Financial Performance - Total revenue decreased by 15.3% to HK$917.4 million for the year ended September 30, 2020, compared to HK$1,082.9 million in 2019[10]. - The loss attributable to owners of the Company was HK$689.7 million, up from HK$258.7 million in 2019, primarily due to impairment allowances and revenue decline[10]. - Impairment allowances increased to approximately HK$1,327.3 million, compared to HK$889.3 million in 2019, reflecting a review of client portfolios amid economic downturn[10]. - Adjusted net profit remained stable at HK$637.6 million, slightly up from HK$630.6 million in 2019, excluding impairment allowances[10]. - Basic loss per share was HK10.23 cents, compared to HK3.84 cents in 2019[10]. - The net loss attributable to shareholders for the year was HK$689.7 million (2019: HK$258.7 million), primarily due to impairment allowances and a decline in total revenue[11]. - Impairment allowances amounted to approximately HK$1,327.3 million (2019: HK$889.3 million), reflecting a review of certain clients' accounts and financial conditions[11]. - Adjusted net profit, excluding impairment allowances, remained stable at HK$637.6 million (2019: HK$630.6 million)[11]. Revenue Breakdown - Financing revenue was HK$779.2 million, down from HK$940.0 million in the previous year[8]. - Brokerage services revenue increased to HK$115.6 million from HK$102.0 million in 2019[8]. - Corporate finance revenue rose to HK$9.1 million, up from HK$6.4 million in 2019[8]. - Placing and underwriting revenue decreased significantly to HK$13.4 million from HK$34.5 million in the previous year[8]. - Revenue from the financing segment was HK$779.2 million (2019: HK$940.0 million), accounting for 84.9% of the group's total revenue[24]. - Revenue from brokerage services increased by 13.3% to HK$115.6 million (2019: HK$102.0 million), representing 12.6% of the group's total revenue[26]. - Revenue from the placing and underwriting segment was HK$13.4 million, a decrease of 61% from HK$34.5 million in 2019, accounting for 1.5% of total revenue[31]. - Revenue from the corporate finance segment increased to HK$9.1 million, up 42% from HK$6.4 million in 2019, representing 1.0% of total revenue[33]. Market Conditions - The Hang Seng Index dropped by 10.1% from 26,092 on September 30, 2019, to 23,459 on September 30, 2020, reflecting bearish market sentiment[15]. - The group adopted a conservative approach by tightening loan approval procedures in response to the challenging business environment[24]. - The Group anticipates a prolonged market recovery due to ongoing economic challenges and instability[38]. - The inclusion of weighted voting rights and secondary listed companies in the Hang Seng Index is expected to enhance the competitiveness of the Hong Kong stock market[39]. - The development of the "Guangdong-Hong Kong-Macao Greater Bay Area" is expected to provide more opportunities for Hong Kong as an international financial hub[39]. Strategic Focus - The Company continues to assess market conditions for potential strategic adjustments and future growth opportunities[10]. - The Group's strategy will focus on mitigating downside risks while seizing opportunities in the current economic climate[40]. - The Group plans to conduct comprehensive assessments of collaterals to minimize default risk and maintain stringent control over operating costs[40]. Assets and Liabilities - As of September 30, 2020, the Group's current assets were HK$9,326.0 million, a slight decrease from HK$9,440.2 million in 2019, while current liabilities rose to HK$4,582.6 million from HK$2,584.4 million[41]. - The total carrying amount of outstanding bonds decreased to approximately HK$1,394.6 million from HK$2,813.5 million in 2019, as the Group repaid part of the bonds during the year[41]. - The Group's bank balances, cash, and pledged bank deposits amounted to HK$852.0 million, down from HK$1,905.5 million in 2019[41]. - As of September 30, 2020, the Group's bank borrowings amounted to HK$2,371.0 million, a significant increase from HK$231.2 million in 2019, with total borrowings (excluding IPO financing) at HK$1,394.6 million, down from HK$3,044.7 million in 2019, resulting in a gearing ratio of 31.5% compared to 59.5% in 2019[44]. - The Group had available unutilized banking facilities of HK$2,440.5 million, indicating sufficient working capital for operations and future development[44]. Staff and Governance - Total staff costs, including directors' remuneration, were approximately HK$62.1 million, a decrease from HK$99.0 million in 2019, with the Group employing 77 account executives and 131 employees as of September 30, 2020[44]. - The Board did not recommend any payment of final dividend for the year ended September 30, 2020, consistent with the previous year where no dividend was paid[44]. - The Group's reserves available for distribution to shareholders as of September 30, 2020, amounted to approximately HK$101.9 million in contributed surplus and HK$164.1 million in retained profits, compared to HK$101.9 million and HK$89.2 million in 2019[69]. - The Company is primarily engaged in financial services, including commercial and personal lending, brokerage services, wealth management, and corporate finance advisory services[65]. - The Group's business review and performance analysis are detailed in the Management Discussion and Analysis section from pages 6 to 11 of the report[65]. Related Party Transactions - The financial services agreement with AY Holdings includes a commission, brokerage, fees, and interest income of HK$374,000 from the Emperor Group[116]. - The financial advisory fee from the listed members of the Emperor Group was HK$2,055,000[116]. - The maximum margin loan amount to the Yeung Family was HK$42,480,000[122]. - The maximum IPO loan amount to the Yeung Family reached HK$199,807,000[122]. - The financial advisory fee from the Yeung Family was HK$800,000[122]. - Transactions under the Emperor Group FSA constitute continuing connected transactions for the company[118]. - The company has complied with the disclosure requirements under Chapter 14A of the Listing Rules regarding related party transactions[124]. - The auditor issued an unqualified letter regarding the Group's non-exempt continuing connected transactions, confirming compliance with the Listing Rules[126]. Corporate Governance - The Company has fully complied with the Corporate Governance Code except for the deviation from code provision A.2.1, which requires separation of the roles of chairman and chief executive officer[139]. - The Board comprised six Directors as of September 30, 2020, including three Executive Directors and three Independent Non-executive Directors[140]. - The independent non-executive directors confirmed that the continuing connected transactions were conducted in the ordinary course of business and on normal commercial terms[130]. - The Company plans to re-appoint Messrs. Deloitte Touche Tohmatsu as auditor at the 2021 AGM[137]. - The Group's remuneration package includes basic salaries, discretionary bonuses, and competitive fringe benefits[135]. - The Board consists of six directors, including three executive directors and three independent non-executive directors, ensuring a balance of skills and experience relevant to the Group's business management[143]. - The independent non-executive directors (INEDs) are all professionals with recognized expertise in financial, legal, or accounting fields, contributing impartial views and independent judgments[146]. - The management is led by the Executive Committee, which comprises all executive directors, responsible for day-to-day operations and key business decisions[149]. - The Board is responsible for formulating strategic directions and monitoring the financial and management performance of the Group[148]. - The Company has received confirmation of independence from each INED, and they are considered independent based on the annual review conducted by the Nomination Committee[147]. - All directors have participated in continuous professional development, covering topics such as corporate governance, finance, industry-specific knowledge, and regulatory compliance[158]. - The Company has arranged appropriate insurance coverage for legal actions against the directors[159]. - The Board structure is designed to ensure adequate independence and effective oversight of management, with no current plans for changes[144]. - The INEDs serve an initial term of three years, automatically renewed for successive one-year terms, subject to early termination with written notice[146]. - The Company ensures compliance with legal and regulatory requirements, including risk management and corporate governance policies[153]. - The Board has ensured compliance with corporate governance codes, with all directors participating in ongoing professional development[161]. - The attendance of directors at meetings was high, with all executive directors attending 100% of the meetings held[166]. - The Executive Committee is responsible for formulating business policies and managing day-to-day operations, consisting of three executive directors[179]. - The Audit Committee and the majority of the Remuneration and Nomination Committees are composed of Independent Non-Executive Directors (INEDs)[178]. - The company has established procedures for directors to seek independent professional advice when necessary, with costs borne by the company[168]. - Regular board meetings are held approximately quarterly, ensuring adherence to applicable rules and regulations[169]. - The company maintains appropriate insurance arrangements for directors facing potential legal actions[163]. - The Board has reviewed the contributions of each director and is satisfied with their time commitment during the year[168]. - Clear written terms of reference are provided to all members of the Board Committees to facilitate effective management[178]. - The company has implemented a process for handling conflicts of interest, ensuring transparency and compliance with governance standards[172]. - The Audit Committee held three meetings during the year to review the effectiveness of the audit process and the accuracy of the annual consolidated financial statements for the financial year ended 30 September 2019[182]. - The Remuneration Committee reviewed the current remuneration structure of Executive Directors and senior management, making recommendations for specific packages[188]. - The Nomination Committee reviewed the structure, size, composition, and diversity of the Board, and made recommendations for the re-election of Directors at the 2020 AGM[196]. - The Audit Committee recommended the re-appointment of the external auditor at the 2020 annual general meeting[185]. - The Remuneration Committee held two meetings during the year to discuss Directors' fees and remuneration packages[189]. - The Audit Committee performed an annual review of non-exempt continuing connected transactions of the Group for the previous year[183]. - The Executive Committee is responsible for developing business policies and making decisions related to the Group's management and daily operations[179]. - The Audit Committee reviewed the effectiveness of the risk management and internal control systems during the previous year[185]. - The Nomination Committee assessed the independence of INEDs and reviewed the time commitment of each Director[196]. - The Remuneration Committee made recommendations to the Board regarding the remuneration of INEDs[188]. - The Board Diversity Policy aims to achieve a broad range of diversity on the Board, including gender, age, cultural and educational background, and professional experience[197]. - The Nomination Policy assists the Nomination Committee in identifying suitable candidates for directorship based on the Board Diversity Policy[198]. - The Nomination Committee reviewed the structure, number, composition, and diversity of the Board during the year[199]. - The Committee also assessed the independence of independent non-executive directors and their time commitment to board responsibilities[199]. - The Board Diversity Policy emphasizes the importance of diversity in complementing the Company's corporate strategy[200].
英皇资本(00717) - 2020 - 年度财报