Rego Interactive Co., Ltd — Interim / Quarterly Report 2020

Apr 27, 2020

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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(a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 1065)

First Quarterly Report 2020

1. Important

• 1.1 The board (the “ Board ”) of directors (the “ Directors ”) and the supervisory committee of Tianjin Capital Environmental Protection Group Company Limited (the “ Company ”) and all of its Directors, supervisors and senior management warrant that there are no false information, misleading statements or material omissions in this quarterly report, and accept joint and several responsibility for the truthfulness, accuracy and completeness of the contents contained in this quarterly report.

• 1.2 Mr. Liu Yujun, the chairman of the Company, Ms. Peng Yilin, the officer in charge of the accounting function, and Mr. Liu Tao, the officer in charge of the accounting department (the accounting management officer) have warranted the truthfulness, accuracy and completeness of the financial statements contained in this quarterly report.

• 1.3 The financial statements contained in the first quarterly report of the Company have not been audited.

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2. Major Financial Data and Changes in Shareholders of the Company

2.1 Major Financial Data

Unit: 0’000 Currency: RMB

		Unit: 0’000	Currency: RMB
	As at the end of this reporting period	As at the end of the previousyear	Comparison between the end of this reporting period and the end of the previous year increase/ decrease(%)
Total assets	1,842,046.2	1,799,080.7	2.39
Net assets attributable to the shareholders of the Company	630,383.2	617,402.5	2.10
	From the beginning of the year to the end of the reporting period	From the beginning of the previous year to the end of the corresponding reporting period of the previousyear	Compared with the same period of the previous year increase decrease(%)
Net cash flows from operatingactivities	-525.2	20,693.1	-102.54
Operatingincome	71,627.6	59,263.4	20.86
Net profits attributable to the shareholders of the Company	12,980.7	9,338.6	39.00
Net profit attributable to the shareholders of the Company after deduction of extraordinaryitems	11,640.4	9,469.6	22.92
Weighted average return ratio on net assets(%)	2.08	1.61	0.47
Basic earningsper share(RMB/share)	0.091	0.065	40.00
Diluted earningsper share(RMB/share)	0.091	0.065	40.00

2

Extraordinary items and amounts

Unit: 0’000 Currency: RMB

Unit: 0’00	0 Currency: RMB
Items	Amount for the reporting period
Government grants included in profit or loss for the current period other than those closely related to the normal operation of the Company, in compliance with national policies and regulations, as well as the government grants entitled continuously in accordance with certain standardquota orquantitybasis	1,811.9
Other non-operating income and expenditure except for those mentioned above	-223.8
Impact on minorityshareholders interests(after tax)	-9.6
Impact on income tax	-238.2
Total	1,340.3

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2.2 Total number of shareholders and tables of the shareholdings of the top ten shareholders and the top ten shareholders of circulating shares (or shareholders of non-restricted circulating shares) as at the end of the reporting period

Total number of shareholders	Total number of shareholders	76,421 of which 65 were shareholders of H Shares	76,421 of which 65 were shareholders of H Shares	76,421 of which 65 were shareholders of H Shares	76,421 of which 65 were shareholders of H Shares	76,421 of which 65 were shareholders of H Shares
Shareholdings of the top ten shareholders
Name of shareholder(Full name)	Number of shares held at the end of the reporting period (shares)	Percentage of shareholding (%)	Number of restricted shares held (shares)	Pledged or frozen		Nature of shareholder
				Status of shares	Number (shares)
Tianjin Municipal Investment Company Limited (“TMICL”)	715,565,186	50.14	0	None	0	State-owned legalperson
HKSCC Nominees Limited	337,954,810	23.68	0	Unknown	0	Other
Central Huijin Asset Management Ltd.	14,169,800	0.99	0	None	0	State-owned legalperson
HongKongSecurities ClearingCompanyLtd.	5,791,704	0.41	0	None	0	Other
Agricultural Bank of China Limited-CSI500 Index Open-ended Fund (中國農業銀行股份有限公司－ 中證500交易型開放式指數證券投資基金)	4,052,852	0.28	0	None	0	Other
Chen Danzhen	3,864,600	0.27	0	None	0	Domestic naturalperson
Zhu Shoupeng	3,755,824	0.26	0	None	0	Domestic naturalperson
Zhejiang Jinxin Construction Engineering Co., Ltd. (浙江錦鑫建設工程有限公司)	3,400,500	0.24	0	None	0	Domestic non-state-owned legalperson
Bank of China Limited-Guangfa China Securities Environmental Protection Industry Index Open-ended Fund (中國銀行股份有限公司－廣發 中證環保產業交易型開放式指數證券投資基金)	2,374,117	0.17	0	None	0	Other
Ye Ruiqing	1,800,000	0.13	0	None	0	Domestic naturalperson

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Shareholdings of the top ten shareholders of non-restricted circulating shares	Shareholdings of the top ten shareholders of non-restricted circulating shares	Shareholdings of the top ten shareholders of non-restricted circulating shares	Shareholdings of the top ten shareholders of non-restricted circulating shares
Name of shareholder	Number of non-restricted circulating shares held (shares)	Type and number of shares
		Type	Number (shares)
TMICL	715,565,186	OrdinaryRMBShares	715,565,186
HKSCC NomineesLimited	337,954,810	HShares	337,954,810
Central Huijin AssetManagementLtd.	14,169,800	OrdinaryRMBShares	14,169,800
HongKong Securities Clearing CompanyLtd.	5,791,704	OrdinaryRMBShares	5,791,704
Agricultural Bank of China Limited-CSI500 Index Open-ended Fund (中國農業銀行股份有限公司－ 中證500交易型開放式指數證券投資基金)	4,052,852	Ordinary RMB Shares	4,052,852
Chen Danzhen	3,864,600	OrdinaryRMBShares	3,864,600
Zhu Shoupeng	3,755,824	OrdinaryRMBShares	3,755,824
Zhejiang Jinxin Construction Engineering Co.,Ltd. (浙江錦鑫建設工程有限公司)	3,400,500	Ordinary RMB Shares	3,400,500
Bank of China Limited-Guangfa China Securities Environmental Protection Industry Index Open-ended Fund (中國銀行股份有限公司－廣發中證環保產業 交易型開放式指數證券投資基金)	2,374,117	Ordinary RMB Shares	2,374,117
YeRuiqing	1,800,000	OrdinaryRMBShares	1,800,000
Notes on the connected relationship or parties acting in concert among the above shareholders	It is not certain whether there is any connected relationship among the top ten shareholders. It is not certain whether there is any connected relationship between the top ten shareholders of non-restricted circulating shares and the top ten shareholders. Notes: (1) According to the register of members as provided by HKSCC Nominees Limited, those H shares held by it were held on behalf of various clients. There was no client who owned 5% or more interest in the total share capital of the Company. (2) None of the top ten shareholders are strategic investors of the Company.

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3. Major Events

3.1 Description of and reasons for substantial changes in principal financial statement items and financial indicators of the Company

As at 31 March 2020, the Company had total assets in the amount of RMB18,420.46 million, representing an increase of RMB429.66 million or 2.39% as compared to the end of last year. Total liabilities were RMB11,130.54 million, representing an increase of RMB281.92 million or 2.60% as compared to the end of last year. Equity interest attributable to the shareholders of the Company was RMB6,303.83 million, representing an increase of RMB129.81 million or 2.10% as compared to the end of last year. The realised net profit attributable to the Company for the period from January to March of 2020 was RMB129.81 million, representing an increase of RMB36.42 million or 39.00% as compared to the same period last year. The substantial increase of revenue and profit as compared to the same period last year is primarily attributable to (i) the increase in volume of sewage processed by sewage treatment projects of the Company where the Company has processed approximately 350 million m[3] of sewage in total during the reporting period, representing an increase of approximately 7.6% as compared to the same period last year; (ii) the new unit price of the sewage treatment service fee, being RMB2.32/m[3] , has been applied to the sewage water treatment plants in Jingu, Beichen and Xianyang Road in Tianjin after their upgrade while the original price (being RMB 1.76/m[3] ) was applied by the aforementioned sewage water treatment plants before their upgrade during the same period last year, and the unit price of the sewage treatment service fee of Jingu and Beichen sewage water treatment plants was adjusted to RMB 2.32/m[3] at the end of last year, and the revenue from price adjustment for the whole year was additionally confirmed.

Analysis of items with more significant changes is set out below:

Unit: 0’000 Currency: RMB

					Unit: 0’000 Currency: RMB
Items	31 March 2020	31 December 2019	Amount of increase/ decrease	Change (%)	Reasons
Notes receivable	787.80	1,613.10	-825.30	-51.16	Mainly due to the recovery of expired bank draft during the currentperiod.
Wages payable	1,922.50	6,610.00	-4,687.50	-70.92	Mainly due to the payment of year- end bonus provided for 2019 during the currentperiod.
Non-current liabilities due within one year	41,567.10	85,255.20	-43,688.10	-51.24	Mainly due to the repayment of long-term borrowings due during the currentperiod.
Long-term borrowings	402,560.30	300,675.60	101,884.70	33.89	Mainly due to the newly-added long-term borrowings during the currentperiod.

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Items	January to March 2020	January to March 2019	Amount of increase/ decrease	Change (%)	Reasons
Taxes and surcharges	920.20	672.20	248.00	36.89	Mainly due to increase in the value-added tax, urban construction tax and other additional taxes as a result of the increase in revenue and decrease in input VAT deductibles for the Company’s projects under construction.
Sales expense	381.60	101.20	280.40	277.08	Mainly due to the commencement of hazardous waste projects of the Company resulting in increase in sales expenses.
Financial expense	6,189.80	4,087.00	2,102.80	51.45	Mainly due to the increase in the financial expenses as a result of the record of interest expenses as expenses after certain construction projects wereput into operation.
Other income	3,987.10	1,727.00	2,260.10	130.87	Mainly due to (i) the increase of value-added tax paid by the Company during the current period and the corresponding increase in the refund upon payment of VAT received; (ii) the increase in revenue from deferred amortization.
Non-operating income	2.30	15.90	-13.60	-85.53	Mainly due to the decrease in revenue that is not directly related to production and operating activities.
Net cash flow from operating activities	-525.20	20,693.10	-21,218.30	-102.54	Mainly due to lower sewage treatment service fees and other operational payments collected in the current period as compared with the same period last year, and higher amount of taxes and operating payments paid in the current period as compared with the sameperiod lastyear.
Net cash flow from investment activities	-46,911.70	-69,325.20	22,413.50	32.33	Mainly due to lower investment expenditures on projects in the current year as compared with last year.

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Net cash flow from financing activities	56,053.00	41,373.20	14,679.80	35.48	Mainly due to a higher additional debt financing in the current year as compared with the same period lastyear.
Net increase in cash and cash equivalents	8,616.10	-7,258.90	15,875.00	218.70	Mainly due to the combined impact of cash flows from operating, investment and financing activities.

3.2 Progress of major event and its effects as well as the analytical explanation of solutions

□ Applicable √ Not applicable

3.3 Commitments that failed to be implemented on time during the reporting period

□ Applicable √ Not applicable

• 3.4 Warning of the prediction that the accumulated net profits from the beginning of the year to the end of the next reporting period may record a loss or substantial changes may have occurred as compared with the same period of the previous year and the reasons

□ Applicable

√ Not applicable

By order of the Board Liu Yujun Chairman

Tianjin, the PRC 27 April 2020

As at the date of this announcement, the Board comprises three executive Directors: Mr. Liu Yujun, Ms. Wang Jing and Mr. Niu Bo; two non-executive Directors: Mr. Han Wei and Mr. Si Xiaolong; and three independent non-executive Directors: Mr. Di Xiaofeng, Mr. Guo Yongqing and Mr. Wang Xiangfei.

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4. Appendices

Consolidated Balance Sheet

As at 31 March 2020

Items CURRENT ASSETS: Currency funds Notes receivable Trade receivables Prepayments Other receivables Inventories Non-current assets due within one year Other current assets Total current assets NON-CURRENT ASSETS: Long-term receivables Long-term equity investments Other investments in equity instruments Fixed assets Construction in progress Intangible assets Deferred income tax assets Other non-current assets Total non-current assets TOTAL ASSETS

Unit: ’000 Currency: RMB As at 31 March 2020 As at 31 December 2019 2,165,774 2,079,613 7,878 16,131 2,809,343 2,492,764 48,781 38,583 77,730 65,156 17,021 14,805 17,930 17,224 92,856 72,504 5,237,313 4,796,780 231,440 236,450 195,000 195,000 2,000 2,000 629,713 641,793 169,854 159,214 11,700,880 11,759,442 4,209 4,209 250,053 195,919 13,183,149 13,194,027 18,420,462 17,990,807

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Items CURRENT LIABILITIES: Short-term borrowings Trade payable Contract liabilities Wages payable Taxes payable Other payables Including: Interests payable Dividends payable Non-current liabilities due within one year Other current liabilities Total current liabilities NON-CURRENT LIABILITIES: Long-term borrowings Bonds payable Long-term payables Expected liabilities Deferred income Deferred income tax liabilities Other non-current liabilities Total non-current liabilities TOTAL LIABILITIES OWNERS’ EQUITY (OR SHAREHOLDERS’ EQUITY): Paid-up capital (or share capital) Capital reserves Surplus reserves Retained earnings Total equity attributable to owners of the Company (or shareholders’equity) Minority shareholders interest Total owners’ (or shareholders’) equity TOTAL LIABILITIES AND OWNERS’ (OR SHAREHOLDERS’) EQUITY	As at 31 March 2020 200,000 262,622 603,797 19,225 67,315 1,269,841 62,561 780 415,671 15,250 2,853,721 4,025,603 1,797,645 266,451 11,665 2,014,218 125,232 36,000 8,276,814 11,130,535 1,427,228 431,024 558,250 3,887,330 6,303,832 986,095 7,289,927 18,420,462	As at 31 December 2019 200,000 231,293 558,472 66,100 86,188 1,534,014 42,974 1,172 852,552 20,250 3,548,869 3,006,756 1,797,389 262,652 11,665 2,059,702 125,587 36,000 7,299,751 10,848,620 1,427,228 431,024 558,250 3,757,523 6,174,025 968,162 7,142,187 17,990,807

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Balance Sheet of the Company As at 31 March 2020

Items CURRENT ASSETS: Currency funds Trade receivables Prepayments Other receivables Including: Interest receivables Dividend receivables Inventories Non-current assets due within one year Other current assets Total current assets NON-CURRENT ASSETS: Long-term receivables Long-term equity investments Other investments in equity instruments Fixed assets Construction in progress Intangible assets Other non-current assets Total non-current assets TOTAL ASSETS

Unit: ’000 Currency: RMB As at 31 March 2020 As at 31 December 2019 925,270 741,257 2,078,702 1,958,081 5,322 1,916 100,253 87,945 0 0 1,820 1,820 5,511 4,811 17,930 17,224 338,728 478,566 3,471,716 3,289,800 231,441 236,450 4,141,561 4,067,052 2,000 2,000 155,907 160,912 1,371 699 4,000,207 4,021,934 199,520 115,332 8,732,007 8,604,379 12,203,723 11,894,179

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Items CURRENT LIABILITIES: Short-term borrowings Trade payable Contract liabilities Wages payable Taxes payable Other payables Including: Interests payable Dividends payable Non-current liabilities due within one year Total current liabilities NON-CURRENT LIABILITIES: Long-term borrowings Bonds payable Long-term payables Expected liabilities Deferred income Deferred income tax liabilities Other non-current liabilities Total non-current liabilities TOTAL LIABILITIES OWNERS’ EQUITY (OR SHAREHOLDERS’EQUITY): Paid-up capital (or share capital) Capital reserves Surplus reserves Retained earnings Total owners’ (or shareholders’) equity TOTAL LIABILITIES AND OWNERS’ (OR SHAREHOLDERS’) EQUITY	As at 31 March 2020 200,000 81,390 69,270 11,809 6,366 436,965 62,561 – 167,146 972,946 1,724,659 1,797,645 266,451 11,665 1,577,166 61,234 670,000 6,108,820 7,081,766 1,427,228 380,788 558,250 2,755,691 5,121,957 12,203,723	As at 31 December 2019 200,000 65,904 4,950 30,463 31,101 417,707 42,974 0 582,872 1,332,997 1,135,632 1,797,389 262,652 11,665 1,593,830 60,642 670,000 5,531,810 6,864,807 1,427,228 380,788 558,250 2,663,106 5,029,372 11,894,179

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Consolidated Income Statement

January to March 2020

Unit: ’000 Currency: RMB

			First Quarter	First Quarter
Items			of 2020	of 2019
1.	Total operating income		716,276	592,634
	Including: Operating income		716,276	592,634
2.	Total operating costs		588,164	480,058
	Including: Operating costs		478,978	395,951
		Tax and surcharges	9,202	6,722
		Sales expenses	3,816	1,012
		Administrative expenses	32,949	33,952
		Research and development expenses	1,321	1,551
		Financial expenses	61,898	40,870
		Including: Interest expenses	74,378	60,372
		Interest income	10,139	17,104
	Add: Other income		39,871	17,270
3.	Operating profit(losses are stated by “-”)		167,983	129,846
	Add: Non-operating income		23	159
	Less: Non-operating expenses		2,265	2,379
4.	Total profit (total losses are stated by “-”)		165,741	127,626
	Less: Income tax expenses		30,707	30,172
5.	Net	profit (net losses are stated by “-”)	135,034	97,454
	(I)	Classified by continuity of operations
		1. Net profit from continuing operations
		(net losses are stated by “-”)	135,034	97,454
	(II)	Classified by ownership of the equity
		1. Net profit attributable to shareholders of the
		Company (net losses are stated by “-”)	129,807	93,386
		2. Loss or profit attributable to minority shareholders
		(net losses are stated by “-”)	5,227	4,068
6.	Other comprehensive income, net of tax		–	–
7.	Total comprehensive income		135,034	97,454
	(I)	Total comprehensive income attributable to owners
		of the Company	129,807	93,386
	(II)	Total comprehensive income attributable to
		minority shareholders	5,227	4,068
8	Earnings per share:
	(I)	Basic earnings per share (RMB/share)	0.091	0.065
	(II)	Diluted earnings per share (RMB/share)	0.091	0.065

For the business combination under common control effected in the current period, the net profit recognized by the merged party before the combination was RMB0, and the net profit recognized by the merged party in the previous period was RMB0.

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Income Statement of the Company January to March 2020

Unit: ’000 Currency: RMB

		First Quarter	First Quarter
Items		of 2020	of 2019
1.	Operating income	358,348	267,780
	Less: Operating costs	210,888	170,325
	Tax and surcharges	3,029	944
	Administrative expenses	19,281	18,934
	Financial expenses	50,920	37,098
	Including: Interest expenses	56,717	42,717
	Interest income	3,392	3,044
	Add: Other income	30,218	3,834
	Investment Income (losses are stated by “-”)	6,163	11,461
2.	Operating profit(losses are stated by “-”)	110,611	55,774
	Less: Non-operating expenses	1,688	2,379
3.	Total profit (total losses are stated by “-”)	108,923	53,395
	Less: Income tax expenses	16,338	13,349
4.	Net profit (net losses are stated by “-”)	92,585	40,046
	(I) Net profit from continuing operations
	(net losses are stated by “-”)	92,585	40,046
5.	Other comprehensive income, net of tax	–	–
6.	Total comprehensive income	92,585	40,046
7.	Earnings per share:
	(I) Basic earnings per share (RMB/share)	–	–
	(II) Diluted earnings per share (RMB/share)	–	–

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Consolidated Cash Flow Statement

January to March 2020

		Unit: ’000	Currency: RMB
		First Quarter	First Quarter
Items		of 2020	of 2019
1.	Cash flows from operating activities:
	Cash received from sales of goods and rendering of services	562,094	598,185
	Taxes and levies rebate received	7,962	5,674
	Cash received relating to other operating activities	42,668	93,244
	Sub-total of cash inflow from operating activities	612,724	697,103
	Cash paid for goods and services	318,579	258,129
	Cash paid to and on behalf of employees	126,087	113,562
	Payment of taxes and levies	116,659	75,097
	Cash payments relating to other operating activities	56,651	43,384
	Sub-total of cash outflow for operating activities	617,976	490,172
	Net cash flow generated from operating activities	-5,252	206,931
2.	Cash flows from investing activities:
	Net cash received from disposal of fixed assets,
	intangible assets and other long-term assets	49	–
	Cash received from other investing activities	–	4,274
	Sub-total of cash inflow from investing activities	49	4,274
	Cash paid to acquire and construct fixed assets,
	intangible assets and other long-term assets	469,166	697,526
	Sub-total of cash outflow for investing activities	469,166	697,526
	Net cash flows generated from investing activities	-469,117	-693,252

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		First Quarter	First Quarter
Items		of 2020	of 2019
3.	Cash flows from financing activities:
	Cash received from assimilated investments	12,706	8,100
	Including: cash received from minority shareholders’
	investments assimilated by subsidiaries	12,706	8,100
	Cash received from borrowings	1,152,524	689,130
	Sub-total of cash inflow from financing activities	1,165,230	697,230
	Cash paid for repayment of debt	567,580	263,164
	Cash paid for distribution of dividends, profits
	or interest payments	37,120	20,334
	Sub-total of cash outflow from financing activities	604,700	283,498
	Net cash flow generated from financing activities	560,530	413,732
4.	Effect of foreign exchange rate changes on
	cash or cash equivalent	–	–
5.	Net increase in cash and cash equivalents	86,161	-72,589
	Add: Balance of cash and cash equivalents at the
	beginning of the period	2,066,301	1,808,543
6.	Balance of cash and cash equivalents at the end
	of the period	2,152,462	1,735,954

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Cash Flow Statement of the Company January to March 2020

Unit: ’000 Currency: RMB

		First Quarter	First Quarter
Items		of 2020	of 2019
1.	Cash flows from operating activities:
	Cash received from sales of goods and rendering of services	353,299	310,240
	Taxes and levies rebate received	2,072	2,078
	Cash received relating to other operating activities	255,746	379,225
	Sub-total of cash inflow from operating activities	611,117	691,543
	Cash paid for goods and services	149,349	116,804
	Cash paid to and on behalf of employees	56,628	46,284
	Payment of taxes and levies	77,197	17,059
	Cash payments relating to other operating activities	188,407	324,152
	Sub-total of cash outflow for operating activities	471,581	504,299
	Net cash flow generated from operating activities	139,536	187,244
2.	Cash flows from investing activities:
	Cash paid to acquire and construct fixed assets,
	intangible assets and other long-term assets	44,717	101,580
	Cash paid for investments	74,509	156,082
	Sub-total of cash outflows for investing activities	119,226	257,662
	Net cash flows generated from investing activities	-119,226	-257,662
3.	Cash flows from financing activities:
	Cash received from borrowings	682,280	335,679
	Sub-total of cash inflow from financing activities	682,280	335,679
	Cash repayments of borrowings	501,000	250,000
	Cash paid for distribution of dividends, profits
	or interest payments	17,577	14,377
	Sub-total of cash outflow for financing activities	518,577	264,377
	Net cash flows generated from financing activities	163,703	71,302
4.	Effect of foreign exchange rate changes on
	cash or cash equivalent	–	–
5.	Net increase in cash and cash equivalents	184,013	884
	Add: Balance of cash and cash equivalents at the
	beginning of the period	736,182	586,888
6.	Balance of cash and cash equivalents
	at the end of the period	920,195	587,772

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