CHIHO ENV (00976) has issued an announcement stating that following the disposal of the Schultze Group, the Company has been in discussions with its auditors regarding the accounting treatment of the Schultze Group.

After considering the applicable provisions of Hong Kong Financial Reporting Standards in relation to the Group's consolidated financial statements for the year ended 31 December 2025, the Board is of the view that the Schultze Group should be deconsolidated from the Group's consolidated statements (the Schultze Deconsolidation) with effect from the date on which receivers were appointed over the shares of CRD, CRIH and CTRL, namely 14 May 2025.

This is because, following the appointment of the receivers, the receivers appointed a majority of directors to the boards of CRD, CRIH and CTRL on 14 May 2025, as a result of which the Company is unable to exercise control over CRD, CRIH and CTRL and has lost the ability to influence the affairs of the Schultze Group through its interests in CRD and CRIH.

In light of the above, the Group will exclude the financial position of the Schultze Group as at and after 14 May 2025, as well as the results and cash flows of the Schultze Group from 14 May 2025 onwards, from its consolidated financial statements for the financial year ending 31 December 2025.

The Board believes that, given the circumstances of the Schultze Group, preparing the Group's consolidated financial statements for the year ended 31 December 2025 on this basis will provide a fairer overall presentation of the Group's financial performance and position.

The Board is of the view that the Schultze Deconsolidation will have a material impact on the Group's consolidated financial statements for the year ended 31 December 2025.

Further details regarding the financial impact of the Schultze Deconsolidation are set out in the Company's unaudited interim results for the six months ended 30 June 2025 and 2026, as well as the unaudited full-year results for the year ended 31 December 2025, which will be published on 30 September 2026.