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TIL Enviro Limited — Annual Report 2018
Mar 25, 2019
50171_rns_2019-03-25_b8ac1ab6-d2fb-4924-a85c-6b2d73c40eb4.pdf
Annual Report
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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.
TIL Enviro Limited 達力環保有限公司
(Incorporated in the Cayman Islands with limited liability)
(Stock code: 1790)
ANNOUNCEMENT OF ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018
FINANCIAL HIGHLIGHTS
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Revenue for the year was approximately HK$492.5 million, representing a year-onyear increase of approximately HK$126.1 million or approximately 34% as compared to approximately HK$366.4 million in the preceding year.
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Gross profit for the year was approximately HK$176.1 million, representing a yearon-year increase of approximately HK$43.3 million or approximately 33% as compared to approximately HK$132.8 million in the preceding year.
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Profit for the year was approximately HK$70.1 million, representing a year-on-year increase of approximately HK$11.2 million or approximately 19% as compared to approximately HK$58.9 million in the preceding year.
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No final dividend has been recommended by the Board for the year ended 31 December 2018 (2017: nil).
ANNUAL RESULTS
The board (the “ Board ”) of directors (the “ Directors ” and each a “ Director ”) of TIL Enviro Limited (the “ Company ”) is pleased to announce the consolidated annual results of the Company and its subsidiaries (collectively, “ we ”, “ us ”, “ our ” or the “ Group ”) for the year ended 31 December 2018 with the comparative figures for the preceding financial year, as follows.
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CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2018
| Note Revenue 3 Cost of sales Gross profit Other income Other gains/(losses), net General and administrative expenses Operating profit Finance costs 4 Profit before income tax Income tax expense 5 Profit for the year Profit for the year attributable to: Owners of the Company Non-controlling interests Earnings per share for profit attributable to owners of the Company — Basic and diluted_(HK$ per share) _6 |
2018 HK$’000 492,505 (316,390) 176,115 4,140 5,423 (36,937) 148,741 (43,646) 105,095 (34,965) 70,130 69,996 134 70,130 0.26 |
2017 HK$’000 366,381 (233,597) 132,784 2,847 (3,083) (10,017) 122,531 (41,972) 80,559 (21,659) 58,900 58,915 (15) 58,900 0.79 |
|---|---|---|
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CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
For the year ended 31 December 2018
| Note Profit for the year Other comprehensive income: Items that may be reclassified to profit or loss: Currency translation differences Reclassification of exchange reserve upon deregistration/disposal of subsidiaries Total comprehensive income for the year Total comprehensive income attributable to: Owners of the Company Non-controlling interests |
2018 HK$’000 70,130 (41,975) (144) 28,011 27,604 407 28,011 |
2017 HK$’000 58,900 42,253 – 101,153 101,409 (256) 101,153 |
|---|---|---|
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2018
| Note ASSETS Non-current assets Property, plant and equipment Receivable under service concession arrangement 8 Intangible assets Restricted bank balance Other non-current assets Current assets Inventories Trade and other receivables 9 Receivable under service concession arrangement 8 Amounts due from fellow subsidiaries Financial assets at fair value through profit or loss Restricted bank balance Cash and cash equivalents Total assets EQUITY Capital and reserves Share capital Reserves Retained earnings Non-controlling interests Total equity |
2018 HK$’000 1,810 1,266,925 66,457 4,554 – 1,339,746 731 72,389 264,922 – – – 296,897 634,939 1,974,685 10,000 687,800 272,179 969,979 – 969,979 |
2017 HK$’000 1,700 1,153,512 59,496 4,785 46,143 1,265,636 364 36,126 251,359 17,962 66,873 6,580 130,141 509,405 1,775,041 – (7,769) 202,183 194,414 (12,928) 181,486 |
|---|---|---|
– 4 –
| Note LIABILITIES Non-current liabilities Long-term borrowings 10 Deferred tax liabilities Current liabilities Trade and other payables 11 Tax payable Amount due to LGB Group (HK) Limited Amount due to a fellow subsidiary Amounts due to related companies Current portion of long-term borrowings 10 Short-term borrowings 10 Total liabilities Total equity and liabilities Net current assets/(liabilities) Total assets less current liabilities |
2018 HK$’000 685,176 106,540 791,716 128,149 6,361 – – – 66,526 11,954 212,990 1,004,706 1,974,685 421,949 1,761,695 |
2017 HK$’000 700,356 90,371 790,727 134,062 – 595,739 4,780 146 48,960 19,141 802,828 1,593,555 1,775,041 (293,423) 972,213 |
|---|---|---|
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NOTES TO THE FINANCIAL INFORMATION
1. BASIS OF PREPARATION
The consolidated financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards (“ HKFRS ”) issued by Hong Kong Institute of Certified Public Accountants (“ HKICPA ”) and the disclosure requirements of the Hong Kong Company Ordinance. The consolidated financial statements have been prepared under the historical cost convention, as modified by the valuation of financial assets at fair value through profit or loss, which have been measured at fair value.
2. APPLICATION OF NEW STANDARD AND AMENDMENTS TO HKFRS
Amendments to standards and improvements to HKFRS adopted in 2018
In 2018, the Group has adopted the following amendments to standards which are relevant to its operations:
HKFRSs Annual Improvements 2014–2016 Cycle HKFRS 2 (amendments) Classification and Measurement of Share-based Payment Transactions HKAS 40 (amendments) Transfers of Investment Property Interpretation 22 Foreign Currency Transactions and Advance Consideration
The adoption of these new standards and amendments to standards did not have any impact on the consolidated financial statements or result in any significant changes in the Group’s significant accounting policies.
3. REVENUE
| Wastewater treatment operation services Recycle water supply operation services Wastewater treatment construction services Finance income from service concession arrangement Management fees from related companies FINANCE COSTS Interest expenses on borrowings Interest expenses on loan from LGB Group (HK) Limited Less: interest expenses capitalised as intangible asset |
2018 HK$’000 142,714 5,403 248,656 95,018 714 492,505 2018 HK$’000 43,360 286 43,646 – 43,646 |
2017 HK$’000 76,590 5,428 197,249 86,002 1,112 366,381 2017 HK$’000 41,299 809 42,108 (136) 41,972 |
|---|---|---|
4. FINANCE COSTS
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5. INCOME TAX EXPENSE
| Current income tax Deferred income tax |
2018 HK$’000 13,512 21,453 34,965 |
2017 HK$’000 – 21,659 |
|---|---|---|
| 21,659 |
6. EARNINGS PER SHARE
(a) Basic
The basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares issued during the year.
| 2018 | 2017 | |
|---|---|---|
| Profit attributable to the ordinary shareholders of the Company | ||
| (HK$’000) | 69,996 | 58,915 |
| Weighted average number of ordinary shares in issue | ||
| (thousand shares) | 273,973 | 75,000 |
| Basic earnings per share_(HK$ per share)_ | 0.26 | 0.79 |
The weighted average number of ordinary shares for the purpose of calculating basic earnings per share has been determined on the assumption that the reorganisation (the “ Reorganisation ”) arrangements undertaken by the Group in preparation for listing on The Stock Exchange of Hong Kong Limited has been effective from 1 January 2017.
(b) Diluted
Diluted earnings per share is the same as basic earnings per share as there were no potential diluted ordinary shares outstanding as at 31 December 2018.
7. DIVIDENDS
No dividend has been paid or declared by the Company since its incorporation on 17 April 2018.
8. RECEIVABLE UNDER SERVICE CONCESSION ARRANGEMENT
| — Current — Non-current TRADE AND OTHER RECEIVABLES Trade receivables Other receivables Loan receivable Prepayments |
2018 HK$’000 264,922 1,266,925 1,531,847 2018 HK$’000 49,947 6,735 6,830 8,877 72,389 |
2017 HK$’000 251,359 1,153,512 |
|---|---|---|
| 1,404,871 | ||
| 2017 HK$’000 17,168 5,305 – 13,653 |
||
| 36,126 |
9. TRADE AND OTHER RECEIVABLES
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In general, the Group grants credit periods of within 5–20 days to its customers. Aging analysis of trade receivables based on the invoice dates is as follows:
| 0–30 days 31–60 days 61–90 days Over 90 days 10. BORROWINGS Non-current Long-term borrowings Current Current portion of long-term borrowings Short-term borrowings 11. TRADE AND OTHER PAYABLES Trade payables Advances from customers Retention payables Note payables Other payables and accruals |
2018 HK$’000 26,372 23,572 1 2 49,947 2018 HK$’000 685,176 66,526 11,954 763,656 2018 HK$’000 9,216 – 21,213 – 97,720 128,149 |
2017 HK$’000 17,147 19 – 2 |
|---|---|---|
| 17,168 | ||
| 2017 HK$’000 700,356 48,960 19,141 |
||
| 768,457 | ||
| 2017 HK$’000 89,838 12 8,608 6,580 29,024 |
||
| 134,062 |
The aging analysis of trade payables based on invoice dates is as follows:
| 2018 | 2017 | |
|---|---|---|
| HK$’000 | HK$’000 | |
| 0–30 days | 3,640 | 26,364 |
| 31–60 days | 4,024 | 39,257 |
| 61–90 days | 71 | 2,226 |
| Over 90 days | 1,481 | 21,991 |
| 9,216 | 89,838 |
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MANAGEMENT DISCUSSION AND ANALYSIS
BUSINESS REVIEW
We are a wastewater treatment service provider operating and managing four wastewater treatment facilities located in Yinchuan, being the capital city of Ningxia, the People’s Republic of China (the “ PRC ”). We operate and manage our wastewater treatment plants on a “Transfer — Operate — Transfer” (TOT) basis for 30 years since September 2011. We also undertake the upgrading and expansion of our wastewater treatment facilities to achieve higher wastewater discharge standards and to increase our designed treatment capacities.
Our revenue was primarily derived from three major revenue components, namely: (i) wastewater treatment construction services; (ii) wastewater treatment operation services; and (iii) finance income from service concession arrangement. For the year ended 31 December 2018, we recorded revenue of approximately HK$492.5 million, out of which the revenue contribution of our three major revenue components were as follows, (i) approximately 50% of our revenue was derived from wastewater treatment construction services; (ii) approximately 29% of our revenue was derived from wastewater treatment operation services; and (iii) approximately 19% of our revenue was derived from finance income from service concession arrangement.
As at 31 December 2018, our aggregate daily wastewater treatment capacity had already been increased to 375,000 cubic metres per day, and the discharge standard for all plants had already been upgraded to Class IA. We have completed the construction works for the upgrading of Plant 1 from Class II to Class IA during the year and is currently in the process of obtaining the completion acceptance. The construction works for the expansion for Plant 4 by additional capacity of 100,000 cubic meters where the treated water discharge shall meet Quasi Surface Water Standard Class IV (準四類水標準) has commenced in the second half of 2018 and we expect it to be completed by the end of 2020.
For the year ended 31 December 2018, the total quantity of water effluent treated was approximately 113,396,000 cubic meter, representing a decrease of approximately 6% from the year ended 31 December 2017 at 120,387,000 cubic meter, mainly due to one-off 15 days of suspension to the wastewater treatment operations of Plant 1 attributable to the upgrading works as well as lower incoming wastewater flows from Plant 3 and Plant 4 during the year.
During the year, as an ancillary business, we had also derived approximately 1% of our total income from the supply of recycled water, which was the treated wastewater processed by our Plant 1 and Plant 3, to end-users in Yinchuan which include but not limited to a power plant and a public institution in Yinchuan in charge of public area landscaping.
On another note, given the continuous effort of Yinchuan local government on adhering to the urban development ideology of “Green, High-end, Harmonious and Livable” (綠色、高端、 和諧、宜居), our main subsidiary, Taliworks (Yinchuan) Wastewater Treatment Co. Ltd (達 力(銀川)污水處理有限公司) was accredited as an “Advanced Entity in Overall Environmental Management” (環境綜合治理工作先進集體) for the year of 2017 issued by the Municipal Government of Yinchuan in December 2018.
- For identification purpose only
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OUTLOOK
2018 was the first year that our shares (the “ Shares ”) were listed on the Main Board of The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”). The successful listing of our Shares will provide strong capital support to our Company in carrying out our future business development.
In the meantime, our Group will continue to strengthen our mission of ensuring stable operation, stable outflow of treated wastewater as per required discharge standards under the concession agreement entered into between us and Yinchuan local government (穩定達標排 放) and will continue to focus on cost optimisation and increasing efficiency in our existing wastewater treatment facilities.
FINANCIAL REVIEW
Results of Operations
Revenue
The Group’s revenue is derived from (i) wastewater treatment construction services for the upgrading and expansion of our existing wastewater treatment facilities; (ii) wastewater treatment operation services; and (iii) finance income from service concession arrangement, despite that we generally only receive payments for our services rendered during the operational phase.
Our revenue increased from approximately HK$366.4 million for the year ended 31 December 2017 to approximately HK$492.5 million for the year ended 31 December 2018, representing a year-on-year increase of approximately HK$126.1 million or approximately 34%, which was primarily attributable to the increase in revenue derived from our wastewater treatment operation and construction services, further analysis of which is set out below:
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revenue derived from the wastewater treatment operation services increased from approximately HK$76.6 million for the year ended 31 December 2017 to approximately HK$142.7 million for the year ended 31 December 2018, representing a year-on-year increase of approximately HK$66.1 million or approximately 86%. As our wastewater treatment operation services revenue is recognised on the basis of actual costs with a reasonable profit margin, the increase was mainly attributable to our increase in costs to meet Class IA discharge standard for all plants;
-
revenue derived from the wastewater treatment construction services increased from approximately HK$197.3 million for the year ended 31 December 2017 to approximately HK$248.7 million for the year ended 31 December 2018, representing a year-on-year increase of approximately HK$51.4 million or approximately 26%, such increase was primarily attributable to upgrading works carried out on Plant 1 and expansion of Plant 4 during the year;
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revenue derived from the finance income from service concession arrangement increased from approximately HK$86.0 million for the year ended 31 December 2017 to approximately HK$95.0 million for the year ended 31 December 2018, representing a year-on-year increase of approximately HK$9.0 million or approximately 10%, such increase was primarily attributable to the increase in receivable under the service concession arrangement mainly as a result of the upgrading and expansion works during the year; and
-
the remaining revenue was primarily attributable to the recycle water supply operation services and management fees from related companies, which remained largely stable at approximately HK$6.5 million and HK$6.1 million for the two years ended 31 December 2017 and 2018, respectively.
Cost of sales
Our cost of sales increased from approximately HK$233.6 million for the year ended 31 December 2017 to approximately HK$316.4 million for the year ended 31 December 2018, representing a year-on-year increase of approximately HK$82.8 million or approximately 35%, which was primarily attributable to the increase in construction costs and cost of wastewater treatment operation, further analysis of which is set out below:
-
construction costs increased from approximately HK$179.3 million for the year ended 31 December 2017 to approximately HK$226.1 million for the year ended 31 December 2018, representing an increase of approximately HK$46.8 million or approximately 26%. The construction costs recorded during the year ended 31 December 2018 was mainly attributable to upgrading and expansion works carried out on Plant 1 and Plant 4;
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costs of wastewater treatment operation increased from approximately HK$41.2 million for the year ended 31 December 2017 to approximately HK$74.5 million for the year ended 31 December 2018, representing an increase of approximately HK$33.3 million or approximately 81%. Such increase was mainly attributable to higher chemical and utility cost to meet Class IA discharge standard for all plants;
-
the remaining cost of sales, which consisted primarily of employee benefit expenses, amortisation of intangible assets, repair and maintenance costs and other costs, recorded a slight increase from approximately HK$13.1 million for the year ended 31 December 2017 to approximately HK$15.9 million for the year ended 31 December 2018, such movement was mainly attributable to a year-on-year increase of approximately HK$2.6 million in employee benefit expenses.
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Gross profit and gross profit margin
Our gross profit increased from approximately HK$132.8 million for the year ended 31 December 2017 to approximately HK$176.1 million for the year ended 31 December 2018, representing a year-on-year increase of approximately HK$43.3 million or approximately 33%, which was primarily attributable to the increase in revenue derived from our wastewater treatment operation services during the year ended 31 December 2018. Our gross profit margin remained largely stable at approximately 36% for the two years ended 31 December 2017 and 2018, respectively. Further analysis on the gross profit and gross profit margin is set out below:
-
gross profit derived from the wastewater treatment operation services and recycle water supply operation services, amounted to approximately HK$27.7 million and HK$57.7 million for the year ended 31 December 2017 and 2018, respectively;
-
gross profit margin for the upgrading and expansion services, which contributed approximately 50% of our revenue for the year ended 31 December 2018 (2017: approximately 54%), were lower than our gross profit margin derived from the provision of wastewater treatment operation services, which contributed approximately 29% of our revenue for the year ended 31 December 2018 (2017: approximately 21%); and
-
our finance income from service concession arrangement, representing the imputed interest income, amounted to approximately HK$86.0 million and HK$95.0 million for the year ended 31 December 2017 and 2018, respectively.
Other income
Other income increased by approximately HK$1.3 million, or approximately 46%, to approximately HK$4.1 million for the year ended 31 December 2018 from approximately HK$2.8 million for the year ended 31 December 2017, such increase was mainly attributable to increase in value-added tax refund attributable to intangible asset by approximately HK$0.9 million to approximately HK$2.8 million (2017: HK$1.9 million) and increase in interest income by approximately HK$0.5 million to approximately HK$1.1 million (2017: HK$0.6 million).
Other gains and losses, net
Our Group recorded net other gains of approximately HK$5.4 million for the year ended 31 December 2018 compared to net other losses of approximately HK$3.1 million for the year ended 31 December 2017. Such movement in the other gains and losses, net balance was mainly attributable to net foreign exchange gains of approximately HK$3.9 million (2017: net foreign exchange loss of approximately HK$4.0 million).
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General and administrative expenses
General and administrative expenses, excluding listing expenses of approximately HK$19.0 million recognised during the year, increased by approximately HK$7.9 million, or approximately 79%, to approximately HK$17.9 million for the year ended 31 December 2018 from approximately HK$10.0 million for the year ended 31 December 2017. Such increase was primarily due to increase in the legal and professional fee (including audit fee) and travelling and transportation expenses for the year ended 31 December 2018 amounted to approximately HK$6.7 million, representing an increase of approximately HK$4.2 million as compared to the year ended 31 December 2017 (2017: HK$2.5 million).
Finance costs
Finance costs increased by approximately HK$1.6 million, or approximately 4%, to approximately HK$43.6 million for the year ended 31 December 2018 from approximately HK$42.0 million for the year ended 31 December 2017. Such increase was mainly attributable to the increase in interest expenses on borrowings arising from higher drawdown of loan during the year.
Income tax expenses
We incurred income tax expense of approximately HK$35.0 million for the year ended 31 December 2018 and approximately HK$21.7 million for the year ended 31 December 2017 at effective tax rates of approximately 33% and 27%, respectively. The increase in effective tax rate was mainly attributable to the increase in non-tax deductible expenses such as one-off listing expenses recorded by our Group during the year.
Profit and total comprehensive income for the year
As a result of the foregoing factors, our profit for the year increased from approximately HK$58.9 million for the year ended 31 December 2017 to approximately HK$70.1 million for the year ended 31 December 2018, representing an increase of approximately HK$11.2 million, or approximately 19%.
The total comprehensive income for the year ended 31 December 2017 amounted to approximately HK$101.2 million compared to approximately HK$28.0 million for the year ended 31 December 2018. The difference between the profit for the year and the total comprehensive income for the year was due to currency translation differences from the translation of RMB being our functional currency to HK$ being our reporting currency (2018: RMB/HKD 1.1384, 2017: RMB/HKD 1.1963).
Earnings per share
For the year ended 31 December 2018, the earnings per share (the “ EPS ”) for profit attributable to owners of the Company (basic and diluted) was HK$0.26 per share as compared to HK$0.79 per share* for the year ended 31 December 2017. Such decrease was primarily due to increase in number of ordinary shares in issue pursuant to capitalisation of shareholders’ loan and Share Offer which took effect in September and November 2018, respectively.
- Although our Company was listed on 29 November 2018, the EPS calculation for 2017 was on the assumption that the Reorganisation has been effective from 1 January 2017.
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Receivable under Service Concession Arrangement
Our receivable under service concession arrangement that were classified as (i) current assets were approximately HK$251.4 million and HK$264.9 million as at 31 December 2017 and 2018, respectively; and (ii) non-current assets were approximately HK$1,153.5 million and HK$1,266.9 million as at 31 December 2017 and 2018, respectively.
Our total receivable under service concession arrangement amounted to approximately HK$1,404.9 million and HK$1,531.8 million as at 31 December 2017 and 2018, respectively. This represented a year-on-year increase of approximately 9% from 2017 to 2018, primarily due to the tariff payments received by our Group being less than the revenue recognised from (i) our wastewater treatment construction services; (ii) our wastewater treatment operation services; and (iii) finance income from service concession arrangement during the year ended 31 December 2018.
Cash and bank balances
Our Group’s cash and bank balances increased by approximately 113% to approximately HK$301.5 million in 2018 as compared to approximately HK$141.5 million in 2017, mainly due to the net proceeds raised from the initial public offering of our Shares listed on the Stock Exchange. The cash and bank balances were denominated in HK$, RMB, US$ and SG$.
Borrowings
As at 31 December 2018, our Group had bank borrowings of approximately HK$763.7 million (2017: HK$768.5 million), represented by short-term working capital loan of approximately HK$12.0 million (2017: HK$19.1 million) and long term loan of approximately HK$751.7 million (2017: HK$749.4 million), which were denominated in RMB.
Gearing ratio
As at 31 December 2018, the gearing ratio (calculated by net debts divided by total equity; net debts include total borrowings plus amounts due to related companies minus cash and bank balances) was approximately 33% (2017: approximately 87%).
Foreign currency risks
Our Group principally operates in the PRC with most of the transactions being settled in RMB, which is the functional currency of most of the group entities. Foreign currency risk arises from the recognised assets and liabilities and net investments in foreign operations. Currency exposure arising from the net assets of our Group’s foreign operations is managed primarily through financing activities denominated in the relevant foreign currencies, including the US$ (the “ Non-functional Currency ”).
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Fluctuations in exchange rates between the functional currencies of respective group entities and Non-functional Currency in which our group entities conduct business may affect our Group’s financial position and results of operations. Our Group seeks to limit its exposure to foreign currency risk by closely monitoring and minimising its net foreign currency position.
Contingent liabilities
Our Group did not have any material contingent liabilities or outstanding litigation as at 31 December 2017 and 2018.
Final dividend
No final dividend has been recommended by the Board for the year ended 31 December 2018 (2017: nil).
Contractual Obligations
Capital commitments
As at 31 December 2017 and 2018, our Group has the following capital commitments in respect of upgrading and expansion works of our wastewater treatment plants under development:
| As at 31 | December | |
|---|---|---|
| 2018 | 2017 | |
| HK$’000 | HK$’000 | |
| Contracted but not provided for | 88,725 | 200,530 |
As at 31 December 2018, our capital commitments of approximately HK$88.7 million is related to the upgrading and expansion works of Plant 4.
Lease Commitments
Our Group had the following future aggregate minimum lease payments under non-cancellable operating leases as at 31 December 2017 and 2018:
| Within one year Over one year |
As at 31 December 2018 2017 HK$’000 HK$’000 439 717 – 30 439 747 |
As at 31 December 2018 2017 HK$’000 HK$’000 439 717 – 30 439 747 |
|---|---|---|
| 747 |
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INITIAL PUBLIC OFFERING AND USE OF PROCEEDS
The Shares of our Company were listed on the Main Board of the Stock Exchange on 29 November 2018 (the “ Listing date ”) and our Company issued 250,000,000 Shares of par value of HK$0.01 per share with the offer price of HK$0.58 per share (the “ Share Offer ”). The total issuance size (before deducting the expenses) amounted to approximately HK$145 million. The net proceeds from the Share Offer received by our Company, after deduction of underwriting fees and commissions and estimated expenses payable by us in connection with the Share Offer, were approximately HK$104.7 million.
As of 31 December 2018, we have not utilised any of the net proceeds from the Share Offer. Such net proceeds will be applied in accordance with the proposed application as disclosed in the supplemental prospectus issued by our Company dated 14 November 2018.
COMPLIANCE WITH CORPORATE GOVERNANCE CODE
Our Company has applied the principles and complied with all the applicable code provisions as set out in the Corporate Governance Code (“ CG Code ”) contained in Appendix 14 to the Rules Governing the Listing of Securities on the Stock Exchange (the “ Listing Rules ”) throughout the period from the Listing Date to 31 December 2018.
AUDIT COMMITTEE
Our Company has established an audit committee (the “ Audit Committee ”) in compliance with Rule 3.12 of the Listing Rules and paragraph C.3 of the CG Code for the purpose of reviewing and providing supervision over our Group’s financial reporting process, risk management and internal controls.
The Audit Committee comprises of two independent non-executive Directors, Mr. Hew Lee Lam Sang (being the chairman of the Audit Committee who has a professional qualification in accountancy) and Mr. Tam Ka Hei Raymond, and one non-executive Director, Mr. Lim Chin Sean.
The Audit Committee has reviewed the consolidated annual results of our Group for the financial year ended 31 December 2018. The Audit Committee has also discussed matters with respect to the accounting policies and internal controls adopted with the senior management of our Company.
SCOPE OF WORK OF THE AUDITOR
The figures as set out in this announcement in respect of our Group’s results for the year ended 31 December 2018 have been agreed by our Company’s auditor, PricewaterhouseCoopers, to the amounts set out in our Group’s draft consolidated financial statements for the year. The work performed by PricewaterhouseCoopers in this respect did not constitute an assurance engagement in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the Hong Kong Institute of Certified Public Accountants, and consequently, no assurance has been expressed by PricewaterhouseCoopers on this announcement.
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MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS
Our Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the “ Model Code ”) as set out in the Appendix 10 to the Listing Rules as the code of conduct regarding securities transactions by the Directors. Our Company has made specific enquiries with all of its Directors, and all of the Directors have confirmed that they have fully complied with the required standard set out in the Model Code from the Listing Date to 31 December 2018.
PURCHASE, SALE OR REDEMPTION OF THE LISTED SECURITIES OF THE COMPANY
During the period from the Listing Date to 31 December 2018, neither our Company nor any of its subsidiaries purchased, sold or redeemed any listed securities of our Company.
PUBLICATION OF THE ANNUAL RESULTS ANNOUNCEMENT AND ANNUAL REPORT
The annual results announcement has been published on the website of the Stock Exchange (www.hkexnews.hk) and the website of the Company (www.tilenviro.com). The annual report of our Company for the year ended 31 December 2018 will be despatched to our Company’s shareholders and published on the aforesaid websites in due course.
APPRECIATION
The Board would like to take this opportunity to express its sincere gratitude to our Company’s shareholders for their support and to our Group’s staff for their hard work and contribution in 2018.
By order of the Board TIL Enviro Limited Lim Chin Sean Chairman
Hong Kong, 25 March 2019
As at the date of this announcement, the non-executive Director is Mr. Lim Chin Sean; the executive Director is Mr. Wong Kok Sun; and the independent non-executive Directors are Mr. Tan Yee Boon, Mr. Hew Lee Lam Sang and Mr. Tam Ka Hei Raymond.
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