CPM Group Limited — Management Reports 2021

Jul 7, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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SUPPLEMENTAL ANNOUNCEMENT TO THE ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

Reference is made to the annual report of CPM Group Limited (the “ Company ”) for the year ended 31 December 2020 (the “ 2020 Annual Report ”). Unless otherwise defined, terms used herein shall bear the same meanings as those defined in the 2020 Annual Report.

Pursuant to the prospectus of the Company dated 19 June 2017 (the “ Prospectus ”), the net proceeds from the Global Offering (as defined in the Prospectus) at the time of its listing on 10 July 2017 (the “ Listing ”) was approximately HK$168.2 million. On 29 July 2019, the board (the “ Board ”) of directors (the “ Directors ”) of the Company resolved to change the use of the remaining unutilised proceeds from the Global Offering (as defined in the Prospectus) (the “ Reallocation ”). For details of the Reallocation, please refer to the announcement of the Company dated 29 July 2019. In addition to the information disclosed in the paragraph headed “Use of Net Proceeds from the Share Offer” under the section “Management Discussion and Analysis” of the 2020 Annual Report, the Board would like to provide additional information regarding the expected timeline for utilising the remaining balance of net proceeds as stated in the 2020 Annual Report. The details of the expected timeline are set out as follows:

		Use of net				Amount
		proceeds			Amount	utilised	Amount
		from		Use of net	unutilised	during the	unutilised	Actual and expected
		the Global		proceeds	as at	year ended	as at	timeline for utilising
		Offering		subsequent	31	31	31	the	remaining	net
	Use of	prior to the	The	to the	December	December	December	proceeds from		the
	proceeds	Reallocation	Reallocation	Reallocation	2019	2020	2020	Listing
		HK$ million	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million
(1)	Construction	78.5	(52.2)	26.3	−	−	−	Fully	utilised as	of
	of the Xinfeng							31 December 2019
	Production
	Plant
(2)	Repayment of	19.1	−	19.1	−	−	−	Fully	utilised as	of
	the bank loans							31 December 2017
(3)	Acquisitions	42.0	−	42.0	−	−	−	Fully	utilised as	of
	of businesses							31 December 2018
	or
	production
	assets
(4)	Sales and	28.6	−	28.6	−	−	−	Fully	utilised as	of
	market							31 December 2017
	campaigns
	and activities

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(5) Construction − 32.2 32.2 19.1 (19.1) − Fully utilised as of
of production 31 December 2020
facilities for
water-based
paint
and coating
products in
the
Zhongshan
Production
Plant
(6) Product − 20.0 20.0 20.0 (0.8) 19.2 Expected to be fully
research and utilised by 30 June
development 2022
centre
168.2 − 168.2 39.1 (19.9) 19.2
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As at 31 December 2020, the amount of the unutilised amount of the net proceeds from the Global Offering (as defined in the Prospectus) amounted to HK$19.2 million which would be used for the establishment of a product research and development centre. The Directors confirm that such usage has not been changed, but the expected date of commencement of the product research and development centre would depend on the continuous development of the economy of Mainland China, which would be in turn affected by (i) whether the COVID-19 pandemic is under control with vaccination; (ii) the resumption of normal cross-border and business activities between Hong Kong and Mainland China; and (iii) the relaxation of the quarantine rules currently in force in certain parts of Mainland China. These factors affect the economic situation in Mainland China and the commercial viability of the proposed establishment of the new product research and development centre in Mainland China.

As at the date of this announcement, the Directors are not aware of any material change to the proposed usage of the net proceeds set forth above. If there is any further change in the proposed usage of the net proceeds, the Company will make a further announcement in full compliance with the Listing Rules as and when appropriate.

The information in this supplemental announcement does not affect other information contained in the 2020 Annual Report and save as disclosed above, all other information in the 2020 Annual Report remains unchanged.

On behalf of the Board CPM Group Limited Lam Ting Ball, Paul Chairman

Hong Kong, 7 July 2021

As at the date of this announcement, the Board comprises Mr. Tsui Ho Chuen, Philip, Mr. Li Guangzhong and Mr. Wong Anders as executive directors; Mr. Lam Ting Ball, Paul and Mr. Chong Chi Kwan as non-executive directors; and Ms. Chiu Kam Hing, Kathy, Mr. Chua Joo Bin and Mr. Xia Jun as independent non-executive directors.

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