• we are exposed to geopolitical risk, where unexpected changes in global, regional, or local political or social conditions could adversely affect our foreign operations.

Our success as a global business will depend, in part, upon our ability to succeed in differing legal, regulatory, economic, social and political conditions by developing, implementing and maintaining policies and strategies that are effective in each location where we do business.

# We are exposed to currency exchange rate changes that impact our profitability.

We are exposed to currency exchange rate risk through our U.S. and nonU.S. operations. Changes in currency exchange rates may materially affect our operating results. For example, changes in currency exchange rates may affect the relative prices at which we and our competitors sell products in the same region and the cost of materials used in our operations. A substantial portion of our net sales and assets are denominated in currencies other than the U.S. dollar, particularly the euro. When the U.S. dollar strengthens against other currencies, at a constant level of business, our reported sales, earnings, assets and liabilities are reduced because the nonU.S. currencies translate into fewer U.S. dollars.

We incur a currency transaction risk whenever one of our operating subsidiaries enters into either a purchase or a sales transaction using a currency different from the operating subsidiary's functional currency. Given the volatility of exchange rates, we may not be able to manage our currency transaction risks effectively, or volatility in currency exchange rates may expose our financial condition or results of operations to a significant additional risk.

Prices for certain raw materials and energy are volatile and can have a significant effect on our manufacturing and supply chain strategies as we seek to maximize our profitability. If we are unable to successfully adjust our strategies in response to volatile raw materials and energy prices, such volatility could have a negative effect on our earnings in future periods.

We use petroleumbased materials, metals, natural gas and other materials in the manufacture of our products. We consume substantial amounts of energy in our manufacturing processes. Prices for these materials and energy are volatile and can have a significant effect on our pricing, sales, manufacturing and supply chain strategies as we seek to maximize our profitability. Our ability to successfully adjust strategies in response to volatile raw material and energy prices is a significant factor in maintaining or improving our profitability. If we are unable to successfully adjust our strategies in response to volatile prices, such volatility could have a negative effect on our sales and earnings in future periods.

# A substantial portion of our raw materials are commodities whose prices fluctuate as market supply and demand fundamentals change.

We attempt to manage exposure to price volatility of major commodities through:

• contracts with customers that permit adjustments for changes in prices of commoditybased materials and energy;

• forward buying programs that layer in our expected requirements systematically over time; and

Although we regularly assess our exposure to raw material price volatility, we cannot always predict the prospects of volatility and we cannot always cover the risk in a cost effective manner.

We have a policy of maintaining, when available, multiple sources of supply for raw materials. However, certain of our raw materials may be provided by single sources of supply. We may not be able to obtain sufficient raw materials due to unforeseen developments that would cause an interruption in supply. Even if we have multiple sources of supply for raw materials, these sources may not make up for the loss of a major supplier.

# If we are not able to continue our technological innovation and successful introduction of new products, our customers may turn to other suppliers to meet their requirements.

The specialty chemicals industry and the enduse markets into which we sell our products experience ongoing technological change and product improvements. A key element of our business strategy is to invest in research and development activities with the goal of introducing new highperformance, technically differentiated

products. We may not be successful in developing new technology and products that effectively compete with products introduced by our competitors, and our customers may not accept, or may have lower demand for, our new products. If we fail to keep pace with evolving technological innovations or fail to improve our products in response to our customers’ needs, then our business, financial condition and results of operations could be adversely affected as a result of reduced sales of our products.

# We spend large amounts of money for environmental compliance in connection with our current and former operations.

As a manufacturer of specialty chemicals and specialty materials, we are subject to stringent regulations under numerous U.S. federal, state, local and foreign environmental, health and safety laws and regulations relating to the generation, storage, handling, discharge, disposition and stewardship of chemicals and other materials. We have expended substantial funds to comply with such laws and regulations and have established a policy to minimize our emissions to the environment. Nevertheless, legislative, regulatory and economic uncertainties (including existing and potential laws and regulations pertaining to climate change) make it difficult for us to project future spending for these purposes, and if there is an acceleration in new regulatory requirements, we may be required to expend substantial additional funds to remain in compliance.

# We are subject to environmental cleanup costs, fines, penalties and damage claims that have been and continue to be costly.

In the U.S., we are subject to lawsuits and regulatory actions, in connection with current and former operations (including some divested businesses and offsite disposal facilities), that seek cleanup or other remedies. We are also subject to similar risks outside of the U.S.

We operated a vermiculite mine in Libby, Montana, until 1990. Some of the vermiculite ore that was mined at the Libby mine contained naturally occurring asbestos. We are cooperating with the U.S. Environmental Protection Agency and other federal, state and local governmental agencies in a remedial investigation and feasibility study ("RI/FS") of the Libby mine and the surrounding area to determine the location, scope and extent of required remediation. The EPA is also investigating or remediating formerly owned or operated sites that processed Libby vermiculite into finished products. We are cooperating with the EPA on these investigation and remediation activities, and have recorded a liability to the extent that our review has indicated that a probable liability has been incurred and the cost is estimable.

We have recorded liabilities for all environmental matters for which a loss is considered to be probable and sufficient information is available to reasonably estimate the loss. These liabilities do not include the cost to remediate the Libby vermiculite mine and surrounding area or costs related to any additional EPA claims, whether resulting from the EPA's investigation of vermiculite facilities or otherwise, which may be material but are not currently estimable. Due to these vermiculiterelated matters, it is probable that our ultimate liability for environmental matters will exceed our current estimates by material amounts.

# Our indebtedness may materially affect our business, including our ability to fulfill our obligations, react to changes in our business and incur additional debt to fund future needs.

We have a substantial amount of debt. As of December 31, 2017, we had \$1,033.1 million of unsecured indebtedness outstanding and \$510.8 million of secured indebtedness outstanding. Our indebtedness may have material effects on our business, including to:

• require us to dedicate a substantial portion of our cash flow to debt payments, thereby reducing funds available for working capital, capital expenditures, acquisitions, research and development, distributions to stockholders, stock repurchase programs and other purposes;

• restrict us from making strategic acquisitions or taking advantage of favorable business opportunities;

• limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate;

• increase our vulnerability to adverse economic, credit and industry conditions, including recessions;

• make it more difficult for us to satisfy our debt service and other obligations;

• place us at a competitive disadvantage compared to our competitors that have relatively less debt; and

• limit our ability to borrow additional funds, or to dispose of assets to raise funds, if needed, for working capital, capital expenditures, acquisitions, research and development and other purposes.


# XII. RELATED PARTIES AND TRANSACTIONS (Continued)

# 3. Principal joint ventures and associates of the Group (Continued)

Name of joint ventures and associates	Relationship with
the Group

Sichuan Guotai High-tech Pipe Network Investment Co., Ltd.	Joint venture

Tianjin Zhongji Equipment Manufacturing Co., Ltd.	Joint venture

Zhuhai Kaduhaijun Real Estate Development Co., Ltd. (Note)	Joint venture

Zhongye Tap Water (Zhumadian) Co., Ltd.	Joint venture

SL-GV-MCC PTE LTD.	Associate

Wuhan MCC Lutheran Brothers Sun Donglin Engineering Technology Co., Ltd.	Associate

Baotou MCC Real Estate Co., Ltd.	Associate

Beijing Zhongye HengSheng Real Estate Co., Ltd..	Associate

Chengdu Tianfu New District MCC Xinde Real Estate Co., Ltd.	Associate

Fuzhou MCC Infrastructure Investment Co., Ltd.	Associate

Harbin Shuangqi Environmental Resources Co., Ltd.	Associate

Henan Ruzhou Science and Education Park Investment Development Co., Ltd.	Associate

Huai’an Huaguang Construction Investment Co., Ltd.	Associate

Maanshan Jiahe Real Estate Co., Ltd.	Associate

Maanshan MCC High-tech Construction Co., Ltd.	Associate

Maanshan MCC Economic Development Company Ltd.	Associate

Maanshan Golden Tourism Investment Co., Ltd.	Associate

Maanshan MCC Putang Construction Co., Ltd.	Associate

Mudanjiang MCC Real Estate Co., Ltd.	Associate

Nanjing Zhongkang Construction and Development Co., Ltd.	Associate

Inner Mongolia Zhongye DeBang Real Estate Co., Ltd.	Associate

Puyang MCC Longhu Construction and Development Co., Ltd.	Associate

Renqiu MCC Infrastructure Construction Co., Ltd.	Associate

Shanghai Libo Labor Service Co., Ltd.	Associate

Shanghai United Automobile Road Construction Development Co., Ltd.	Associate

Shanghai Tongjibao Construction Robot Co., Ltd.	Associate

(Original name: Shanghai Tongji Baoye Construction Robot Co., Ltd.)

Shanghai Yuepu South Concrete Co., Ltd.	Associate

Shanghai Zhihu Real Estate Co., Ltd.	Associate

Shanghai MCC Jiahe Real Estate Co., Ltd.	Associate

Shanghai MCC Xiangqi Investment Co., Ltd.	Associate

CERI Yingkou Equipment Technology Co., Ltd.	Associate

Sichuan HangYe Industrial Co., Ltd.	Associate

Siping City Integrated Pipe Network Construction and Operation Co., Ltd.	Associate

Si County MCC construction Investment Co., Ltd.	Associate

Suining Kaihong Construction Development Co., Ltd.	Associate

Tangshan Caofeidian 22nd Metallurgical Construction Technique Co., Ltd.	Associate

Tangshan Wanzhu 22nd Metallurgical Construction Technique Co., Ltd.	Associate

MCC Tangshan Fangzhou Real Estate Development Co., Ltd.	Associate

Tianjin SERI Machinery Equipment Corporation Ltd.	Associate

Tianjin MCC Heyuan Real Estate Co., Ltd.	Associate

Tianjin MCC Jincheng Real Estate Co., Ltd.	Associate

Tianjin MCC Jinyu Real Estate Co., Ltd.	Associate

Tianjin Tuanbo Urban Development Co., Ltd.	Associate

Name of joint ventures and associates	Relationship with
the Group

Tianjin MCC Xinhua Real Estate Co., Ltd.	Associate

Wuhan Hanwei Refining Engineering Co., Ltd.	Associate

Wuhan Zhonghe Engineering Technique Co., Ltd.	Associate

Wuhan MCC Xin’ao Property Management Co., Ltd.	Associate

Wuhan Zhong Yi Investment Construction Company Ltd.	Associate

MCC Suzhou SUMA Construction Development Co., Ltd.	Associate

CERI Yingkou Construction Development Co., Ltd.	Associate

Zhanjiang Baofa CISDI Rotary Hearth Furnace Technology Co., Ltd.	Associate

Zhejiang MCC Investment Management Co., Ltd.	Associate

MCC-Huafa Integrated Pipe Network Co., Ltd.	Associate

MCC Capital (Xiangtan) Heavy Industrial Equipment Co., Ltd.	Associate

WISDRI (Xinyu) Cold Rolling New Material Technology Co., Ltd.	Associate

Chongqing Beimeng Project Management Limited Liability Company	Associate

Chongqing MCC 17 Group Construction Engineering Co., Ltd.	Associate

Chongqing Wansheng Xihua Road Construction Co., Ltd.	Associate

Chongqing Xinlian Steel Equipment Technique Co., Ltd.	Associate

Note: Zhuhai Kaduhaijun Real Estate Development Co., Ltd. has been disposed in January 2016.

Other related parties entered into transactions with the Group during the year, or during the prior year with remaining closing balance were as follows, such transactions also constitute connected transactions or continuing connected transactions as defined in Chapter 14A of Listing Rules of the Hong Kong Stock Exchange:

Name of other related parties	Relationship with the Group

MCC Huludao Nonferrous Metals Group Co., Ltd.	Under common control by CMGC

MCC Asset Management Co., Ltd.	Under common control by CMGC

Subsidiaries of MCC Huludao Nonferrous Metals Group Co., Ltd.:

Huludao Zinc Industry Co., Ltd.	Under common control by CMGC

Subsidiaries of MCC Asset Management Co., Ltd.:

Beijing Dongxing Metallurgical New-Tech & Development Corp.	Under common control by CMGC

Beijing China Metallurgical Construction Taxi Company	Under common control by CMGC

Shanghai MCC Hospital	Under common control by CMGC

Subsidiaries of Beijing Dongxing Metallurgical New-Tech &
Development Corp.:

Handan Huaye Property Services Co., Ltd.	Under common control by CMGC

Handan Huaye New Type Building Material Co., Ltd.	Under common control by CMGC

Chengdu MCC 5 Rongshen Real Estate Development Co., Ltd.	Under common control by CMGC

Hainan Luda Real Estate Development Co., Ltd.	Under common control by CMGC

Chengdu Hongqiang Property Management Co., Ltd.	Under common control by CMGC


Since 2021, benefiting from extensive vaccination of COVID-19 vaccines and increased fiscal stimulus in the US, Japan and other countries, positive outlook has been seen in global economy, the repressed consumer demand has been released, the manufacturing industry has continued to expand and demand for base metals has rebounded rapidly. Due to the influence of the pandemic, production of and investment in global commodity including base metals have slowed down, causing the growth of supply to fall short of that of demand, resulting in a phased gap in supply and a sharp rise in commodity prices. Prices of base metal products hit multi-year highs, some even record highs.

In the international market, the robust recovery in overseas demand once the pandemic being gradually contained has led to a period of tension in aluminum supply, prompting a rise in aluminum price in London. At the same time, China came up with “dual carbon” goals, which stimulated capital market to adopt aluminum as long allocation resources, the domestic and overseas aluminum price formed a trend of resonance rising. In the first half of 2021, the average prices of current month aluminum futures and three-month aluminum futures at LME were USD2,269 per tonne and USD2,258 per tonne, respectively, representing a year-on-year increase of 37.4% and 39.0%, respectively.

In the domestic market, in early 2021, despite the elevated commodity prices driven by the unprecedented liquidity easing environment, the domestic aluminum price nosedived in January due to the outstanding problems of contradiction of excess supply occurred in virtue of the impacts of factors such as concerns about the significant growth of aluminum supply, limited production of aluminum fabrication enterprises in Henan and other regions because of environmental issues and combined with massive inflows of imported primary aluminum. In February, on the context of the firm promotion of carbon peak and carbon neutrality of the State, aluminum, as the largest non-ferrous metal in carbon emissions, was frequently under the market spotlight. Moreover, measures such as the dual control of energy consumption and suspension of or limitation on production in Inner Mongolia region and the emergency off-peak use of electricity adopted by enterprises in Yunnan province as a result of the tight situation of electricity supply caused the maximum production reduction of electrolytic aluminum to reach 1.2 million tonnes per year; dual control of energy consumption in Guangxi and Guizhou has also led to delays in construction progress and partial decrease in the output of new projects. In the meantime, the stimulus package worth up to USD1.9 trillion launched by the US poured massive funds into the aluminum market where supply continues to tighten. The domestic price of aluminum increased to RMB20,445 per tonne in early May, hitting a 13-year high. As the adverse impact brought about by the sustained high raw material prices became more and more prominent, the domestic electrolytic aluminum price began to decline gradually in late May under the policy of stabilizing prices such as the joint talks among the five departments under the Chinese government and key manufacturing enterprises of iron ore,

steel products, copper and aluminum industries as well as the output of reserve by State Reserve. In the first half of 2021, the average prices of current month aluminum futures and three-month aluminum futures at SHFE were RMB17,378 per tonne and RMB17,330 per tonne, representing a year-on-year increase of 24.8% and 34.0%, respectively.

According to the statistics, the global output and consumption of primary aluminum in the first half of 2021 were approximately 33.95 million tonnes and approximately 34.03 million tonnes, representing a year-on-year increase of 5.7% and 14.8%, respectively. The domestic output and consumption of primary aluminum were approximately 19.58 million tonnes and approximately 19.91 million tonnes, representing a year-on-year increase of 7.9% and 12.7%, respectively.

In the first half of 2021, under the development goal of building itself into a world-class aluminum company with global competitiveness, based on the new development stage, the Company implemented new development philosophy and adhered to systematic concept. Taking the promotion of high-quality development as the theme, the enhancement of the capability to create value as the leading driver, and the deepening of all-factor benchmarking as the starting point, the Company strengthened the asset operation and management responsibilities, promoted the implementation, improved efficiency and strived to build first-class company, creating a new situation of reform and development of the Company.

1. Significant increase in product output, comprehensive optimization of operating quality and great growth in economic efficiency. In the first half of the year, the output of major products of the Company including bauxite, alumina, electrolytic aluminum, refined alumina and carbon, increased by 34.9%, 14.3%, 5.5%, 3.2% and 18.7%, respectively, year-on-year. The level of return on assets improved significantly. The operating cash flow reached RMB9.467 billion, the best level as compared with the corresponding periods in history; the operating revenue amounted to RMB120.736 billion, representing a year-on-year increase of 43.55%, and the total profit was RMB6.031 billion, representing a year-on-year increase of RMB5.639 billion. Labor productivity of alumina, electrolytic aluminum and carbon increased by 25%, 16% and 20%, respectively, year-on-year.

2. The benchmarking management being further deepened, the management and control capability being continuously enhanced, the process and technical indicators being fully optimized and the product quality holding the lead. The Company further improved its benchmarking system by adopting “one-to-one (一對一)” supervision of enterprises to refine and implement the all-factor benchmarking plan, conducting monthly profit and cash flow analysis and ranking the enterprises monthly according to the benchmarking and their competitiveness, with effective reduction in management cost. The Company formulated


As the Group solely operates in the PRC, no geographical segment information has been presented.

(a) The Group’s investment properties and other property, plant and equipment are located in the PRC.

(b) Investment properties with carrying amount of RMB11,476,000, RMB11,057,000, RMB10,639,000 and RMB10,429,000 are pledged against bank loans (see note 20) as at 31 December 2007, 2008 and 2009 and 30 June 2010, respectively.

(c) Other property, plant and equipment with carrying amount of RMB4,976,000, RMB4,819,000, RMB4,661,000 and RMB4,582,000 are pledged against bank loans (see note 20) as at 31 December 2007, 2008 and 2009 and 30 June 2010, respectively.

(d) Other property, plant and equipment with carrying amount of RMB139,343,000, RMB134,643,000, RMB129,944,000 and RMB127,242,000 are pledged against bank loans granted to related parties (see note 29(d)) as at 31 December 2007, 2008 and 2009 and 30 June 2010, respectively.


‘‘Deed of Indemnit’’y	a deed of indemnity dated 16 June 2014 entered into between our
Controlling Shareholders and our Company referred to in
Appendix IV of this prospectus

‘‘Deed of Non-competition’’	a deed of non-competition dated 16 June 2014 entered into by our
Controlling Shareholders in favour of our Company, details of
which are set out in the section headed ‘‘Relationship with
Controlling Shareholders’’ in this prospectus

‘‘Director(s)’’	the director(s) of our Company

‘‘ERP’’	enterprise resource lpanning

‘‘Fiona Kim Investments’’	Fiona Kim Investments Limited, a company with limited liability
incorporated in the BVI on 10 April 2012 and a direct wholly-
owned subsidiary of our Company

‘‘Fiona Trust’’	Fiona Trust, a discretionary trust set up by Mr. Jin for which
Standard Chartered Trust acts as the trustee and Mr. Jin, his
spouse and his children are the beneficiaries

‘‘Frost & Sullivan’’	Frost & Sullivan (Beijing) Inc., Shanhiga Branch Co., a lgobal
market research and consulting company, which is an Independent
Third Party engaged by our Company as their industry consultant

‘‘Frost & Sullivan Report’’	a customised report titled ‘‘China Lady-wear Market Study,
2014’’ prepared by Frost & Sullivan and commissioned by our
Company for the purpose of the Global Offering

‘‘GDP’’	gross domestic product

‘‘Global Offerin’’g	the Hong Kong Public Offering and the International Offering

‘‘GREEN Alii’’ppcaton Form(s)	the alifppcation orm(s) to be comldbKpete Hy the  eIPO White
Form Service Provider, designated by the Company

‘‘Grou’’‘‘p, our Grou’’‘‘p, we’’,
‘‘  our’’or‘‘us’’	our Company and its subsidiaries or, where the context so
requires, with respect to the period before which our Company
became the holding company of its current subsidiaries, our
Compan’ys current subsidiaries or the businesses operated by
such subsidiaries or their predecessors (as the case may be)

‘‘HK$’’ or ‘‘Hong Kong dollars’’
or ‘‘cents’’	Hong Kong dollars and cents, respectively, the lawful currency of
Hong Kong

‘‘HK eIPO White Form’’	alifHKppyng or onPSg onblig uc Offer hares to be issued in your
own name by submitting alippcations online throuhhg te
designated website at www.hkeipo.hk

‘‘HK eIPO White Form Service
Provider’’	the HK eIPO White Form service provider designated by the
Company, as specified on the designated website of HK eIPO
White Form at www.hkeipo.hk

‘‘HKSCC’’	Hong Kong Securities Clearing Company Limited

‘‘HKSCC Nominees’’	HKSCC Nominees Limited, a wholly-owned subsidiary of
HKSCC

‘‘Hon’’‘‘KA’g KonRg, HS’ or
‘‘HK’’	the Hong Kong Special Administrative Reifgon o the PRC

‘‘Hong Kong Public Offer Shares’’	the 12,500,000 new Shares initially being offered for subscription
by our Company at the Offer Price under the Hong Kong Public
Offering (subject to adjustment as described in the section headed
‘‘Structure of the Global Offerin’’ ign this prospectus)

‘‘Hong Kong Public Offerin’’g	the offer by our Company of the Hong Kong Public Offer Shares
for subscription by the public in Hong Kong as described in the
section headed ‘‘Structure of the Global Offerin’’g in this
prospectus at the Offer Price (lpus brokerage of 1%, SFC
transaction levy of 0.003% and Stock Exchange trading fee of
0.005% of the Offer Price) and on and subject to the terms and
conditions stated herein and in the Alippcation Forms relating
thereto

‘‘Hong Kong Branch Share
Reigstrar’’	Tricor Investor Services Limited

‘‘Hong Kong Underwriters’’	the underwriters of the Hong Kong Public Offering named in the
hparagra headed ‘‘Undperwriting — Hong Kong Underwriters’’ in
this prospectus

‘‘Hong Kong Underwriting
Agreement’’	the conditional Hong Kong underwriting agreement dated 16 June
2014 relating to the Hong Kong Public Offering entered into by,
among others, our Company, the Joint Global Coordinators and
the Hong Kong Underwriters

‘‘IFRS’’	International Financial Reporting Standards

‘‘Independent Third Party(ies)’’	a party that is independent of and not connected (as defined under
the Listing Rules) with any directors, chief executive, or
substantial shareholders (within the meaning of the Listing Rules)
of our Company or any of its subsidiaries or any of their
respective associates


residual values is dependent on our future ability to market the vehicles under the prevailing market conditions. Over the life of the lease, we evaluate the adequacy of our estimate of the residual value and make adjustments to the depreciation rates to the extent the expected value of the vehicle at lease termination changes. In addition to estimating the residual value at lease termination, we also evaluate the current value of the operating lease asset and test for impairment to the extent necessary when there is an indication of impairment based on market considerations and portfolio characteristics. Impairment is determined to exist if fair value of the leased asset is less than carrying value and it is determined that the net carrying value is not recoverable. The net carrying value of a leased asset is not recoverable if it exceeds the sum of the undiscounted expected future cash flows expected to result from the operating lease payments and the estimated residual value upon eventual disposition. If our operating lease assets are considered to be impaired, the impairment is measured as the amount by which the carrying amount of the assets exceeds the fair value as estimated by discounted cash flows. No impairment was recognized in 2018, 2017, or 2016. We accrue rental income on our operating leases when collection is reasonably assured. We generally discontinue the accrual of revenue on operating leases at the time an account is determined to be uncollectible, which we determine to be the earliest of (i) the time of repossession, (ii) within 60 days of bankruptcy notification, unless it can be clearly demonstrated that repayment is likely to occur, or (iii) greater than 120 days past due.

When a leased vehicle is returned to us, either at the end of the lease term or through repossession, the asset is reclassified from investment in operating leases, net, to other assets and recorded at the lower-of-cost or estimated fair value, less costs to sell, on our Consolidated Balance Sheet. Any losses recognized at this time are recorded as depreciation expense. Subsequent decline in value and any gain or loss recognized at the time of sale is recognized as a remarketing gain or loss and presented as a component of depreciation expense.

The net carrying values of long-lived assets (including property and equipment) are evaluated for impairment whenever events or changes in circumstances indicate that their net carrying values may not be recoverable from the estimated undiscounted future cash flows expected to result from their use and eventual disposition. Recoverability of assets to be held and used is measured by a comparison of their net carrying amount to future net undiscounted cash flows expected to be generated by the assets. If these assets are considered to be impaired, the impairment is measured as the amount by which the net carrying amount of the assets exceeds the fair value estimated using a discounted cash flow method. No material impairment was recognized in 2018, 2017, or 2016.

An impairment test on an asset group to be sold or otherwise disposed of is performed upon occurrence of a triggering event or when certain criteria are met (e.g., the asset is planned to be disposed of within twelve months, appropriate levels of authority have approved the sale, there is an active program to locate a buyer, etc.), which cause the disposal group to be classified as held-for-sale. Long-lived assets held-for-sale are recorded at the lower of their carrying amount or estimated fair value less cost to sell. If the net carrying value of the assets held-for-sale exceeds the fair value less cost to sell, we recognize an impairment loss based on the excess of the net carrying amount over the fair value of the assets less cost to sell. Refer to Note 2 for a discussion of discontinued operations.

Property and equipment stated at cost, net of accumulated depreciation and amortization, are reported in other assets on our Consolidated Balance Sheet. Included in property and equipment are certain buildings, furniture and fixtures, leasehold improvements, IT hardware and software, capitalized software costs, and assets under construction. We begin depreciating these assets when they are ready for their intended use. Depreciation is recorded on a straight-line basis over the estimated useful lives of the assets, which generally ranges from three to thirty years depending on the asset class. Capitalized software is generally amortized on a straight-line basis over its useful life, which generally ranges from three to five years. Capitalized software that is not expected to provide substantive service potential or for which development costs significantly exceed the amount originally expected is considered impaired and written down to fair value. Software expenditures that are considered general, administrative, or of a maintenance nature are expensed as incurred.

Goodwill and intangible assets, net of accumulated amortization, are reported in other assets.

Our intangible assets primarily consist of acquired customer relationships and developed technology, and are amortized using a straight line methodology over their estimated useful lives. We review intangible assets for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If it is determined the carrying amount of the asset is not recoverable, an impairment charge is recorded.

Goodwill represents the excess of the cost of an acquisition over the fair value of net assets acquired, including identifiable intangibles. We allocate goodwill to applicable reporting units based on the relative fair value of the other net assets allocated to those reporting units at the time of the acquisition. In the event we restructure our business, we may reallocate goodwill. We test goodwill for impairment annually, or more frequently if events and changes in circumstances indicate that it is more likely than not that impairment exists. Our annual goodwill impairment test is performed as of August 31 of each year. In certain situations, we may perform a qualitative assessment to test goodwill for impairment. We may also decide to bypass the qualitative assessment and perform a quantitative assessment. If we perform the qualitative assessment to test goodwill for impairment and conclude that it is more likely than not that the reporting unit’s fair value is greater than its carrying value, then the quantitative assessment is not required. However, if we perform the qualitative assessment and determine that it is more likely than not that a reporting unit’s fair value is less than its carrying value, then we must perform the quantitative assessment. The quantitative assessment uses a two-step process. The first step of the assessment requires us to compare the fair value of each of the reporting units to their respective carrying value. The fair value of the reporting units in our quantitative assessment is determined based on various

analyses including discounted cash flow projections using assumptions a market participant would use. If the carrying value is less than the fair value, no impairment exists, and the second step does not need to be completed. If the carrying value is greater than the fair value or there is an indication that impairment may exist, a second step must be performed where we determine the implied value of goodwill based on the individual fair values of the reporting unit’s assets and liabilities, including unrecognized intangibles, to compute the amount of the impairment.

# Unearned Insurance Premiums and Service Revenue

Insurance premiums, net of premiums ceded to reinsurers, and service revenue are earned over the terms of the policies. The portion of premiums and service revenue written applicable to the unexpired terms of the policies is recorded as unearned insurance premiums or unearned service revenue. For vehicle service and maintenance contracts, premiums and service revenues are earned on a basis proportionate to the anticipated cost emergence. For additional information related to these contracts, refer to Note 3. For other short duration contracts, premiums and service revenue are earned on a pro rata basis. For further information, refer to Note 4.

# Deferred Insurance Policy Acquisition Costs

Certain incremental direct costs incurred to originate a policy are deferred and recorded in other assets. These costs primarily include commissions paid to dealers to originate these policies and vary with the production of business. Deferred policy acquisition costs are amortized over the terms of the related policies and service contracts on the same basis as premiums and service revenue are earned. We group costs incurred for acquiring like contracts and consider anticipated investment income in determining the recoverability of these costs.

# Reserves for Insurance Losses and Loss Adjustment Expenses

Reserves for insurance losses and loss adjustment expenses are reported in accrued expenses and other liabilities on our Consolidated Balance Sheet. They are established for the unpaid cost of insured events that have occurred as of a point in time. More specifically, the reserves for insurance losses and loss adjustment expenses represent the accumulation of estimates for both reported losses and those incurred, but not reported, including loss adjustment expenses relating to direct insurance and assumed reinsurance agreements.

We use a combination of methods commonly used in the insurance industry, including the chain ladder development factor, expected loss, Bornhuetter Ferguson (BF), and frequency and severity methods to determine the ultimate losses for an individual business line as well as accident year basis depending on the maturity of the accident period and business-line specifics. These methodologies are based on different assumptions and use various inputs to develop alternative estimates of losses. The chain ladder development factor is used for more mature years where expected loss, BF, and frequency and severity methods are used for less mature years. Both paid and incurred loss and loss adjustment expenses are reviewed where available and a weighted average of estimates or a single method may be considered in selecting the final estimate for an individual accident period. We did not change our methodology for developing reserves for insurance losses for the year ended December 31, 2018.

Estimates for salvage and subrogation recoverable are recognized at the time losses are incurred and netted against the provision for insurance losses and loss adjustment expenses. Reserves are established for each business at the lowest meaningful level of homogeneous data. Since the reserves are based on estimates, the ultimate liability may vary from such estimates. The estimates are regularly reviewed and adjustments, which can potentially be significant, are included in earnings in the period in which they are deemed necessary.

Reserves for legal and regulatory matters are established when those matters present loss contingencies that are both probable and estimable, with a corresponding amount recorded to other operating expense. In cases where we have an accrual for losses, it is our policy to include an estimate for probable and estimable legal expenses related to the case. If, at the time of evaluation, the loss contingency related to a legal or regulatory matter is not both probable and estimable, we do not establish a liability for the contingency. We continue to monitor legal and regulatory matters for further developments that could affect the requirement to establish a liability or that may impact the amount of a previously established liability. There may be exposure to loss in excess of any amounts recognized. For certain other matters where the risk of loss is determined to be reasonably possible, estimable, and material to the financial statements, disclosure regarding details of the matter and an estimated range of loss is required. The estimated range of possible loss does not represent our maximum loss exposure. We also disclose matters that are deemed probable or reasonably possible, material to the financial statements, but for which an estimated range of loss is not possible to determine. While we believe our reserves are adequate, the outcome of legal and regulatory proceedings is extremely difficult to predict and we may settle claims or be subject to judgments for amounts that differ from our estimates. For information regarding the nature of all material contingencies, refer to Note 29.

We compute basic earnings per common share by dividing net income from continuing operations attributable to common stockholders after deducting dividends on preferred stock by the weighted-average number of common shares outstanding during the period. We compute diluted earnings per common share by dividing net income from continuing operations after deducting dividends on preferred stock by the weighted-average number of common shares outstanding during the period plus the dilution resulting from incremental shares that would have been outstanding if dilutive potential common shares had been issued (assuming it does not have the effect of antidilution), if applicable.

# Derivative Instruments and Hedging Activities

We use derivative instruments primarily for risk management purposes. We do not use derivative instruments for speculative purposes. Certain of our derivative instruments are designated as accounting hedges in qualifying relationships, whereas other derivative instruments


数据来源：公司公告，长城国瑞证券研究所

# 3.4 环保行业上市公司重要股东二级市场交易

上周没有环保行业上市公司重要股东增减持。

# 4 环保行业上市公司安全垫空间

# 表 8 环保行业上市公司安全垫空间


• On June 1, 2018, Missouri Senate Bill 564 was enacted. The provision of the law applicable to the TCJA was effective immediately; the remaining provisions, including the ability to elect PISA, became effective August 28, 2018. The law required the MoPSC to authorize a reduction in Ameren Missouri’s rates to pass through the effect of the TCJA within 90 days of the law’s effective date. In July 2018, the MoPSC authorized Ameren Missouri to reduce its annual revenue requirement by \$167 million and reflect that reduction in rates beginning August 1, 2018. The reduction included \$74 million for the amortization of excess accumulated deferred income taxes. In addition, Ameren Missouri recorded a reduction to revenue and a corresponding regulatory liability of \$60 million for the excess amounts collected in rates related to the TCJA from January 1, 2018, through July 31, 2018. The regulatory liability will be reflected in customer rates over a period of time to be determined by the MoPSC in the next regulatory rate review. Pursuant to its PISA election, Ameren Missouri is permitted to defer and recover 85% of the depreciation expense and a weighted-average cost of capital return on rate base on certain property, plant, and equipment placed in service after September 1, 2018, and not included in base rates . Accumulated PISA deferrals earn carrying costs at the weighted-average cost of capital, and all approved PISA deferrals will be added to rate base prospectively and recovered over a period of 20 years following a regulatory rate review. PISA mitigates the impacts of regulatory lag between regulatory rate reviews. The remaining 15% of certain property, plant, and equipment placed in service and not eligible for recovery under PISA, unless eligible for recovery under the RESRAM, remain subject to regulatory lag. As a result of the PISA election, additional provisions of the new law apply to Ameren Missouri, including limitations on electric customer rate increases and an electric base rate freeze until April 2020. Both the rate increase limitation and PISA are effective through December 2023, unless Ameren Missouri requests and receives MoPSC approval of an extension through December 2028. See Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report for information regarding Missouri Senate Bill 564.

• In February 2019, Ameren Missouri announced its Smart Energy Plan, which includes a five-year capital investment overview with a detailed one-year plan for 2019, designed to upgrade Ameren Missouri's electric infrastructure. The plan includes investments that will upgrade the grid and accommodate more renewable energy. Investments under the plan are expected to total approximately \$6.3 billion over the five-year period from 2019 through 2023, with costs largely recoverable under PISA and, for the portion of wind and other renewable generation investments that are not recoverable under PISA, recoverable under the RESRAM.

• In June 2018, the MoPSC approved Ameren Missouri’s Renewable Choice Program, which allows large commercial and industrial customers and municipalities to elect to receive up to 100% of their energy from renewable resources. The tariff-based program is designed to recover the costs of the election, net of changes in the market price of such energy. Based on customer contracts, the program enables Ameren Missouri to supply up to 400 megawatts of renewable wind energy generation, up to 200 megawatts of which it could own. As applicable, the addition of generation by Ameren Missouri would be subject to the issuance of a certificate of convenience and necessity by the MoPSC, obtaining transmission interconnection agreements with MISO or other RTOs, and FERC approval. This generation would be incremental to estimated capital expenditures through 2023 discussed below. Ameren Missouri anticipates finalizing customer interest and pursuing renewable energy projects to fulfill requirements in 2019. Without extension, the option to elect into the program will terminate in the third quarter of 2023.

• In December 2018, the MoPSC issued an order approving Ameren Missouri’s MEEIA 2019 plan. The plan includes a portfolio of customer energy-efficiency programs through December 2021 and low-income customer energy-efficiency programs through December 2024, along with a regulatory recovery mechanism. Ameren Missouri intends to invest \$226 million over the life of the plan, including \$65 million per year through 2021. The plan includes the continued use of the MEEIA rider, which allows Ameren Missouri to collect from, or refund to, customers any difference in actual MEEIA program costs and related lost electric margins and the amounts collected from customers. In addition, the plan includes a performance incentive that provides Ameren Missouri an opportunity to earn additional revenues by achieving certain customer energy-efficiency goals, including \$30 million if 100% of the goals are achieved during the period ended December 2021. Additional revenues may be earned if Ameren Missouri exceeds 100% of its energy savings goals.

• Ameren continues to make significant investments in FERC regulated electric transmission businesses. Ameren Illinois expects to invest \$2.2 billion in electric transmission assets from 2019 through 2023, to replace aging infrastructure and improve reliability. ATXI has three MISO-approved multi-value projects: the Spoon River, Illinois Rivers, and Mark Twain projects. The Spoon River project, located in northwest Illinois, was placed in service in February 2018. The Illinois Rivers project involves the construction of a transmission line from eastern Missouri across Illinois to western Indiana. Construction of the Illinois Rivers project is substantially complete, with the last section awaiting the outcome of certain legal proceedings, which will delay the expected completion date to 2020. This delay is not expected to materially affect 2019 rate base or earnings. The Mark Twain project involves the construction of a transmission line from northeast Missouri, connecting the Illinois Rivers project to Iowa. Construction of the Mark Twain project began in the second quarter of 2018, and is expected to be completed by the end of 2019. ATXI’s expected remaining investment in its multi-value projects is approximately \$150 million in 2019, with the total investment expected to be more than \$1.6 billion.

• Ameren Illinois and ATXI use a forward-looking rate calculation with an annual revenue requirement reconciliation for each company’s electric transmission business. Based on expected rate base growth and the currently allowed 10.82% return on common equity, the

2019 revenue requirements included in rates for Ameren Illinois’ and ATXI’s electric transmission businesses are \$297 million and \$177 million, respectively. These revenue requirements represent an increase in Ameren Illinois' and ATXI’s revenue requirements of \$24 million and \$3 million, respectively, primarily because of the rate base growth. These rates will affect Ameren Illinois’ and ATXI’s cash receipts during 2019, but will not determine their respective electric transmission service operating revenues, which will instead be based on 2019 actual recoverable costs, rate base, and return on common equity as calculated under the FERC formula ratemaking framework.

• The return on common equity for MISO transmission owners, including Ameren Illinois and ATXI, is the subject of a FERC complaint case filed in February 2015 challenging the allowed base return on common equity. Ameren Illinois and ATXI currently use the FERC authorized total allowed return on common equity of 10.82% in customer rates. A final FERC order would establish the allowed return on common equity to be applied to the 15-month period from February 2015 to May 2016 and also establish the return on common equity to be included in customer rates prospectively from the effective date of such order, replacing the current 10.82% total return on common equity. In October 2018, the FERC issued an order addressing the remanded issues in an unrelated case. That order proposed a new methodology for determining the base return on equity and required further briefs from the participants. In November 2018, the FERC issued an order related to the February 2015 complaint case and the September 2016 final order, which required briefs from the participants to be filed in February 2019 regarding a new methodology for determining the base return on common equity and whether and how to apply the new methodology to the two MISO complaint cases. Ameren is unable to predict the ultimate impact of the proposed methodology on these complaint cases at this time. As the FERC is under no deadline to issue a final order, the timing of the issuance of the final order in the February 2015 complaint case, or any potential impact to the amounts refunded as a result of the September 2016 final order, is uncertain. See Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report for information regarding FERC complaint cases. A 50 basis point reduction in the FERC-allowed base return on common equity would reduce Ameren’s and Ameren Illinois’ net income by an estimated \$9 million and \$5 million , respectively, based on each company’s 2019 projected rate base.

• In November 2018, the ICC issued an order in Ameren Illinois’ annual update filing that approved a \$72 million increase in Ameren Illinois’ electric distribution service rates beginning in January 2019. However, Illinois law provides for an annual reconciliation of the electric distribution revenue requirement as is necessary to reflect the actual costs incurred and investment return in a given year with the revenue requirement that was reflected in customer rates for that year. Consequently, Ameren Illinois’ 2019 electric distribution service revenues will be based on its 2019 actual recoverable costs, rate base, and return on common equity as calculated under the Illinois performance-based formula ratemaking framework. The 2019 revenue requirement is expected to be higher than the 2018 revenue requirement because of an expected increase in recoverable costs, expected rate base growth of approximately 8%, and an expected increase in the annual average of the monthly yields of the 30-year United States Treasury bonds. The 2019 revenue requirement reconciliation is expected to result in a regulatory asset that will be collected from customers in 2021. A 50 basis point change in the annual average of the monthly yields of the 30-year United States Treasury bonds would result in an estimated \$8 million change in Ameren’s and Ameren Illinois’ net income, based on Ameren Illinois’ 2019 projected year-end rate base.

• Ameren Illinois is allowed to earn a return on its electric energy-efficiency program investments. Ameren Illinois’ electric energy-efficiency investments are deferred as a regulatory asset and earn a return at its weighted-average cost of capital, with the equity return based on the annual average of the monthly yields of the 30-year United States Treasury bonds plus 580 basis points. The equity portion of Ameren Illinois’ return on electric energy-efficiency investments can be increased or decreased by up to 200 basis points, depending on the achievement of annual energy savings goals. Pursuant to the FEJA, Ameren Illinois plans to invest up to \$100 million per year in electric energy-efficiency programs through 2023 and will earn a return on those investments. The ICC has the ability to reduce electric energy-efficiency savings goals if there are insufficient cost-effective programs available or if the savings goals would require investment levels that exceed amounts allowed by legislation. The electric energy-efficiency program investments and the return on those investments are collected from customers through a rider and are not included in the electric distribution formula ratemaking framework. See Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report for information regarding Ameren Illinois’ energy-efficiency program.

• In November 2018, the ICC issued an order approving a stipulation and agreement that resulted in an annual natural gas rate increase of \$32 million, based on a 9.87% return on common equity, a capital structure composed of 50% common equity, and a rate base of \$1.6 billion. This increase reflects the reduction in the federal statutory corporate income tax rate enacted under the TCJA, as well as the increase in the Illinois corporate income tax rate that became effective in July 2017, which collectively decreased annual rates by approximately \$17 million. The new customer rates were effective in November 2018. As a result of this order, the rate base under the QIP rider was reset to zero. Ameren Illinois used a 2019 future test year in this proceeding.

• Ameren Missouri’s next scheduled refueling and maintenance outage at its Callaway energy center is scheduled for the spring of 2019. During the 2017 refueling, Ameren Missouri incurred maintenance expenses of \$35 million. During a scheduled refueling, which occurs every 18 months, maintenance expenses increase relative to non-outage years. Additionally, depending on the availability of its other generation sources and the market prices for power, Ameren Missouri’s purchased power costs may increase and the amount of excess


GRI
Standard	Descriptions	HKEx ESG
Reporting
Guide	Remarks	Page No.

GRI 100: Universal Disclosures 2016

GRI 102: General Disclosures 2016

102-1	Name of the organisation		About Our Group	8

102-2	Activities, brands, products and
services		About Our Group	8-11

102-3	Location of headquarters		About Our Group	8

102-4	Location of operations		About Our Group	8

102-5	Ownership and legal form		About Our Group	8-11

102-6	Markets served		About Our Group	8

102-7	Scale of the organisation		About Our Group	10

102-8	Information on employees and
other workers	KPI B1.1	Value for People,
Sustainability Performance	56-58,
83-85

102-9	Supply chain	KPI B5.1	Value for People,
Sustainability Performance	62-65, 87

102-10	Significant changes to the
organization and its supply chain		There were no significant changes
to size, structure or ownership
during the reporting period	/

102-11	Precautionary Principle or approach		Our Enhanced Corporate
Governance	22-24

102-12	External initiatives		Sustainability Awards and
Professional Memberships	88-93

102-13	Membership of associations		Sustainability Awards and
Professional Memberships	94, 95

102-14	Statement from senior decision-
maker		Message from Management	2

102-16	Values, principles, standards, and
norms of behaviour		Our Enhanced Corporate
Governance	24

102-18	Governance structure		Our Enhanced Corporate
Governance	22-24

102-40	List of stakeholder groups		Our Materiality Approach	25

GRI
Standard	Descriptions	HKEx ESG
Reporting
Guide	Remarks	Page No.

102-41	Collective bargaining agreements		The majority of Henderson
Land's employees are in Hong
Kong where there is no statutory
recognition of collective
bargaining agreements	/

102-42	Identifying and selecting
stakeholders		Our Materiality Approach	25-27

102-43	Approach to stakeholder
engagement		Our Materiality Approach	25-27

102-44	Key topics and concerns raised		Our Materiality Approach	25-27

102-45	Entities included in the
consolidated financial statements		About Our Group	11

102-46	Defining report content and
topic Boundaries		Stakeholder Engagement and
Materiality Assessment	104

102-47	List of material topics		Our Materiality Approach,
Stakeholder Engagement and
Materiality Assessment	26, 104

102-48	Restatements of information		We have not restated information
from previous years	/

102-49	Changes in reporting		There are no significant changes
from previous reporting periods
in the list of material topics and
topic boundaries	/

102-50	Reporting period		About this Report	13

102-51	Date of most recent report		Our Sustainability Report 2019
was published in April 2020	/

102-52	Reporting cycle		About this Report	13

102-53	Contact point for questions
regarding the report		About this Report	13

102-54	Claims of reporting in accordance
with the GRI Standards		About this Report	13


Aspect	KPI	Description	Statement/Section	Page No.

SUBJECT AREA (B) SOCIAL

B1: EMPLOYMENT

B1	General
disclosure	Information on:
(a)   the policies; and
(b) compliance	(a)   The people behind the
process;
(b) The Group complied with
relevant laws and
regulations and there was
no relevant material
non-compliance during the
reporting period	39–40

B1.1	Total workforce by gender,
employment type, age group and
geographical region.	The people behind the process	40

B1.2	Employee turnover rate by gender,
age group and geographical
region.	The Group shall improve data
collection system for future
disclosure	—

B2: HEALTH AND SAFETY

B2	General
disclosure	Information on:
(a)   the policies; and
(b) compliance	(a)   The people behind the
process;
(b) The Group complied with
relevant laws and
regulations and there was
no relevant material
non-compliance during the
reporting period	39

B2.1	Number and rate of work-related
fatalities.	The people behind the process	39

B2.2	Lost days due to work injury.	The people behind the process
The people behind the process	39

B2.3	Description of occupational health
and safety measures adopted, how
they are implemented and
monitored.	39

B3: DEVELOPMENT AND TRAINING

B3	General
disclosure	Policies	The people behind the process	38

B3.1	The percentage of employees
trained by gender and employee
category (e.g. senior management,
middle management).	The Group shall improve data
collection system for future
disclosure	—

B3.2	The average training hours
completed per employee by gender
and employee category.	The people behind the process	38

Aspect   KPI	Description	Statement/Section	Page No.

B4: LABOUR STANDARDS

General
disclosure	Information on:
(a)   the policies; and
(b) compliance	(a)   The people behind the
process;
(b) The Group complied with
relevant laws and
regulations and there was
no relevant material	41

B4		non-compliance during the
reporting period

B4.1	Description of measures to review
employment practices to avoid
child and forced labour.	The people behind the process	41

B4.2	Description of steps taken to
eliminate such practices when
discovered.	The people behind the process	41

B5: SUPPLY CHAIN MANAGEMENT

General
disclosure	Policies	The making of products	35–36

B5.1	Number of suppliers by
geographical region.	The making of products	36

B5      B5.2	Description of practices relating to
engaging suppliers, number of
suppliers where the practices are
being implemented, how they are
implemented and monitored.	The making of products	35–36

B6: PRODUCT RESPONSIBILITY

General	Information on:	(a) The making of products;	36–38

disclosure	(a)   the policies; and
(b) compliance	(b) The Group complied with
relevant laws and
regulations and there was
no relevant material
non-compliance during the
reporting period

B6.1	Percentage of total products sold
or shipped subject to recalls for
safety and health reasons.	The making of products	37

B6.2B6     	Number of products and service
related complaints received and
how they are dealt with.	The making of products	37

B6.3	Description of practices relating to
observing and protecting
intellectual property rights.	The making of products	38

B6.4	Description of quality assurance
process and recall procedures.	The making of products	36–37

B6.5	Description of consumer data
protection and privacy policies,
how they are implemented and
monitored.	The making of products	38


(b) A master purchase agreement was entered into between the Company and COSCO SHIPPING (Hong Kong) on 15th November 2016 in relation to the provision of shipping and other services, sale of shipping related materials and products and sale of other materials and products in connection with the general trading business of the Group by the relevant member(s) of COSCO SHIPPING Group to the relevant member(s) of the Group, including without limitation: (a) the provision of agency services, technical services and ancillary services, including the collection of market information, technical advisory, promotion and marketing, coordination with suppliers and customers, purchase of raw materials and products from suppliers, the provision of assistance in collecting sale proceeds and the procurement or provision of certain after-sale services; (b) the provision of logistics and transportation services; (c) the sale of other materials and products including construction materials and chemicals; and (d) the solicitation and referral of businesses by COSCO SHIPPING Group to the Group, including recommending products manufactured by the Group to the customers and manufacturers of COSCO SHIPPING Group (collectively the “Purchase Continuing Connected Transactions”) for the three financial years ending 31st December 2019 (the “Master Purchase Agreement”). COSCO SHIPPING (Hong Kong) agrees and will procure COSCO SHIPPING Group to agree with the Group that the transactions contemplated under the Master Purchase Agreement shall be conducted on normal commercial terms and negotiated on arm’s length basis and the service fees, commission and the consideration for the purchase of materials and products shall be at market rates or rates no less favourable to the relevant member(s) of the Group than those available to or from (as appropriate) independent third parties. Part of the services provided by COSCO SHIPPING Group will be charged by adopting pre-determined formulae (for example, provision of agency services, technical services and ancillary services and solicitation and referral of businesses will be charged at certain fixed percentages of the value of the subject matter with reference to market price of comparable services) and the remaining services will be charged by COSCO SHIPPING Group at fixed per unit consideration (for example, provision of logistics and transportation services will be charged at a fixed per unit price based on the quantity of the subject matter involved and the distance of the destination). The prices offered by COSCO SHIPPING Group for services provided to the Group and sale of other materials and products including construction materials and chemicals to the Group shall be at market rates or rates no less favourable to the relevant member(s) of the Group than those available from independent third party suppliers for comparable services and similar materials and products (based on similar amount and similar specifications) respectively. In particular, the relevant purchasing department of the related companies within the Group will obtain quotations from different suppliers (both COSCO SHIPPING Group and independent third party suppliers) in respect of comparable services and a similar type of materials or products (based on similar amount and similar specifications) respectively for comparison. The aggregate amount of the Purchase Continuing Connected Transactions for each of the financial years ending 31st December 2017, 2018 and 2019 would not exceed the relevant cap amounts set out in the table headed “Caps with COSCO SHIPPING Group” (the “Purchase Caps”).

(c) A fuel oil master agreement was entered into between the Company and COSCO SHIPPING (Hong Kong) on 15th November 2016 in relation to trading and supply of fuel oil and/or related products and services between the relevant member(s) of the Group and the relevant member(s) of COSCO SHIPPING Group, including without limitation: (a) purchase or sale of fuel oil and/or related products by the relevant member(s) of the Group from or to the relevant member(s) of COSCO SHIPPING Group (the “Fuel Oil Transactions”); and (b) provision of services by the relevant member(s) of COSCO SHIPPING Group to relevant member(s) of the Group to carry out arrangements at the instruction of and for and on behalf of the relevant member(s) of the Group from time to time to enter into fuel oil and/or related products swap contracts and/or derivatives with independent third parties to facilitate the relevant member(s) of the Group to hedge against the risk of fuel oil and/or related products price fluctuation under the fuel oil and/or related products transactions of its business of providing fuel oil and/or related products and services including marine bunker supplies, trading of fuel oil and related products and broker services (the “Fuel Oil Financial Services”) (collectively the “Fuel Oil Continuing Connected Transactions”) for the three financial years ending 31st December 2019 (the “Fuel Oil Master Agreement”). COSCO SHIPPING (Hong Kong) agrees and will procure COSCO SHIPPING Group to agree with the Group that a) the transactions contemplated under the Fuel Oil Master Agreement shall be conducted on normal commercial terms and negotiated on arm’s length basis and the service fees and the consideration for the sale or

purchase of fuel oil and/or related products shall be at market rates or rates no less favourable to the relevant member(s) of the Group than those available to or from (as appropriate) independent third parties and for this purpose, the following pricing policies will be followed (aa) fixed per unit consideration would be payable by or to the Group (as appropriate); (bb) in determining the market rates for sale or purchase of fuel oil and/or related products, the parties would refer to the mean price of fuel oil traded through Singapore as published by S&P Global Platts or market price of fuel oil as published by the government authority or other recognised organisations of supply ports in the pricing month or at the time of quotation as reference; (cc) the Group would also consider the prices offered to or by the independent third parties (based on similar quantity of fuel oil and/or related products) and compare to those offered to or by COSCO SHIPPING Group. In particular, the relevant sales and purchasing department (as appropriate) of the related companies within the Group will compare the selling price offered to or by different parties (both COSCO SHIPPING Group and the independent third parties) in respect of a similar quantity of fuel oil and/or related products for comparison; and b) the relevant member(s) of COSCO SHIPPING Group would not charge member(s) of the Group any service fee in relation to the provision of the Fuel Oil Financial Services; member(s) of the Group shall only be responsible for all amounts payable to independent third parties (together with the related handling fees and other charges charged by such independent third parties) by relevant member(s) of COSCO SHIPPING Group for and on behalf of member(s) of the Group under the fuel oil and/or related products swap contracts and/or derivatives. The aggregate amount of the Fuel Oil Continuing Connected Transactions for each of the financial years ending 31st December 2017, 2018 and 2019 would not exceed the relevant cap amounts set out in the table headed “Caps with COSCO SHIPPING Group” (the “Fuel Oil Caps”).

(d) A financial services master agreement was entered into between the Company and COSCO Finance on 15th November 2016 in relation to the provision of a range of financial services, including the deposits services, loan services, settlement services, remittance services, entrusted loan services (as lending agent in entrusted loan arrangements among members of the Group) and acceptance bill services by COSCO Finance to the Group (collectively the “Financial Services Continuing Connected Transactions”) for the three financial years ending 31st December 2019 (the “Financial Services Master Agreement”). The transactions contemplated under the Financial Services Master Agreement shall be conducted on normal commercial terms and negotiated on arm’s length basis and the terms of the transactions (including the interest receivable by the Group and the fees (including the service fees and handling charges) payable under the financial services to COSCO Finance) shall be at market rates or rates no less favourable to the relevant member(s) of the Group than those available to or from (as appropriate) independent third parties. It was agreed that the interest payable to or receivable by the Group (as appropriate) or service fees payable by the Group for the services are (a) the interest rate for the deposit services shall be no lower than: (i) the floor rate for the same category of deposit services stipulated by the People’s Bank of China from time to time; and (ii) the rate for the same category of deposit services offered by independent commercial banks in the PRC; (b) the interest rate for the loan and entrusted loan services shall be no higher than: (i) the cap rate for the same category of loan services stipulated by the People’s Bank of China from time to time; and (ii) the rate for the same category of loan services charged by independent commercial banks in the PRC; (c) service fees of other services approved by China Banking Regulatory Commission shall be determined in accordance with the following pricing principles: (i) the price to be complied with the fee standards prescribed by the People’s Bank of China or China Banking Regulatory Commission; (ii) no higher than those charged by independent commercial banks in the PRC for services of similar nature; and (iii) no higher than those charged by COSCO Finance to other member company(ies) of COSCO SHIPPING Group for services of similar nature. The aggregate amount of the Financial Services Continuing Connected Transactions for each of the financial year ending 31st December 2017, 2018 and 2019 would not exceed the relevant cap amounts set out in the table headed “Caps with COSCO SHIPPING Group” (the “Financial Services Caps”).


# We may change our target assets, financing and investment strategy and other operational policies without stockholder consent, which may adversely affect the market price of our common stock and our ability to make distributions to stockholders.

Within our overall investment guidelines, we may change our target assets financing strategy, and investment guidelines at any time without the consent of our stockholders, which could result in our making investments that are different from, and possibly riskier than, the investments described in this Annual Report on Form 10-K. Our Board also determines our other operational policies and may amend or revise such policies, including our policies with respect to our REITqualification, acquisitions, dispositions, operations, indebtedness and distributions, or approve transactions that deviate from these policies, without a vote of, or notice to, our stockholders. A change in our targeted investments, financing strategy, investment guidelines and other operational policies may increase our exposure to interest rate risk, default risk and real estate market fluctuations, all of which could adversely affect the market price of our common stock and our ability to make distributions to our stockholders.

# We operate in a highly competitive market for investment opportunities and related financing and competition may limit our ability and financing to acquire desirable investments in our target assets, obtain necessary financing and could also affect the pricing of these assets and cost of funds.

We operate in a highly competitive market for investment opportunities and borrowing facilities. Our profitability depends, in large part, on our ability to acquire our target assets at attractive prices and finance them economically. In acquiring and financing our target assets, we will compete with a variety of institutional investors, including other REITs, specialty finance companies, public and private funds, government entities, commercial and investment banks, commercial finance and insurance companies and other financial institutions. Many of our competitors are substantially larger and have considerably greater financial, technical, marketing and other resources than we do. Several other REITs may have investment objectives that overlap with ours, which may create additional competition for investment opportunities and financing. Some competitors may have a lower cost of funds and access to funding sources that may not be available to us, such as funding from the U.S. or foreign governments. Many of our competitors are not subject to the operating constraints associated with REIT tax compliance or maintenance of an exemption from the Investment Company Act. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, competition for investments in our target assets may lead to the price of such assets increasing, which may further limit our ability to generate desired returns. We cannot provide assurance that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations. Also, as a result of this competition, desirable investments in our target assets may be limited in the future and we may not be able to take advantage of attractive investment opportunities from time to time, as we can provide no assurance that we will be able to identify, finance and make investments that are consistent with our investment objectives.

# Risks Related to Our Management and Conflicts of Interest

# We depend on ACM and particularly key personnel. The loss of those key personnel could severely and detrimentally affect our operations.

As an externally managed company, we depend on the diligence, experience and skill of ACM for the selection, acquisition, structuring, hedging and monitoring of our MBS and associated borrowings. We depend on the efforts and expertise of our operating officers to manage our day-to-day operations and strategic business direction. If any of our key personnel were to leave the Company, locating individuals with specialized industry knowledge and skills similar to that of our key personnel may not be possible or could take months. Because we have no employees, the loss of ACM could harm our business, financial condition, cash flow and results of operations.

We have a contract with AVM to administer clearing and settlement services for our securities and derivative transactions. We have also entered into a second contract with AVM to assist us with financing transaction services such as repurchase financings and managing the margin arrangement between us and our lenders for each of our repurchase agreements. We use the services of AVM for these aspects of our business so our executive officers can focus on our daily operations and strategic direction. Further, as our business expands, reliance on AVM to provide us with timely, effective services will increase. In the future, as we expand our staff, we may absorb internally some or

all of the services provided by AVM. Until we elect to move those services in-house, we continue to use AVM or other third-parties that provide similar services. If we are unable to maintain a relationship with AVM or are unable to establish a successful relationship with other third-parties providing similar services at comparable pricing, we may have to reduce or delay our operations and/or increase our expenditures and undertake the repurchase agreement and trading and administrative activities on our own, which could have a material adverse effect on our business operations and financial condition. However, we believe that the breadth and scope of ACM’s experience will enable them to fill any needs created by discontinuing a relationship with AVM.

# There are conflicts of interest in our relationship with ACM and its affiliates, which could result in decisions that are not in the best interests of our stockholders.

We are subject to conflicts of interest arising out of our relationship with ACM and its affiliates. Each of our executive officers and our non-independent directors are also affiliated with JAVELIN and such officers and directors will not be exclusively dedicated to our business. Entities affiliated with Mr. Ulm and Mr. Zimmer are the general partners of ACM and each of Mr. Ulm, Mr. Zimmer, Mr. Staton and Mr. Bell is a limited partner in ACM and a stockholder of JAVELIN.

The Management Agreement with ACM may create a conflict of interest and its terms, including fees payable to ACM, may not be as favorable to us as if they had been negotiated with an unaffiliated third-party. In addition, we may choose not to enforce, or to enforce less vigorously, our rights under the Management Agreement because of our desire to maintain our ongoing relationship with ACM. ACM maintains a contractual and fiduciary relationship with us. The Management Agreement with ACM does not prevent ACM and its affiliates from engaging in additional management or investment opportunities some of which will compete with us. ACM and its affiliates may engage in additional management or investment opportunities that have overlapping objectives with ours and may thus face conflicts in the allocation of investment opportunities to these other investments. Such allocation is at the discretion of ACM and there is no guarantee that this allocation would be made in the best interest of our stockholders. We are not entitled to receive preferential treatment as compared with the treatment given by ACM or its affiliates to any investment company, fund or advisory account other than any fund or advisory account which contains only funds invested by ACM (and not of any of its clients or customers) or its officers and directors. Additionally, the ability of ACM and its respective officers and employees to engage in other business activities, including their activities related to JAVELIN, may reduce the time spent managing our activities.

# We compete with current and future investment entities affiliated with ACM.

There are conflicts of interest in allocating investment opportunities among us and other funds, investment vehicles and ventures managed by ACM. There is a significant overlap in the assets and investment strategies of us and JAVELIN. Although ACM may dedicate certain trading and investment personnel to serve us only, in most cases the same trading and investment personnel may provide services to both entities. ACM and its affiliates may in the future form additional funds or sponsor additional investment vehicles and ventures that have overlapping objectives with us and therefore may compete with us for investment opportunities and ACM resources. ACM has an allocation policy that addresses the manner in which investment opportunities are allocated among the various entities and strategies for which they provide investment management services. However, we cannot assure you that ACM will always allocate every investment opportunity in a manner that is advantageous for us; indeed, we may expect that the allocation of investment opportunities will at times result in our receiving only a portion of, or none of, certain investment opportunities.

# Resolution of potential conflicts of interest in allocation of investment opportunities.

In allocating investment opportunities among us and any other funds or accounts managed by them, ACM's personnel are guided by the principles that they will treat all entities fairly and equitably, they will not arbitrarily distinguish among entities and they will not favor one entity over another.

In allocating a specific investment opportunity among us and JAVELIN, ACM will make a determination, exercising their judgment in good faith, as to whether the opportunity is appropriate for each entity. Factors in making such a determination may include an evaluation of each entity's liquidity, overall investment strategy and objectives, the composition of the existing portfolio, the size or amount of the available opportunity, the characteristics of the


axial ratios remains to be determined, but the important point is that the current best upper limit for axial ratios with respect to VSAs is around 3, and it would be unusual to find a VSA with an axial ratio far above that. There are two caveats worth noting however. Firstly, large axis ratios result in large magnitude variations between telescopic exposures, and may cause high-amplitude bodies to be missed entirely, biasing our sample. Secondly, our method of determining axis ratios from the light curve from the formula of Kwiatkowski et al. (2010a) provides a lower limit. As a result, the axis ratios of small NEAs may be systematically larger than reported here.

Nakamura et al. (2011) concluded that small fast-rotating asteroids have a tendency to be more spherical than slowly rotating asteroids, but Kwiatkowski et al. (2010a) reportedj ust the opposite. In Fig. 3 we find little correlation between the asteroid periods and their \( a / b \) ratios. Least squares fits to our samples do have slight upslopes however, 0.0198 \( \mathrm { h r } ^ { - 1 } \) on the upper panel, and 0.0835 \( \mathrm { h r } ^ { - 1 } \) on the lower panel, so our samples do have a nominal weak correlation. But these slopes are heavily leveraged by a few points at the right-most edge of the figures and should be interpreted with caution.

Histograms of the axial ratios of our two samples are given in Fig. 4. The \( a / b \) ratio sample has mean and median \( a / b \) ratios of 1.43 and 1.29. Our \( D \le \) 60 m sample does not have enough information to compute axis ratios for all its members, but the mean and median \( a / b \) ratios of the 46 members of the \( a / b \) sample with diameters below 60 m are 1.46 and 1.36 respectively, consistent with the idea that size and axis ratio are not strongly correlated.

We note that there has been some discussion in the literature surrounding the determination of \( a / b \) ratios in Nakamura et al. (2011). Already in 2009, Warner et al. pointed out that low light curve amplitudes (which result in concomitantly smaller axis ratios) may simply be a result of finding the highest amplitude spectral peak in noisy data. In the LCDB itself, a significant portion of the data are in the quality range of \( U \leq 1 + \), meaning that they are of doubtful quality. A fuller explanation as to why some of this data were given such a low quality rating can be additionally found in Warner et al. (2009).

In addition to period and effective diameter, the LCDB also records the taxonomic class. Out of the 88 asteroids in our \( D \le \) 60 m survey, 83 asteroids were of S-type (silicaceous “stony” objects), and out of the 92 asteroids in our \( a / b \) ratio sample (which does overlap partially with the previous sample), 89 were of S-type as well, making it the most common type in our specific asteroid population. The few other spectral types that were seen in the population were four asteroids in the C-group (carbonaceous objects, including one type B and one F), and three others being in the X-group (metallic objects). It is believed that 20% (Brophy et al., 2012) of the near-Earth asteroid population is C-type, but that they are harder to discover because of their lower albedos. Thus the C types are underrepresented in our sample, reflecting the reality that our observed sample is sharply limited by target brightness. We are not arguing here that the real NEA population is low in C types, but the set of potential targets for the ARM mission is likely to be.

Taxonomic class is linked to asteroid density, but for S-type asteroids we must take the size into consideration as well since, as Carry (2012) observes, the density of S-type asteroids appears to increase with mass. If we look at Fig. 9 in the paperj ust mentioned, S-type asteroids in the ARM size range would have an average bulk density of around 2.6 g \( \mathrm { c m ^ { - 3 } } \), though the density of S-type can be as low as 1.9 g \( \mathrm { c m } ^ { - 3 } \) such as for Itokawa (Fujiwara et al., 2006). Given the predominance of S types among the small near-Earth asteroid population, it is reasonable to conclude that the density of most potential ARM targets will be in the same range though the density of a specifically

chosen C-type target would be lower, around 1 g \( \mathrm { c m } ^ { - 3 } \)(Britt et al., 2002). The composition, mass and internal properties (rubble pile versus monolith) will all play a role here.

We have collected the available data on very small asteroids (VSAs) with the highest quality light curves. Unsurprisingly, a VSA will most likely be found to have a period under the “spin barrier” of 2.2 hrs; the average period from the \( D \le \) 60 m sample analyzed here is 0.67 hrs or 40 minutes. The lower limit for the period of the current sample reaches down to 25 seconds (2010 \( \mathrm { J L } _ { 8 8 } \), a 13 m diameter S-type) or even less (2014 RC, a 12-22 m Sq-type, with a period of 16 seconds) though shorter periods are possible.

With respect to structure, our results imply that a VSA will probably be a monolithic structure in which a singular boulder is held together by its own tensile strength, as opposed to a “rubble pile” in which many boulders are gravitationally bound together, although arguments from Holsapple (2003) and new evidence from Mommert et al. (2014) show that this may not necessarily be true.

We used the information on the light curves provided by various surveys to estimate the axial ratio. The VSAs in our samples have an average minimum \( a / b \) ratio of about 1.4, and the VSA with the greatest axial ratio was found to be 2007 \( \mathrm { T S _ { 2 4 } } \) at 2.8. Alternate analyses of some asteroid light curves have given slightly different values, but all VSAs observed to date are consistent with axial ratios less than three. The mission outlined by the KISS report discussed a capture bag capable of accommodating a 10x15 meter asteroid with a 2:1 axis ratio. Most (\( > \) 90%) of our \( D \le \) 60 m restricted sample have an \( a / b \) ratio less than 2, but a few exceed this value. We do note that our method of determining axial ratios from Kwiatkowski et al. (2010a) provides the minimum axial ratio consistent with the light curve amplitude, and so the values reported here are lower limits.

The composition of most potential targets is likely to be rich in silicates (S-type taxonomic class). The KISS study suggested that C-type asteroids would make more interesting targets be-cause of their more diverse composition, which include water, carbon compounds, rock and metal. However, such asteroids are not common within the currently characterized small near-Earth as-teroid population, though four C-group (including sub-types B and F) and three X-types appear in our sample. Though the real NEA population is not necessarily this low in C types, the list of potential ARM targets is likely to be poorer in carbonaceous bodies than might otherwise be expected.

The authors thank Duncan Steel and David Asher for thoughtful comments which much im-proved this paper. This work was supported in part by the Natural Sciences and Engineering Council of Canada and the Canadian Space Agency (CSA) through the ASTRO CSA Cluster.

Britt, D. T., Yeomans, D., Housen, K., and Consolmagno, G. (2002). Asteroid Density, Porosity, and Structure. Asteroids III, pages 485–500.

Brophy, J., Culick, F., Friedman, L., and 31 others (2012). Asteroid retrieval feasibility study. Technical report, Keck Institute for Space Studies, Pasadena, California.


• 利益相關者參與（續）

Category
類別	ESG Issues
環境、社會及管治問題	Importance
重要性

Environmental Issues
環境問題	1.   Greenhouse gas emission
溫室氣體排放	Medium
中

2.   Energy consumption
能源消耗	Medium
中

3. Water consumption
水資源消耗	Medium
中

4. Waste
廢棄物	Medium
中

5.   Environmental impact of construction
建造對環境的影響	Medium
中

6.   Green building certification
綠色建築認證	Medium
中

7.   Customer engagement in environmental issues
客戶參與環境問題	Medium
中

8.   Use of chemicals
使用化學品	Medium
中

Social Issues
社會問題	9.   Local community engagement
當地社區參與	Medium
中

10. Community investment
社區投資	Medium
中

11. Occupational health and safety
職業健康及安全	High
高

12.   Labour standards in supply chain
供應鏈勞工準則	High
高

13. Training and development
培訓及發展	High
高

14. Employee welfare
僱員福利	High
高

15.   Inclusion and equal opportunities
包容及平等機會	High
高

16.   Talent attraction and retention
吸引及挽留人才	High
高

• 利益相關者參與（續）

Category
類別	ESG Issues
環境、社會及管治問題	Importance
重要性

Operating Issues
營運問題	17. Economic value generated
所產生經濟價值	Medium
中

18. Corporate governance
企業管治	High
高

19. Anti-corruption
反貪污	High
高

20. Supply chain management
供應鏈管理	High
高

21. Customer satisfaction
客戶滿意度	High
高

22. Customer privacy
客戶私隱	High
高

# • Environmental Strategy and Management Approach

The company has established regular emission reduction policies such as supporting our people to reduce the use of conventionally fuelled vehicles, to use paper more efficiently and conduct paper-less meetings, encouraging our employees to turn off the lights and air conditioners in unmanned rooms. We also try to replace business trip and meeting where telephone and video conferencing are possible. In addition, the company also actively purchases energy-efficient office equipment, purchases and uses energy-efficient air conditioners, recycles waste paper, cardboard and plastic bottles, and effectively reduces the burden onto the environment caused by the Group's business operations.

本公司已制定常規減排政策，如鼓勵我們的員工減少使用傳統燃油汽車、更善用紙張及召開無紙化會議、鼓勵僱員在房間無人使用時關閉電燈及空調。如可以使用電話及視像會議，我們亦嘗試用以取代商務旅行及會議。此外，本公司亦積極購置節能辦公設備，購置及使用節能空調，循環使用廢紙、紙板及塑料瓶，有效地減少本集團業務營運對環境造成的負擔。


# 1. Anomalous paramagnetism \( T > T _ { c 0 } \))

In the paramagnetic state of ferromagnetic and anti-ferromagnetic systems, the muon spin depolarization at zero external field has contributions from the static nu-clear dipolar fields and the fluctuating fields from electron spins. The nuclear spin contribution is well reproduced by the Gaussian Kubo-Toyabe (GKT) function derived from the Gaussian distribution of the local field (\( B _ { \mathrm { l o c } } \)),which is a good approximation for a dense ensemble of randomly orientated nuclear magnetic moments.18 The GKT function is written as

where \( \Delta / \gamma _ { \mu } = \langle B _ { \mathrm { l o c } } ^ { 2 } \rangle ^ { 1 / 2 } \) corresponds to the root-mean-square for the distribution of the local magnetic field (where \( \gamma _ { \mu } = 2 \pi \times 1 3 5 . 5 3 \) MHz/T is the muon gyromag-netic ratio). On the other hand, the dynamical electron spin contribution is given as \( \exp ( - \lambda t ) \) with the relax-ation rate \( \lambda \). Then, the depolarization function G(t) is described by the product of the two contributions:

\[ G ( t ) = G _ { \mathrm { G K T } } ( t ) \exp ( - \lambda t ) . \eqno ( 3 ) \]

Figure 6(a) shows the zero-field (ZF)-\( \mu ! \) SR spectra at 300 K and 80 K (i.e., above and below \( T _ { \mathrm { c 1 } } \)), where no sign of the emergence of the spontaneous internal mag-netic field, such as oscillation and/or fast damping, is observed below \( T _ { \mathrm { c 1 } } \). This immediately leads us to the conclusion that no long-range magnetic order is present below \( T _ { c 1 } \), which is in qualitative agreement with the pre-vious result.11 The temperature dependence of \( \lambda \) deduced by a curve fitting is plotted in the inset of Fig. 6(a).

The spectra in Fig. 6(a) including the one at 18 K show that the exponential damping gradually overcomes the GKT depolarization below 40 K. Figure 6(b) shows \( \mu \) SR spectra at 18 K measured with ZF and longitudinal fields (LFs) of 10 mT and 100 mT. Generally, the expo-nential damping due to the electron spin fluctuation does not depend much on the LF because the fluctuation rate of the dynamical field from the ordinary paramagnetic moments is much larger than the Larmor frequency of the muon spin precession. However, the depolarization is quenched by the application of a relatively weak LF, which indicates that \( B _ { \mathrm { l o c } } \) is much weaker than the LF and that it is quasistatic within the time window of \( \mu \) SR (\( > 1 0 ^ { - 5 } \) s). These features allow us to estimate an up-per limit for the mean hyperfine field at the muon site, \( B _ { \mathrm { l o c } } \, \simeq \, \Delta / \gamma _ { \mu } \, \lesssim \, 2 \) mT, and that of the fluctuation rate \( \nu \lesssim \) 0.5 MHz. We also performed curve fitting for the LF dependence of the \( \mu \) SR spectra at 18 K by replac-ing the exponential term in Eq. (3) with the Lorentzian Kubo-Toyabe (LKT) function for a finite LF:

FIG. 6. (Color online) (a) Zero-field (ZF)-\( \mu ^ { 6 } \) SR time spectra at 300 K, 80 K, and 18 K. The solid curves are the fitted results of Eq. (3). The inset shows the temperature dependence of the relaxation rate. (b) \( \mu ^ { \star } \) SR spectra at 18 K measured with ZF and longitudinal fields (LF = 10 mT and 100 mT) with the results of the curve fitting with Eq.(4).

\[ \begin{array} { l } { \displaystyle G _ { \mathrm { L K T } } ( t ) = \! 1 - \frac { \Delta } { \omega _ { 0 } } j _ { 1 } ( \omega _ { 0 } t ) e ^ { - \Delta t } } \\ { \displaystyle \quad \, - \big ( \frac { \Delta } { \omega _ { 0 } t } \big ) ^ { 2 } [ j _ { 0 } ( \omega _ { 0 } t ) e ^ { - \Delta t } - 1 ] } \\ { \displaystyle \quad \, - \big [ 1 + \big ( \frac { \Delta } { \omega _ { 0 } } \big ) ^ { 2 } \big ] \Delta \int _ { 0 } ^ { t } j _ { 0 } ( \omega _ { 0 } t ^ { \prime } ) e ^ { - \Delta t ^ { \prime } } d t ^ { \prime } , \, \, \, \, ( 4 ) } \end{array} \]

where \( \omega _ { 0 } = \gamma _ { \mu } B _ { 0 } \) is the Larmor frequency of the muon spin precession in the presence of an external field \( B _ { 0 } \), and \( j _ { 0 } \) and \( j _ { 1 } \) denote spherical Bessel functions.19 We note that the results of the curve fitting indicate that the entire volume of the sample exhibits a Lorentzian-like field distribution. Thus, we are led to the conclusion that the dilute magnetic moments of d electrons having an unusually quasistatic characteristic make a significant contribution to the muon depolarization for \( T _ { c 0 } \leq T \leq \)\( T _ { c 1 } \), although their origin is not clear at this stage.

# 2. Inhomogeneous magnetism \( ( T < T _ { c 0 } \))

As is observed for the ZF-\( \mu \) SR spectra in Fig. 7(a), a rapid depolarization develops with decreasing tempera-ture below \( T _ { \mathrm { c 0 } } \). We show the ZF- and LF-\( \mu \) SR spectra at 30 mK measured in the presence of various LFs up to 100 mT in Fig. 7(b). The ZF spectra clearly demonstrate the absence of conventional long-range magnetic order at

FIG. 7. (Color online) (a) ZF-\( \mu \) SR time spectra in the temper-ature range between 4.2 K and 10 K. (b) \( \mu ^ { \circ } \) SR time spectra measured at 30 mK in the presence of various longitudinal fields (LFs) up to 100 mT. The inset shows the earlier part of the spectrum at ZF. The solid lines are the fitted results by using Eq. (6)..

the base temperature. The initial fast depolarization ex-hibits a gradual suppression with increasing LF and is nearly quenched at \( ^ { \dag } \) F = 100 mT. Surprisingly, we also observed a finite slope due to the residual magnetic fluc-tuation in these spectra at a large time, which is almost independent of the LF, even at 30 mK. These features can be observed from the fast damped 2/3 amplitude followed by a slowly relaxing 1 \( / \) 3 component originating from the magnetic ordered state with slow persistent spin dynamics.

In a previous \( \mu \) SR study, Sugiyama et al. analyzed their ZF-\( \cdot \mu \) SR spectra by using a combination of an expo-nentially relaxing cosine oscillation for the damped 2 \( / \) 3 component and an exponential function for the 1 \( / \) 3 tail signal.11 They showed that the ratio of the relaxation rate of the 1 \( / \) 3 tail component \( \lambda _ { \mathrm { t a i l } } \) to the precession frequency \( \omega _ { \mathrm { A F } } \) is close to unity, \( \lambda _ { \mathrm { t a i l } } / \omega _ { \mathrm { A F } } \, \sim \, 1 \), where \( \lambda _ { \mathrm { t a i l } } / \omega _ { \mathrm { A F } } \) corresponds to the field distribution normalized to the mean value of \( B _ { \mathrm { l o c } } \). However, their fitting function is based on an unique precession signal at a spontaneous local field for the conventional magnetic ordered state, \( \lambda _ { \mathrm { t a i l } } / \omega _ { \mathrm { A F } } \ll 1 \) . The observed broad \( B _ { \mathrm { l o c } } \) distribution and residual magnetic fluctuation strongly suggest that a highly inhomogeneous magnetic state appears in the ground state of \( \mathrm { S r } _ { 2 } \)\( \ldots \) 4.

The inset of Fig. 7(b) shows the earlier part of the ZF-\( \mu \) SR spectrum at 30 mK. As mentioned above, the GKT and LKT functions are widely attributed to the \( \mu \) SR spectra for random magnetism in dense and diluted spin systems. However, the ZF spectrum at 30 mK lacks a decrease that usually precedes the asymptotic tail for the GKT function, although it exhibits a Gaussian-like initial depolarization. We attributed this to a broad dis-tribution of \( B _ { \mathrm { l o c } } \), which is not characterized by a sin-gle root-mean-square width, and adopted the Gaussian-broadened Gaussian (GbG) function as a recursive func-tion for the curve fitting.20–22

The GbG function is described as one of the general-ized forms of the GKT function, where \( \Delta \) in Eq. (2) has a distribution with the mean value \( \Delta _ { 0 } \) and root-mean-square width W. \( G _ { \mathrm { G b G } } ( t ) \) for ZF is written as

where R is the ratio of the distribution width, and \( R = W / \Delta _ { 0 } \). For \( R \) = 0, the GbG function is identical to the GKT function with a deep minimum after the ini-tial depolarization. The depth of the minimum decreases with increasing R and becomes almost independent of R for \( R > \) 1. Thus, we imposed the condition 0 \( \le R \le \) 1 in the following analysis. We note that the GbG function does not approach the LKT function, even for \( R \gg \) 1.

For the curve fitting, we presume that G(t) is primar-ily described by the product of the GbG function and a slow exponential decay due to the persistent spin dynam-ics in addition to a supplementary term for exponential damping:

\[ G ( t ) = f G _ { \mathrm { G b G } } ( t ) e ^ { - \lambda t } + ( 1 - f ) e ^ { - \lambda _ { \mathrm { e x t } } t } , \qquad ( 6 ) \]

where f is the volume fraction exhibiting inhomoge-neous magnetism, and \( \lambda \) is the relaxation rate reflecting the spin dynamics. The second exponential term with the relaxation rate \( \lambda _ { \mathrm { e x t } } \) is for extrinsic contributions originat-ing from the magnetically ordered state region with rel-atively fast persistent dynamics, which makes the above muon spin depolarization model unreasonable. The T dependence of f is plotted in the inset of Fig. 8. The in-homogeneous magnetism develops over the almost entire volume of the sample below 6 K. We obtained \( R = 0 . 7 ( 1 ) \) below 4.2 K, whereas R is unity at higher temperatures. This discrepancy might be caused by the lack of data for \( t \sim 0 . 1 \)\( \cdot \ \mu \) s that is masked by the limited time resolu-tion of the pulsed muon beam (∼100 ns). We note that the dynamical LKT function and dynamical spin glass models19 could not reproduce the spectra over the early time range.

The absence of decrease in the \( \mu \) SR time spectra tells us important aspects of the magnetic ground state. Noakes et al. reproduced the shallow decrease in the GbG


# 8、母公司所有者权益变动表