Financial Performance - Overall revenue decreased by approximately 9.5% to HKD 352.2 million (2019: HKD 388.9 million), with a net loss attributable to shareholders of HKD 216.3 million, a decrease of 401.7% or HKD 288.0 million compared to the previous year[6] - Revenue from brand promotion segment, including retail and procurement services for brand apparel, swimwear, and accessories, was approximately HKD 133.2 million (2019: HKD 210.7 million)[7] - Revenue from the retail segment, including rental income from investment properties and commission income from managing and operating outlets, totaled approximately HKD 156.1 million (2019: HKD 119.8 million)[7] - Brand promotion segment revenue decreased by 26.6% to HKD 168.0 million, with a reported segment loss of HKD 17.2 million[8] - Retail segment revenue increased by 30.3% to HKD 156.1 million, with a reported segment loss of HKD 40.6 million[9] - Financial services segment revenue decreased by 30.6% to HKD 28.1 million, with a reported segment loss of HKD 92.6 million[10] - Gross profit decreased by 12.1% to HKD 245.4 million, with a gross margin of 69.7%[11] - Other income and gains decreased by 32.8% to HKD 29.3 million[12] - Distribution and selling expenses decreased by 14.2% to HKD 97.9 million[13] - Administrative expenses decreased by 7.8% to HKD 119.6 million[14] - Financing costs increased by 29.6% to HKD 69.6 million[15] - The company recorded a net loss attributable to owners of HKD 216.3 million, compared to a net profit of HKD 71.7 million in the previous year[20] - Revenue decreased to HKD 352.159 million in 2020 from HKD 388.944 million in 2019, a decline of 9.5%[161] - Gross profit dropped to HKD 245.406 million in 2020 from HKD 279.113 million in 2019, a decrease of 12.1%[161] - Net loss for the year was HKD 217.086 million in 2020, compared to a net profit of HKD 81.905 million in 2019[161] - Basic loss per share was HKD 0.0727 in 2020, compared to a basic earnings per share of HKD 0.0241 in 2019[161] - Total comprehensive income for the year was a loss of HKD 8.119 million in 2020, compared to a profit of HKD 389.846 million in 2019[162] - The company reported a net loss of 216,328 thousand HKD for the year 2020, compared to a net profit of 71,705 thousand HKD in 2019[165][166] - The company reported a loss before tax of HK80,657 thousand in 2019[167] - Depreciation of property, plant, and equipment increased to HK32,548 thousand in 2019[167] - The fair value loss on financial assets at fair value through profit or loss was HK88,843 thousand in 2019[167] - Cash generated from operating activities was HK5,335 thousand in 2019[167] - Net cash used in investing activities was HK14,797 thousand in 2019[168] - Net cash from financing activities was HK34,752 thousand in 2019[168] - The company's cash and cash equivalents increased to HK121,987 thousand at the end of 2019[169] Business Segments - The company operates in three main business segments: brand management (including "PONY" and "SKINS"), retail (property investment and outlet management), and financial services (securities brokerage, margin financing, lending, underwriting, and financial advisory services)[36] - The company's main businesses include brand promotion, retail, and financial services[170] Strategic Initiatives and Partnerships - The company completed the acquisition of the global trademarks and patents of the sports compression wear brand "SKINS" and established a joint venture with Itochu Corporation to operate the "SKINS" business[4] - The company partnered with Descente to operate the "arena" brand in the Chinese swimming products market, leveraging Descente's influence and experience in the sports brand industry[4] - The company is preparing to celebrate the 50th anniversary of its international footwear brand "PONY" in 2022, with plans for a series of promotional activities[4] - The company strategically expanded its retail business through a combination of outlet malls and community shopping centers in various regions across China, attracting multiple international brands[4] - The company's SPAC merged with a mobile digital media company in early 2020, aiming to leverage digital media for brand expansion and consumer engagement[5] Corporate Governance and Leadership - The Board of Directors consists of six members, including three executive directors and three independent non-executive directors, with expertise in securities, finance, investment, business management, accounting, FMCG sales, distribution, property management, and legal professions[72] - The Board has delegated significant operational and management authority to the Chief Operating Officer and senior management, with regular reviews of the effectiveness of this delegation[73] - All Board members attended 4 out of 4 Board meetings and 1 out of 1 Annual General Meeting during the year, demonstrating full participation[74] - The Audit Committee, composed of three independent non-executive directors, held two meetings to review the Group's interim and annual financial statements and discuss accounting principles and audit matters[79] - The Board has implemented a diversity policy to enhance efficiency, corporate governance, and sustainable development, considering factors such as age, cultural and educational background, ethnicity, professional experience, and tenure[71] - The Chairman and CEO roles are currently held by the same individual, Mr. Cheng Tun Ni, to provide strong and continuous leadership in a changing business environment[77] - The Board has established three committees (Audit, Remuneration, and Nomination) in line with corporate governance codes, all chaired by independent non-executive directors[78] - The company provides regular updates and training to directors on business developments, listing rules, and regulatory changes to ensure compliance and good corporate governance practices[75] - Newly appointed directors receive briefings and professional development to ensure understanding of the Group's business and responsibilities under listing rules and regulatory requirements[76] - The Audit Committee reviewed the Group's risk management and internal control systems with an independent internal audit service provider and identified no significant issues[79] - Audit services fees amounted to HKD 2,030 thousand, while non-audit services fees were HKD 320 thousand[81] - The company's independent auditor, BDO Limited, adheres to a seven-year rotation policy for lead partners, with the current lead partner appointed in the 2017 fiscal year[80] - The Remuneration Committee reviewed and recommended executive directors' compensation, including salary, discretionary bonuses, and share options[82] - The Nomination Committee reviewed the board's structure, size, and composition, and assessed the independence of non-executive directors[83] - No new directors were appointed during the year, and the board reviewed its composition and the re-election of retiring directors[84] - The company appointed a new company secretary, Mr. Yeung King Hong, who completed over 15 hours of professional training in 2020[85] Environmental, Social, and Governance (ESG) - The company emphasized its commitment to integrating environmental, social, and governance (ESG) matters into daily business operations and decision-making processes[142] - The company has identified 26 key sustainability issues relevant to its operations, assessed through stakeholder surveys and management evaluations, to prioritize ESG initiatives[101] - The company maintains a robust internal control and risk management system, regularly reviewed by the audit committee and independent consultants to mitigate risks[97] - The company emphasizes stakeholder engagement, maintaining communication channels with employees, customers, suppliers, shareholders, and regulatory bodies to gather feedback and improve operations[98] - The company has over 400 well-known brands in its Shenyang and Xiamen outlets, providing a one-stop shopping and entertainment experience[108] - The company received only one customer complaint related to customer service at its outlets, which was promptly resolved[111] - The company's securities business holds licenses for securities trading, investment advisory, and asset management activities in Hong Kong[110] - The company ensures product quality by only selling authorized and nationally recognized products in its apparel and accessories business[109] - The company has implemented comprehensive policies to ensure compliance and customer protection in its securities business[110] - The company organized various activities, including puppet shows and lucky draws, to enhance visitor satisfaction at its outlets[107] - The company adheres to local laws and regulations, including consumer rights and product quality laws, with no product recalls or legal violations reported[106] - The company emphasizes supplier and tenant evaluations to ensure quality and compliance with brand standards[107] - The company focuses on environmental sustainability, including gas emissions, waste management, and green procurement[104] - The company prioritizes workplace diversity, anti-discrimination, and employee welfare as part of its ESG initiatives[105] - The company has implemented strict COVID-19 prevention measures, including daily temperature checks for employees, social distancing, mandatory mask-wearing, and regular disinfection of public areas[112] - The company employs 271 domestic suppliers to reduce greenhouse gas emissions from transportation and enforces strict environmental and social risk management[115] - The company provides competitive compensation and benefits, including social insurance, housing provident fund, and mandatory provident fund for employees in mainland China and Hong Kong, respectively[120] - The company offers various employee benefits such as annual leave, sick leave, maternity leave, high-temperature subsidies, and medical insurance[121] - The company has a reward system for employees, including year-end bonuses, Spring Festival gift packages, and various monetary gifts for occasions like marriage, childbirth, and birthdays[123] - The company organized over 200 hours of training courses during the reporting period, with an average training duration of 3.21 hours per employee[127] - Male employees accounted for 43.24% of training participation, while female employees accounted for 56.76%[128] - Senior management received an average of 5.56 hours of training, middle management 2.61 hours, and general and technical staff 3.22 hours[128] - The company implemented a new video training method in Shenyang Sunac Outlets to teach computer software operation skills and etiquette training[126] - The company conducted regular fire drills and training, and developed a "Fire Evacuation Drill Plan" to enhance employee emergency response capabilities[129] - The company established a comprehensive anti-corruption policy and reporting mechanism, with no complaints or lawsuits related to corruption, bribery, or money laundering during the reporting period[131] - The company emphasized environmental protection in its operations and complied with relevant environmental laws and regulations, with no major administrative sanctions or penalties for environmental violations[132] - The company has implemented energy-saving measures, including installing automatic lighting sensors and setting air conditioning temperatures to 25°C in summer and 18°C in winter to reduce energy consumption[133] - LED lighting has been adopted to replace traditional lighting, reducing reliance on non-renewable energy sources[133] - The company has reduced water consumption by over 30% by switching to a single-pipe constant temperature water supply system and flow control system[135] - The company has established a water-saving leadership group in Shenyang Outlets, utilizing a computer-assisted management system to monitor water usage in real-time[135] - The company prioritizes collaboration with brands that have ISO 14001 environmental management systems and includes environmental protection clauses in lease agreements[136] - Wastewater treatment includes pre-treatment of oily wastewater through grease traps and subsequent discharge into municipal sewage networks[136] - Kitchen exhaust is treated through purification equipment and discharged via dedicated exhaust pipes[136] - Noise reduction measures include soundproofing and vibration damping for equipment such as fans and generators[136] - Regular collection and separate treatment of kitchen waste are conducted by qualified units[136] - The company promotes a "paperless office" initiative and encourages employees to use electronic communication channels to reduce paper usage[134] - Total greenhouse gas emissions increased to 3,663.22 metric tons of CO2 equivalent in 2020, up from 775.644 metric tons in 2019[137] - Direct emissions (Scope 1) decreased to 42.25 metric tons of CO2 equivalent in 2020, down from 64.75 metric tons in 2019[137] - Indirect emissions (Scope 2) surged to 3,622.95 metric tons of CO2 equivalent in 2020, compared to 710.904 metric tons in 2019[137] - Total energy consumption rose to 3,967.39 thousand kWh in 2020, up from 925.47 thousand kWh in 2019[137] - Total water consumption increased to 69,621.83 cubic meters in 2020, compared to 22,347.00 cubic meters in 2019[137] - The company donated 500 pieces of anti-epidemic supplies worth approximately HKD 65,000 to Yan Chai Hospital during the reporting period[139] - The company contributed HKD 42,000 to Yan Chai Hospital and sponsored over HKD 14,000 for various hospital services during the reporting period[140] - The company participated in the Earth Hour event organized by WWF Hong Kong and signed a pledge to turn off lights for one hour on March 28, 2020[141] - The company donated 20 computers, 17 laptops, 9 printers, and 14 monitors to Caritas Computer Workshop to improve working conditions[140] - Total greenhouse gas emissions and density data are provided, with specific figures available on page 50[143] - Total hazardous waste generated and its density are detailed, with data available on page 50[143] - Total non-hazardous waste generated and its density are outlined, with data available on page 50[143] - Total direct and/or indirect energy consumption by type and density are provided, with data available on page 50[143] - Total water consumption and its density are detailed, with data available on page 50[143] - Employee turnover rate by gender, age group, and region is provided, with data available on page 42[145] - Percentage of employees trained by gender and employee category is detailed, with data available on page 45[147] - Average training hours completed per employee by gender and employee category is outlined, with data available on page 45[147] - Number of suppliers by region is provided, with data available on page 40[147] - Policies and compliance information regarding environmental and natural resource impacts are detailed, with data available on page 49[144] Financial Statements and Reporting - The company's financial statements were prepared in accordance with Hong Kong Financial Reporting Standards and comply with the disclosure requirements of the Hong Kong Companies Ordinance[150] - The company engaged independent qualified valuers to assist in the fair value measurement of investment properties, leased land, and outlet buildings[153] - The company's financial statements were audited in accordance with Hong Kong Standards on Auditing, and the auditor confirmed independence and compliance with ethical responsibilities[151] - Key audit matters included the fair value measurement of investment properties, leased land, and outlet buildings, as well as impairment assessments of trade receivables and loans[152] - The company's financial statements for 2020 were considered to present a true and fair view of the financial position and performance of the group[150] - The company's financial statements included consolidated financial statements, comprehensive income statements, and cash flow statements for the year ended December 31, 2020[150] - The company's financial statements were audited by BDO Limited, an independent auditor based in Hong Kong[149] - Trade and other receivables and loan impairment assessment identified as a key audit matter due to significant judgment and estimation uncertainty, with a material impact on the consolidated financial statements[155] - Goodwill and intangible assets impairment assessment identified as a key audit matter, with a carrying amount of HK194,740,000 for intangible assets as of December 31, 2020[155] - Limited useful life intangible assets had a carrying amount of HK$24,084,000 as of December 31, 2020, requiring impairment testing when indicators of impairment are present[155] - Management concluded no impairment loss for remaining goodwill and intangible assets as of December 31, 2020, except for impairment loss on goodwill from health product acquisition[155] - Key inputs for recoverable amount assessment include long-term growth rate, gross margin, and discount rate, involving significant judgment and estimation uncertainty[155] - Independent qualified valuers were engaged to assess the recoverable amount of cash-generating units, with their performance and objectivity evaluated by the auditor[156] - The auditor reviewed the accuracy of cash flow forecasts and the reasonableness of key inputs used in the impairment assessment of goodwill and intangible assets[156] - The auditor assessed the adequacy of disclosures related to the impairment assessment of goodwill and intangible assets[156] - Directors are responsible for the preparation of true and fair consolidated financial statements in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance[157] - The auditor's responsibility is to obtain reasonable assurance that the consolidated financial statements are free from material misstatement, whether due to fraud or error[158] - The consolidated financial statements are prepared in accordance with HKFRS, Hong Kong Accounting Standards (HKAS), and the disclosure requirements of the Hong Kong Companies Ordinance[184] - The consolidated financial statements are prepared on a historical cost basis, except for certain properties and financial instruments measured at fair value[185] - The preparation of the consolidated financial statements requires significant accounting judgments and estimates, which are subject to ongoing review and revision[185] - The consolidated financial statements are presented in Hong Kong dollars, which is also the functional currency of the company[186] - The company uses the acquisition method to account for business combinations when control is transferred, and the acquisition cost is measured at the fair value of assets transferred, liabilities incurred, and equity issued[187] - Non-controlling interests are measured at fair value unless specified otherwise by Hong Kong Financial Reporting Standards, and acquisition-related costs are expensed unless incurred during the issuance of equity instruments[187] - Contingent consideration is recognized at fair value at the acquisition date, with adjustments made within 12 months if new information affects the fair value measurement[187] - When the company loses control
新沣集团(01223) - 2020 - 年度财报