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2 CONTENTS Corporate Information Financial Highlights Management Discussion and Analysis 19 Unaudited Condensed Consolidated Statement of Profit or Loss 20 Unaudited Condensed Consolidated Statement of Comprehensive Income 21 Unaudited Condensed Consolidated Statement of Financial Position 23 Unaudited Condensed Consolidated Statement of Changes in Equity 24 Unaudited Condensed Consolidated Statement of Cash Flows 25 Notes to the Unaudited Condensed Consolidated Interim Financial Statements 48 Other Information

3 Century Sunshine Group Holdings Limited 2 Corporate Information (852) (852) ir@centurysunshine.com.hk Board of Directors Executive Directors Chi Wen Fu (Chairman) Shum Sai Chit Chi Jing Chao Non-executive Director Guo Mengyong Independent Non-executive Directors Cheung Sound Poon Sheng Hong Lau Chi Kit Company Secretary Luk Sai Wai, Simon Committees Audit Committee Cheung Sound Poon (Committee Chairman) Sheng Hong Lau Chi Kit Nomination Committee Chi Wen Fu (Committee Chairman) Cheung Sound Poon Sheng Hong Remuneration Committee Cheung Sound Poon (Committee Chairman) Shum Sai Chit Sheng Hong Lau Chi Kit Head Office Suite 1104, 11/F, Tower 6, The Gateway, 9 Canton Road, Tsim Sha Tsui, Kowloon Hong Kong Telephone: (852) Fax: (852) ir@centurysunshine.com.hk Website:

4 2020 INTERIM REPORT 2020 Corporate Information Listing Information Listing : Main Board of The Stock Exchange of Hong Kong Limited Stock code : ,581,116, ,164, ,000 Share Information Company s shares of : 4,581,116,843 Shares HK$0.02 each (the Shares ) in issue (30 June 2020) Market capitalisation : HK$348,164,880 (30 June 2020) Board lot size : 5,000 Shares SMP Partners (Cayman) Limited Royal Bank House 3rd Floor, 24 Shedden Road P.O. Box 1586 Grand Cayman KY Cayman Islands Share Registrar and Transfer Offices Principal: SMP Partners (Cayman) Limited Royal Bank House 3rd Floor, 24 Shedden Road P.O. Box 1586 Grand Cayman KY Cayman Islands Hong Kong: Tricor Investor Services Limited Level 54, Hopewell Centre 183 Queen s Road East Hong Kong Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY Cayman Islands Registered Office Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY Cayman Islands

5 Century Sunshine Group Holdings Limited 4 Financial Highlights (I) (I) Financial Summary 6 30 Six months ended 30 June Decrease (unaudited) (unaudited) (unaudited) HK$ 000 HK$ 000 % Revenue Fertiliser business 721,446 1,357,513 (46.9) Magnesium product business 368, ,229 (49.3) Metallurgical flux business 16,951 31,304 (45.9) 1,106,575 2,115,046 (47.7) (Loss)/Profit attributable to owners of the Company (6,708) 214,784 (103.1) Basic (loss)/earnings per share (0.15 cents) 4.69 cents (103.2) Dividend As at As at 30 June 31 December Decrease (unaudited) (audited) (unaudited) HK$ 000 HK$ 000 % Total assets 7,342,342 7,627,565 (3.7) Net assets 4,165,607 4,269,911 (2.4) Total borrowings 2,052,433 2,180,883 (5.9) Shareholders equity 3,748,832 3,828,905 (2.1)

6 2020 INTERIM REPORT 2020 Financial Highlights 5 (II) (II) Financial Ratio 6 30 Six months ended 30 June notes Return on shareholders equity 1 (0.2%) 5.7% 5.4% 4.3% 4.2% Return on total assets 2 (0.2%) 3.1% 2.8% 2.0% 2.3% Interest coverage 3 1x 5x 4x 3x 4x As at June As at 31 December notes Gearing ratio % 28.6% 27.6% 27.3% 29.4% Liquidity 5 1x 1x 1x 1x 3x notes: 1. (Loss)/Profit for the period attributable to owners of the Company/Shareholders equity 2. (Loss)/Profit for the period/total assets 3. Profit before income tax and interest expense/interest expense 4. Total borrowings/total assets 5. Current assets/current liabilities

7 Century Sunshine Group Holdings Limited 6 Management Discussion and Analysis 2020 IMF GDP GDP -4.9% GDP -8% GDP 1%5.1 GDP -10.2%11.5 GDP Industry Review The first half of 2020 has been an unusual and challenging year for all industries. COVID-19 outbreaks have occurred all over the world. Countries have responded to the spread with strict social controls. China took the lead in controlling the epidemic through strict prevention and control measures. The raging epidemic has severely impacted the global economy. According to the 2020 GDP forecast released by IMF on 30 June, 2020, the global GDP growth rate is -4.9%. The GDP growth in the U.S. is -8%. China s GDP growth, though 1%, is down 5.1ppt from last year. The Eurozone is the worst, with GDP growth of -10.2%, down 11.5 percentage points from last year. Although China s GDP growth is still positive, the fertilizer industry misses out the most significant season of the year. As the saying goes, A Year s Plan Starts With Spring. The spring is the season for farmers to plow and sow. Spring plowing and sowing are significantly related to the harvest of the year. The impact of the epidemic is mainly reflected in delays in the farming season and insufficient supplies of materials for production. Due to the need of epidemic prevention and control, raw materials and products once could not be shipped, and people could not move across cities. The influence of the epidemic, and the series of prevention and control measures have significant impacts on the industrial and supply chain of the agricultural production businesses. It causes a severe impact that fertilizer businesses could not be operated normally or could only be operated on a limited basis, not to mention impediments on delivery.

8 2020 INTERIM REPORT 2020 Management Discussion and Analysis The magnesium industry also suffers from the spread of the global epidemic. The magnesium industry is heavily dependent on exports. Most of the export destinations are areas where the epidemic is rather severe. It may take a long time for the production to resume normal in those regions. The global epidemic, in fact, affects the magnesium industry severely. Besides, since June this year, heavy rains caused severe floods in many parts of China. It hit the Yangtze River basin in China the hardest. The Yangtze River basin is pivotal in China. It covers the arable land of approximately more than 200,000 square kilometers, affecting tens of millions of people. Floods have affected thousand of hectares of crops, and direct economic losses are up to tens of billions yuan. In 2020, many farmers have already missed the spring plowing and delayed summer planting. As a result, the market demand is much weakened. It will take some time for the economy and the agricultural production in the affected areas to fully recover from the severe floods.

9 Century Sunshine Group Holdings Limited 8 Management Discussion and Analysis ,106,575, ,115,046, % 17.2% % 17,658, ,089, ,446, ,357,513, % ,178, ,229, % 20.5% Business Review Under the adverse international environment of negative growth in major economies, almost all industries have suffered. For the six months ended 30 June 2020 (the Period ), the Group recorded an overall revenue of HK$1,106,575,000 (2019: HK$2,115,046,000), representing a year-on-year decrease of approximately 47.7%. The overall gross profit margin was 17.2% (2019: 25.3%), and the loss after tax was HK$17,658,000 (2019: profit after tax was HK$228,089,000). Among them, revenue from the fertilizer business for the Period amounted to HK$721,446,000 (2019: HK$1,357,513,000), representing a year-on-year decrease of approximately 46.9%. The epidemic impairs demands and retards transportation. Consequently, the Group s inventories go up and the receivables collection cycles are lengthened. The continued global spread of COVID-19 has an obvious impact on Rare Earth Magnesium Technology Group Holdings Limited ( REMT ), which is the subsidiary of the Group. In the first quarter of 2020, due to the impact of strict social and transportation control measures in China, some employees failed to return to work on time after the Chinese New Year holidays. Some regions were closed resulting in the logistics obstruction. Businesses were not operated normally or only operated on a limited basis. With the spread of the epidemic abroad and the increasing tension between China and the United States, the downstream customers of magnesium products have been affected by the weak export orders. This leads to a sharp decline in the sales of REMT and longer receivable collection cycles. Meanwhile, the importation of COVID-19 patients from overseas and from some unknown virus sources, have caused the resurgence of the epidemic in Northeast China and Xinjiang regions, where REMT s production bases locate. Due to epidemic prevention and control, REMT has implemented strict measures, which has affected the operations and the efficiency of the enterprise. During the Period, REMT s revenue was approximately HK$368,178,000 (2019: HK$726,229,000), representing a year-on-year decrease of 49.3% with the average gross margin of approximately 20.5%.

10 2020 INTERIM REPORT 2020 Management Discussion and Analysis 9 8 Prospect The No.1 Document from the Central Government of China ( Chinese Government ) for the past ten years has been all about Issues Concerning Agriculture, Rural Areas and Farmers, in which the rural ecological governance is one of the crucial points. The Chinese Government encourages farmers to minimize the use of pesticides and chemical fertilizers, and pursue high-yield agriculture, and to gradually develop high-value ecological agriculture. Green ecological fertilizers, strongly promoted by the Chinese Government, are the differentiated product of the Group. Our ecological fertilizers meet the demand of organic and high-quality agricultural products, and improve the soil quality. The Group s two other categories of products are functional fertilizers and general fertilizers. Functional fertilizers help improve soil conditions and fertilizer utilization rate; enhance crop yields and quality; combat diseases and bacteria. General fertilizers provide necessary nutrients to crops, which are well supported under government policies of Fertilizer Prescription and Scientific Fertilization. The COVID-19 epidemic continues to spread around the world. It has been more than eight months since the outbreak, and in many countries, it has not been effectively brought under control. There have also been resurgences in some parts of mainland China and Hong Kong. The Group will pay close attention to the epidemic and adjust its strategies, and respond to market changes. We believe that in the post-epidemic era, the Government will pay more attention to food security and agricultural production. People will pay more attention to food safety and quality, to meet their increasing desire for tasty food and a healthy life. The Group will, as always, adhere to the strategy of developing green industry, and to make ourselves a flagship in ecological industry. We will uphold the mission of Enhancing Crop Productivity and Soil Fertility, and prepare for the new era of ecological fertilizer industry.

11 Century Sunshine Group Holdings Limited 10 Management Discussion and Analysis Key Operational Data % Unaudited key operational data for the six months ended 30 June 2020, together with the comparative figures for the corresponding period in 2019, are as follows. Main businesses listed below contributed over 98% of the Group s total revenue for the Period. (a) (a) Sales volume of major products: Decrease Tonnes Tonnes % Fertiliser business 328, ,762 (39.0) Magnesium product business 18,674 28,395 (34.2) (b) (b) Average selling price of major products: Decrease HK$/ Tonnes HK$/ Tonnes % Fertiliser business 2,194 2,520 (12.9) Magnesium product business 19,716 25,576 (22.9) (c) (c) Gross profit margin: % % Decrease percentage point Fertiliser business (7.8) Magnesium product business (7.9) The Group s overall (8.1)

12 2020 INTERIM REPORT 2020 Management Discussion and Analysis 11 1,106,575, % 65.2% 33.3% % 34.3% 721,446, , % 39.0%15.4% ,178,000 18, % 34.2%20.5%7.9 FINANCIAL REVIEW Operating income and gross profit During the Period, the Group recorded revenue of approximately HK$1,106,575,000, being year-on-year decrease of approximately 47.7%. Contribution by our Group s dual core businesses: fertiliser business and magnesium product business accounted for similar proportion as compared to corresponding period of last year, representing 65.2% and 33.3% (2019: 64.2% and 34.3%) of revenue respectively. In response to the outbreak of COVID-19 at the beginning of the year, the PRC government adopted series of prevention and control measures. As a result, many companies ceased operations for a long time or maintained only limited operations, and the movements of both people and materials were not smooth. The Group was also deeply affected, resulting in a decline in production and sales. Revenue and sales volume of fertiliser business were approximately HK$721,446,000 and approximately 328,791 tonnes during the Period, being year-on-year decrease of approximately 46.9% and 39.0%, respectively. The average gross profit was 15.4%, being year-on-year decrease of approximately 7.8 percentage points. The decrease in gross margin was mainly attributable to the soft prices of general fertilizers. In addition, the Group has also introduced some basic ecological fertilizers to cater to different needs, which reduced the gross profit of overall fertilizer. Revenue and sales volume of magnesium product business were approximately HK$ 368,178,000 and approximately 18,674 tons during the Period, being year-on-year decrease of approximately 49.3% and 34.2%, respectively. The average gross profit was 20.5%, being year-on-year decrease of approximately7.9 percentage points.

13 Century Sunshine Group Holdings Limited 12 Management Discussion and Analysis 24,161, % 1,136,000 7,774,000 27,662, % 123,142, % 7,357,000 74,711, % Other gains or losses, net During the Period, the Group s other net gains or losses were approximately HK$24,161,000, being a decrease of approximately 34.6% from last year, mainly due to the fact that the Group s equity instruments at fair value through profit or loss recorded a fair value loss of approximately HK$1,136,000 during the Period, compared to a fair value gain of approximately HK$7,774,000 for the corresponding period of last year. Selling and marketing costs During the Period, the Group s selling and marketing costs were approximately HK$27,662,000, being a decrease of approximately 41.9% from last year, which was in line with the Group s revenue decrease. The selling and marketing costs mainly consisted of salaries, commissions and transportation costs. Administrative expenses During the Period, the Group s administrative expenses were approximately HK$123,142,000, being an increase of 16.2% from the corresponding period of last year. Administrative expenses mainly include staff compensation, depreciation and amortisation and professional expenses. The increase in administrative expenses was mainly due to the fact that the R&D expenses of magnesium product business during the Period increased by approximately HK$7,357,000 year-on-year. Finance costs During the Period, the Group s finance costs were approximately HK$74,711,000, representing a decrease of approximately 9.3% year-on-year, mainly resulted from decrease in the exchangeable bonds outstanding balances.

14 2020 INTERIM REPORT 2020 Management Discussion and Analysis 13 Income tax expense 26,107, % During the Period, the Group s income tax expense was approximately HK$ 26,107,000, representing a decrease of approximately 74.5% year-on-year. The decrease was mainly attributable to the reduction in the Group s taxable income as impacted by the epidemic. Margin 17,658, % Based on the reasons above, the Group s loss for the Period was approximately HK$17,658,000, representing a year-on-year decrease of approximately 107.7%. Possible Debt Restructuring and the Appointment of Joint Provisional Liquidators for Restructuring Purposes ,750,000 Historically, the Group has enjoyed strong growth and profitability over a number of years in its fertilizer business, metallurgical flux business, and magnesium product business. However, the raging COVID-19 outbreak and the Chinese Government s epidemic prevention and control measures have led to key businesses either not operating normally or only operating on a limited basis. These conditions had resulted in slower orders and longer receivable collection cycles and has led to a material reduction in the Group s profitability and liquidity in the first half of This, coupled with the spread of the epidemic, and the rising tensions between the United States of America and mainland China have adversely affected the Company s ability to refinance the Notes and other borrowings, leading to the default in its redemption of its subordinated notes in aggregate principal amount of SGD101,750,000 that matured on 3 July 2020.

15 Century Sunshine Group Holdings Limited 14 Management Discussion and Analysis Ernst & Young Ltd Roy Bailey EY Cayman Ltd. Tammy Karina Fu Roy Bailey Tammy Karina Fu In order to facilitate a restructuring of its debts with the benefit of a statutory moratorium prohibiting the commencement or continuance of any proceedings against the Company without the leave of court, the Company has applied on 2 July 2020 (Cayman Islands time) to the Grand Court of the Cayman Islands (the Grand Court ) for the appointment of Mr. Yen Ching Wai David and Ms. So Kit Yee Anita of Ernst & Young Transactions Limited, Mr. Roy Bailey of Ernst & Young Ltd, and Ms. Tammy Karina Fu of EY Cayman Ltd. (collectively, the JPLs ) as the light-touch joint provisional liquidators of the Company for restructuring purposes, with the power to act jointly and severally. REMT, the subsidiary of the Company, has also made a similar application to the Supreme Court of Bermuda for the same purpose. A light touch basis is that the Board will retain management of the Company and maintain the operation of the Group, while the JPLs will work alongside the Company s management to monitor, supervise, and oversee the implementation of a group-wide holistic and coordinated restructuring of its debts and liabilities including to maintain the listing of the Company on the Stock Exchange. The JPL Application was heard before the Grand Court on 14 July 2020 (Cayman Islands time). The Grand Court granted an order that the JPLs have been appointed with immediate effect. On 18 August 2020, the Grand Court issued a letter of request ( LOR ) to the High Court of Hong Kong for the recognition of the appointment and powers of the JPLs in Hong Kong to, inter alia, develop and propose a restructuring plan to allow the Company to continue as a going concern. The Grand Court also accepted the resignation of one of the JPLs, Mr. Yen Ching Wai David on the same day. The JPLs appointment order remains in force in respect of Mr. Roy Bailey, Ms. Tammy Karina Fu and Ms. So Kit Yee Anita as JPLs. An application has been filed by the JPLs to the High Court of Hong Kong on 26 August 2020 for the recognition of the appointment and powers of the JLPs pursuant to the LOR. On 28 August 2020, the High Court of Hong Kong has approved the said application.

16 2020 INTERIM REPORT 2020 Management Discussion and Analysis ,000, ,600,000, ,371, ,662, % % % Liquidity, liabilities and financial resources On 18 April 2020, the Company entered into a subscription agreement (the Subscription Agreement ) with China Century Sunshine Group Investment Company Limited, (the Subscriber, wholly-owned by Mr. Chi Wen Fu, a controlling Shareholder and an executive Director), pursuant to which, the Company conditionally agreed to issue, and the Subscriber conditionally agreed to subscribe for, the Convertible Bonds in the aggregate principal amount of HK$300,000,000, which may be converted into 1,600,000,000 Conversion Shares based on the initial Conversion Price of HK$ per Conversion Share upon full conversion. On 3 July 2020, the Subscription Agreement was terminated by both parties. For more details, please refer to the announcements made by the Company on 18 April 2020 and 3 July As at 30 June 2020, total amount of bank and cash balances of the Group was approximately HK$303,371,000 (as at 31 December 2019: approximately HK$832,662,000). As at 30 June 2020, the Group s total borrowings decreased by approximately 5.9% as compared to that as at 31 December The Group s gearing ratio (calculated by total borrowings over total assets) was approximately 28.0% as at 30 June 2020 (as at 31 December 2019: approximately 28.6%). The Group s ongoing business operations and capital expenditure will be funded by internal cash flows generated from operations, available credit facilities and equity/debt financings. Exchange Rate Risk Management The Group mainly operates in the People s Republic of China (the PRC ) and Hong Kong and is exposed to foreign exchange risk primarily with respect to HK$, Renminbi, US$, Singapore dollars and Australian dollars. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations. The Group does not presently hedge the foreign exchange risks. The Group will periodically review liquid assets and liabilities held in currencies other than HK$ to evaluate its foreign exchange risk exposure and consider the usage of hedging instruments when necessary.

17 Century Sunshine Group Holdings Limited 16 Management Discussion and Analysis ,683, ,428, ,166, ,167, ,183,000 47,450, ,622,337 4,581,116, , ,350 Pledge of Assets As at 30 June 2020, the Group had pledged its property, plant and equipment, right-of-use assets and bank deposits with carrying amount of approximately HK$912,683,000, HK$154,428,000 and HK$187,166,000 respectively (as at 31 December 2019: approximately HK$884,167,000, HK$160,183,000 and HK$47,450,000 respectively) to secure borrowings and bills payables. Contingent liabilities As at 30 June 2020, other than those disclosed in Note 18 to the financial statements, the Group did not have any significant contingent liabilities. Capital Structure As at 30 June 2020 and 31 December 2019, the issued share capital of the Company was HK$91,622,337, divided into 4,581,116,843 shares of HK$0.02 each. Human resources The number of employees of the Group was approximately 2,140 as at 30 June 2020 (as at 31 December 2019: approximately 2,350). The remuneration of employees is determined by the Group with reference to their performance, work experience and current market conditions. Employee benefits include medical insurance, defined contribution retirement plans, discretionary bonus and employee share option scheme. There has been no labour dispute or significant change in the number of employees that affect the normal operations of the Group. The Directors believe that the Group maintains admirable relations with its employees.

18 2020 INTERIM REPORT 2020 Management Discussion and Analysis * Project Overview Dolomite Mine The Group s dolomite mine is situated in Baishan City, Jilin Province, the PRC. The mine is operated by open-pit method, and therefore no additional exploration works are involved or required. Only simple infrastructure works for open-pit mining are involved in the development activities, and no underground drilling or structural works are involved. The dolomite mined is the raw material for producing magnesium products of the Group. The transportation cost for the raw material is relatively low due to the close proximity of the mine to the production base of the Group. As disclosed in the 2010 annual report of the Company, the dolomite mine of the Group was reported under the Chinese resource/reserve categories. As at 30 June 2020, the anticipated resource and reserve volumes were determined based on the yearly reduction of quantity mined to calculate the remaining resource and reserve volumes. There is no material change in the assumptions of estimation by the Group as compared with those previously disclosed. The resource and reserve volumes was reviewed by the Group s internal geological experts. For the six months ended 30 June 2020, there were no dolomite output*. As compared with the status as at 31 December 2019, there was no material change in the resource estimate and ore reserve of the dolomite mine. For the six months ended 30 June 2020, there were no expenditures incurred in mining activities, exploration activities and development activities. Serpentine Mine The Group s serpentine mine is situated in Donghai County, Jiangsu Province, the PRC. The mine is operated by open-pit method, and therefore no additional exploration works are involved or required. Only simple infrastructure works for open-pit mining are involved in the development activities, and no underground drilling or structural works are involved. The serpentine mined is sold directly as metallurgical flux for iron and steel smelting and is the raw material for producing silicon magnesium fertilisers of the Group. The transportation cost for the raw material is relatively low due to the close proximity of the mine to the production base of the Group.

19 Century Sunshine Group Holdings Limited 18 Management Discussion and Analysis JORC ,782* ,616,000 * As disclosed in the 2010 annual report of the Company, the resource/reserve of the Serpentine Mine was reported under the JORC system when it was acquired in As at 30 June 2020, the anticipated resource and reserve volumes were determined based on the volume at the time of acquisition with the yearly reduction of quantity mined to calculate the remaining resource and reserve volumes. There is no material change in the assumptions of estimation by the Group as compared with those previously disclosed. The resource and reserve volumes were reviewed by the Group s internal geological experts. For the six months ended 30 June 2020, the Group completed a serpentine output of 148,782* tonnes. As compared with the status as at 31 December 2019, there was no material change in the resource estimate and ore reserve of the serpentine mine. The expenditures incurred for the six months ended 30 June 2020 in mining activities were mainly for direct wages, materials, energy, transportation, depreciation and amortisation, etc. Such expenditures have been included in cost of sales and charged to the unaudited condensed consolidated statement of profit or loss and the unaudited condensed consolidated statement of comprehensive income. The expenditure incurred in mining production activities of serpentine for the six months ended 30 June 2020 was approximately HK$11,616,000 while the expenditure incurred in development activities and exploration activities was HK$Nil. * Output is the stock-in-quantity from Dolomite/Serpertine mines, including mine extraction for the Period.

20 2020 INTERIM REPORT 2020 Unaudited Condensed Consolidated Statement of Profit or Loss For the six months ended 30 June (unaudited) (unaudited) Notes HK$ 000 HK$ 000 Revenue 4 1,106,575 2,115,046 Cost of sales (916,796) (1,579,963) Gross profit 189, ,083 Other gains or losses, net 24,161 36,960 Selling and marketing costs (27,662) (47,630) Administrative expenses (123,142) (105,936) Exchange difference, net 20,024 (5,415) Finance costs 6 (74,711) (82,403) Profit before income tax 8, ,659 Income tax expense 7 (26,107) (102,570) (Loss)/Profit for the period 8 (17,658) 228,089 (Loss)/Profit for the period attributable to: Owners of the Company (6,708) 214,784 Non-controlling interests (10,950) 13,305 (17,658) 228,089 (Loss)/Earnings per share: basic 9(a) (0.15 cents) 4.69 cents diluted 9(b) (0.15 cents) 4.69 cents

21 Century Sunshine Group Holdings Limited 20 Unaudited Condensed Consolidated Statement of Comprehensive Income For the six months ended 30 June (unaudited) (unaudited) HK$ 000 HK$ 000 (Loss)/Profit for the period (17,658) 228,089 Other comprehensive expenses, net of income tax: Items that may be reclassified subsequently to profit or loss: Exchange differences arising from translation of foreign operations (95,651) (17,152) Other comprehensive expenses for the period (net of income tax) (95,651) (17,152) Total comprehensive (expenses)/income for the period (113,309) 210,937 Total comprehensive (expenses)/income for the period attributable to: Owners of the Company (87,445) 204,849 Non-controlling interests (25,864) 6,088 (113,309) 210,937

22 2020 INTERIM REPORT 2020 Unaudited Condensed Consolidated Statement of Financial Position As at As at 30 June 31 December (unaudited) (audited) Notes HK$ 000 HK$ 000 Non-current assets Right-of-use asset , ,442 Property, plant and equipment 11 3,795,369 3,866,144 Goodwill 197, ,368 Intangible assets 339, ,142 Mining rights 417, ,468 Long term bank deposits 55 9,604 5,026,685 5,137,168 Current assets Equity instruments at fair value through profit or loss 7,645 8,782 Inventories 555, ,760 Trade and bills receivables , ,381 Prepayment, deposits and other receivables 672, ,397 Bank and cash balances 303, ,058 2,226,278 2,399,378 Asset classified as held for sale 89,379 91,019 2,315,657 2,490,397 Less: Current liabilities Trade and bills payables , ,863 Accruals and other payables 243, ,096 Contract liabilities 196, ,707 Lease liabilities 1,067 1,962 Income tax payable 10,890 22,397 Borrowings 15 1,758,510 1,524,157 Exchangeable bonds , ,640 2,717,235 2,364,822 Net current (liabilities)/assets (401,578) 125,575 Total assets less current liabilities 4,625,107 5,262,743

23 Century Sunshine Group Holdings Limited 22 Unaudited Condensed Consolidated Statement of Financial Position As at As at 30 June 31 December (unaudited) (audited) Notes HK$ 000 HK$ 000 Less: Non current liabilities Deferred revenue 67,053 68,283 Other payables 46,118 46,962 Contract liabilities 176,448 Lease liabilities 12 5,397 5,870 Borrowings , ,086 Deferred tax liabilities 155, , , ,832 Net assets 4,165,607 4,269,911 Capital and reserves attributable to owners of the Company Share capital , ,419 Reserves 3,647,413 3,727,404 3,748,832 3,828,823 Non-controlling interests 416, ,088 Total equity 4,165,607 4,269,911

24 2020 INTERIM REPORT 2020 Unaudited Condensed Consolidated Statement of Changes in Equity For the six months ended 30 June Attributable to owners of the Company Share Share capital premium Capital redemption reserve Share Capital Statutory option Translation Other reserve reserve reserve reserve reserve Retained earnings Sub-total Noncontrolling interests Total (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ As at 1 January 2019 (audited) 101,419 1,353,356 4,526 13, ,242 9,625 (243,203) (232,769) 2,277,023 3,527, ,733 3,956,618 Profit for the period 214, ,784 13, ,089 Other comprehensive expenses for the period (net of income tax): Exchange differences arising from translation of foreign operations (9,935) (9,935) (7,217) (17,152) Total comprehensive income/ (expenses) for the period (9,935) 214, ,849 6, ,937 Transfer of reserve 676 (676) Equity settled share-based transactions 2,978 2,978 2, As at 30 June 2019 (unaudited) 101,419 1,353,356 4,526 13, ,918 12,603 (253,138) (232,769) 2,491,131 3,735, ,821 4,170, As at 1 January 2020 (audited) 101,419 1,353,356 4,526 13, ,051 32,594 (347,598) (221,707) 2,617,516 3,828, ,088 4,269,911 Profit for the period (6,708) (6,708) (10,950) (17,658) Other comprehensive expenses for the period (net of income tax): Exchange differences arising from translation of foreign operations (80,737) (80,737) (14,914) (95,651) Total comprehensive expense for the period (80,737) (6,708) (87,445) (25,864) (113,309) Transfer of reserve 271 (271) Change in ownership interest in subsidiaries (726) 2,175 1,449 1,551 3,000 Equity settled share-based transactions 6,005 6,005 6, As at 30 June 2020 (unaudited) 101,419 1,353,356 4,526 13, ,322 37,873 (428,335) (219,532) 2,610,537 3,748, ,775 4,165,607

25 Century Sunshine Group Holdings Limited 24 Unaudited Condensed Consolidated Statement of Cash Flows For the six months ended 30 June (unaudited) (unaudited) HK$ 000 HK$ 000 Net cash (used in)/generated from operating activities (245,962) 191,716 Net cash used in investing activities (228,214) (273,821) Net cash used in from financing activities (172,972) (42,216) Net decrease in cash and cash equivalents (647,148) (124,321) Cash and cash equivalents at the beginning of the period 785, ,651 Effect of foreign exchange rate changes (21,859) (7,780) Cash and cash equivalents at the end of the period 116, ,550 Analysis of balances of cash and cash equivalents Bank and cash balances as stated in the unaudited condensed consolidated statement of financial position 303, ,146 Deposits with banks pledged as security for borrowings and bills payables (187,166) (96,596) Non-pledged deposits with bank with original maturity of more than three months when acquired (55) Cash and cash equivalents as stated in the unaudited condensed consolidated statement of cash flows 116, ,550

26 2020 INTERIM REPORT 2020 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June General Information Century Sunshine Group Holdings Limited (the Company ) and its subsidiaries (collectively referred to as the Group ) are principally engaged in fertiliser business, magnesium product business and metallurgical flux business GEM The Company was incorporated in the Cayman Islands on 21 January 2003 as an exempted company with limited liability under the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands. On 17 February 2004, the Company s shares were listed on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the Stock Exchange ) and the Company s shares have been listed on the Main Board of the Stock Exchange since 1 August The unaudited condensed consolidated interim financial statements are presented in Hong Kong dollars ( HK$ ) and all values are rounded to the nearest thousand (HK$ 000) except when otherwise indicated The unaudited condensed consolidated interim financial statements for the six months ended 30 June 2020 were approved for issue by the Board on 31 August 2020.

27 Century Sunshine Group Holdings Limited 26 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June Basis of Preparation The unaudited condensed consolidated interim financial statements for the six months ended 30 June 2020 have been prepared in accordance with Hong Kong Accounting Standard ( HKAS ) 34 Interim Financial Reporting and the applicable disclosure requirements of Appendix 16 to the Main Board Listing Rules Governing the Listing of Securities on the Stock Exchange (the Listing Rules ). The unaudited condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements for the year ended 31 December 2019, which has been prepared in accordance with Hong Kong Financial Reporting Standards (the HKFRSs ). The preparation of the unaudited condensed consolidated interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. Other than the changes in accounting policies resulting from application of amendments to HKFRSs, in preparing these unaudited condensed consolidated interim financial statements, the significant judgments made by management in applying the Group s accounting policies and the key sources of estimate uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December Reference is made to the announcement of the Company dated 3 July 2020, 8 July 2020, 9 July 2020, 15 July 2020, 11 August 2020, 24 August 2020 and 31 August 2020 (the Announcements ), in relation to, among other things, the winding up petition (the Petition ) and application for the appointment of light touch joint provisional liquidators (the JPL Application ) for restructuring purposes.

28 2020 INTERIM REPORT 2020 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June ,750, Ernst & Young Ltd Roy Bailey EY Cayman Ltd. Tammy Karina Fu Roy Bailey Tammy Karina Fu The Company has defaulted on the redemption of the SGX listed subordinated notes in the principal amount of the SGD101,750,000 (the Notes ) on their maturity on 3 July In view of the payment default, so caused cross defaults constitute an event of default in respect of certain borrowings of the Group and certain debts are immediately payable on demand in accordance with their terms. On 14 July 2020, an order was granted by the Grand Court of the Cayman Islands (the Grand Court ) for the appointment of Mr. Yen Ching Wai David and Ms. So Kit Yee Anita of Ernst & Young Transactions Limited, Mr. Roy Bailey of Ernst & Young Ltd, and Ms. Tammy Karina Fu of EY Cayman Ltd. (collectively, the JPLs ) as the light-touch joint provisional liquidators of the Company for restructuring purposes, with the power to act jointly and severally. Joint provisional liquidators on a light touch basis that the board of directors of the Company will retain management of the Company while the joint provisional liquidators will work alongside the Company s management to, amongst other things, monitor, supervise, and oversee the implementation of a group-wide holistic and coordinated restructuring of its debts and liabilities including to maintain the listing of the Company on the Stock Exchange. On 18 August 2020, the Grand Court issued a letter of request ( LOR ) to the High Court of Hong Kong for the recognition of the appointment and powers of the JPLs in Hong Kong to, inter alia, develop and propose a restructuring plan to allow the Company to continue as a going concern. The Grand Court also accepted the resignation of one of the JPLs, Mr. Yen Ching Wai David on the same day. The JPLs appointment order remains in force in respect of Mr. Roy Bailey, Ms. Tammy Karina Fu and Ms. So Kit Yee Anita as JPLs. An application has been filed by the JPLs to the High Court of Hong Kong on 26 August 2020 for the recognition of the appointment and powers of the JLPs pursuant to the LOR. On 28 August 2020, the High Court of Hong Kong has approved the said application.

29 Century Sunshine Group Holdings Limited 28 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June ,658, ,867,086, Going Concern Basis During six months ended 30 June 2020, the Group recorded loss approximately HK$17,658,000. And as at 30 June 2020, the Group s borrowings approximately HK$1,867,086,000 are subject to renewal or to be fully repaid within the next twelve months. These conditions may cast doubt on the Group s ability to continue as a going concern. Therefore, the Group may be unable to realize its assets and discharge its liabilities in the normal course of business. The Company is actively exploring options to restructure its debts and intends, to implement a management led restructuring by taking advantage of the court-supervised provisional liquidation regime in the Cayman Islands, commonly known as a light touch provisional liquidation, which gives the Company the benefit of a statutory moratorium prohibiting the commencement or continuance of any proceedings against the Company without the leave of the Grand Court of the Cayman Islands. The Company is actively considering to develop a viable restructuring proposal, including but not limited to some or all of the followings: 1. equity restructuring to facilitate the raising of cash for the Company from third party investors through equity issue; 2. a debt restructuring that may involve refinancing and/or a compromise or arrangement of the debts and liabilities of the Group; 3. potential investment in the Company from one or more third party investor(s) to facilitate raising of cash for the Company and potential disposal of non-core business and non-operating fixed assets of the Group; and/or 4. implementation of further cost control measures on capital investments, production and administrative operations to reduce overall operating costs of the Group.

30 2020 INTERIM REPORT 2020 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June The directors of the Company are of the opinion that it is appropriate to prepare the unaudited condensed consolidated financial statements on going concern basis. These unaudited condensed consolidated financial statements have been prepared on a going concern basis, the validity of which depends upon that the Group will be able to successfully negotiate and agree with the creditors to renew or extend the existing borrowings or complete debt financing to meet its liabilities as they fall due. Should the Group be unable to continue as a going concern, adjustments would have to be made to the unaudited condensed consolidated financial statements, to write down the value of assets to their recoverable amounts, to provide for further liabilities which might arise and to reclassify non-current assets and non-current liabilities as current assets and current liabilities, respectively. The effect of these adjustments has not been reflected in the unaudited condensed consolidated financial statements. 3. Significant Accounting Policies Application of amendments to HKFRSs In the current interim period, the Group has applied the Amendments to References to the Conceptual Framework in HKFRS Standards and the following amendments to HKFRSs issued by the HKICPA, for the first time, which are mandatorily effective for the annual period beginning on or after 1 January 2020 for the preparation of the Group s unaudited condensed consolidated financial statements: 1 8 Amendments to HKAS 1 and HKAS 8 Definition of Material 3 Amendments to HKFRS 3 Definition of a Business Amendments to HKFRS 9, HKAS 39 and HKFRS 7 Interest Rate Benchmark Reform 16 In addition, the Group has early applied the Amendment to HKFRS 16 Covid-19-Related Rent Concessions.

31 Century Sunshine Group Holdings Limited 30 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June 2020 Except as described below, the application of the Amendments to References to the Conceptual Framework in HKFRS Standards and the amendments to HKFRSs in the current period has had no material impact on the Group s financial positions and performance for the current and prior periods and/ or on the disclosures set out in these unaudited condensed consolidated financial statements Impacts of application on Amendments to HKAS 1 and HKAS 8 Definition of Material The amendments provide a new definition of material that states information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity. The amendments also clarify that materiality depends on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements taken as a whole. The application of the amendments in the current period had no impact on the unaudited condensed consolidated financial statements. Changes in presentation and disclosures on the application of the amendments, if any, will be reflected on the consolidated financial statements for the year ending 31 December 2020.

32 2020 INTERIM REPORT 2020 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June Impacts and accounting policies on application of Amendments to HKFRS 3 Definition of a Business Accounting policies Business combinations or asset acquisitions Optional concentration test Effective from 1 January 2020, the Group can elect to apply an optional concentration test, on a transaction-by-transaction basis, that permits a simplified assessment of whether an acquired set of activities and assets is not a business. The concentration test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. The gross assets under assessment exclude cash and cash equivalents, deferred tax assets, and goodwill resulting from the effects of deferred tax liabilities. If the concentration test is met, the set of activities and assets is determined not to be a business and no further assessment is needed Transition and summary of effects The amendments had no impact on the unaudited condensed consolidated financial statements of the Group.

33 Century Sunshine Group Holdings Limited 32 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June Impacts and accounting policies on early application of Amendment to HKFRS 16 Covid-19- Related Rent Concessions Accounting policies Rent concessions relating to lease contracts that occurred as a direct consequence of the Covid-19 pandemic, the Group has elected to apply the practical expedient not to assess whether the change is a lease modification if all of the following conditions are met: the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change; any reduction in lease payments affects only payments originally due on or before 30 June 2021; and there is no substantive change to other terms and conditions of the lease. A lessee applying the practical expedient accounts for changes in lease payments resulting from rent concessions the same way it would account for the changes applying HKFRS 16 Leases if the changes were not a lease modification. Forgiveness or waiver of lease payments are accounted for as variable lease payments. The related lease liabilities are adjusted to reflect the amounts forgiven or waived with a corresponding adjustment recognised in the profit or loss in the period in which the event occurs.

34 2020 INTERIM REPORT 2020 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June Transition and summary of effects The amendments had no impact on the unaudited condensed consolidated financial statements of the Group Revenue 6 30 Six months ended 30 June (unaudited) (unaudited) HK$ 000 HK$ 000 Sales of fertiliser products 721,446 1,357,513 Sales of magnesium products 368, ,229 Sales of metallurgical flux products 16,951 31,304 1,106,575 2,115,046 Timing of revenue recognition: A point in time 1,106,575 2,115, Segment Information Information reported to the Company s Chief Executive Officer, being the chief operating decision maker, for the purposes of resource allocation and assessment of segment performance focuses on the operating divisions. The Group s operating and reportable segments under HKFRS 8 are therefore as follows: Fertiliser business Magnesium product business Metallurgical flux business Information regarding the Group s reportable segments is presented below.

35 Century Sunshine Group Holdings Limited 34 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June 2020 (a) (a) Segment Revenue and Results Six months ended 30 June 2020 Magnesium Fertiliser product Metallurgical business business flux business Total (unaudited) (unaudited) (unaudited) (unaudited) HK$ 000 HK$ 000 HK$ 000 HK$ 000 Segment revenue 721, ,178 16,951 1,106,575 Inter-segment revenue Revenue from external customers 721, ,178 16,951 1,106,575 Segment results 89,514 70,604 1, ,117 Other gains or losses, net 44,185 Central administrative costs (123,142) Finance costs (74,711) Profit before income tax 8, Six months ended 30 June 2019 Magnesium Fertiliser product Metallurgical business business flux business Total (unaudited) (unaudited) (unaudited) (unaudited) HK$ 000 HK$ 000 HK$ 000 HK$ 000 Segment revenue 1,357, ,229 32,404 2,116,146 Inter-segment revenue (1,100) (1,100) Revenue from external customers 1,357, ,229 31,304 2,115,046 Segment results 274, ,288 12, ,453 Other gains or losses, net 31,545 Central administrative costs (105,936) Finance costs (82,403) Profit before income tax 330,659

36 2020 INTERIM REPORT 2020 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June 2020 Segment revenue reported above represents revenue generated from external customers. Intersegment revenue has been eliminated in current and last periods. Inter-segment transactions are entered into at arm s length. The accounting policies of the reportable segment s are the same as the Group s accounting policies. Segment results represent the results from each segment without allocation of central administrative costs including directors emoluments, net realised and unrealised exchange differences, other net gains or losses, finance costs and income tax expense. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance. (b) (b) Segment Assets As at As at 30 June 31 December (unaudited) (audited) HK$ 000 HK$ 000 Fertiliser business 3,742,118 3,509,692 Magnesium product business 2,533,829 2,478,920 Metallurgical flux business 582, ,761 6,858,270 6,587,373 Unallocated 484,072 1,040,192 7,342,342 7,627,565

37 Century Sunshine Group Holdings Limited 36 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June Finance Costs 6 30 Six months ended 30 June (unaudited) (unaudited) HK$ 000 HK$ 000 Interest on listed subordinated notes 19,657 20,500 Interest on exchangeable bonds 5,679 18,529 5 Interest on borrowings wholly repayable within five years 49,139 43,374 Interest on lease liabilities ,711 82, Income Tax Expense The amount of income tax expense charged/(credited) to the unaudited condensed consolidated statement of profit or loss and the unaudited condensed consolidated statement of comprehensive income represents: 6 30 Six months ended 30 June (unaudited) (unaudited) HK$ 000 HK$ 000 Current tax: PRC Enterprises Income Tax 26, ,913 Deferred taxation (799) (1,343) 26, ,570

38 2020 INTERIM REPORT 2020 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June (Loss)/Profit for the Period (Loss)/Profit for the period has been arrived at after charging: 6 30 Six months ended 30 June (unaudited) (unaudited) HK$ 000 HK$ 000 Depreciation and amortisation 101, , (Loss)/Earnings Per Share (a) (a) Basic Basic (loss)/earnings per share is calculated by dividing the (loss)/profit for the period attributable to owners of the Company by the weighted average number of ordinary shares in issue during the period Six months ended 30 June (unaudited) (unaudited) (Loss)/Earnings (Loss)/Profit attributable to ordinary equity holders of the parent, used in the basic (loss)/earnings per share calculation (HK$ 000) (6,708) 214,784 Weighted average number of ordinary shares in issue (thousand shares) 4,581,117 4,581,117 Basic (loss)/earnings per share (HK cents per share) (0.15) 4.69

39 Century Sunshine Group Holdings Limited 38 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June 2020 (b) (b) Diluted Diluted (loss) earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has one category of dilutive potential ordinary shares: share options. For the share options, a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average market price of the Company s shares during the Period) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options. The computation of diluted (loss)/earnings per share does not assume the exercise of the Company s share options because the exercise price of those share options was higher than the average market price of shares for the period ended 30 June 2020 and Dividend The directors of the Company do not recommend the payment of any dividend in respect of the six months ended 30 June 2020 (2019: HK$Nil) ,568, ,123, ,554,000 1,554, Property, Plant and Equipment and Right- of-use Asset During the six months period ended 30 June 2020, the Group had acquired property, plant and equipment amounting to approximately HK$90,568,000 (2019: HK$330,123,000). During the six months period ended 30 June 2020, the Group has not entered into any new lease agreement (2019: the Group entered into a new lease agreement for the use of office premises for 10 years. The Group is required to make fixed monthly payment during the contract period. On lease commencement, the Group recognised HK$1,554,000 of right-of-use assets and HK$1,554,000 of lease liabilities).

40 2020 INTERIM REPORT 2020 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June Trade and Bills Receivables As at As at 30 June 31 December (unaudited) (audited) HK$ 000 HK$ 000 Trade receivables 682, ,119 Allowance for credit losses (15,622) (15,876) 666, ,243 Bills receivables 20,370 11, , ,381 As at the reporting date, the ageing analysis of the trade receivables of the Group presented based on the invoice date and net of allowance for doubtful debts was as follows: As at As at 30 June 31 December (unaudited) (audited) HK$ 000 HK$ Within 30 days 90, , to 60 days 124, , to 90 days 84,065 56, Over 90 days 367,504 2, , , The Group allows a credit period normally not more than 180 days (2019: not more than 180 days) to its trade customers.

41 Century Sunshine Group Holdings Limited 40 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June ,370, ,138,000 As at 30 June 2020, total bills receivables amounting to HK$20,370,000 (31 December 2019: HK$11,138,000) are held by the Group for settlement of trade receivables. The Group continues to recognised their full carrying amounts at the end of the reporting period. All bills receivables by the Group are with a maturity period of less than one year Trade and Bills Payables As at As at 30 June 31 December (unaudited) (audited) HK$ 000 HK$ 000 Trade payables 166, ,793 Bills payable 232,090 40, , ,863 As at the reporting date, the ageing analysis of the trade payables of the Group presented based on the invoice date was as follows: As at As at 30 June 31 December (unaudited) (audited) HK$ 000 HK$ Within 30 days 86, , to 60 days 11,964 4, to 90 days 8,534 2, Over 90 days 59,107 55, , ,793

42 2020 INTERIM REPORT 2020 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June Exchangeable bonds The carrying values of the liability component of the exchangeable bonds ( EBs ) are as follows: HK$ As at 1 January ,464 Imputed interest expense charged 28,325 Interest expense paid and payable (46,789) Repayment of principal (111,360) As at 31 December 2019 and 1 January , Repayment of principal (12,064) As at 30 June , ,000,000 8% % % 9% note: On 5 May 2016, the Company issued EBs with the principal amount of HK$232,000,000 for cash. The EBs bear an interest of 8% per annum payable in arrear every six calendar months from the issue date. The EBs entitle the holder to exchange for the shares of China Rare Earth Magnesium Technology Holdings Limited ( China Rare Earth ). The number of share transferable to the holders of EBs shall be determined by the formula described in EBs instrument. The holders of EBs have the right to exchange all or any part of the principal amount of the EBs at any time during the exchange period as pursuant to the terms and conditions of the EBs instrument. For details, please refer to the announcement of the Company dated on 26 April On 4 September 2017, an Agreement Notice was given to the holders of EBs due to the re-organisation in relation to China Rare Earth, the exchange right was lapsed on 6 October The maturity date of the EBs is three years commencing from the date of issue of the EBs (the Term ) and it can be extended for another 1 calendar year (the Extended Term ), the extension option was exercised by the holders of EBs upon maturity in 2019 to 5 May 2020, which was further extended to 5 May 2021 during the current period. The effective interest rate of the liability component on initial recognition is 18.04% per annum. Upon the extension in 2019, the effective interest rate changed to 10% per annum. The interest rate further changed to 9% upon further extension in current period.

43 Century Sunshine Group Holdings Limited 42 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June Borrowings As at As at 30 June 31 December (unaudited) (audited) HK$ 000 HK$ 000 Bank borrowings 863, ,772 Other borrowings 517, ,185 a Listed subordinated notes (note a) 563, ,286 1,943,857 2,060,243 Borrowings: Within one year 1,758,510 1,524,157 More than one year but not exceeding five years 185, ,086 1,943,857 2,060,243 Less: Amounts shown under current liabilities (1,758,510) (1,524,157) Amounts shown under non-current liabilities 185, ,086 Borrowings: Secured 876, ,912 Unsecured 1,067,224 1,334,331 1,943,857 2,060,243 note: (a) ,750, % (a) This represents the carrying amount of the 7.0% subordinated notes with the face value of SGD101,750,000 (under the Multicurrency Medium Term Note Programme) issued by the Company on 5 June The notes are listed on the Singapore Stock Exchange and maturing on 3 July The Company has defaulted the repayment, please refer to note 22 for further details.

44 2020 INTERIM REPORT 2020 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June Share Capital Number of Share shares capital 000 HK$ Authorised: Ordinary shares of HK$0.02 each As at 1 January 2019, 31 December 2019, 1 January 2020 and 30 June ,000, ,000 Issued and fully paid: As at 1 January 2019, 31 December 2019, 1 January 2020 and 30 June ,581, , Capital Commitments As at As at 30 June 31 December (unaudited) (audited) HK$ 000 HK$ 000 Capital expenditure in respect of the acquisition of property, plant and equipment contracted for but not provided in the unaudited condensed consolidated interim financial statements/audited consolidated financial statements 148, ,808

45 Century Sunshine Group Holdings Limited 44 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June Litigations and Contingent Liabilities (a) (a) Reference was made to the announcement of the Company dated 9 October 2014 regarding a civil claim against Capital Idea Investments Limited ( Capital Idea ). As of the date of this unaudited condensed consolidated interim financial statement, to the best knowledge of the Company, the writ of summons of the litigation has not yet been served on Capital Idea. Upon receiving this legal document, Capital Idea will seek legal advice in relation to the claim and the necessary actions to be taken in this respect and will vigorously defend against the claim. The Board of the Company is of the view that this claim will not have a material adverse impact on the business, operation and financial position of the Group. (b) ,736,000 (b) Reference is made to the disclosure in Note 21, in view of the payment default, so caused cross defaults constitute an event of default in respect of certain borrowings of the Group and certain debts are immediately payable on demand in accordance with their terms. The Company anticipate that it is unlikely to be able to refinance its offshore borrowings that will fall due in the next couple of months. As at 30 June 2020, the Group has received serval demand letters from its bank creditors for the repayment of borrowings of the Company or its subsidiaries or guaranteed by the Company of approximately HK$63,736,000 plus interest accrued. Further announcement(s) will be made by the Company to update the shareholders and investors of the Company in relation to any developments on the financial reorganization and related legal proceedings.

46 2020 INTERIM REPORT 2020 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June Material Related Party Transactions Except as disclosed elsewhere in the unaudited condensed consolidated interim financial statements, the Group entered into the following significant related party transactions during the period. (a) (a) Key management compensation 6 30 Six months ended 30 June (unaudited) (unaudited) HK$ 000 HK$ 000 Directors 2,789 2,317 Other key management personnel: Salaries and other short-term employee benefits 2,077 1,811 4,866 4,128 (b) (b) Mr. Chi Wen Fu has undertaken to maintain a minimum level of shareholding in the Company. The undertaking form part of the collateral of certain borrowings by the Group and exchangeable bond issued by the Company. (c) 14A (c) There was no material related partly transactions, as disclosed under above, falls under the definition of connected transaction or continuing connected transaction as defined in Chapter 14A of the Listing Rules.

47 Century Sunshine Group Holdings Limited 46 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June Changes in Ownership Interest in Subsidiaries , 0.11% 1,551,000 2,175,000 During the six months period ended 30 June 2020, there is a decrease in equity interest of 0.11% in Rare Earth Magnesium Technology Group Holdings Limited by the Group as a result of exercise of share options by its employees. As a result of these transactions the Group recognised an increase in noncontrolling interest of approximately HK$1,551,000 and an increase in other reserve of approximately HK$2,175, Events After The Reporting Period Reference is made to the announcement of the Company dated 3 July 2020, 8 July 2020, 9 July 2020, 15 July 2020, 11 August 2020, 24 August 2020 and 31 August 2020 (the Announcements ), in relation to, among other things, the winding up petition (the Petition ) and application for the appointment of light touch joint provisional liquidators (the JPL Application ) for restructuring purposes. 101,750, The Company has defaulted on the redemption of the SGX listed subordinated notes in the principal amount of the SGD101,750,000 (the Notes ) on their maturity on 3 July In view of the payment default, so caused cross defaults constitute an event of default in respect of certain borrowings of the Group and certain debts are immediately payable on demand in accordance with their terms.

48 2020 INTERIM REPORT 2020 Notes to the Unaudited Condensed Consolidated Interim Financial Statements For the six months ended 30 June Ernst & Young Ltd Roy Bailey EY Cayman Ltd. Tammy Karina Fu Roy Bailey Tammy Karina Fu On 14 July 2020, an order was granted by the Grand Court of the Cayman Islands (the Grand Court ) for the appointment of Mr. Yen Ching Wai David and Ms. So Kit Yee Anita of Ernst & Young Transactions Limited, Mr. Roy Bailey of Ernst & Young Ltd, and Ms. Tammy Karina Fu of EY Cayman Ltd. (collectively, the JPLs ) as the light-touch joint provisional liquidators of the Company for restructuring purposes, with the power to act jointly and severally. Joint provisional liquidators on a light touch basis that the board of directors of the Company will retain management of the Company while the joint provisional liquidators will work alongside the Company s management to, amongst other things, monitor, supervise, and oversee the implementation of a group-wide holistic and coordinated restructuring of its debts and liabilities including to maintain the listing of the Company on the Stock Exchange. On 18 August 2020, the Grand Court issued a letter of request ( LOR ) to the High Court of Hong Kong for the recognition of the appointment and powers of the JPLs in Hong Kong to, inter alia, develop and propose a restructuring plan to allow the Company to continue as a going concern. The Grand Court also accepted the resignation of one of the JPLs, Mr. Yen Ching Wai David on the same day. The JPLs appointment order remains in force in respect of Mr. Roy Bailey, Ms. Tammy Karina Fu and Ms. So Kit Yee Anita as JPLs. An application has been filed by the JPLs to the High Court of Hong Kong on 26 August 2020 for the recognition of the appointment and powers of the JLPs pursuant to the LOR. On 28 August 2020, the High Court of Hong Kong has approved the said application. Further announcement(s) will be made by the Company to update the shareholders and investors of the Company in relation to any developments on the financial reorganisation and related legal proceedings. 22. Comparative Figures Certain comparative figures have been reclassified to conform to current period s presentation.

49 Century Sunshine Group Holdings Limited 48 Other Information (1) ,856,204 Share Option Schemes (1) Share option scheme of the Company In order to attract and retain the best quality employees for the development of the Group s businesses and to provide additional incentives or rewards to selected qualifying participants, the Company adopted a share option scheme on 3 December 2008 (the Old Scheme ) and on 26 June 2019 (the New Scheme or the Scheme ) respectively. The qualifying participants mainly include employees of the Group, Directors and contractors, suppliers or service providers of the Group who have contribution to the Group. Both schemes, unless otherwise cancelled or amended, will remain in force for 10 years since its establishing date. The Old Scheme was expired on 3 December 2018 while the remaining life of the New Scheme is approximately 9 years (expiry on 26 June 2029). Options granted under the Old Scheme before its expiry remain in force. As at 30 June 2020, options to subscribe for a total of 314,856,204 Shares were outstanding under the Old Scheme and new scheme (the Options ) Options Options Options Held at granted exercised lapsed Held at 1 January during during during 30 June Exercise 2020 the period the period the period 2020 price HK$ The Old Scheme (A) Employees 8,567,059 8,567, (B) Directors 6,389,145 6,389, Lau Chi Kit 14,956,204 14,956,

50 2020 INTERIM REPORT 2020 Other Information Options Options Options Held at granted exercised lapsed Held at 1 January during during during 30 June Exercise 2020 the period the period the period 2020 price HK$ The New Scheme (A) Employees 121,900, ,900, (B) a Consultants (note a) 110,000, ,000, (C) Directors 20,000,000 20,000, Chi Wen Fu 20,000,000 20,000, Shum Sai Chit 8,000,000 8,000, Chi Jing Chao 5,000,000 5,000, Guo Mengyong 5,000,000 5,000, Cheung Sound Poon 5,000,000 5,000, Sheng Hong 5,000,000 5,000, Lau Chi Kit 299,900, ,900, ,856, ,856,204 note: (a) ,000,00025,000,000 40,000,000 (a) On 25 July 2019, 3 consultants were granted each with 45,000,000, 25,000,000 and 40,000,000 Share Options respectively. They are body incorporated and independent third parties to the Group who are rendering, including but not limited to, services in relation to assisting of all types of financing arrangement, introducing of investors, and other financial services if appropriate and available, etc.

51 Century Sunshine Group Holdings Limited 50 Other Information The Company consider that in view of the limited resources of the Group and to maintain a long term growth, the Share Options granted to the consultants can help to retain and motivates these non-employees to generate growth in company value. The Share Options was granted as incentive for these consultants to provide ongoing service to the Group and to maintain a long-term relationship with them so that the Group can maintain a streamline operation with stability. Apart from the Share Options granted, the Company has not provided any other remuneration to these consultants for this interim report ,856, % As at 30 June 2020, Options to subscribe for a total of 314,856,204 Shares were outstanding under the 2 schemes, representing approximately 6.87% of the issued share capital of the Company as at the date of this Interim Report. The Options outstanding at the end of the reporting period have the following expiry date, exercise period and exercise prices. Grant date Expiry date Exercise period Exercise prices per Share HK$ Number of Options The Old Scheme January October 2020 From 1 November 2015 to 31 October 2020 The New Scheme July December 2025 From 1 November 2020 to 30 December ,956, ,900, ,856,204

52 2020 INTERIM REPORT 2020 Other Information ,067, % As at the date of the this interim report, the total number of Shares of the Company available for issue under the New Scheme (including the above Options under the 2 Schemes outstanding not yet exercised) was 473,067,888, representing approximately 10.33% of the issued share capital of the Company as at the date of this interim report. The New Scheme will be expired on 26 June (2) (2) Share option scheme of the subsidiary Rare Earth Magnesium Technology Group Holdings Limited ( REMT ) In order to attract and retain the best quality employees for the development of the Group of REMT s businesses and to provide additional incentives or rewards to selected qualifying participants, REMT adopted a share option scheme on 4 December 2017 (the REMT Scheme ). The qualifying participants mainly include employees, directors, contractors, suppliers or service providers who have contribution to the Group of REMT. The REMT Scheme, unless otherwise cancelled or amended, will remain in force for 10 years since its establishing date. The remaining life of the REMT Scheme is approximately 7.5 years (expiry on 4 December 2027).

53 Century Sunshine Group Holdings Limited 52 Other Information ,400,000 As at 30 June 2020, options to subscribe for a total of 401,400,000 Shares were outstanding under the REMT Scheme (the REMT Options ) REMT REMT REMT Options Options Options Held at granted exercised lapsed Held at 1 January during during during 30 June Exercise 2020 the period the period the period 2020 price HK$ (A) (B) Employees 163,400, ,400, ,000,000 40,000, ,000,000 (10,000,000) 140,000, Directors 30,000,000 30,000, Shum Sai Chit 3,000,000 3,000, Chi Jing Chao 5,000,000 5,000, Cheung Sound Poon 20,000,000 20,000, Other directors of REMT 221,400, ,400, ,000,000 40,000, ,000,000 (10,000,000) 140,000, ,400,000 (10,000,000) 401,400,000

54 2020 INTERIM REPORT 2020 Other Information 53 The above REMT Options outstanding at the end of the reporting period have the following expiry date, exercise period and exercise prices. Grant date Expiry date Exercise period Exercise price per REMT share HK$ Number of REMT Options April December 2023 From 1 November 2018 to 29 December April December 2020 From 1 January 2019 to 31 December July August 2022 From 1 September 2019 to 31 August ,400, ,000, ,000, ,400, ,839, % As at the date of the 2020 Interim Report, the total number of shares of REMT available for issue under the REMT Scheme (including the above REMT Options outstanding not yet exercised) was 858,839,005, representing approximately 13.0% of the issued share capital of REMT as of the date thereof. The remaining life of the Scheme is approximately 7.5 years and to be expired on 4 December 2027.

55 Century Sunshine Group Holdings Limited 54 Other Information XV 352 Directors and Chief Executive s Interest in the Shares, Underlying Shares and Debentures of the Company and Any Associated Corporation As at 30 June 2020, the interests and short positions of the Directors and chief executive of the Company in the Shares, underlying shares and debentures of the Company and any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the SFO )), as recorded in the register to be kept by the Company under Section 352 of the SFO or as otherwise notified to the Company and The Stock Exchange of Hong Kong Limited (the Stock Exchange ) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix 10 of the Listing Rules (the Model Code ), were as follows: (1) (1) Long positions in shares and share options of the Company ( b) c Number of Shares held Number of Number of conversion share of Percentage of issued share Name of Director Personal interests Spouse interests Corporate interests Total Options held (note b) Convertible Bonds (note c) capital of the Company as at 30 June ,970,548 1,341,871,364 1,591,841, % Chi Wen Fu ( Mr. Chi ) a (note a) 20,000, % 1,600,000, % 14,666,305 14,666, % Shum Sai Chit 20,000, % 1,633,998 1,633, % Chi Jing Chao 8,000, % 2,625,000 2,625, % Guo Mengyong 5,000, % Cheung Sound Poon 5,000, % 1,775,000 1,775, % Sheng Hong 5,000, % 2,000,000 2,000, % Lau Chi Kit 11,389, %

56 2020 INTERIM REPORT 2020 Other Information 55 (2) (2) Long positions in debentures of the Company Name of director Capacity/Nature of interest Amount of debentures held SGD 2,500,000 Mr. Chi Personal interest (3) (3) Interests in the shares, underlying shares and debenture of associated corporation of the Company REMT Number of ordinary shares interested b Percentage of or deemed to be interested Number of issued share REMT capital of Director Long position Family interests Corporate interests Total Options held (note b) REMT as at 30 June ,000, % Shum Sai Chit 3,000, % Chi Jing Chao 5,000, % Cheung Sound Poon

57 Century Sunshine Group Holdings Limited 56 Other Information notes: (a) 83.74% (a) These Shares are held by Alpha Sino International Limited ( Alpha Sino ) and are deemed corporate interests by virtue of Mr. Chi s holding of 83.74% of the issued share capital of Alpha Sino which entitled him to exercise or control the exercise of one-third or more of the voting power at general meeting of Alpha Sino ,280, % As pursuant to a share mortgage dated 10 July 2014, Alpha Sino, being the substantial shareholder of the Company, had mortgaged 549,280,000 Shares (representing approximately 12% of the issued share capital of the Company as at 30 June 2015) to International Finance Corporation ( IFC ) to secure repayment of the IFC Loan under a loan agreement dated 30 May 2014 entered into between IFC and Baishan City Tianan Magnesium Resources Co. Ltd. (b) (b) Details of options held are set out in the above section headed Share Option Schemes. (c) ,600,000,000 (c) On 18 April 2020, the Company entered into a subscription agreement (the Subscription Agreement ) with China Century Sunshine Group Investment Company Limited, (the Subscriber, wholly-owned by Mr. Chi Wen Fu, a controlling Shareholder and an executive Director), pursuant to which, the Company conditionally agreed to issue, and the Subscriber conditionally agreed to subscribe for, the Convertible Bonds in the aggregate principal amount of HK$300 million, which may be converted into 1,600,000,000 Conversion Shares based on the initial Conversion Price of HK$ per Conversion Share upon full conversion On 3 July 2020, the Subscription Agreement was terminated by both parties For more details, please refer to the announcements made by the Company on 18 April 2020 and 3 July XV 352 Save as disclosed above, as at 30 June 2020, none of the Directors or chief executive of the Company or their respective associates had interests and short positions in the Shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), as recorded in the register to be kept by the Company under Section 352 of SFO.

58 2020 INTERIM REPORT 2020 Other Information 57 Directors Right to Acquire Shares or Debentures Save as disclosed above, at no time during the period were rights to acquire benefits by means of the acquisition of Shares in or debentures of the Company granted to any Directors or their respective spouse or children under 18 years of age, or were any such rights exercised by them; or was the Company or any of its subsidiaries a party to any arrangement to enable the Directors to acquire such rights in any other body corporate. Interests and Short Positions of Substantial Shareholders in the Shares and Underlying Shares of the Company So far as is known to any Director or chief executive of the Company, as at 30 June 2020, persons who had interests or short positions in the Shares or underlying shares of equity derivatives of the Company as recorded in the register required to be kept under Section 336 of the SFO were as follows: Name of shareholder Nature Number of Shares held Number of Options held Number of convertible share of Convertible Bonds Percentage of issued share capital of the Company as at 30 June ,591,841, % Chi Wen Fu Long position a (note a) 20,000, % Long position c (note c) 1,600,000, % Long position d (note d) 1,341,871, % Alpha Sino Long position b (note b) China Century Sunshine Group Investment Company Limited International Finance Corporation ( IFC ) 1,600,000, % Long position d (note d) 793,526, % Long position b (note b)

59 Century Sunshine Group Holdings Limited 58 Other Information notes: (a) 1,591,841,912 (a)249,970,548 (b)1,341,871, % (a) Mr. Chi Wen Fu has interest in an aggregate of 1,591,841,912 Shares of which (a) 249,970,548 Shares are beneficially owned by him and registered in his name; and (b) 1,341,871,364 Shares are deemed corporate interests by virtue of his holding of 83.74% of the issued share capital of Alpha Sino which entitled him to exercise or control the exercise of one-third or more of the voting power at general meeting of Alpha Sino. (b) 793,526,275 (a)244,246,275 (b) ,280, % (b) IFC has interest in an aggregate of 793,526,275 Shares of which (a) 244,246,275 Shares are beneficially owned by it and registered in its name; and (b) Pursuant to a share mortgage dated 10 July 2014, Alpha Sino, being the substantial shareholder of the Company, had mortgaged 549,280,000 Shares (representing approximately 12% of the issued share capital of the Company as at 30 June 2015) to International Finance Corporation ( IFC ) to secure repayment of the IFC Loan under a loan agreement dated 30 May 2014 entered into between IFC and Baishan City Tianan Magnesium Resources Co. Ltd. (c) (c) Details of options held are set out in the above section headed Share Option Schemes. (d) ,600,000,000 (d) On 18 April 2020, the Company entered into a subscription agreement (the Subscription Agreement ) with China Century Sunshine Group Investment Company Limited, (the Subscriber, wholly-owned by Mr. Chi Wen Fu, a controlling Shareholder and an executive Director), pursuant to which, the Company conditionally agreed to issue, and the Subscriber conditionally agreed to subscribe for, the Convertible Bonds in the aggregate principal amount of HK$300 million, which may be converted into 1,600,000,000 Conversion Shares based on the initial Conversion Price of HK$ per Conversion Share upon full conversion On 3 July 2020, the Subscription Agreement was terminated by both parties For more details, please refer to the announcements made by the Company on 18 April 2020 and 3 July Directors Interests in Competing Business During the period under review, none of the Directors nor the management shareholders of the Company or their respective associates (as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the Listing Rules )) had any interest in a business that competed or might compete with the business of the Group.

60 2020 INTERIM REPORT 2020 Other Information 59 Purchase, Sale or Redemption of The Company s Listed Securities Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company s listed securities during the Period. Code of Corporate Governance Practices 14 Throughout the Period, the Company has complied with the code provisions as set out in the Corporate Governance Code as set out in Appendix 14 of the Listing Rules, with the following deviations: (a) E (a) Under the code provision E.1.2, the chairman of the Board should attend the annual general meeting. The chairman of the Board was unable to attend the annual general meeting held on 30 June 2020 as he was obliged to be away for a business trip on that date. Mr. Shum Sai Chit, executive Director of the Company, attended the said annual general meeting to answer questions from shareholders. (b) A (b) Under code provision A.6.7, independent nonexecutive directors and other non-executive directors should also attend general meetings and develop a balanced understanding of the views of shareholders. Mr. Guo Mengyong (being a non-executive Director) and Mr. Sheng Hong (being independent nonexecutive Director) were unable to attend the annual general meeting held on 30 June 2020 as they were obliged to be away for business trip and was retired respectively. Code of Conduct Regarding Securities Transactions by Directors 10 The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules as the code of conduct of the Company regarding Directors securities transactions. The Company made specific enquiries to all Directors and all Directors have confirmed in writing that they have complied with the required standards set out in the code of conduct during the Period.