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Biodegradable Materials Manufacturing Business
Paper Manufacturing

 

Biodegradable Materials Manufacturing Business
   

The biodegradable materials manufacturing business of the Group has not commenced operations as planned and did not have any contribution to the group revenue for the period ended 31 December 2014 (2013: nil). There was severe problem of the liquidity of the two 60% owned subsidiaries of the Group, the Zhongshan Jiu He Bioplastics Company Limited (中山九禾生物塑料有限公司) (“Zhongshan Jiu He”) and Dongguan Jiu He Bioplastics Company Limited (東莞九禾生物塑料有限公司) (“Dongguan Jiu He”) (collectively the “PRC subsidiaries”) due to the shortfall of capital injection as committed by the vendors of shares of the PRC subsidiaries.

In addition, the Directors of the Company had been unable to obtain complete sets of books and records together with the supporting documents of the PRC subsidiaries due to (i) a number of key management staff of the PRC subsidiaries resigned in early 2013; and (ii) the non-controlling shareholders of the PRC subsidiaries were unwilling to cooperate before as well as after the financial year ended on 31 March 2013.
 

As such, the PRC Subsidiaries and their respective holding companies namely Fast Rise Development Limited, Ever Stable Holdings Limited and World Champion Investments Limited, which form the Group’s biodegradable materials manufacturing segment, was de-consolidated from the Group’s consolidated financial results.

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