a public limited company incorporated in Bermuda and its shares are listed on the Stock Exchange of Hong 

Kong Limited (the “Stock Exchange”). The address of the registered office of the Company is located at Clarendon House, 2 

Church Street, Hamilton HM11, Bermuda. The address of the principal place of business of the Company was Suite 6303-4 on 

63/F, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong on 10 November 2006.

The consolidated financial statements are presented in Hong Kong dollars, which is also the functional currency of the Company.

The Company is an investment holding company. Its subsidiaries are principally engaged in sourcing and trading of non-ferrous 

metals and audio-visual products. The principal activity of the Group’s jointly controlled entity is the provision of copper smelting 

and production of copper anode.

The Group is controlled by the investor, Climax Associates Limited (“CA Ltd”), which is incorporated in the British Virgin Islands. In 

the opinion of the directors, the ultimate holding company is Rich Concept Worldwide Limited, which is incorporated in the British 

Virgin Islands.

2.  APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSS”)

In the current year, the Group has applied, for the first time, the following new standard, amendment and interpretations (“new 

HKFRSs”)  issued  by  the  Hong  Kong  Institute  of  Certified  Public  Accountants  (“HKICPA”),  which  are  effective  for  the  Group’s 

financial year beginning 1 January 2007.

HKAS 1 (Amendment) 

HKFRS 7 

HK(IFRIC)-INT 7 

HK(IFRIC)-INT 8 

HK(IFRIC)-INT 9 

HK(IFRIC)-INT 10 

Capital disclosures

Financial instruments: Disclosures

Applying the restatement approach under HKAS 29

  Financial Reporting in Hyperinflationary Economies

Scope of HKFRS 2

Reassessment of embedded derivatives

Interim financial reporting and impairment

The  adoption  of  the  new  HKFRSs  had  no  material  effect  on  how  the  results  and  financial  position  for  the  current  or  prior 

accounting periods have been prepared and presented. Accordingly, no prior period adjustment has been required.

The Group has applied the disclosure requirements under HKAS 1 (Amendment) and HKFRS 7 retrospectively. Certain information 

presented in prior year under the requirements of HKAS 32 has been removed and the relevant comparative information based on 

the requirements of HKAS 1 (Amendment) and HKFRS 7 has been presented for the first time in the current year.

 
 
 
 
 
 
 
 
 
 
 
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2.  APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”)-

CONTINUED

The Group has not early applied the following new and revised standards or interpretations that have been issued but are not yet 

effective.

HKAS 1 (Revised) 

HKAS 23 (Revised) 

HKAS 27 (Revised) 

HKFRS 2 (Amendment) 

HKFRS 3 (Revised) 

HKFRS 8 

HK(IFRIC)-INT 11 

HK(IFRIC)-INT 12 

HK(IFRIC)-INT 13 

HK(IFRIC)-INT 14 

Presentation of financial statements 1

Borrowing costs 1

Consolidated and separate financial statements 2

Vesting conditions and cancellation 1

Business combinations 2

Operating segments 1

HKFRS 2: Group and treasury share transactions 3

Service concession arrangements 4

Customer loyalty programmes 5

HKAS 19 – The limit on a defined benefit asset,

  minimum funding requirements and their interaction 4

1 
2 
3 
4 
5 

Effective for annual periods beginning on or after 1 January 2009.
Effective for annual periods beginning on or after 1 July 2009.
Effective for annual periods beginning on or after 1 March 2007.
Effective for annual periods beginning on or after 1 January 2008.
Effective for annual periods beginning on or after 1 July 2008.

The  adoption  of  HKFRS  3  (Revised)  may  affect  the  accounting  for  business  combination  for  which  the  acquisition  date  is  on 

or after the beginning of the first annual reporting period beginning on or after 1 July 2009. HKAS 27 (Revised) will affect the 

accounting treatment for changes in a parent’s ownership interest in a subsidiary that do not result in a loss of control, which will 

be accounted for as equity transactions. The directors of the Company anticipate that the application of other new or revised 

standards, amendment or interpretations will have no material impact on the results and the financial position of the Group.

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3.  SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared on the historical cost basis, except for certain financial instruments, 

which are measured at fair value, as explained in the accounting policies set out below.

The consolidated financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards issued 

by the HKICPA. In addition, the consolidated financial statements include applicable disclosures required by the Rules Governing 

the Listing of Securities on the Stock Exchange and by the Hong Kong Companies Ordinance.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries made up to 31 

December each year. Control is achieved where the Company has the power to govern the financial and operating activities of an 

entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the 

effective date of acquisition or up to the effective date of disposal, as appropriate.

Where the Company holds more than half of the issued share capital of a subsidiary, but does not control the composition of the 

board of directors or equivalent governing body, the financial statements of that subsidiary are not consolidated because it would 

be misleading to do so. Where the Company is in a position to exercise significant influence, such investments are dealt with as 

jointly controlled entities or associates as appropriate. Otherwise, they are dealt with as available-for-sale investments.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies used in line 

with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Joint ventures

Jointly controlled entities

Joint  venture  arrangements  that  involve  the  establishment  of  a  separate  entity  in  which  venturers  have  joint  control  over  the 

economic activity of the entity are referred to as jointly controlled entities.

The Group recognises its interests in jointly controlled entities using proportionate consolidation. The Group’s share of each of the 

assets, liabilities, income and expenses of the jointly controlled entities are combined with the Group’s similar line items, line by 

line, in the consolidated financial statements.

When a group entity transacts with a jointly controlled entity of the Group, profits or losses are eliminated to the extent of the 

Group’s interest in the jointly controlled entity.

 
 
 
 
 
 
 
 
 
 
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3.  SIGNIFICANT ACCOUNTING POLICIES-CONTINUED

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods 

provided in the normal course of business, net of discounts and sales related taxes.

Revenue from sale of goods is recognised when the goods are delivered and title has passed.

Service income is recognised when services are provided.

Interest income from a financial asset excluding financial assets at fair value through profit or loss is accrued on a time basis, by 

reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts the 

estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

Property, plant and equipment

Property, plant and equipment other than construction in progress are stated at cost less subsequent accumulated depreciation 

and accumulated impairment losses.

Depreciation is provided to write off the cost of items of property, plant and equipment over their estimated useful lives after taking 

into account their estimated residual value, using the straight-line method.

Construction in progress includes property, plant and equipment for production or for its own use purposes. Construction in 

progress is carried at cost less any recognised impairment loss. Construction in progress is classified to the appropriate category 

of property, plant and equipment when completed and ready for intended use. Depreciation of these assets on the same basis as 

other property assets, commences when the assets are ready for their intended use.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to 

arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference 

between the net disposal proceeds and the carrying amount of the item) is included in the consolidated income statement in the 

year in which the item is derecognised.

Prepaid lease payment

Payments for obtaining land use rights is considered as operating lease payment and charged to consolidated income statement 

over the period of land use right using the straight-line method.

 
 
 
 
 
 
 
 
 
 
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3.  SIGNIFICANT ACCOUNTING POLICIES-CONTINUED

Impairment of tangible assets

At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is any indication 

that those assets have suffered an impairment loss. If the recoverable amount of an asset is estimated to be less than its carrying 

amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense 

immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its 

recoverable  amount,  but  so  that  the  increased  carrying  amount  does  not  exceed  the  carrying  amount  that  would  have  been 

determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as 

income immediately.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is calculated using the weighted average method.

Financial instruments

Financial  assets  and  financial  liabilities  are  recognised  on  the  balance  sheet  when  a  group  entity  becomes  a  party  to  the 
contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction 
costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets 
and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or 
financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets 
or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Financial assets

The Group’s financial assets comprise of financial assets at fair value through profit or loss (“FVTPL”) and loans and receivables. 
All  regular  way  purchases  or  sales  of  financial  assets  are  recognised  and  derecognised  on  a  trade  date  basis.  Regular  way 
purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by 
regulation or convention in the marketplace.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income 
over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all 
fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or 
discounts) through the expected life of the financial asset, or, where appropriate, a shorter period.

Income is recognised on an effective interest basis for debt instruments other than those financial assets designated as at fair 
value through profit or loss, of which interest income is included in net gains or losses.

Financial assets at fair value through profit or loss

Financial assets at FVTPL has two subcategories, including financial assets held for trading and those designated at FVTPL on 
initial recognition.

 
 
 
 
 
 
 
 
 
 
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3.  SIGNIFICANT ACCOUNTING POLICIES-CONTINUED

Financial instruments-continued

Financial assets-continued

Financial assets at fair value through profit or loss-continued

A financial asset is classified as held for trading if:

(cid:129) 

(cid:129) 

it has been acquired principally for the purpose of selling in the near future; or

it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern 
of short-term profit-taking; or

(cid:129) 

it is a derivative that is not designated and effective as a hedging instrument.

A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if:

(cid:129) 

(cid:129) 

(cid:129) 

such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; 
or

the  financial  asset  forms  part  of  a  group  of  financial  assets  or  financial  liabilities  or  both,  which  is  managed  and  its 
performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment 
strategy, and information about the grouping is provided internally on that basis; or

it  forms  part  of  a  contract  containing  one  or  more  embedded  derivatives,  and  HKAS  39  permits  the  entire  combined 
contract (asset or liability) to be designated as at FVTPL.

Index-linked note is hybrid instruments that contain embedded derivatives. The Group has designated the index-linked note as 
“financial assets at fair value through profit or loss” upon initial recognition in accordance with HKAS 39. The notes are carried at 
fair values, with changes in fair values recognised in profit or loss.

At each balance sheet date subsequent to initial recognition, financial assets at FVTPL are measured at fair value, with changes 
in fair value recognised directly in profit or loss in the period in which they arise. The net gain or loss recognised in profit or loss 
excludes any dividend or interest earned on the financial assets.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active 
market. At each balance sheet date subsequent to initial recognition, loans and receivables (including trade receivables, loan 
receivables, trade receivable from a joint venture partner, pledge bank deposits, bank balances and cash and other receivable) 
are carried at amortised cost using the effective interest method, less any identified impairment losses.

Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each balance sheet date. Financial 
assets  are  impaired  where  there  is  objective  evidence  that,  as  a  result  of  one  or  more  events  that  occurred  after  the  initial 
recognition of the financial asset, the estimated future cash flows of the financial assets have been impacted.

For financial assets, objective evidence of impairment could include:

(cid:129) 

(cid:129) 

(cid:129) 

significant financial difficulty of the issuer or counterparty; or

default or delinquency in interest or principal payments; or

it becoming probable that the borrower will enter bankruptcy or financial re-organisation.

 
 
 
 
 
 
 
 
 
 
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3.  SIGNIFICANT ACCOUNTING POLICIES-CONTINUED

Financial instruments-continued

Impairment of financial assets-continued

An impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as 
the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the 
original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception 
of trade receivables, where the carrying amount is reduced through the use of an allowance account. Changes in the carrying 
amount of the allowance account are recognised in profit or loss. When a trade receivable is considered uncollectible, it is written 
off against the allowance account. Subsequent recoveries of amounts previously written off are credited to profit or loss.

If, in a subsequent period, the amount of impairment loss decreases and the decrease can be related objectively to an event 
occurring after the impairment losses was recognised, the previously recognised impairment loss is reversed through profit or loss 
to the extent that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised 
cost would have been had the impairment not been recognised.

Financial liabilities and equity

Financial liabilities and equity instruments issued by a group entity are classified according to the substance of the contractual 
arrangements entered into and the definitions of a financial liability and equity instrument.

An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities. 
The accounting policies adopted in respect of financial liabilities and equity instruments are set out below.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense 
over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the 
expected life of the financial liability, or, where appropriate, a shorter period. Interest expense is recognised on an effective interest 
basis.

Derivative financial instruments

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to 

their fair value at each balance sheet date. The resulting gain or loss is recognized in profit or loss immediately.

Other financial liabilities

Financial liabilities including trade and other payables and bank borrowings are subsequently measured at amortised cost, using 

the effective interest method.

Equity instruments

Equity instruments issued by the group entities, including warrants which will be settled by the exchange of a fixed amount of 

cash for a fixed number of the Company’s own equity instruments, are recorded at the proceeds received, net of direct issue 

costs.

 
 
 
 
 
 
 
 
 
 
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3.  SIGNIFICANT ACCOUNTING POLICIES-CONTINUED

Financial instruments-continued

Derecognition

Financial  assets  are  derecognised  when  the  rights  to  receive  cash  flows  from  the  assets  expire  or,  the  financial  assets  are 

transferred  and  the  Group  has  transferred  substantially  all  the  risks  and  rewards  of  ownership  of  the  financial  assets.  On 

derecognition of a financial asset, the difference between the asset’s carrying amount and the sum of the consideration received 

and the cumulative gain or loss that had been recognised directly in equity is recognised in profit or loss. If the Group retains 

substantially all the risks and rewards of ownership of a transferred asset, the Group continues to recognise the financial asset 

and recognise a collateralised borrowing for proceeds received.

Financial liabilities are derecognised when the obligation specified in the relevant contract is discharged, cancelled or expires. 

The  difference  between  the  carrying  amount  of  the  financial  liability  derecognised  and  the  consideration  paid  or  receivable  is 

recognised in profit or loss.

Share-based payment transactions

Equity-settled share-based payment transactions

Share options granted to employees

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The fair value of services received determined by reference to the fair value of share options granted at the grant date is expensed 

on a straight-line basis over the vesting period, with a corresponding increase in equity (share options reserve).

At each balance sheet date, the Group revises its estimates of the number of options that are expected to ultimately vest. The 

impact  of  the  revision  of  the  estimates  during  the  vesting  period,  if  any,  is  recognised  in  profit  or  loss,  with  a  corresponding 

adjustment to share options reserve.

At the time when the share options are exercised, the amount previously recognised in share options reserve will be transferred to 

share premium. When the share options are forfeited after the vesting date or are still not exercised at the expiry date, the amount 

previously recognised in share options reserve will be continue to be held in share option reserve.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated 

income statement because it excludes items of income or expense that are taxable or deductible in other years and it further 

excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have 

been enacted or substantively enacted by the balance sheet date.

Deferred  tax  is  recognised  on  differences  between  the  carrying  amounts  of  assets  and  liabilities  in  the  consolidated  financial 

statements and the corresponding tax base used in the computation of taxable profit, and is accounted for using the balance 

sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets 

are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences 

can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial 

recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable 

profit nor the accounting profit.

 
 
 
 
 
 
 
 
 
 
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3.  SIGNIFICANT ACCOUNTING POLICIES-CONTINUED

Taxation-continued

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, and interests in joint 

ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary 

difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer 

probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. 

Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which 

case the deferred tax is also dealt with in equity.

Retirement benefits costs

Payments to state-managed retirement benefit schemes and Mandatory Provident Fund Scheme are charged as an expense 

when employees have rendered service entitling them to the contributions.

Leasing

Leases are classified as finance lease whenever the terms of the lease transfer substantially all the risks and rewards of ownership 

to the lessee. All other leases are classified as operating leases.

The Group as lessee

Rentals payable under operating leases are charged to the income statement on a straight-line basis over the term of the relevant 

leases. Benefits received and receivable as an incentive to enter into an operating lease are recognised as a reduction of rental 

expense over the lease term on a straight-line basis.

Foreign currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the functional currency 

of that entity (foreign currencies) are recorded in the respective functional currency at the rates of exchanges prevailing on the 

dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the 

rates prevailing on the balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency 

are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in 

profit or loss for the period.

For the purposes of presenting consolidated financial statements in Hong Kong dollars, the assets and liabilities of the Group 

entities are translated into Hong Kong dollars using exchange rates prevailing on the balance sheet date. Income and expense 

items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during the period, 

in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as 

equity and transferred to the Group’s translation reserve. Translation differences relating to a foreign operation are recognised in 

profit or loss in the period in which the foreign operation is disposed of.

 
 
 
 
 
 
 
 
 
 
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3.  SIGNIFICANT ACCOUNTING POLICIES-CONTINUED

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, are capitalised as part of 

the cost of those assets. Capitalisation of such borrowing costs ceases when the assets are substantially ready for their intended 

use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying 

assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

4.  KEY SOURCES OF ESTIMATION UNCERTAINTY

The key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment 

to the carrying amounts of assets and liabilities within the next financial year, are also discussed below.

Useful lives of property, plant and equipment

The management determines the estimated useful lives and related depreciation charges for its property, plant and equipment. 

This estimate is based on the historical experience of the actual useful lives of property, plant and equipment of similar nature 

and functions. It may also change significantly as a result of technical innovations and competitor actions in response to industry 

cycles. Management will increase the depreciation charges where useful lives are less than previously estimated lives, or it will 

write-off or write-down technically obsolete or non-strategic assets that have been abandoned or sold.

5.  REVENUE AND SEGMENTS INFORMATION

Revenue represents the amounts received and receivable for goods sold by the Group to customers, less return and discounts. 

An analysis of the Group’s revenue, by business segments, is as follows:

(a)  Business segments

For management purposes, the Group is currently organised into three operating divisions namely metals sourcing and 

trading, production of copper anode and consumer electronics. In which metals sourcing and trading and production of 

copper anode is newly introduced during the year. These divisions are the basis on which the Group reports its primary 

segment information.

Principal activities are as follows:

Metals sourcing and trading 

Production of copper anode 

Consumer electronics 

– 

– 

– 

sourcing and trading of non-ferrous metals

manufacturing of copper anode

sourcing and trading of consumer electronics business

Segment information about these businesses is presented below.

 
 
 
 
 
 
 
 
 
 
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5.  REVENUE AND SEGMENTS INFORMATION-CONTINUED

(a)  Business segments-continued

Year ended 31 December 2007

Consolidated income statement

Metals

sourcing and  Production of 

Consumer

trading  copper anode 

electronics 

Elimination 

Total

HK$’000 

HK$’000 

HK$’000 

HK$’000 

HK$’000

Turnover

  External sales 

1,188,933 

749,133 

114,934 

– 

2,053,000

Inter-segment sales 

79,583 

– 

– 

(79,583) 

–

  Total 

Result

Segment results 

Interest income 

Other income 

Finance costs 

Unallocated corporate expenses 

Profit before taxation 

Taxation 

Profit for the year 

Consolidated balance sheet

ASSETS

Segment assets 

Unallocated corporate assets 

Consolidated total assets 

LIABILITIES

Segment liabilities 

Unallocated corporate liabilities 

Consolidated total liabilities 

1,268,516 

749,133 

114,934 

(79,583) 

2,053,000

104,098 

17,899 

424 

– 

122,421

7,091

4,689

(3,537)

(52,597)

78,067

(14,556)

63,511

895,107

224,480

1,119,587

190,826

146,909

337,735

630,594 

238,286 

26,227 

94,168 

90,166 

6,492 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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5.  REVENUE AND SEGMENTS INFORMATION-CONTINUED

(a)  Business segments-continued

Other information

Metals

sourcing and  Production of 

Consumer

trading  copper anode 

electronics  Unallocated 

Total

HK$’000 

HK$’000 

HK$’000 

HK$’000 

HK$’000

Additions of prepaid lease payments 

Write-down of inventories 

Amortisation of prepaid lease payments 

Capital additions 

Depreciation 

– 

– 

– 

347 

40 

Year ended 31 December 2006

Consolidated income statement

19,310 

1,479 

212 

44,412 

441 

Metals

– 

– 

– 

37 

196 

– 

– 

– 

5,480 

527 

19,310

1,479

212

50,276

1,204

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Turnover

  External sales 

Result

Segment results 

Interest income 

Other income 

Finance costs 

Unallocated corporate income 

Profit before taxation 

Taxation 

Profit for the year 

sourcing and 

Production of 

Consumer

trading  copper anode 

electronics 

Total

HK$’000 

HK$’000 

HK$’000 

HK$’000

– 

– 

– 

– 

264,803 

264,803

853 

853

302

7,762

(116)

256,491

265,292

(350)

264,942

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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5.  REVENUE AND SEGMENTS INFORMATION-CONTINUED

(a)  Business segments-continued

Consolidated balance sheet

Metals

sourcing and 

Production of 

Consumer

trading  copper anode 

electronics 

Total

HK$’000 

HK$’000 

HK$’000 

HK$’000

– 

– 

– 

8,565 

– 

691 

8,565

274,953

283,518

691

17,179

17,870

Metals

sourcing and 

Production of 

Consumer

trading  copper anode 

electronics 

Total

HK$’000 

HK$’000 

HK$’000 

HK$’000

– 

– 

– 

– 

770 

58 

770

58

ASSETS

Segment assets 

Unallocated corporate assets 

Consolidated total assets 

LIABILITIES

Segment liabilities 

Unallocated corporate liabilities 

Consolidated total liabilities 

Other information

Capital additions 

Depreciation 

(b)  Geographical segments

All the Group’s assets and capital expenditure incurred during the year are located in the PRC (including Hong Kong), which 

is considered as one geographical location in an economic environment with similar risks and returns. In addition, over 90% 

of the Group’s revenue by geographical market based on location of customer are also located in the PRC. Accordingly, no 

geographical segment revenue analysis is presented.

6.  COST OF SALES

Cost of sales during both years represented cost of inventories recognised as expenses.

7.  OTHER INCOME

Bank interest income 

Interest income from loan receivables 

Change in fair value of other financial assets

  – held-for-trading 

  – derivative financial instruments 

Agency fee income 

Others 

2007 

HK$’000 

2006

HK$’000

4,613 

2,478 

825 

53,346 

– 

3,864 

65,126 

302

–

–

–

7,219

543

8,064

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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8.  OTHER EXPENSES

Other  expenses  mainly  represent  various  expense  incurred  in  exploring  potential  investments  opportunities  by  the  Group 

amounting to HK$11,079,000 (2006: HK$2,126,000).

9.  NET GAIN ON DEBT RESTRUCTURING

Net gain on debts waived 

Restructuring and scheme costs 

2007 

HK$’000 

– 

– 

– 

2006

HK$’000

277,844

(14,676)

263,168

The trading of the Company’s shares on the Stock Exchange was suspended on 24 March 2003. On 21 June 2003, provisional 

liquidators was appointed by the High Court of Hong Kong Special Administrative Region so as to enforce and preserve the 

assets and business of the Company, to consider and review all debt restructuring proposals and/or scheme of arrangement 

to be proposed by any party. On 13 April 2006, the Company, CA Ltd and provisional liquidators entered into a restructuring 

agreement for implementation of debt restructuring. The principal elements of debt restructuring included capital reorganisation, 

subscription of new shares by CA Ltd., restructuring all indebtedness of the Company, open offer and placing of the Company’s 

shares and disposal of certain subsidiaries of the Group. Details of which are disclosed in the Company’s 2006 annual report.

The  completion  of  debt  restructuring  took  place  on  20  September  2006  (the  “Closing”).  Immediately  after  the  Closing,  the 

investor, CA Ltd, became the substantial shareholder of the Company and the petition against the Company on 25 March 2003 

was withdrawn and the provisional liquidators were discharged and released by the court with effect from the Closing. Trading of 

the Company’s shares on the Stock Exchange was resumed on 26 September 2006.

Net gain on debts waived of approximately HK$277,844,000 represented indebtedness discharged upon the Closing.

Most of former accounting personnel and former directors had left the Group on or before completion of debt restructuring, and 

accordingly the directors were unable to obtain sufficient documentary information to satisfy themselves as to whether the net 

gain on debts waived for the year ended 31 December 2006 was fairly stated.

10.  FINANCE COSTS

Interest on bank borrowings wholly repayable within five years 

3,537 

116

2007 

HK$’000 

2006

HK$’000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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11.  TAXATION

Current tax:

  Hong Kong Profits Tax 

2007 

HK$’000 

2006

HK$’000

14,556 

350

Hong Kong Profits Tax is calculated at 17.5% (2006: 17.5%) of the estimated assessable profit for the year.

The Group’s jointly controlled entity is subjected the taxation arising in other jurisdictions which is calculated at the rates prevailing 

in the relevant jurisdictions.

The Group’s jointly controlled entity is exempted from PRC Enterprise Income Tax for the first two profitable years starting from 

year ended 31 December 2007 and 50% reduction for the following three years.

On 16 March 2007, the People’s Republic of China promulgated the Law of the People’s Republic of China on Enterprise Income 

Tax (the “New Law”) by Order No. 63 of the President of the People’s Republic of China. On 6 December 2007, the State Council 

of the PRC issued Implementation Regulations of the New Law. The New Law and Implementation Regulations will change the 

tax rate from 33% to 25% for the jointly controlled entity from 1 January 2008.

The tax charge for the year can be reconciled to the profit before taxation per the consolidated income statement as follows:

Profit before taxation 

Tax at the applicable rates of 17.5% (2006: 17.5%) 

Tax effect of income not taxable for tax purpose 

Tax effect of expenses not deductible for tax purpose 

Tax effect of tax losses not recognised 

Utilisation of tax losses 

Effect of tax exemption granted to a PRC jointly controlled entity 

Others 

Tax charge for the year 

2007 

HK$’000 

2006

HK$’000

78,067 

265,292

13,662 

(766) 

3,983 

– 

(122) 

(2,151) 

(50) 

14,556 

46,426

(46,106)

1

118

–

–

(89)

350

 
 
 
 
 
 
 
 
 
 
 
 
 
 
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12.  PROFIT FOR THE YEAR

Profit for the year has been arrived at after charging (crediting):

Directors’ remuneration (Note 13) 

Other staff’s retirement benefits costs 

Other staff costs 

Other staff share based payment expenses 

Total staff costs 

Auditor’s remuneration 

Write-down of inventories 

Exchange loss 

Depreciation of property, plant and equipment 

Amortisation of prepaid lease payment 

Minimum lease payments under operating leases in

respect of office premises 

13.  DIRECTORS’ EMOLUMENTS

Fees 

Other emoluments

  Salaries and other benefits 

  Retirement benefits scheme contribution 

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2007 

HK$’000 

2006

HK$’000

9,494 

552 

17,486 

8,702 

36,234 

1,600 

1,479 

1,959 

1,204 

212 

3,307 

922

93

2,829

–

3,844

250

–

–

58

–

868

2007 

HK$’000 

2006

HK$’000

450 

9,005 

39 

9,494 

188

730

4

922

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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13.  DIRECTORS’ EMOLUMENTS-CONTINUED

The emoluments paid or payable to each of 6 (2006: 5) directors were as follows:

Salaries, 

and other 

benefits 

HK$’000 

Fees 

HK$’000 

Other emoluments

Share 

based 

Retirement

benefits

scheme 

payment 

contributions 

2007

Total

HK$’000 

HK$’000 

HK$’000

Name 

Directors:

Executive Directors

  Wong Chi Wing, Joseph 

  Chu Kwok Chi, Robert 

  Cheng Hai Rong 

Non-Executive Directors

  Leung Hon Chuen 

Independent non-executive Directors

  Poon Kwok Shin 

  Xu Mingshe 

Total emoluments 

– 

– 

– 

150 

150 

150 

450 

2,306 

910 

1,951 

– 

– 

– 

1,485 

263 

1,485 

233 

233 

139 

5,167 

3,838 

13 

13 

13 

– 

– 

– 

39 

Name 

Directors:

Executive Directors

  Wong Chi Wing, Joseph 

  Chu Kwok Chi, Robert 

Non-Executive Directors

  Leung Hon Chuen 

Independent non-executive Directors

  Poon Kwok Shin 

  Xu Mingshe 

Total emoluments 

Salaries 

and other 

benefits 

HK$’000 

Fees 

HK$’000 

– 

– 

37 

114 

37 

188 

495 

235 

– 

– 

– 

730 

Other emoluments

Share 

based 

Retirement

benefits

scheme 

payment 

contributions 

HK$’000 

HK$’000 

HK$’000

– 

– 

– 

– 

– 

– 

1 

3 

– 

– 

– 

4 

496

238

37

114

37

922

There  was  no  arrangement  under  which  a  director  waived  or  agreed  to  waive  remuneration  during  the  year.  In  addition, 

no  remuneration  was  paid  by  the  Group  to  any  of  the  directors  as  an  inducement  to  join,  or  upon  joining  the  Group  or  as 

compensation for loss of office.

3,804

1,186

3,449

383

383

289

9,494

2006

Total

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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14.  EMPLOYEES’ EMOLUMENTS

Of  the  five  individuals  with  the  highest  emoluments  in  the  Group,  three  (2006:  one)  were  directors  of  the  Company  whose 

emoluments are included in the disclosures in Note 13. The emoluments of the remaining two (2006: four) individuals were as 

follows:

Salaries and other benefits 

Contributions to retirement benefit scheme 

There emoluments were within the following bands:

HK$ nil to HK$1,000,000 

HK$1,500,001 to HK$2,000,000 

HK$2,500,001 to HK$3,000,000 

15.  DIVIDENDS

Dividend recognised as distribution during the year:

2007 

HK$’000 

2006

HK$’000

4,342 

26 

4,368 

1,659

–

1,659

2007 

No. of 

2006

No. of

employee 

employee

– 

1 

1 

4

–

–

2007 

HK$’000 

2006

HK$’000

Interim – HK0.25 cents per share (2006: HKnil cents) 

10,338 

–

The final dividend of HK0.25 cents (2006: HKnil cents) per share has been proposed by the directors and is subject to approval 

by the shareholders in general meeting.

16.  EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share attributable to the ordinary equity holders of the Company is based on 

the following data:

Earnings

2007 

HK$’000 

2006

HK$’000

Earnings for the purposes of basic earnings per share 

63,511 

264,942

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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16.  EARNINGS PER SHARE-CONTINUED

Number of shares

Weighted average number of ordinary shares for

the purposes of basic earnings per share 

Effect of dilutive potential ordinary shares:

  Options 

Weighted average number of ordinary shares for the

  purpose of diluted earnings per share 

2007 

’000 

2006

’000

3,872,418 

935,591

133,630 

–

4,006,048 

935,591

The computation of diluted earnings per share for 2007 does not assume the exercise of the Company’s outstanding warrants 

and certain of the Company’s share options as the exercise price of those warrants/options is higher than the average market 

price for shares for the period which the warrants/options were outstanding.

No diluted earnings per share has been presented for the 2006 as there were no outstanding dilutive potential ordinary shares.

17.  PROPERTY, PLANT AND EQUIPMENT

Furniture, 

Plant  Construction

Motor 

fixture and 

and 

in

Building 

vehicles 

equipment  machinery 

progress 

Total

HK$’000 

HK$’000 

HK$’000 

HK$’000 

HK$’000 

HK$’000

– 

– 

– 

7,683 

– 

7,683 

– 

– 

– 

78 

78 

– 

485 

485 

2,916 

– 

3,401 

– 

24 

24 

438 

462 

94 

285 

379 

4,212 

– 

4,591 

27 

34 

61 

424 

485 

– 

– 

– 

8,935 

645 

9,580 

– 

– 

– 

264 

264 

– 

– 

– 

94

770

864

7,220 

(645) 

30,966

–

6,575 

31,830

– 

– 

– 

– 

– 

27

58

85

1,204

1,289

7,605 

2,939 

4,106 

9,316 

6,575 

30,541

COST

At 1 January 2006 

Additions 

At 31 December 2006 

Additions 

Transfer from CIP 

At 31 December 2007 

ACCUMULATED DEPRECIATION

At 1 January 2006 

Provided for the year 

At 31 December 2006 

Provided for the year 

At 31 December 2007 

CARRYING VALUES

At 31 December 2007 

At 31 December 2006 

– 

461 

318 

– 

– 

779

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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17.  PROPERTY, PLANT AND EQUIPMENT-CONTINUED

The above items of property, plant and equipment are depreciated on a straight-line basis, and after taking into account of their 

estimated residual value, as follow:

Building 

Motor vehicles 

Furniture, fixtures and equipment 

Plant and machinery 

Over the shorter of the term of the lease or 45 years

20%

20%-331/3%

121/2%

The Group has pledged certain plant and machinery and building having a carrying amount of approximately HK$2,777,000 (2006: 

HK$ nil) and HK$5,986,000 (2006: HK$nil) to secure short term bank borrowing respectively.

18.  PREPAID LEASE PAYMENTS

CARRYING AMOUNT

At beginning of the year 

Additions 

Charged to consolidated income statement 

At end of the year 

Analysed of the carrying amount of prepaid lease payments is as follows:

Prepaid lease payments 

Less: Portion to be charged to consolidated income statement

in the coming twelve months and shown as current assets 

Amount due after one year 

2007

HK$’000

–

19,310

(212)

19,098

2007

HK$’000

19,098

(424)

18,674

The prepaid lease payments represent leasehold interest in the PRC with rights to use the land under medium term lease and is 

amortised over 45 years on a straight-line basis.

The Group has pledged certain land use rights have a carrying amount of approximately HK$19,098,000 (2006: HK$nil) to secure 

short term bank borrowing.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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19.  FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Index-linked note 

2007 

HK$’000 

2006

HK$’000

2,340 

–

The index-linked note is denominated in United States Dollars (“USD”) with principal amount of USD300,000. The note does not 

bear any interest and the Group is entitled to a 100% principal protection level (“Principal Protection Clause”) if the note is not 

redeemed before its maturity date. The Group has an option to redeem the note on or before maturity, settled at the valuation 

amount provided by the counterparty bank which will be determined based on the exchange rate movements on certain specified 

currencies at the redemption date. Early redemption is not covered by the aforesaid Principal Protection Clause.

The index-linked note is designated as financial asset at fair value through profit or loss upon initial recognition as it contains an 

embedded derivatives. The maturity date of the index-linked note outstanding as at 31 December 2007 is July 2012 and were 

therefore classified as non-current. As at 31 December 2007, the fair value of the index-linked note was determined based on the 

exchange rate movements on certain specified currencies as valuation amount provided by the counterparty bank.

The index-linked note has been pledged to secure banking facilities granted to the Group.

20. 

INVENTORIES

Raw materials and consumables 

Work in progress 

Finished goods 

2007 

HK$’000 

2006

HK$’000

77,559 

8,721 

59,784 

146,064 

–

–

–

–

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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21.  LOAN RECEIVABLES

Loan receivables comprise:

Interest-bearing loan receivable (note a) 

  Non-interest bearing loan receivable (note b) 

Interest-bearing loan receivable from a joint

  venture partner (note c) 

Analysed as

  Current 

  Non-current 

2007 

HK$’000 

2006

HK$’000

24,000 

7,500 

17,433 

48,933 

24,000 

24,933 

48,933 

–

–

20,933

20,933

–

20,933

20,933

Notes:

(a) 

The  loan  represents  the  amount  drawn  down  and  remained  outstanding  as  at  31  December  2007  from  the  HK$30  million  facility  the  Group  granted  to  an 
independent third party (“ITP”). The loan is secured and bears interest at the Hong Kong prime rate offered by The Hong Kong and Shanghai Banking Corporation 
plus 5% and is repayable after 6 months from the loan agreement dated on 3 December 2007. The Group has assessed the ITP’s credit quality and the balance 
is not past due at the balance sheet date. Accordingly, no impairment loss is required to recognised in the consolidated financial statements. The loan is secured 
by certain equity securities listed in Hong Kong held by the ITP.

(b) 

The amount represents a loan advanced to a wholly owned subsidiary of Vision Tech International Holdings Limited (“Vision Tech”). Vision Tech is a Hong Kong 
listed company and the Group became the substantial shareholder of Vision Tech subsequent to the balance sheet date (see note 39). It is unsecured and 
interest free. The Group has assessed the credit quality of the loan at the balance sheet date and considered that no impairment loss is required to be recognised 
in the consolidated financial statements.

(c) 

The amount  represents advance to one of the joint venture partners made during the year ended 31 December 2006. The amount  is unsecured and bears 
interest at 10% per annum.

22.  TRADE AND OTHER RECEIVABLES

Trade receivables 

Bills receivables 

Other receivables (note) 

Prepayments to suppliers 

Margin deposits to financial institutions 

Total trade and other receivables 

Note:

2007 

HK$’000 

2006

HK$’000

502,304 

28,756 

531,060 

46,934 

72,755 

20,353 

671,102 

2,797

–

2,797

65,964

1,701

–

70,462

Other receivables include balances of HK$14,890,000 (2006: HK$57,350,000) receivables from independent third parties. The amounts are unsecured, interest free 
and is expected to be repaid within 12 months from the balance sheet date. The Group has assessed the credit quality of the balances and the balances are fully repaid 
subsequent to the balance sheet date. In addition, as at 31 December 2007, there is a balance of HK$23,173,000 (2006: HK$nil) receivable from a bank in respect of 
commodity forward trading settlement balance. This amount has been settled subsequent to the balance sheet date.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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22.  TRADE AND OTHER RECEIVABLES-CONTINUED

The Group allows on average credit period of 90 days to its trade customers. The following is an aged analysis of trade and bills 

receivables at the reporting date:

0-30 days 

31-60 days 

61-90 days 

Over 90 days 

2007 

HK$’000 

2006

HK$’000

321,239 

106,572 

103,249 

– 

531,060 

2,521

77

–

199

2,797

Before  accepting  any  new  customer,  the  Group  assess  the  potential  customer’s  credit  quality  and  define  credit  limits  by 

customer.  Limits  and  credit  quality  attributed  to  customers  are  reviewed  regularly.  Approximately,  100%  (2006:  93%)  of  the 

trade receivables that are neither past due nor impaired have the best credit quality assessed by the Group. Management closely 

monitors the credit quality of trade and other receivables and considers the trade and other receivables that are neither past due 

nor impaired to be of a good credit quality.

Included  in  the  Group’s  trade  and  bills  receivable  balance  are  debtors  with  aggregate  carrying  amount  of  HK$  Nil  (2006: 

HK$199,000) which are past due at the reporting date for which the Group had not provided for impairment loss. The Group does 

not hold any collateral over these balances. The average age of these receivables is 117 days in 2006.

Ageing of trade and bills receivables which are past due but not impaired.

91-120 days 

2007 

HK$’000 

2006

HK$’000

– 

199

Included in trade and bills receivables are the following amount denominated in currency other than functional currency of the 

relevant Group’s entities:

USD 

2007 

HK$’000 

Equivalent 

2006

HK$’000

Equivalent

275,646 

27,050

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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23.  HELD-FOR-TRADING INVESTMENTS

Held-for-trading investments included:

  Listed securities

  – Equity securities listed in Hong Kong 

2007 

HK$’000 

2006

HK$’000

9,673 

–

The investments represent investments in listed equity securities in Hong Kong which present the Group with opportunity for 

return through dividend income and trading gain. The fair value of these securities as at 31 December 2007 are based on bid 

prices quoted in active market.

24.  DERIVATIVE FINANCIAL INSTRUMENTS

Commodity forward contract – Copper Cathode

  – Derivative financial assets 

  – Derivative financial liabilities 

2007 

HK$’000 

2006

HK$’000

1,999 

(1,126) 

873 

–

–

–

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The Group utilises commodity forward contracts to hedge forecasted purchase of copper concentrate and/or related materials. 

These arrangements are designed to address significant fluctuation in the price of copper concentrate and/or related materials 

which move in line with the price of copper cathode. However, the Group does not designate these forward contracts as hedging 

instruments according to HKAS 39. Accordingly, they are treated as financial assets or liabilities held for trading and included in 

fair value through profit or loss. The respective unrealised gain was recognised in the consolidated income statement and the 

respective balance was recognised under current assets and current liabilities.

At  31  December  2007,  the  fair  value  of  commodity  forward  contracts  of  the  Group  which  are  not  designated  as  hedging 

instruments amounting to HK$1,999,000 (2006: HK$ nil) and HK$1,126,000 (2006: HK$nil) were recognised as current assets 

and current liabilities in the consolidated balance sheet respectively. Fair values of commodity forward contracts were determined 

by reference to the spot price of related metals quoted from London Metal Exchange and Shanghai Futures Exchange as at year 

end.

The major terms of these contracts (with net settlement option) as at 31 December 2007 were as follows:

Position: Sell forward contracts quantities (in tonnes) 

Price per tonne (HK$) 

Delivery period 

2007 

2006

3,030 

51,920-62,092 

Jan 2008-Mar 2008 

N/A

N/A

N/A

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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25.  TRADE RECEIVABLES FROM A JOINT VENTURE PARTNER

The amount was unsecured, interest-free and aged within 90 days.

The balance was not past due at the reporting date and the Group does not hold any collateral over this balance.

The  management  closely  monitors  the  credit  quality  of  the  balance  and  considers  the  balance  that  is  neither  past  due  nor 

impaired to be of a good credit quality.

26.  BANK BALANCES AND CASH/PLEDGED BANK DEPOSITS

Cash at banks and in hand 

Pledged bank deposit 

2007 

HK$’000 

145,047 

26,918 

2006

HK$’000

186,344

5,000

171,965 

191,344

Bank balances carry interest at market rates which range from 1% to 1.5% (2006: 1.7% to 2.5%). The pledged deposits carry 

fixed interest rate of 3% to 4% (2006: 3.5% to 5%). The pledged bank deposits will be released upon the settlement of relevant 

bank borrowings.

Pledged  bank  deposits  represents  deposits  pledged  to  banks  to  secure  banking  facilities  granted  to  the  Group.  Deposits 

amounting to HK$26,918,000 (2006: HK$5,000,000) have been pledged to secure undrawn facilities and are therefore classified 

as current assets.

In addition, included in the bank balances and cash are the following amounts denominated in currencies other than the functional 

currency of the Group’s entities:

USD 

2007 

HK$’000 

Equivalent 

2006

HK$’000

Equivalent

39,766 

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27.  TRADE AND OTHER PAYABLES

Trade payables 

Bills payables 

Other payables and accruals 

The following is an aged analysis of trade and bills payables at the balance sheet date:

0-30 days 

31-60 days 

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2007 

HK$’000 

2006

HK$’000

79,390 

99,801 

179,191 

15,025 

194,216 

2007 

HK$’000 

177,397 

1,794 

179,191 

–

–

–

15,832

15,832

2006

HK$’000

–

–

–

The average credit period on purchases of goods is 30 days. The Group has financial risk management policies in place to ensure 

that all payables within the credit timeframe.

All of the other payables are unsecured, interest free and expected to be settled within one year.

Included in trade and bills payables, the following amounts denominated in USD and Renminbi as of the balance sheet date:

USD 

Renminbi 

2007 

HK$’000 

Equivalent 

2006

HK$’000

Equivalent

94,541 

84,650 

–

–

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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28.  BANK BORROWINGS

Bank loans 

Secured 

Unsecured 

The exposure of the Group’s borrowings and the contractual maturity dates are as follows:

Carrying amount repayable

  On demand or within one year:

  Fixed-rate borrowings 

  Variable-rate borrowings 

2007 

HK$’000 

2006

HK$’000

126,495 

44,966 

81,529 

126,495 

–

–

–

–

2007 

HK$’000 

2006

HK$’000

90,154 

36,341 

126,495 

–

–

–

The ranges of effective interest rate (which are also equal to contracted interest rate) on Group’s borrowings are as follow:

Effective interest rate:

  Fixed-rate borrowings 

  Variable-rate borrowings 

2007 

2006

5.832% to 6.480% 

5% to 5.83% 

N/A

N/A

The interest rate of variable-rate borrowings are based on the China’s Inter-Bank Lending rate.

The Group’s borrowings that are denominated in currencies other than functional currencies of the relevant group entities are set 

out below:

USD 

Renminbi 

2007 

HK$’000 

Equivalent 

2006

HK$’000

Equivalent

32,963 

93,532 

–

–

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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29.  SHARE CAPITAL

Authorised:

Ordinary shares of HK$0.01 each at 1 January 2006, 31 December 2006 

  and 31 December 2007 

Issued and fully paid:

Ordinary shares of HK$0.01 each at 1 January 2006 

Share consolidation (note (a) (i)) 

Ordinary shares of HK$1 each 

Capital reduction (note (a) (ii)) 

Ordinary shares of HK$0.01 each 

Issue of subscription and additional shares to an investor (note (a) (iii) (1)) 

Open offer (note (a) (iii) (2)) 

Issue of shares (note (a) (iii) (2)) 

Ordinary shares of HK$0.01 each upon completion of capital restructuring 

Issue of shares (note (b)) 

Shares repurchase (note (c)) 

Ordinary shares of HK$0.01 each at 31 December 2006 and 1 January 2007 

Issue of shares (note(d)) 

Exercise of share options (note(e)) 

Exercise of warrants subscription right (note(f)) 

Share repurchase (note (g)) 

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Number

of shares 

Amount

HK$’000

25,000,000,000 

250,000

8,076,257,020 

(7,995,494,450) 

80,762,570 

– 

80,762,570 

2,427,750,000 

145,372,626 

374,627,374 

3,028,512,570 

605,000,000 

(25,300,000) 

3,608,212,570 

573,540,000 

4,400,000 

7,976,000 

(59,100,000) 

80,763

–

80,763

(79,955)

808

24,278

1,453

3,746

30,285

6,050

(253)

36,082

5,735

44

80

(591)

Ordinary shares of HK$0.01 each at 31 December 2007 

4,135,028,570 

41,350

Notes:

(a) 

Pursuant to special and ordinary resolutions passed at a special general meeting held on 22 June 2006, the following capital restructuring of the Company was 
duly passed and the capital restructuring became effective on 20 September 2006.

(i) 

Share consolidation

Every 100 issued shares of HK$0.01 each in the capital of the Company was consolidated into one consolidated share of HK$1 each.

(ii) 

Capital reduction

The issued share capital of the Company was reduced by cancelling the paid-up capital to the extent of HK$0.99 on each consolidated share so that 
each of the issued shares became one fully paid share of HK$0.01 each in the capital of the Company.

Surplus of approximately HK$79,955,000 arising from capital reduction had been credited directly to the contributed surplus account of the Company.

(iii) 

Subscription, open offer and placing pursuant to debt restructuring

(1) 

On 20 September 2006, 2,075 million ordinary shares of HK$0.01 each were issued to CA Ltd at a consideration of HK$83 million.

In addition, 352,750,000 ordinary shares of HK$0.01 each were issued, and credited as fully paid, at par value to CA Ltd by way of capitalisation 
of the amounts standing to the credit of the contributed surplus account of the Company.

(2) 

On  20  September  2006,  145,372,626  offer  shares  of  HK$0.01  each  were  issued  to  the  qualifying  shareholders  at  a  subscription  price  of 
HK$0.06 per share. On the same date, 374,627,374 placing shares of HK$0.01 each were placed to not less than six independent investors at a 
placing price of HK$0.1 per share.

HK$21.5 million out of total subscription proceeds of HK$83 million as stated in note (a)(iii)(1) has been transferred to the scheme administrators for 
settlement and discharge of indebtedness as part of the Group’s restructuring. The balance of the proceeds from subscription, open offer and placing 
were then used for working capital and investment of the Company.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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29.  SHARE CAPITAL-CONTINUED

(b) 

On 5 December 2006, the Company entered into a subscription agreement with CA Ltd to allot and issue 605,000,000 ordinary shares of HK$0.01 each to CA 
Ltd at a subscription price of HK$0.295 per share. The subscription agreement is conditional upon completion of a placing made by the placing agent on behalf 
of CA Ltd.

On 18 December 2006, following completion of the placing made by CA Ltd, 605,000,000 ordinary shares of HK$0.01 were issued to CA Ltd pursuant to the 
subscription  agreement.  HK$152  million  out  of  total  subscription  proceeds  of  HK$178  million  would  be  applied  for  the  non-ferrous  metal  business  and  the 
balance of proceeds would be used for general working capital of the Group.

(c) 

The Company repurchased its own shares on the Stock Exchange as follows:

Month of 
repurchase 

Number of 
ordinary shares 

Highest 

Lowest 

Aggregate
consideration
paid

December 2006 

25,300,000 

HK$0.228 

HK$0.208 

HK$5,583,000

The above ordinary shares were subsequently cancelled.

(d) 

On 14 June 2007, the Company entered into a subscription with CA Ltd., the controlling shareholder of the Company to allot and issue 573,540,000 ordinary 
shares of HK$0.01 each at a subscription price of HK$ 0.81 per share. The subscription agreement is conditional upon completion of the placing of 573,540,000 
ordinary shares of the Company made by the placing agent on behalf of CA Ltd.. On 20 June 2007, following the completion of the placing, 573,540,000 ordinary 
shares of HK$ 0.01 were issued to CA Ltd. pursuant to the subscription agreement.

(e) 

During  the  year,  Mr.  Leung  Hon  Chuen,  Mr.  Poon  Kwok  Shin,  Edmond  and  employee  had  exercised  share  options  amounting  to  4,400,000  shares  at  the 
subscription price of HK$0.205 per share.

(f) 

On 25 July 2007, 7,976,000 unit of warrants have been exercised.

(g) 

The Company repurchased its own share on the Stock Exchange as follows:

Month of 
repurchase 

January 2007 
August 2007 

Number of 
ordinary shares 

23,500,000 
35,600,000 

Highest 

Lowest 

HK$0.200 
HK$0.600 

HK$0.189 
HK$0.470 

Aggregate
consideration
paid

HK$4,688,540
HK$20,084,000

The above shares were cancelled upon repurchase. None of the Company’s subsidiaries purchased, sold or redeemed any of the Company’s listed securities 
during the year.

30.  WARRANTS

On 14 June 2007, the Company entered into the warrant placing agreement with the placing agent pursuant to which the placing 

agent agreed to place warrants attaching the rights to subscribe for 143,380,000 shares on the basis of the initial exercise price 

of HK$0.94 per warrant share, on behalf of the Company, to placees who are independent of the Company and its connected 

persons, at the issue price of HK$0.08 per warrant. The warrants were exercisable from 29 June 2007 to 28 June 2008.

During the year ended 31 December 2007, 7,976,000 new shares were issued on exercise of the warrants.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
31.  SHARE OPTIONS

The  Company’s  share  option  scheme  (the  “Scheme”)  was  adopted  for  a  period  of  10  years  commencing  6  November  2006 

pursuant to an Ordinary Resolution passed at the Special General Meeting of the Shareholders held on 6 November 2006 for the 

purpose of providing incentives or rewards to selected employees and directors for their contribution to the Group.

Under the Scheme, the Company may grant options to selected employees and directors of the Company and its subsidiaries, to 

subscribe for shares in the Company. Additionally, the Company may, from time to time, grant share options to eligible vendors, 

customers, advisors and consultants to the Company and its subsidiaries at the discretion of the Board of Directors.

The total number of shares in respect of which options may be granted under the Scheme is not permitted to exceed 10% of the 

shares of the Company in issue at any point of time, without prior approval from the Company’s shareholders. The number of 

shares issued and to be issued in respect of which options granted and may be granted to any individual in any one year is not 

permitted to exceed 1% of the shares of the Company in issue at any point in time, without prior approval from the Company’s 

shareholders.  Options  granted  to  substantial  shareholders,  Independent  non-executive  directors,  or  any  of  their  respective 

associates  (including  a  discretionary  trust  whose  discretionary  objects  include  a  substantial  shareholders,  Independent  non-

executive directors, or any of their respective associates) in excess of 0.1% of the Company’s share capital or with a value in 

excess of HK$5,000,000 must be also approved by the Company’s shareholders.

The exercise price of the share options is determinable by the directors, but may not be less than the higher of (i) the Stock 

Exchange closing price of the Company’s shares on the date of the offer of the share options which must be a business day; (ii) 

the average Stock Exchange closing price of the Company’s shares for the five trading days immediately preceding the date of 

the offer; and (iii) the nominal value of the Company’s shares.

As at 31 December 2007, options to subscribe for an aggregate of 247,240,000 shares of the Company granted to the Director 

and certain employees pursuant to the Scheme remained outstanding.

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31.  SHARE OPTIONS-CONTINUED

Details of the movements in the number of share options during the year under the New Scheme are as follows:

Option 
type 

Date 
of grant 

Exercisable
period 
(both date 
inclusive) 

 Outstanding 
at 
1.1.2006 

Exercise 
price 
HK$

Granted Outstanding 
at 
1.1.2007 

during 
the year 

Granted 
during 
the year 

Exercise Outstanding
at
the year  31.12.2007

during 

Directors:

31 January 2007 

31 January 2007 

31 January 2007 

21 February 2007 

21 February 2007 

21 February 2007 

Employees:

31 January 2007 

31 January 2007 

31 January 2007 

21 February 2007 

21 February 2007 

15 August 2007 

15 August 2007 

15 August 2007 

21 February 2007-
  31 December 2009 
1 January 2008-
  31 December 2009 
1 January 2009-
  31 December 2009 
28 February 2007-
  31 December 2009 
1 January 2008-
  31 December 2009 
1 January 2009-
  31 December 2009 

21 February 2007-
  31 December 2009 
1 January 2008-
  31 December 2009 
1 January 2009-
  31 December 2009 
1 January 2008-
  31 December 2009 
1 January 2009-
  31 December 2009 
15 August 2008-
  15 August 2011 
15 August 2009-
  15 August 2011 
15 August 2010-
  15 August 2011 

0.205 

0.205 

0.205 

0.300 

0.300 

0.300 

0.205 

0.205 

0.205 

0.300 

0.300 

0.642 

0.642 

0.642 

A 

B 

C 

D 

E 

F 

A 

B 

C 

E 

F 

G 

H 

I 

Total 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

–  20,500,000 

(2,400,000)  18,100,000

–  18,260,000 

–  18,260,000

–  16,000,000 

–  16,000,000

– 

– 

– 

680,000 

2,140,000 

4,340,000 

– 

– 

– 

680,000

2,140,000

4,340,000

–  61,920,000 

(2,400,000)  59,520,000

–  57,500,000 

(2,000,000)  55,500,000

–  57,500,000 

–  57,500,000

–  55,320,000 

–  55,320,000

– 

– 

– 

– 

– 

7,200,000 

9,200,000 

1,000,000 

1,000,000 

1,000,000 

– 

– 

– 

– 

– 

7,200,000

9,200,000

1,000,000

1,000,000

1,000,000

–  189,720,000 

(2,000,000)  187,720,000

–  251,640,000 

(4,400,000)  247,240,000

The vesting period ends on the date the exercisable period of the share options begin.

In respect of the share options exercised during the year ended 31 December 2007, the share price at the dates of exercise 

ranged from HK$0.610 to HK$0.870 and the weighted average share price is HK$0.681.

The Company has used the Binomial model (the “Model”) with the consideration of vesting period and possible exercise pattern 

to value the share options granted during the year ended 31 December 2007. The Model is one of the commonly used models to 

estimate the fair value of the share option. The value of an option varies with different variables of certain subjective assumptions. 

Any change in the variables so adopted may materially affect the estimation of the fair value of an option.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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31.  SHARE OPTIONS-CONTINUED

During the year, the share options were granted on 31 January 2007, 21 February 2007 and 15 August 2007 respectively. The 

estimated fair value of the options granted on that date were as follows:

Option type 

Grant date 

A 

B 

C 

D 

E 

F 

G 

H 

I 

31 January 2007 

31 January 2007 

31 January 2007 

21 February 2007 

21 February 2007 

21 February 2007 

15 August 2007 

15 August 2007 

15 August 2007 

Fair value

HK$

0.0562

0.0603

0.0664

0.0645

0.0684

0.0765

0.2123

0.2346

0.2522

The closing prices of the Group’s share each immediately before 31 January 2007, 21 February 2007 and 15 August 2007 were 

HK$0.205, HK$0.270 and HK$0.642 respectively.

These fair values were calculated using the Binomial option pricing model. The inputs into the model were as follows:

A 

B 

C 

D 

E 

F 

G 

H 

I

Option type

Share price on grant date 

Exercise price 

Expected volatility 

Expected life (years) 

Risk-free rate 

0.205 

0.205 

0.205 

0.205 

0.205 

0.205 

0.270 

0.300 

0.270 

0.300 

0.270 

0.300 

0.642 

0.642 

0.642 

0.642 

0.642

0.642

44.87% 

44.87% 

44.87% 

44.76% 

44.76% 

44.76% 

47.88% 

47.88% 

47.88%

1.92 

1.92 

1.92 

1.75 

1.75 

1.75 

4.00 

4.00 

4.00

4.059% 

4.059% 

4.059% 

4.108% 

4.108% 

4.108% 

4.126% 

4.126% 

4.126%

Expected dividend yield 

0.45% 

0.45% 

0.45% 

0.45% 

0.45% 

0.45% 

0.45% 

0.45% 

0.45%

The Group recognised an expense in the income statement of approximately HK$12.5 million (2006: HK$nil) for the year ended 

31 December 2007 in relation to share options granted by the Group.

32.  JOINT VENTURE

The Group has the following significant interest in a joint venture:

Place of 

registrations/ 

Effective

Nominal 

percentage of

value of 

interest held

Name of entity 

operations 

registered capital 

by the Group 

Principal activities

Qingyuan JCCL EPI Copper Limited 

PRC 

RMB90,000,000.00 

51% 

Production of copper anode

(“JCCL EPI”)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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o
t
e
s

t
o

t
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e
C
o
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s
o
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i

d
a
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d
F
i
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32.  JOINT VENTURE-CONTINUED

The Group holds 51% (2006: nil) of the registered capital of JCCL EPI and is entitled to nominate three out of five directors. The 

board of directors comprise of three directors appointed by the Group and two directors appointed by the other shareholders. 

However, under the shareholders’ agreement, all the resolutions have to be passed with approval of all the board of directors. 

Accordingly, JCCL EPI is jointly controlled by the Group and the other significant shareholders. Therefore, JCCL EPI is classified 

as a jointly controlled entity of the Group.

The following amounts are included in the Group’s financial statements as a result of the proportionate consolidation of the above 

joint venture:

Non-current assets 

Current assets 

Current liabilities 

Income 

Expenses 

33.  FINANCIAL INSTRUMENTS

Financial risk management objectives

2007 

HK$’000 

2006

HK$’000

43,940 

207,332 

187,591 

760,246 

746,087 

–

–

–

–

–

The financial instruments are fundamental to the Group’s daily operations. The Group’s major financial instruments include loan 

receivables, trade and other receivables, trade receivable from a joint venture partner, pledged bank deposits, bank balances 

and cash, trade and other payables and bank borrowings. Details of these financial instruments are disclosed on the respective 

notes. The risks associated with the financial instruments and the policies on how to mitigate these risks are set out below. The 

management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective 

manner.

Categories of financial instruments

2007 

HK$’000 

2006

HK$’000

Financial assets

  Loans and receivables (including cash and cash equivalents) 

836,302 

281,038

Designated as at FVTPL 

Held-for-trading investments 

Derivative financial instruments 

Financial liabilities

  Amortised cost 

Derivative financial instruments 

2,340 

9,673 

1,999 

–

–

–

850,314 

281,038

313,584 

3,534

1,126 

–

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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33.  FINANCIAL INSTRUMENTS-CONTINUED

Foreign currency risk management

The functional currency of the Company and its major subsidiaries which operates in Hong Kong is HK$ in which most of the 

transactions are denominated. The functional currency of the Group’s jointly controlled entity operating in PRC is RMB in which 

most of its transactions are denominated. However, certain trade receivables, trade payables and bank balances of the Group 

are denominated in USD, which expose the Group to foreign currency risk. The Group currently does not have a foreign currency 

hedging  policy.  However,  the  management  monitors  foreign  exchange  exposure  and  will  consider  hedging  significant  foreign 

currency exposure should the need arises.

The carrying amounts of the Group’s foreign currency denominated trade and bills receivables, trade and bills payables, bank 

borrowings and bank balances, at the reporting date as follows:

Liabilities 

Assets

2007 

HK$’000 

2006 

HK$’000 

2007 

HK$’000 

2006

HK$’000

USD 

127,504 

– 

315,412 

27,941

Foreign currency sensitivity

The following table details the Group’s sensitivity to a 5% increase and decrease in HKD against the relevant foreign currencies. 

5%  is  the  sensitivity  rate  used  when  reporting  foreign  currency  risk  internally  to  key  management  personnel  and  represents 

management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only 

outstanding foreign currency denominated monetary items and adjust their translation at the year end for a 5% change in foreign 

currency rates. The sensitivity analysis represents the trade receivables, trade payables, bank borrowings and bank balances 

where the denomination of certain trade receivables, trade payables, bank borrowings and bank balances are in USD, the major 

foreign currency risk. A positive number indicates an increase in profit for the year where HKD strengthens against USD.

Impact of USD

2007 

HK$ 

2006

HK$

Increase (decrease) in profit for the year 

(7,751) 

(1,153)

Credit risk

As at 31 December 2007, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group due to 

failure to discharge an obligation by the counterparties is arising from:

– 

the  carrying amount  of the  respective recognised financial assets  and loan commitments as  stated  in the consolidated 

balance sheet; and

– 

the amount of loan commitment is related to credit facility issued by the Group as disclosed in note 21.

The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international 

credit-rating agencies.

The Group’s concentration of credit risk by geographical locations is mainly in PRC and Hong Kong, which accounted for 100% 

(2006: 100%) of the total trade receivable as at 31 December 2007.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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33.  FINANCIAL INSTRUMENTS-CONTINUED

Credit risk-continued

With respect to credit risk arising from trade receivables from a joint venture partner, other receivables and margin deposit, the 

Group’s exposure to credit risk from default of counterparties are limited as the counterparties have good credit standing and the 

Group does not expect any significant loss for uncollected advances from the entity.

The Group has concentration of credit risk of the Group’s loan receivables from a few entities. In order to minimise the credit risk, 

the management continuously monitor the level of exposure to ensure that follow-up action and/or corrective actions are taken 

promptly to lower exposure or even to recover over due balances.

The Group has concentration of credit risk. Five largest customers represented approximately 88% (2006: 99%) of the revenue 

of the Group for the year ended 31 December 2007. The Group has concentration of credit risk as 97% (2006: 89%) of the total 

trade receivables was due from the Group’s five largest customers as at 31 December 2007. Trade receivables attributable to the 

Group’s largest debtor represented approximately 28% (2006: 81%) of the total receivables as at 31 December 2007. In order to 

minimise the credit risk, the management of the Group has delegated a team responsible for determination of credit limits, credit 

approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the 

Group reviews regularly the recoverable amount of each individual trade receivable to ensure that adequate impairment losses are 

made for irrecoverable amounts. In this regard, the management considers that the Group’s credit risk is significantly reduced.

Other price risk

The Group’s derivative financial instrument, investments in listed equity securities and index-linked note are measured at fair value 

at each balance sheet date. Therefore, the Group is exposed to various price risk. The management manages this exposure by 

maintaining a portfolio of investments with different risk profiles. Details of the derivative financial instrument, investments in listed 

equity securities and index-linked note are set out in notes 24, 23 and 19. The management has closely monitor the price risk and 

will consider hedging the risk exposure should the need arise.

Sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to equity price risks at the reporting date.

If  the  prices  of  the  respective  equity  instruments  had  been  10%  higher/lower,  profit  for  the  year  ended  31  December  2007 

increase/decrease by HK$1,063,098 (2006: HK$nil) as a result of the changes in fair value of financial assets at fair value through 

profit or loss, derivative financial instruments and held-for-trading investments.

 
 
 
 
 
 
 
 
 
 
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33.  FINANCIAL INSTRUMENTS-CONTINUED

Liquidity risk

In the management of the liquidity risk, the Group monitors and maintains a level of cash and cash equivalents deemed adequate 

by the management to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. The management 

monitors the utilisation of bank borrowings and ensures compliance with loan covenants.

The  following  table  details  the  Group’s  remaining  contractual  maturity  for  its  financial  liabilities.  For  non-derivative  financial 

liabilities, the table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on 

which the Group can be required to pay. The table includes both interest and principal cash flows.

Liquidity and interest risk tables

Weighted

average 

Total 

Carrying

effective 

Less than 

1-6 

7 months  undiscounted 

amount at

interest rate 

% 

1 month 

HK$’000 

months 

HK$’000 

to 1 year 

cash flow 

31.12.2007

HK$’000 

HK$’000 

HK$’000

2007

Non-derivative financial liabilities

Trade payables 

Bills payables 

Other payable 

Bank loans

  – fixed rate 

  – variable rate 

n/a 

n/a 

n/a 

6.06 

5.42* 

77,596 

53,829 

7,898 

– 

– 

1,794 

45,972 

– 

92,886 

37,326 

139,323 

177,978 

Derivative settlement net

Commodity forward contracts 

n/a 

– 

1,126 

– 

– 

– 

– 

– 

– 

– 

79,390 

99,801 

7,898 

92,886 

37,326 

79,390

99,801

7,898

90,154

36,341

317,301 

313,584

1,126 

1,126

Weighted

average 

effective 

interest rate 

% 

Less than 

1 month 

HK$’000 

1-6 

7 months 

undiscounted 

amount at

months 

HK$’000 

to 1 year 

HK$’000 

cash flow 

31.12.2006

HK$’000 

HK$’000

Total 

Carrying

2006

Non-derivative financial liabilities

Trade payables 

Other payables 

Bank loans

  – fixed rate 

  – variable rate 

n/a 

n/a 

n/a 

n/a 

– 

3,534 

– 

– 

3,534 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

3,534 

– 

– 

–

3,534

–

–

3,534 

3,534

* 

The interest rate of variable-rate borrowings are based on the China’s Inter-Bank lending rate as at the balance sheet date.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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33.  FINANCIAL INSTRUMENTS-CONTINUED

Interest rate risk

The  cash  flow  interest  rate  risk  relates  primarily  to  the  Group’s  floating  rate  bank  borrowings  and  in  relation  to  short-term 

deposits placed in banks that are interest-bearing at market interest rate. The fair value interest rate risk relates primarily to fixed-

rate pledged bank deposits and fixed-rate loan receivables. The Group currently does not have an interest rate hedging policy. 

However, the management monitors interest rate exposure and will consider hedging significant interest rate exposure should the 

need arise. The fair value and cash flow interest rate risk on bank deposits is insignificant as the fixed deposits are short-term and 

impact on variable-rate deposit and loan receivable is not expected to be significant.

The Group’s sensitivity to interest rate risk has been determined based on the exposure to interest rates for both derivatives and 

non-derivative instruments at the balance sheet date and the reasonably possible change taking place at the beginning of each 

year and held constant throughout the year. If interest rates on bank borrowings had been 100 basis points higher/lower and all 

other variables were held constant, the potential effect on profit for the year is as follows:

Increase (decrease) in profit for the year 

2007 

HK$ 

6,325 

2006

HK$

N/A

The management considers the fair value interest rate risk is insignificant due to the Group had no borrowings due more than one 

year.

34.  PLEDGE OF ASSETS

At 31 December 2007, property, plant and equipment, prepaid lease payment, index-linked note and pledged bank deposits 

of  approximately  HK$8,763,000  (2006:  HK$  nil),  HK$19,098,000  (2006:  HK$  nil),  HK$2,340,000  (2006:  HK$  nil)  and 

HK$26,918,000 (2006: HK$5,000,000) respectively were pledged to secure certain of the Group’s bank borrowings and banking 

facilities.

 
 
 
 
 
 
 
 
 
 
 
 
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35.  OPERATING LEASE COMMITMENTS

At the balance sheet date, the Group had the following capital commitments:

The Group leases certain of its office properties under operating lease arrangements. Leases for properties are negotiated for 

terms of three years.

At 31 December 2007, the Group had total future minimum lease payments under non-cancellable operating leases falling due as 

follows:

Within one year 

In the second to fifth years, inclusive 

36.  CAPITAL COMMITMENTS

At the balance sheet date, the Group had the following capital commitments:

Capital expenditure in respect of the acquisition of

  property, plant and equipment contracted for but

  not provided in the consolidated financial statements 

2007 

HK$’000 

2006

HK$’000

4,253 

2,698 

6,951 

1,746

3,201

4,947

2007 

HK$’000 

2006

HK$’000

13,467 

–

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During  the  year  ended  31  December  2006,  a  subsidiary  of  the  Company,  EPI  Metals  Limited,  entered  into  a  joint  venture 

agreement  with  independent  third  parties  to  establish  an  equity  joint  venture  company  in  the  PRC  with  registered  capital  of 

RMB90 million. Pursuant to the joint venture agreement, the Group agreed to contribute RMB45.9 million.

37.  RETIREMENT BENEFITS SCHEMES

The  Group  contributes  to  a  MPF  Scheme  for  all  qualifying  employees  employed  under  the  jurisdiction  of  the  Hong  Kong 

Employment  Ordinance.  Contributions  to  the  scheme  by  the  Group  and  the  employees  are  calculated  as  a  percentage  of 

employee’s  relevant  income.  The  retirement  benefit  scheme  costs  charged  to  consolidated  income  statement  represent 

contributions payable by the Group to the fund. The assets of the scheme are held separately from those of the Group in an 

independently administered fund.

The Group (including its subsidiaries and jointly controlled entities) also participates in the employees’ pension schemes of the 

respective municipal government in various places in the PRC where the Group operates. The Group makes monthly contributions 

calculated  as  a  percentage  of  the  monthly  payroll  costs  and  the  respective  municipal  government  undertakes  to  assume  the 

retirement benefit obligations of all existing and future retirees of the Group. The Group has no other obligations for the payment 

of pension and other post-retirement benefits of employees other than the above contributions payments.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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38.  PARTICULARS OF PRINCIPAL SUBSIDIARIES

Details of the Company’s principal subsidiaries, all of which, excluding those explained below, are limited liability companies, at 31 

December 2007 are as follows:

Place of 

Nominal value 

of issued 

and fully paid 

Name of subsidiaries 

operations 

registered capital 

incorporation/ 

ordinary share/ 

Attributable

proportion of

nominal value of

issued/registered

capital held

by the Company 

Directly 

Indirectly

Principal activities

Innovision Enterprises Limited 

Hong Kong 

EPI Metals Limited 

Hong Kong 

HK$1 

HK$1 

– 

– 

100% 

Trading of consumer

(2006: 100%) 

  electronics (indent)

100% 

Metal sourcing and

(2006: 100%) 

trading

The above table lists the subsidiaries of the Group which, in the opinion of the directors, principally affected the results of net 

assets of the Group. To give details of other subsidiaries would, in the opinion of the directors, result in particulars of excessive 

length.

None of the subsidiaries had any debt securities outstanding at the end of the year, or at any time during the year.

39.  SUBSEQUENT EVENTS

The following events occurred subsequent to the balance sheet date:

1. 

In  January  2008,  the  Company  repurchased  a  total  number  of  7,680,000  shares  on  the  Stock  Exchange  with  the 

aggregated consideration of HK$2,429,000.

2. 

Acquisition

Pursuant to the Company’s circular dated 20 July 2007, the Group has entered into subscription agreement with Vision 

Tech,  which  principal  business  involve  the  trading  and  distribution  of  audio-visual  products  and  home  appliances.  In 

accordance with the subscription agreement, the Group has conditionally agreed to subscribe for and Vision Tech has 

conditionally agreed to issue and allot 750,000,000 new ordinary shares of Vision Tech at a price of HK$0.10 per share.

Subsequent  to  31  December  2007,  the  transaction  was  completed  on  3  March  2008  and  the  subscription  cost  of 

HK$75,000,000 was satisfied in cash. Vision Tech became a subsidiary of the Group.

Details of the subscription are set out in the Company’s circular dated 20 July 2007.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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39.  SUBSEQUENT EVENTS-CONTINUED

The net assets acquired in the transaction, and the goodwill arising, are as follows:

Net assets acquired:

Property, plant and equipment 

Inventories 

Trade and receivables 

Other receivables 

Bank balances and cash 

Trade payables 

Other payables 

Taxation payable 

Minority interest 

Goodwill 

Total consideration, satisfied by cash 

Net cash inflow arising on acquisition:

Cash consideration paid 

Cash and cash equivalents acquired 

N
o
t
e
s

t
o

t
h
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C
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Carrying

amount at

3.3.2008

HK$’000

1,172

257

7,614

736

128,358

(10,560)

(17,713)

(1,481)

108,383

(45,608)

62,775

12,225

75,000

(75,000)

128,358

53,358

At the date of this report, the Group is still awaiting the valuation of the net assets acquired and the above amounts are on a 

provisional basis.

The goodwill arising on the acquisition is attributable to the anticipated future operating synergies upon the future combination 

with the existing operation of the Group.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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40.  RELATED PARTY DISCLOSURE

(a) 

During the year,  the  Group had entered into the following significant transactions with the following related parties and 

connected parties:

Name of related parties 

Nature of transaction 

Jiangxi Copper Company Limited 

Sales of copper anode

(“JCCL”) 

(note 1) 

JCC (Guixi) Logistics Company Limited 

Logistic service fee

(“JCC Logistics”) 

(note 2) 

2007 

HK$’000 

2006

HK$’000

749,133 

556 

–

–

Notes:

(1) 

(2) 

JCCL is the other joint venture partner of a jointly controlled entity in which the Group has a 51% interest.

JCC Logistics is a 64% owned indirect subsidiary of JCCL.

(b)  Balances with related parties

Trade receivable from a joint venture partner 

Loan receivable from a joint venture partner 

2007 

HK$’000 

17,057 

17,433 

2006

HK$’000

–

20,933

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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RESULTS

Revenue 

Cost of sales 

Gross profi t (loss) 

Net gain on debt restructuring 

Other income 

Distribution and selling expenses 

Administrative expenses 

Other expenses 

Gain on deconsolidation of subsidiaries 

Finance costs 

Profi t (loss) before taxation 

Taxation 

Year ended 31 December

2007 

2006 

2005 

2004 

2003

HK$’000 

HK$’000 

HK$’000 

HK$’000 

HK$’000

2,053,000 

(1,927,189) 

125,811 

– 

65,126 

(47,999) 

(50,255) 

(11,079) 

– 

(3,537) 

78,067 

(14,556) 

264,803 

(257,909) 

6,894 

263,168 

8,064 

(884) 

(9,708) 

(2,126) 

– 

(116) 

265,292 

(350) 

513,610 

(498,221) 

119,677 

(117,147) 

59,070

(77,374)

15,389 

– 

2,139 

(236) 

(6,981) 

– 

– 

(300) 

10,011 

(1,810) 

2,530 

(18,304)

– 

– 

(202) 

(7,008) 

– 

205,229 

(42) 

–

475

(501)

(16,408)

–

–

(959)

200,507 

(35,697)

(57) 

–

F
i
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e
Y
e
a
r

F
i
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a
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i
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l

S
u
m
m
a
r
y

Profi t (loss) for the year 

63,511 

264,942 

8,201 

200,450 

(35,697)

ASSETS AND LIABILITIES

Total assets 

Total liabilities 

Equity attributable to equity

  holders of the Company 

At 31 December

2007 

2006 

2005 

2004 

2003

HK$’000 

HK$’000 

HK$’000 

HK$’000 

HK$’000

1,119,587 

(337,735) 

283,518 

(17,870) 

13,982 

2,532 

48,037

(308,359) 

(305,110) 

(545,595)

781,852 

265,648 

(294,377) 

(302,578) 

(497,558)

781,852 

265,648 

(294,377) 

(302,578) 

(497,558)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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MINING AND TECHNICAL DEFINITIONS

Concentrate

The product of a physical concentration process, such as flotation or gravity 

concentration, which involves separating ore minerals from unwanted waste rock. 

Concentrates require subsequent processing (such as smelting or leaching) to 

break down or dissolve the ore minerals and obtain the desired elements, usually 

metals.

Copper

A chemical element with the symbol Cu (Latin: cuprum) and atomic number 29. It 

is a ductile metal with excellent electrical conductivity and is rather soft in its pure 

state and has a pinkish luster (beside gold) unusual for a metal that is normally 

silvery white. It finds extensive use as an electrical conductor, heat conductor and 

building material, and has a component of various alloys.

Copper anode

At the final stage of the smelting of copper concentrates, the copper is cast into 

specially shaped slabs called anodes for subsequent refining to produce refined 

cathode copper. Copper anode has a nominal 99.1% to 99.5% of copper content.

Copper cathode

Refined copper produced by electrolytic refining of impure copper or by electro-

winning. Copper cathode has a nominal 99.9% of copper content. Copper 

cathode is a medium of measurement in the international commodity exchanges 

such as LME and COMEX.

Gold

A chemical element with the symbol Au (from Latin aurum, meaning “shining 

dawn”) and atomic number 79. It is a precious metal, which occurs as nuggets, 

grains in rocks, underground “ veins” or in alluvial deposits. Gold is dense, soft and 

shiny and the most malleable and ductile of the known metals.

Grade or ore grade

The relative amount of valuable elements or minerals contained in a parcel of ore 

materials. For copper and iron, the grade is commonly expressed in percentage %. 

For gold and silver, the grade is commonly expressed in grams per tonne terms.

Iron

A chemical element with the symbol Fe (Latin: ferrum) and the atomic number 26. 

Iron is lustrous, silvery soft metal. It is one of the few ferromagnetic elements.

Indicated resource(s)

The part of a mineral resource for which tonnage, densities, shape, physical 

characteristics, grade and mineral content can be estimated with a reasonable 

level of confidence. It is based on exploration, sampling and testing information 

gathered through appropriate techniques from locations such as outcrops, 

trenches, pits, workings and drill holes. The locations are too widely or 

inappropriately spaced to confirm geological and/or grade continuity but are 

spaced closely enough for continuity to be assumed.

Inferred resource(s)

The part of a mineral resource for which tonnage, grade and mineral content can 

be estimated with a low level of confidence. It is inferred from geological evidence 

and assumed but not verified geological and/or grade continuity. It is based on 

information gathered through appropriate techniques from locations such as 

outcrops, trenches, pits, workings and drill holes, which may be limited or of 

uncertain quality and reliability.

 
 
 
 
 
 
 
 
 
 
 
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JORC Code

The common reference for the Australasian Code for Reporting of Identified 

Mineral Resources and Ore Reserves, as published by The Joint Ore Reserves 

Committee (JORC) of the Australasian Institute of Mining and Metallurgy, Australian 

Institute of Geoscientists and Minerals Council of Australia (latest edition 2004).

LME

London Metal Exchange

Measured resource(s)

The part of a mineral resource for which tonnage, densities, shape, physical 

characteristics, grade and mineral content can be estimated with a high level of 

confidence. It is based on detailed and reliable exploration, sampling, and testing 

information gathered through appropriate techniques from locations such as 

outcrops, trenches, pits, workings and drill holes. The locations are spaced closely 

enough to confirm geological and grade continuity.

Mineral resource(s)

A concentration or occurrence of material of intrinsic economic interest in or on the 

earth’s crust in such form, quality and quantity that there are reasonable prospects 

for eventual economic extraction, as defined in the JORC Code. The location, 

quantity, grade, geological characteristics and continuity of a mineral resource are 

known, estimated or interpreted from specific geological evidence and knowledge.

Molybdenum

A group 6 chemical element with the symbol Mo and atomic number 42 (from 

Greek, meaning “lead-like”); a silvery-white, hard, transition metal. It has the sixth 

highest melting point of any element, melting at around 2,625 degree Celsius. 

Molybdenum is a valuable alloying agent and is used mainly as a compound 

material to strengthen the resistance to corrosion, high temperature and pressure 

of steel and to increase its hardness. Molybdenum is found in trace amounts in 

plants and animals.

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Non-ferrous metals

The term non-ferrous metals is used to indicate metals other than iron and alloys 

that do not contain an appreciable amount of iron. Ferrous, in the chemical science 

realm, indicates bivalent iron compound (as opposed to ferric, which indicates a 

trivalent iron compound). Outside of chemical science, ferrous is an adjective used 

to indicate the presence of iron. The word is derived from the Latin word ferrum 

(iron). Ferrous metals include steel and pig iron (which contains a small percentage 

of carbon) and alloys of iron with other metals (such as stainless steel).

Open pit or open pit mining

Mining of a deposit from a pit open to the surface and usually carried out by 

stripping of overburdened materials.

Ore

A naturally occurring solid material from which a metal or valuable mineral can be 

extracted profitably.

Ore reserve(s)

The economically mineable part of a measured and/or indicated mineral resource. 

It includes diluting materials and allowances for losses that may occur when the 

material is mined. Appropriate assessments and studies have been carried out, 

and include consideration of and modification by realistically assumed mining, 

metallurgical, economic, marketing, legal, environmental, social and government 

factors, as defined in the JORC Code. These assessments demonstrate at the 

time of reporting that extraction could reasonably be justified. Ore reserves are 

sub-divided in order of increasing confidence into probable ore reserves and 

proved ore reserves.

 
 
 
 
 
 
 
 
 
 
 
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Probable ore reserve(s)

The economically mineable part of an indicated resource, and in some 

circumstances a measured resource. It includes diluting materials and allowances 

for losses which may occur when the material is mined. Appropriate assessments 

and studies have been carried out, and include consideration of and modification 

by realistically assumed mining, metallurgical, economic, marketing, legal, 

environmental, social and government factors. These assessments demonstrate at 

the time of reporting that extraction could reasonably be justified.

Proved ore reserve(s)

The economically mineable part of a measured resource. It includes diluting 

materials and allowances for losses that may occur when the material is mined. 

Appropriate assessments and studies have been carried out, and include 

consideration of and modification by realistically assumed mining, metallurgical, 

economic, marketing, legal, environmental, social and governmental factors. 

These assessments demonstrate at the time of reporting that extraction could 

reasonably be justified.

Scrap metal

A term used to describe recyclable metal materials left over from every manner 

of product consumption, such as parts of vehicles, building supplies and surplus 

materials. Scrap metal in fact has monetary value and is one of the USA’s largest 

exports.

Scrap yards

Also known as breakers yards, these companies collect large quantities of 

recycled metals and resell them to metal smelters or metal traders. Scrap yards 

dealers sell bulk metals by weight and price primarily using domestic market metal 

exchange daily rates as reference.

Silver

A chemical element with the symbol Ag (Latin: argentum) and atomic number 47. 

It is a precious metal that is soft, white and lustrous, and also a transition metal, 

with the highest electrical conductivity of any element and the highest thermal 

conductivity of any metal. It occurs as a pure free metal (native silver) and as an 

alloy with gold, as well as in various minerals, such as argentite and chlorargyrite. 

Most silver is produced as a by-product of copper, gold, lead and zinc mining.

A pyro-metallurgical process of separating metal by fusion from those impurities 

with which it is chemically combined or physically mixed.

Metric ton

Smelting

Tonne

Underground mine

Openings in the earth accessed via shafts and adits below the land surface to 

extract minerals.

 
 
 
 
 
 
 
 
 
 
 
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SCRAP METALS

COPPER/RED METALS

No. 1 Copper

No. 2 Copper

Light Copper

Yellow brass scrap

Copper Ingot

ALUMINUM

Taint/Tabor

Tense

 
 
 
 
 
 
 
 
 
 
 
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CONVERSION OF WEIGHTS AND MEASURES

1 troy ounce = 31.1 grams
1 kilogram = 32.15 troy ounces
1 kilogram = 2.2046 pounds
1 metric tonne = 1,000 kilograms
1 metric tonne = 2,204.6 pounds
1 metric tonne = 1.1023 short tons

1 short ton = 2,000 pounds
1 long ton = 2,240 pounds
1 gram per metric tonne = 0.02917 troy ounces per short ton
1 gram per metric tonne = 0.03215 troy ounces per metric tonne
1 kilometre = 0.6214 miles

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Disclaimer

All the information contained in this section is provided for general information and reference purposes only. EPI (Holdings) Limited does 

not warrant or represent that the information provided is complete and accurate. EPI (Holdings) Limited assumes no responsibility for the 

information contained in this section and disclaims any or all liability in respect of such information.

 
 
 
 
 
 
 
 
 
 
 
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EPI (HOLDINGS) LIMITED
(Incorporated in Bermuda with limited liability)

EXECUTIVE DIRECTORS

Mr. Wong Chi Wing Joseph (Chairman & CEO)

Mr. Cheng Hairong (Deputy Chairman)

Mr. Chu Kwok Chi Robert

NON-EXECUTIVE DIRECTOR

Mr. Leung Hon Chuen

INDEPENDENT NON-EXECUTIVE DIRECTORS

Mr. Poon Kwok Shin Edmond

Mr. Xu Mingshe

Mr. Wu Xiaoke

QUALIFIED ACCOUNTANT AND COMPANY 
SECRETARY

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REMUNERATION COMMITTEE

Mr. Leung Hon Chuen (Chairman of the Remuneration Committee)

Mr. Poon Kwok Shin Edmond

Mr. Xu Mingshe

NOMINATION COMMITTEE

Mr. Wong Chi Wing Joseph (Chairman of the Nomination 

Committee)

Mr. Leung Hon Chuen

Mr. Poon Kwok Shin Edmond

Mr. Xu Mingshe

Mr. Wu Xiaoke

REGISTERED OFFICE

Clarendon House

2 Church Street

Hamilton HM 11

Bermuda

Mr. Hong Kin Choy

INVESTORS CONTACT

PRINCIPAL BANKER (HONG KONG)

Miss Rose Cheung

Bank of Communication Company Limited, Hong Kong Branch

Citic Ka Wah Bank Limited

DBS Bank (Hong Kong) Limited

Hang Seng Bank Limited

Standard Chartered Bank (Hong Kong) Limited

PRINCIPAL BANKER (PRC)

Bank of China Limited

China Citic Bank Corporation Limited

Shenzhen Development Bank Company Limited

PRINCIPAL SHARE REGISTRAR

Butterfi eld Fund Services (Bermuda) Limited

65 Front Street

Hamilton HM 12

Bermuda

BRANCH SHARE REGISTRAR

Tricor Tengis Limited

26/F., Tesbury Centre

28 Queen’s Road East

Hong Kong

AUDIT COMMITTEE

PRINCIPAL PLACE OF BUSINESS 

IN  HONG KONG

Suite 6303, 63/F., Central Plaza

18 Harbour Road

Wanchai

Hong Kong

Telephone: (852) 2616 3689

Fax: (852) 2481 2902

SOLICITORS

Vincent T. K. Cheung, Yap & Co.

AUDITORS

Deloitte Touche Tohmatsu

SHARE INFORMATION

Place of listing: Main Board of The Stock Exchange of 

Hong Kong Limited

Stock Code: 0689

Board lot: 20,000 shares

Financial year end: 31 December

Share price at 31 December 2007: HK$0.42

Market capitalization at 31 December 2007: HK$1,737 million

Mr. Poon Kwok Shin Edmond (Chairman of the Audit Committee)

WEBSITE ADDRESS

Mr. Leung Hon Chuen

Mr. Xu Mingshe

www.epiholdings.com

 
 
 
 
 
 
 
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fi bre from well-managed forests certifi ed in accordance with the 
rules of the Forest Stewardship Council.