DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2023

Discontinued Operations

DISCONTINUED OPERATIONS

3. DISCONTINUED OPERATIONS

On July 28, 2023, the Company’s board of directors had approved the Sale and Purchase Agreement (“SPA") with Feishang Group. Pursuant to the SPA, the Company agreed to sell 100% equity interest of Precise Space-Time Technology Limited ("PSTT") to Feishang Group, together with PSTT's outstanding payable owed to the Company, for consideration of approximately CNY95,761 comprising: (i) CNY-34,197, the fair value of 100% equity interest of PSTT as determined by the independent valuation report dated July 28, 2023. (ii) CNY129,958, the book value of PSTT's outstanding payable owed to the Company (referred as Disposal of PSTT). PSTT operated the wastewater treatment segment. After the disposal, the Company will not operate any wastewater treatment business and will continue operating its exploration and mining business.

The disposal of PST Technology was accounted for as an equity transaction of entities under common control. The consideration received by the Company for the disposal has been accounted for as a deemed contribution from the controlling shareholder in the consolidated statement of changes in equity. The assets and liabilities of the wastewater treatment transferred to Mr. Li Feilie were accounted for as a deemed distribution to the controlling shareholder on the closing date of the transaction.

The results of PSTT for the years/period are presented below.

	2021			2022			For the period from January 1, 2023 to July 28, 2023
		CNY			CNY			CNY
Revenue		18,735			20,306			12,748
Cost of sales		(18,494	)		(14,485	)		(5,872	)
Gross profit		241			5,821			6,876
Selling and distribution expenses		(922	)		(700	)		(442	)
Administrative expenses		(11,793	)		(11,501	)		(5,699	)
Other (losses)/income		(782	)		205			142
Impairment (losses)/reversal on financial assets		(3,330	)		1,073			(9,931	)
Finance costs		(4,193	)		(3,586	)		(1,906	)
Finance income		16,922			15,594			8,785
(LOSS)/PROFIT BEFORE INCOME TAX		(3,857	)		6,906			(2,175	)
Income tax expense		(7,230	)		(5,864	)		(1,931	)
(LOSS)/PROFIT FOR THE YEAR/PERIOD FROM THE DISCONTINUED OPERATIONS		(11,087	)		1,042			(4,106	)
Attributable to:
Owners of the company		(4,268	)		(1,285	)		(5,504	)
Non-controlling interests		(6,819	)		2,327			1,398

The major classes of assets and liabilities of PSTT as at December 31, 2022 and July 28, 2023 are as follows:

	December 31, 2022			July 28, 2023
		CNY			CNY
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment		367			282
Intangible assets		19,381			18,921
Right-of-use Assets		1,980			1,621
Trade receivables		10,520			4,714
Contract assets		89,713			88,423
TOTAL NON-CURRENT ASSETS		121,961			113,961
CURRENT ASSETS
Inventories		729			911
Trade receivables - current		46,760			56,277
Bills receivable		8,500			—
Contract assets - current		21,647			17,842
Prepayments		1,723			902
Other receivable		84,865			82,857
Other current assets		3,160			3,160
Cash and cash equivalents		25,655			37,460
TOTAL CURRENT ASSETS		193,039			199,409
TOTAL ASSETS		315,000			313,370
LIABILITIES
CURRENT LIABILITIES
Trade payables		20,225			21,522
Contract Liability		690			690
Other payables and accruals		141,136			143,067
Income tax payable		10,732			11,673
Interest-bearing loans and borrowings - current		3,000			3,500
Lease liabilities - current		645			584
Due to related companies		444			496
TOTAL CURRENT LIABILITIES		176,872			181,532
NON-CURRENT LIABILITIES
Deferred tax liabilities		5,276			5,266
Lease liabilities - non current		1,248			1,073
Interest-bearing loans and borrowings		71,000			69,000
TOTAL NON-CURRENT LIABILITIES		77,524			75,339
TOTAL LIABILITIES		254,396			256,871
NET ASSETS		60,604			56,499
Equity attributable to owners of the Company		(49,076	)		(54,579	)
Non-controlling interests		109,680			111,078

The net cash flows incurred by PSTT are as follows:

	2021			2022			For the period from January 1, 2023 to July 28, 2023
		CNY			CNY			CNY
Operating activities		(11,166	)		(2,255	)		15,162
Investing activities		8,835			(13	)		(12	)
Financing activities		(11,936	)		(11,930	)		(3,378	)
Net foreign exchange difference		(9	)		—			33
Net (decrease) /increase in cash and cash equivalents		(14,276	)		(14,198	)		11,805
Loss per share
– Basic, from the discontinued operations		(0.52	)		(0.15	)		(0.67	)
– Diluted, from the discontinued operations		(0.52	)		(0.15	)		(0.67	)

The calculations of basic and diluted earnings per share from discontinued operations are based on:

	2021			2022			For the period from January 1, 2023 to July 28, 2023
		CNY			CNY			CNY
Loss for the year attributable to owners of the Company from discontinued operations		(4,268	)		(1,285	)		(5,504	)
Weighted average number of ordinary shares in issue during the year / period used in the basic and diluted earnings per share calculation (note 8)		8,144,050			8,189,617			8,222,658