Financial Performance - The Group maintained a healthy financial position despite a challenging year, with a focus on suppressing impacts from market volatility and reshuffling the asset portfolio by disposing of high-risk assets [8]. - The Group's financial resilience was enhanced, allowing for sufficient internal resources to be reserved for future investment opportunities [8]. - The Group's revenue from financial services for the year ended 31 December 2018 was HK$134 million, a decrease of 43% compared to the previous year, with over 98% of this revenue derived from effective interest income from loan note investments [10]. - The distressed debt assets held by the Group decreased to HK$10 million at the end of the year, representing a 98% decrease from HK$447 million at the end of the previous year [11]. - The net investment losses from Distressed Debt Asset Management amounted to HK$13 million, a decline from net investment gains of HK$81 million in 2017, resulting in a loss of HK$31 million for the year compared to a gain of HK$56 million the previous year [11]. - The change in fair value of financial assets held-for-trading resulted in a loss of HK$173 million, leading to substantial losses of HK$234 million from trading securities, compared to a gain of HK$117 million in the prior year [11]. - The Group's overall performance in financial services remained stable, recording a profit of HK$86 million, unchanged from the previous year [10]. - Revenue from commodity trading decreased by 62% to HK$4,045 million for the year ended 31 December 2018, down from HK$10,617 million in the previous year [16]. - Medical equipment trading revenue increased by 82% to HK$40 million for the year ended 31 December 2018, compared to the previous year [16]. - Property investment revenue decreased by 27% to HK$95 million for the year ended 31 December 2018, down from HK$130 million in the previous year [17]. - A loss of HK$125 million was recognized due to fair value changes in the Group's investment properties in the UK for the year ended 31 December 2018 [17]. Asset Management and Investments - The Group's investment portfolios were reshuffled to maximize returns to shareholders and improve risk management, with a focus on distressed debt assets [11]. - The Group adopted a prudent approach to maintain investments by decreasing the size of investment portfolios amid global uncertainties [11]. - The Group entered into a sale and purchase agreement with Solis Capital Limited for the proposed disposal of shares of The Hongkong and Shanghai Hotels, Limited [12]. - The Group's strategy includes actively tapping into the value gap of distressed debt assets in China to maximize overall revenues [10]. - The Group holds four mining right licenses for three tungsten projects in Mongolia [17]. - The acquisition cost for the mining rights was HK$940 million, satisfied through cash payment, promissory notes, and convertible preference shares [17]. - The impairment losses of the mining rights amounted to approximately HK$110 million for the year ended 31 December 2018, compared to HK$0 in 2017 [18]. - The average grades of the Mining Rights decreased, leading to a lower valuation, with specific grades reported as 1.1% and 2.7% for licenses 5518A & 11027A as of 31 December 2018 [24]. - The valuation method remained unchanged, utilizing the discounted cash flow method under the income approach for both 2018 and 2017 [21]. - The adopted price for 65% tungsten concentrate was US$14,030 per ton as of 31 December 2018, an increase from US$12,778 per ton in 2017 [27]. - The price growth rate for the valuation was 0.6% for 2018, down from 2.7% compound annual growth rate from 2006 [27]. - The discount rate applied in the valuation was 22.0% for 2018, compared to 21.5% in 2017 [27]. - The Group is in the process of identifying suitable independent third parties for potential cooperative arrangements to exploit the Mining Rights [27]. Corporate Governance - The Company has complied with all code provisions of the Corporate Governance Code throughout the year ended 31 December 2018, with certain disclosed deviations [97]. - The Board currently comprises three executive Directors and three independent non-executive Directors, ensuring compliance with the Listing Rules regarding board composition [107]. - The Company is in the process of identifying a suitable candidate for the Chairman position and will inform shareholders upon appointment [106]. - All Directors confirmed full compliance with the Model Code for Securities Transactions during the year ended 31 December 2018, with no incidents of non-compliance noted [98][99]. - The Board is responsible for major decisions including approval of policies, strategies, budgets, and financial information [101]. - The Company’s independent non-executive Directors meet the requirements under Rule 3.10 of the Listing Rules, with at least one possessing appropriate professional qualifications [107]. - Each independent non-executive Director has made an annual confirmation of independence, and the Company considers all INEDs to be independent [107]. - The Company’s governance practices emphasize transparency, independence, accountability, and responsibility, with regular reviews to meet shareholder expectations [96]. - The Board reserves the right to make decisions on all major matters, including internal control and risk management systems [101]. - The Board held a total of 30 meetings during the year ended December 31, 2018, ensuring adequate governance and oversight [111]. Risk Management - The Board is responsible for establishing a sound risk management and internal control system, which is designed to manage risks within acceptable levels rather than eliminate them entirely [139]. - The risk management and compliance department prepared a risk management framework, including risk identification, analysis, control, and reporting procedures [140]. - For the year ended 31 December 2018, the Group identified major risks relevant to its businesses and began implementing controls to mitigate those risks [143]. - The Audit Committee reviewed the effectiveness of the Group's material internal controls, ensuring compliance with applicable laws and regulations [144]. - The internal control system is designed to safeguard assets against unauthorized use and ensure reliable financial information is maintained [144]. - The Group's risk assessment system is deemed effective and adequate, with periodic reviews planned to enhance its operation [143]. - No material internal control deficiencies were discovered during the sampling check on major compliance control activities conducted in the second half of the year [143]. - The internal auditors conducted an independent appraisal of the adequacy and effectiveness of the risk management and internal control systems for the year ended December 31, 2018 [140]. Employee Engagement and Development - The Group emphasizes talent acquisition and retention through a multi-channel approach and incentive mechanisms to ensure long-term competitiveness [66]. - Employee remuneration is aligned with market standards, industry practices, and individual qualifications, with bonuses distributed based on profitability [66]. - The Group has established an annual performance appraisal system to regularly review employee performance and remuneration policies, aiming to motivate contributions and assist in career development [67]. - The recruitment policy is based on fairness and merit, requiring candidates to undergo objective assessments to ensure alignment with the Group's development needs [68]. - The Group prohibits any form of discrimination in the workplace and has established a reporting mechanism for biased treatment [68]. - Various employee engagement activities were organized to enhance team spirit and corporate culture, including birthday parties and annual dinners [69]. - The Group prioritizes occupational health and safety, providing guidelines for fire safety and encouraging reporting of unsafe conditions [74]. - The Group has established systematic training regimens including induction training, on-the-job training, and external training to support continuous staff development [77]. - The Group initiated special education allowances in FY2018 to encourage staff to pursue further studies related to their current roles or long-term career development [77]. Environmental, Social, and Governance (ESG) Initiatives - The Group focuses on sustainable development to create long-term value for stakeholders [52]. - The ESG Report covers financial services, asset management, commodity trading, medical equipment trading, and property investment, which are the major operating segments for FY2018 [53]. - Significant ESG matters include waste treatment, carbon emissions, energy and water consumption, and environmental impact management [54]. - The total carbon emission of the Group in FY2018 was 73.74 tonnes, with a carbon emission density of 0.042 tonnes of carbon dioxide per square meter of office space [57]. - The Group generated a total of 0.725 tonnes of waste during FY2018, including 0.719 tonnes of non-hazardous waste and 0.006 tonnes of hazardous waste [56]. - Approximately 0.28 tonnes of paper were saved in FY2018 due to the implementation of paperless practices and electronic documentation [56]. - The Group recycled 0.8 tonnes of waste paper during the Reporting Period through various environmental recycling policies [56]. - The Group has implemented green office initiatives to reduce waste and promote environmental protection policies [56]. - The Group has purchased additional video conferencing equipment to reduce greenhouse gas emissions from travel [57]. - The Group achieved a total energy consumption reduction of 5.4% during the Reporting Period through various energy-saving policies and measures [60]. Shareholder Engagement - The Company has adopted a dividend policy, with the payout ratio varying from year to year, and no assurance of specific amounts for any given period [156]. - Shareholders holding at least one-tenth of the paid-up capital can request a special general meeting, which must be convened within 2 months of the requisition [155]. - The Company has established procedures for shareholders to direct enquiries to the Board, including a dedicated email address [156]. - The Group's reserves available for distribution to equity holders as of December 31, 2018 amounted to approximately HK$3,107 million, down from approximately HK$4,498 million in 2017 [164]. - A special dividend of 28.58 HK cents per ordinary share was paid for the year ended 31 December 2018, with a total dividend of 48.58 HK cents for the year, compared to 1.81 HK cents in 2017 [163]. - The Company has recommended a second special dividend of 20 HK cents per ordinary share, subject to shareholder approval [163].