诺科达科技(00519) - 2023 - 年度财报

Company Information This section outlines the company's board composition, committee structures, contact information, and professional advisory network Board Members and Committees The Board comprises two executive and three independent non-executive directors, with designated chairpersons for key committees - The Board of Directors includes two executive directors (Mr. Wu Zhanming, Mr. Wu Tao) and three independent non-executive directors (Mr. Yu Tat Chi, Mr. Chu San Hui, Dr. Chan Kin Keung)[4] - Mr. Yu Tat Chi chairs the Audit Committee, Mr. Chu San Hui chairs the Remuneration Committee, and Mr. Wu Zhanming chairs the Nomination Committee[4] Company Contact and Professional Advisors This section provides details on the company secretary, principal business location, registered office, share registrars, principal bankers, auditor, and legal advisors - The Company Secretary is Ms. Lu Shan, with the principal place of business in Hong Kong located at Unit 2408A, 24th Floor, Lippo Centre Tower 1, 89 Queensway, Admiralty[4] - Principal bankers include China Construction Bank (Asia) Corporation Limited, Hang Seng Bank Limited, and Nanyang Commercial Bank Limited[4] - The auditor is ZHONGSHEN ZHONGHUAN (HONG KONG) CPA LIMITED, and legal advisors are Han Kun Law Offices and ONC Lawyers[5] Chairman's Report The Chairman's Report presents an overview of the company's financial performance and strategic business outlook for the fiscal year Performance Overview For FY2023, the company reported a HKD43.67 million loss, mainly from fair value reductions in financial assets and investment properties 2023 Fiscal Year Loss Composition | Item | Amount (HKD) | | :--- | :--- | | Loss for the year | 43,666,000 | | Net fair value decrease in financial assets at fair value through profit or loss | 29,123,000 | | Net fair value decrease in investment properties | 14,200,000 | Business Review and Outlook Despite a challenging 2022, the Group's business recovered in 2023, completing property projects and exploring autonomous driving technology investments - In the first half of 2023, domestic epidemic control measures were fully optimized, and the Group's business operations and employees' daily lives gradually returned to normal[8] - Sales of the Wuxi property project progressed slowly, but completion and acceptance work was successfully finished during the year, entering a new development stage[11] - The Group established a subsidiary during the year to explore investment opportunities in the autonomous driving technology innovation sector[11] Management Discussion and Analysis This section reviews the Group's business segments, financial performance, liquidity, risk factors, and other significant matters for the fiscal year Business Review The Group's primary businesses encompass resort and property development, property investment, and investment holding, highlighted by property project completion and new ventures in autonomous driving technology - The Group's principal businesses are resort and property development, property investment, and investment holding[13] - The Wuxi property project was completed on June 30, 2023, recognizing HKD88.19 million in revenue with a gross profit margin of approximately 31% in FY2023[14] - The fair value of Hong Kong investment properties decreased by HKD14.2 million in FY2023, but rental income increased to HKD4.82 million (2022: HKD4.41 million) due to higher occupancy rates[15] - The investment holding business recorded a net fair value decrease of HKD29.12 million (2022: HKD128.82 million) in financial assets at fair value through profit or loss[16] - The Group has established a subsidiary to explore investment opportunities in the autonomous driving technology innovation sector[11] Resort and Property Development The Wuxi property project achieved completion in June 2023, recognizing HKD88.19 million in revenue with a 31% gross profit margin - The Wuxi property project was completed on June 30, 2023[14] Resort and Property Development Segment Revenue | Indicator | FY2023 (HKD) | FY2022 (HKD) | | :--- | :--- | :--- | | Revenue | 88,186,000 | 4,705,000 | | Gross Profit Margin | 31% | - | - As of June 30, 2023, contracted sales for properties signed but not yet delivered amounted to approximately HKD26.23 million[14] Property Investment Investment property fair value in Hong Kong decreased by HKD14.2 million, while rental income increased to HKD4.82 million due to improved occupancy rates Investment Property Fair Value and Rental Income | Indicator | FY2023 (HKD) | FY2022 (HKD) | | :--- | :--- | :--- | | Investment property fair value | 280,900,000 | 295,100,000 | | Net fair value decrease | (14,200,000) | (21,600,000) | | Rental income | 4,823,000 | 4,406,000 | - The increase in rental income was primarily due to a higher occupancy rate in FY2023[15] Investment Holding The investment holding segment recorded a net fair value loss of HKD29.12 million on financial assets, primarily influenced by investments in the Green Asia Fund and Zall Smart Commerce Investment Holding Business Financial Data | Indicator | FY2023 (HKD) | FY2022 (HKD) | | :--- | :--- | :--- | | Interest and dividend income | 664,000 | 2,020,000 | | Net (loss) gain on disposal of financial assets | (889,000) | 937,000 | | Net fair value decrease in financial assets | (29,123,000) | 128,823,000 | - The fair value of the Green Asia Fund investment decreased by HKD17.96 million, representing approximately 1.17% of the Group's total assets[20] - The fair value of the Zall Smart Commerce investment decreased by HKD17.34 million, representing approximately 3.53% of the Group's total assets[21] - The Group has filed a winding-up petition against the Green Asia Fund with the Cayman Court and has received an initial dividend of HKD8.58 million[18][19] Financial Review The Group's FY2023 revenue significantly increased by 742% to HKD93.67 million, with annual loss narrowing by 73% to HKD43.67 million FY2023 Financial Performance Overview | Indicator | FY2023 (HKD) | FY2022 (HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 93,673,000 | 11,131,000 | +742% | | Net fair value decrease in financial assets at fair value through profit or loss | (29,123,000) | (128,823,000) | -77% | | Net fair value decrease in investment properties | (14,200,000) | (21,600,000) | -34% | | Finance costs | (9,429,000) | (5,472,000) | +72% | | Loss for the year | (43,666,000) | (162,877,000) | -73% | - The increase in revenue was primarily due to the bulk delivery of properties to customers in FY2023[23] - Selling expenses decreased by 47% to HKD2.64 million, mainly due to sluggish property sales in China[31] - Administrative expenses decreased by 15% to HKD26.10 million, primarily due to reduced legal and professional fees and the absence of a one-off compensation provision[32] Revenue, Cost of Sales, and Gross Profit Margin Revenue surged by 742% to HKD93.67 million, primarily driven by property deliveries within the resort and property development segment Revenue and Gross Profit Margin | Indicator | FY2023 (HKD) | FY2022 (HKD) | | :--- | :--- | :--- | | Total Revenue | 93,673,000 | 11,131,000 | | Resort and Property Development Segment Revenue | 88,186,000 | 4,705,000 | | Resort and Property Development Segment Gross Profit Margin | 20% | 17% | Fair Value Changes of Financial Assets Net fair value loss on financial assets decreased by 77% to HKD29.12 million, primarily influenced by Green Asia Fund and Zall Smart Commerce investments, partially offset by gains in the Gold Mountain portfolio Fair Value Changes of Financial Assets | Indicator | FY2023 (HKD) | FY2022 (HKD) | | :--- | :--- | :--- | | Net fair value decrease in financial assets at fair value through profit or loss | (29,123,000) | (128,823,000) | | Net fair value decrease in investment properties | (14,200,000) | (21,600,000) | - The net fair value decrease in financial assets was mainly due to a HKD17.96 million decrease in Green Asia Fund investment, a HKD17.34 million decrease in Zall Smart Commerce investment, partially offset by a HKD17.40 million increase in the Gold Mountain portfolio investment[25] - The fair value of the Green Asia Fund investment was determined using the discounted cash flow method, with key assumptions including a discount rate of approximately 19% and a recovery rate of 41.9%[26][27] Reversal of Impairment Loss on Loans and Interest Receivables The Group recognized a reversal of impairment loss of HKD8.45 million on loans and interest receivables, following partial repayments and a court order for debtor liquidation Reversal of Impairment Loss on Loans and Interest Receivables | Indicator | FY2023 (HKD) | FY2022 (HKD) | | :--- | :--- | :--- | | Reversal of impairment loss | 8,450,000 | 18,618,000 | - A principal amount of HKD19.39 million and accrued interest of HKD435,000 remain outstanding, and the company has obtained a court order for the debtor's liquidation[30] Selling and Administrative Expenses Selling expenses decreased by 47% to HKD2.64 million, and administrative expenses decreased by 15% to HKD26.10 million, primarily due to reduced legal and professional fees and the absence of a one-off compensation provision Selling and Administrative Expenses | Indicator | FY2023 (HKD) | FY2022 (HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Selling expenses | 2,639,000 | 4,956,000 | -47% | | Administrative expenses | 26,096,000 | 30,675,000 | -15% | Finance Costs and Annual Loss Finance costs increased by 72% to HKD9.43 million due to rising interest rates, while the annual loss significantly narrowed by 73% to HKD43.67 million Finance Costs and Annual Loss | Indicator | FY2023 (HKD) | FY2022 (HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 9,429,000 | 5,472,000 | +72% | | Loss for the year | 43,666,000 | 162,877,000 | -73% | - The annual loss was primarily due to a net fair value decrease of HKD29.12 million in financial assets at fair value through profit or loss and a net fair value decrease of HKD14.2 million in investment properties, which the Board emphasizes are non-cash losses[36] Liquidity, Financial Resources, and Capital Structure As of June 30, 2023, the Group maintained a liquidity ratio of approximately 2.4 times and a gearing ratio of 26%, with all borrowings maturing within one year Liquidity and Capital Structure | Indicator | June 30, 2023 (HKD) | June 30, 2022 (HKD) | | :--- | :--- | :--- | | Current assets | 950,514,000 | 1,070,444,000 | | Current liabilities | 401,822,000 | 462,761,000 | | Current ratio | 2.4 times | 2.3 times | | Total equity | 802,147,000 | 872,987,000 | | Total bank and other borrowings | 210,124,000 | 244,218,000 | | Gearing ratio | 26% | 28% | - All of the Group's bank and other borrowings are repayable within one year[37] Principal Risks and Uncertainties The Group navigates business, market, and financial risks, including property market fluctuations, competitive pressures, foreign currency, interest rate, and credit exposures, mitigated through diversification and continuous monitoring - Business risks primarily stem from the performance of the Hong Kong and China property markets, potentially leading to fair value losses on investment properties and losses in the property development segment[38] - Market risks include competitive pressures in the Hong Kong property leasing market and intense competition in the China real estate market[39] - Financial risks involve foreign currency, equity price, credit, and liquidity risks, with credit risk mainly arising from loans and interest receivables and cash equivalents[41] - The Group mitigates business and market risks through diversifying its asset composition, revenue, and profitability, as well as diversifying its property investment portfolio[38][39] - The Group continuously monitors credit risk for loans and receivables and maintains sufficient levels of cash and cash equivalents to fund operations and expansion[41] Foreign Exchange Management and Financial Policies The Group's foreign exchange risk is not significant as most assets and liabilities are denominated in RMB, HKD, and USD, with no active hedging policy for interest rate risk - The majority of the Group's assets and liabilities are denominated in RMB, HKD, and USD, resulting in non-significant foreign exchange risk, and no foreign exchange speculation activities are conducted[42] - As of June 30, 2023, approximately HKD202.19 million of bank and other borrowings were denominated in HKD, and HKD7.93 million in RMB[43] - The Group currently has no interest rate hedging policy but monitors interest rate risk from time to time[43] Other Significant Matters The Group reported no significant investments, acquisitions, or disposals in the 2023 fiscal year, with certain financial assets and properties pledged as collateral and a stable employee base - In FY2023, the Group had no significant investments, major acquisitions or disposals of subsidiaries, associates, and joint ventures, nor any future plans for significant investments or capital assets[45][46] - As of June 30, 2023, approximately HKD27.24 million of financial assets at fair value through profit or loss were pledged as collateral for margin loan financing[49] - As of June 30, 2023, the Group employed 32 full-time employees, with total staff costs of HKD12.43 million (2022: HKD10.78 million)[51] - The Group complied in all material respects with relevant laws and regulations significantly affecting its business and operations in FY2023, with no material breaches or non-compliance[52] Biographies of Directors and Senior Management This section presents biographical details of the Group's executive and independent non-executive directors, highlighting their professional experience and qualifications Executive Directors Mr. Wu Zhanming serves as Chairman and Acting CEO, possessing extensive investment experience, while Mr. Wu Tao is an Executive Director with 24 years of financial industry expertise - Mr. Wu Zhanming (aged 59) is the Chairman, Executive Director, and Acting Chief Executive Officer, with extensive investment experience across innovative technology, healthcare, real estate, and consumer services sectors[56] - Mr. Wu Tao (aged 54) is an Executive Director with 24 years of experience in the financial industry, holding an Executive Master of Business Administration degree from Fudan University School of Management and a Doctor of Business Administration degree from the United Business Institutes in Belgium[57] Independent Non-Executive Directors Mr. Yu Tat Chi, Mr. Chu San Hui, and Dr. Chan Kin Keung serve as independent non-executive directors, contributing diverse expertise in accounting, finance, and public service - Mr. Yu Tat Chi (aged 58) is a Fellow of CPA Australia and a member of the Hong Kong Institute of Certified Public Accountants, with years of experience in accounting, corporate finance, and asset management[60] - Mr. Chu San Hui (aged 54) has over 30 years of experience in the banking and financial industry, having held various positions at Agricultural Bank of China, Bank of Nanjing, and Ping An Bank[61] - Dr. Chan Kin Keung (aged 59) is a registered dentist with the Dental Council of Hong Kong and was awarded the Bronze Bauhinia Star in 2016 and the Silver Bauhinia Star in 2021[63][64] Directors' Report The Directors' Report outlines the company's principal activities, financial results, share capital, major suppliers and customers, director changes, and corporate governance compliance Principal Activities and Results The Group's principal activities include resort and property development, property investment, and investment holding, with 2023 fiscal year results detailed in the consolidated statement of comprehensive income and no final dividend proposed - The Group is principally engaged in resort and property development, property investment, and investment holding[67] - The Board has resolved not to recommend the payment of a final dividend for FY2023[69] Share Capital and Reserves Details of changes in share capital and reserves are disclosed in the financial statements, with distributable reserves of approximately HKD67.69 million as of June 30, 2023, and no share repurchases during the fiscal year - Details of changes in the company's share capital are set out in Note 24 to the consolidated financial statements[74] - As of June 30, 2023, the total reserves available for distribution to shareholders amounted to approximately HKD67.69 million (2022: HKD73.39 million)[80] - During FY2023, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[78] Major Suppliers and Customers In the 2023 fiscal year, the top five suppliers accounted for 54% of purchases, primarily from the property development segment, while the top five customers contributed 8% of revenue, all being independent third parties - In FY2023, 54% and 29% of the Group's purchases from its five largest suppliers and largest supplier, respectively, were attributable to the resort and property development segment[82] - In FY2023, the total revenue attributable to the five largest customers and the largest customer accounted for 8% and 3% of the Group's revenue, respectively[82] - The major customers are independent third parties of the company, and none of the directors, their associates, or substantial shareholders have any beneficial interest[82] Changes in Board Members and Interests Mr. Zhao Jiewen resigned as an independent non-executive director, and Dr. Chan Kin Keung was appointed, with Mr. Wu Zhanming holding an 11.17% stake in the company - Mr. Zhao Jiewen resigned as an independent non-executive director on May 23, 2023, and Dr. Chan Kin Keung was appointed on June 29, 2023[83][85] Directors' Long Positions in the Company's Shares | Director Name | Capacity and Nature of Interest | Number of Issued Shares Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Wu Zhanming | Beneficial owner | 279,935,000 | 11.17% | - The company's share option scheme expired on November 14, 2022[95] Major Shareholders' Interests As of June 30, 2023, Ms. Li Fu Yi held an 11.17% stake in the company, making her a substantial shareholder Major Shareholders' Long Positions in the Company's Shares | Shareholder Name | Capacity and Nature of Interest | Number of Issued Shares Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Ms. Li Fu Yi | Beneficial owner | 279,930,959 | 11.17% | Related Party Transactions and Remuneration Policy The company reported no disclosable related party transactions in the 2023 fiscal year, and its remuneration policy is based on employee competence, performance, experience, and market terms - In FY2023, the company had no disclosable related party transactions or continuing related party transactions[98] - All related party transactions fall within the scope of connected transactions under Chapter 14A of the Listing Rules but are exempt from certain reporting, annual review, announcement, or independent shareholders' approval requirements[101] - The Group determines employee remuneration based on their competence, performance, experience, and prevailing market terms, offering provident fund schemes, medical insurance, subsidized training programs, and discretionary bonuses[103] Corporate Governance and Compliance The Group complied with relevant laws and regulations in the 2023 fiscal year, with the Audit Committee reviewing financial statements and no change in the auditor for the past three years - The Group complied in all material respects with relevant laws and regulations significantly affecting its business and operations in FY2023, with no material breaches or non-compliance[114] - The Audit Committee has reviewed the company's audited consolidated financial statements for FY2023[115] - The company's auditor is ZHONGSHEN ZHONGHUAN (HONG KONG) CPA LIMITED, with no change in the past three years[116][117] Corporate Governance Report This report details the company's corporate governance practices, board operations, committee structures, and compliance with the Corporate Governance Code Corporate Governance Practices The company generally complied with the Corporate Governance Code in the 2023 fiscal year, with exceptions for director rotation and the combined roles of Chairman and CEO, which the Board believes does not impair accountability - The company complied with all applicable code provisions of the Corporate Governance Code in FY2023, except for code provision B.2.2 (rotation of directors) and C.2.1 (distinction between Chairman and Chief Executive Officer roles)[121][123] - To comply with code provision B.2.2, the company revised and adopted its Bye-laws on December 15, 2022[122] - Mr. Wu Zhanming serves as both Chairman and Acting Chief Executive Officer, which the Board believes does not impair the balance of power and authority, as the Board comprises experienced, capable, and ethical individuals[126] Board Operations The Board is responsible for leading and overseeing the company, holding regular meetings, with all independent non-executive directors serving three-year terms and confirming their independence - The Board is responsible for leading and overseeing the company, reviewing and approving the Group's business objectives, strategies, directions, and policies, annual budgets, annual and interim results, management structure, and other significant policy and financial matters[128] FY2023 Board and General Meeting Attendance Record | Director | Board Meetings Attended | General Meetings Attended | | :--- | :--- | :--- | | Mr. Wu Zhanming | 5/5 | 1/1 | | Mr. Wu Tao | 5/5 | 1/1 | | Mr. Yu Tat Chi | 5/5 | 1/1 | | Mr. Zhao Jiewen (resigned) | 3/3 | 1/1 | | Mr. Chu San Hui | 5/5 | 1/1 | | Dr. Chan Kin Keung (appointed) | 0/0 | 0/0 | - All independent non-executive directors are appointed for a fixed term of three years and are subject to retirement by rotation in accordance with the company's Bye-laws[137] - The company has received annual confirmations of independence from each independent non-executive director in accordance with Rule 3.13 of the Listing Rules and considers all independent non-executive directors to be independent[129] Remuneration Committee The Remuneration Committee, chaired by Mr. Chu San Hui, advises the Board on remuneration policies for directors and senior management, considering experience, responsibilities, performance, and market terms - The Remuneration Committee comprises two independent non-executive directors (Mr. Chu San Hui, Mr. Yu Tat Chi) and one executive director (Mr. Wu Zhanming), with Mr. Chu San Hui serving as Chairman[139] - The Remuneration Committee is primarily responsible for making recommendations to the Board on the remuneration policy and structure for all directors and senior management of the company[139] - The remuneration policy for directors primarily includes a fixed component (basic salary) and a variable component (discretionary bonus and other incentive remuneration), considering experience, level of responsibility, individual performance, the Group's profit performance, and market terms[140] Nomination Committee and Board Diversity The Nomination Committee, chaired by Mr. Wu Zhanming, recommends director appointments and assesses board composition, with the company committed to diversity targets including female representation by the end of 2024 - The Nomination Committee comprises two independent non-executive directors (Mr. Chu San Hui, Mr. Yu Tat Chi) and one executive director (Mr. Wu Zhanming), with Mr. Wu Zhanming serving as Chairman[143] - The Nomination Committee is primarily responsible for making recommendations to the Board on the appointment of directors, assessing the composition of the Board, evaluating the independence of independent non-executive directors, and managing board succession matters[143] - The company has adopted a Board Diversity Policy with measurable objectives including: at least one-third of Board members being independent non-executive directors; at least one Board member possessing professional qualifications in accounting or related financial management; and a plan to achieve at least one female director by December 31, 2024[146] - Regarding employee diversity, as of June 30, 2023, 53% of the Group's total workforce were male and 47% were female[147] Auditor and Audit Committee The external auditor is ZHONGSHEN ZHONGHUAN (HONG KONG) CPA LIMITED, with the Audit Committee, chaired by Mr. Yu Tat Chi, overseeing financial reporting and internal controls Auditor's Remuneration | Service Type | FY2023 (HKD) | | :--- | :--- | | Audit services | 920,000 | | Non-audit related services | 95,000 | - The Audit Committee comprises three independent non-executive directors, with Mr. Yu Tat Chi serving as Chairman[155] - The Audit Committee is primarily responsible for assisting the Board in applying financial reporting and internal control principles and maintaining an appropriate relationship with the company's auditor[155] - The Board confirms its responsibility for preparing the company's consolidated financial statements for FY2023[158] Risk Management and Internal Control The Board is responsible for maintaining and reviewing the effectiveness of risk management and internal control systems, supported by the Audit Committee and an independent consultant - The Board confirms its responsibility for maintaining adequate risk management and internal control systems and continuously reviewing their effectiveness[160] - The Audit Committee assists the Board in monitoring the Group's risk management and internal control systems by providing support and advice[162] - The company has engaged an independent internal control consultant to conduct an independent assessment of the adequacy and effectiveness of the risk management and internal control systems of several subsidiaries for FY2023[164] - The Group's risk management procedures are integrated into its daily operations, identifying, assessing, responding to, and monitoring significant risks through regular discussions with various operating departments[165][167] Shareholder Communication and Dividend Policy The company ensures timely shareholder communication through various channels and has a dividend policy that considers financial performance and liquidity, without a predetermined payout ratio - Shareholders have the right to request the Board in writing to convene a special general meeting or propose any resolution[177] - The company maintains extensive communication channels, including general meetings, annual reports, various notices, announcements, and circulars, to ensure shareholders are informed of the latest news[178] - The company has formulated and adopted a dividend policy, where the Board may, at its discretion, declare and pay dividends to shareholders, considering factors such as the Group's financial performance, liquidity position, retained earnings, debt-to-equity ratio, expansion plans, and economic conditions[179][180][181] - The company does not have any predetermined dividend payout ratio[182] Company Secretary and Changes to Constitutional Documents Company Secretary Ms. Lu Shan completed required professional training, and the company adopted revised and restated Bye-laws in December 2022 to comply with Listing Rules amendments - Company Secretary Ms. Lu Shan received no less than 15 hours of relevant professional training in FY2023 in accordance with Rule 3.29 of the Listing Rules[184] - The revised and restated Bye-laws were adopted at the Annual General Meeting held on December 15, 2022, and became effective on the same day, to comply with amendments to Chapter 13 and Appendix 3 of the Listing Rules concerning the enhancement of the listing regime for overseas issuers[185] Environmental, Social and Governance Report This report details the Group's ESG performance from July 2022 to June 2023, covering environmental, social, and governance aspects in accordance with HKEX guidelines Reporting Scope and Standards This seventh ESG report covers the Group's performance from July 2022 to June 2023, focusing on Hong Kong headquarters, property investment, and the Wuxi property project, adhering to HKEX ESG Reporting Guide principles - This report discloses the Group's environmental, social, and governance performance from July 1, 2022, to June 30, 2023[189] - The reporting scope focuses on the Hong Kong headquarters, Hong Kong property investment business, and the Wuxi property project in China[189] - This report is prepared in accordance with the "comply or explain" provisions and mandatory disclosure requirements of the HKEX Environmental, Social and Governance Reporting Guide[191] - The report adheres to four reporting principles: materiality, quantitative, balance, and consistency[193][194] Sustainability Approach and Governance The Group integrates sustainability principles into its operations, with the Board overseeing ESG strategy and an ESG working group assisting implementation, setting environmental targets for the 2025 fiscal year - The Group's vision is "Artists create beautiful things, we create value enterprises," with a mission that includes passion for customers, partners, and corporate development, delivering sustained growth for shareholders, striving for perfection in every project, fulfilling commitments, and encouraging teamwork[198] - The Board is fully responsible for the Group's environmental, social, and governance strategy and reporting, overseeing ESG matters[201] - The ESG Working Group, led by the Company Secretary, assists the Board in planning and implementing ESG-related matters and reports to the Board regularly[201] - The Group has established a series of environmental targets to be achieved by FY2025, including reducing greenhouse gas emissions, waste generation, energy consumption, and water usage[223] Stakeholder Engagement and Materiality Assessment The Group actively engages with diverse stakeholders and, with an independent consultant, identified 26 ESG issues, prioritizing the 10 most material ones for detailed disclosure - The Group maintains active and continuous communication with stakeholders including employees, customers, government agencies, shareholders and investors, business partners, NGOs/environmental departments, suppliers, and media/public[209] - The Group conducted a materiality assessment, identifying 26 environmental, social, and governance issues relevant to its business operations and development[212] - The 10 most material issues include occupational health and safety, equal opportunities, diversity and anti-discrimination, employee benefits, employment compliance, anti-corruption, labor relations and communication, training and development, service quality, data protection and cybersecurity, and green procurement[215][220] Environmental Targets and Performance The Group has set 2025 fiscal year environmental targets to reduce GHG emissions, waste, energy, and water use by 20% from the 2020 fiscal year baseline, with significant progress already achieved FY2025 Environmental Targets and FY2023 Progress | Indicator | FY2020 Baseline | FY2023 Performance | Target (20% Reduction) | Progress (%) | | :--- | :--- | :--- | :--- | :--- | | GHG Emissions (tonnes CO2e) | 468.38 | 261.80 | 374.70 | 44% | | Waste Generation (tonnes) | 70.05 | 44.24 | 56.04 | 37% | | Energy Consumption (MWh) | 694.73 | 428.17 | 555.78 | 38% | | Water Consumption (cubic meters) | 1,080 | 180.00 | 864 | 83% | - The Group actively promotes energy conservation among employees, encouraging them to switch off unnecessary electrical appliances, maintain indoor temperatures no lower than 25 degrees Celsius, and suggest using video conferencing to reduce carbon footprint[249] - The Wuxi property project incorporates sustainable design, including the installation of solar power and heating systems, rainwater reuse systems, smart building technologies, and ensuring indoor air quality[256] - In selecting suppliers, the Group prioritizes environmentally friendly raw materials and collaborates with local suppliers to promote eco-friendly products and services[257] Creating Value for Customers The Group is committed to delivering quality products and services, ensuring customer data security, and maintaining a zero-tolerance stance on corruption, supported by effective complaint handling - The Group has implemented a comprehensive set of policies to monitor every stage of the Wuxi property project, from early planning and design to construction, acceptance, delivery, and after-sales support[229] Number of Customer Complaints | Indicator | FY2023 | FY2022 | | :--- | :--- | :--- | | Number of property delivery complaints | 18 | 42 | - The Group adopts a zero-tolerance approach to corruption, bribery, fraud, money laundering, and other unethical behaviors, and has established a whistleblowing mechanism[235] - The Group requires key partners to sign anti-corruption agreements and provides anti-corruption training for directors and employees[235] Creating Value for Employees The Group provides a safe and inspiring work environment, competitive remuneration, and training, upholding human rights with a zero-tolerance policy for forced or child labor FY2023 Employee Profile | Indicator | FY2023 | | :--- | :--- | | Total employees | 32 persons | | Male employee ratio | 53% | | Female employee ratio | 47% | | Average training hours (per employee) | 3.53 hours | | Percentage of trained employees | 94% | - The Group practices meritocracy, regardless of gender, age, marital status, family status, pregnancy status, disability, race, or religion, and explicitly prohibits all forms of harassment and discrimination in the workplace[267] - The Group adopts a "zero-tolerance" approach to all forms of forced labor and child labor and strictly complies with all applicable laws and regulations concerning labor standards[269] - The Group organizes emergency drills for employees, ensures construction sites are equipped with adequate safety equipment, and provides comprehensive training on health and safety measures[272] - In FY2023, there were no lost workdays due to work-related injuries, and no work-related fatalities occurred in the past three years[272] Creating Value for the Community The Group actively supports charitable activities, contributing HKD10,000 in the 2023 fiscal year to enhance community health and well-being, particularly for elderly care services - The Group aims to create a positive impact on the community, actively supporting various charitable activities and providing care and support to vulnerable groups in the community[276] Community Investment | Indicator | FY2023 (HKD) | FY2022 (HKD) | | :--- | :--- | :--- | | Resources utilized | 10,000 | 12,000 | - The Group supports the local NGO, Hong Kong Home Care for the Elderly Association, through charitable donations, providing comprehensive one-stop professional care services for the elderly[277] Summary of Performance Data This section provides a summary of key environmental and social performance indicators for the 2022 and 2023 fiscal years, including emissions, energy, waste, water, employee data, and community investment Environmental Performance Data Summary | Indicator | Unit | FY2022 | FY2023 | | :--- | :--- | :--- | :--- | | Total GHG emissions (Scope 1 & 2) | tonnes CO2e | 261.80 | 261.80 | | Total energy consumption | MWh | 427.83 | 428.17 | | Total non-hazardous waste | tonnes | 44.19 | 44.24 | | Total water consumption | cubic meters | 360.00 | 180.00 | Social Performance Data Summary | Indicator | Unit | FY2022 | FY2023 | | :--- | :--- | :--- | :--- | | Total employees | persons | 38 | 32 | | Total turnover rate | % | 11 | 22 | | Product and service related complaints | number | 42 | 18 | | Community investment (resources utilized) | HKD | 12,000 | 10,000 | - In FY2023, the average training hours per employee were 3.53 hours, and the percentage of trained employees was 94%[286] Key Laws and Regulations and Content Index This section lists key environmental, employment, labor, health and safety, product responsibility, and anti-corruption laws and regulations complied with by the Group, along with an ESG report content index - The environmental laws and regulations complied with by the Group include the Waste Disposal Ordinance and the Environmental Protection Law of the People's Republic of China[288] - Employment and labor standards related laws and regulations include the Employment Ordinance, the Mandatory Provident Fund Schemes Ordinance, and the Labor Law of the People's Republic of China[288] - Product responsibility and anti-corruption related laws and regulations include the Personal Data (Privacy) Ordinance, the Law of the People's Republic of China on the Protection of Consumer Rights and Interests, and the Prevention of Bribery Ordinance[288] Independent Auditor's Report The Independent Auditor's Report provides an opinion on the consolidated financial statements, highlighting key audit matters and the responsibilities of directors and auditors Opinion and Basis for Opinion The auditor opines that the consolidated financial statements fairly present the Group's financial position, performance, and cash flows in accordance with HKFRSs and the Companies Ordinance - The auditor believes that the consolidated financial statements give a true and fair view of the Group's financial position as of June 30, 2023, and of its financial performance and cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards[309] - The audit was conducted in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants, and the auditor is independent of the Group and has fulfilled ethical responsibilities[310] Emphasis of Matter The auditor draws attention to Note 33 regarding litigation uncertainties for a claim of approximately RMB74.3 million, which the directors believe does not require a provision - Note 33 to the consolidated financial statements concerns uncertainties related to the potential outcome of a lawsuit filed by an individual with the Huishan District People's Court of Wuxi City[311] - The lawsuit orders the Group and another individual to repay debts and related interest totaling approximately RMB74.3 million (approximately HKD81.18 million)[311] - The company's directors believe that no provision is required for the claim, as there are insufficient legal or factual grounds to support it[311] Key Audit Matters Key audit matters include the valuation of investment properties, net realizable value of properties held for sale, and valuation of unlisted investment funds, due to their materiality and significant judgment involved - The valuation of investment properties (HKD280.9 million) was identified as a key audit matter due to its materiality and the significant judgment and estimates involved[314] - The net realizable value of properties held for sale (HKD727.90 million) was identified as a key audit matter due to its materiality and the significant estimates and judgments involved in its measurement[316] - The valuation of unlisted investment funds (HKD92.5 million) was identified as a key audit matter due to its materiality and the significant judgment and estimates involved[318] - The auditor's procedures included understanding and evaluating management's key controls over fair value assessment procedures, assessing the qualifications, competence, and objectivity of independent professional valuers, and evaluating the reasonableness of key assumptions used in valuations[315][317][319] Responsibilities of Directors and Those Charged with Governance Directors are responsible for preparing fair financial statements and internal controls, assessing going concern, while the governance body oversees the financial reporting process - Directors are responsible for preparing true and fair consolidated financial statements in accordance with Hong Kong Financial Reporting Standards and the disclosure requirements of the Companies Ordinance, and for internal controls[322] - Directors are responsible for assessing the Group's ability to continue as a going concern and disclosing matters related to going concern, as applicable[322] - Those charged with governance are responsible for overseeing the Group's financial reporting process[323] Auditor's Responsibilities The auditor's responsibility is to obtain reasonable assurance that financial statements are free from material misstatement, exercising professional judgment and communicating significant findings to governance - The auditor's objective is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error[324] - The auditor exercises professional judgment and maintains professional skepticism, identifying and assessing the risks of material misstatement in the consolidated financial statements due to fraud or error[326] - The auditor evaluates the appropriateness of accounting policies used by directors and the reasonableness of accounting estimates and related disclosures, and concludes on the appropriateness of directors' use of the going concern basis of accounting[327] - The auditor communicates with those charged with governance regarding the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control[326] Consolidated Statement of Comprehensive Income This statement presents the Group's revenue, gross profit, and comprehensive loss for the year ended June 30, 2023, reflecting a narrowed annual loss Revenue and Gross Profit For the year ended June 30, 2023, the Group's revenue significantly increased to HKD93.67 million, resulting in a gross profit of HKD23.50 million Revenue and Gross Profit | Indicator | 2023 ('000 HKD) | 2022 ('000 HKD) | | :--- | :--- | :--- | | Revenue | 93,673 | 11,131 | | Cost of sales | (70,170) | (3,917) | | Gross profit | 23,503 | 7,214 | Loss and Other Comprehensive Loss The annual loss narrowed to HKD43.67 million, with total other comprehensive loss of HKD32.07 million primarily from foreign currency translation differences Loss and Loss Per Share | Indicator | 2023 ('000 HKD) | 2022 ('000 HKD) | | :--- | :--- | :--- | | Loss for the year | (43,666) | (162,877) | | Total other comprehensive loss for the year | (32,074) | (12,884) | | Total comprehensive loss for the year | (75,740) | (175,761) | | Loss attributable to owners of the company | (43,449) | (162,877) | | Basic loss per share (HK cents) | (1.73) | (6.50) | | Diluted loss per share (HK cents) | (1.73) | (6.50) | - Other comprehensive loss primarily arose from exchange differences on translation of overseas operations (HKD32.02 million)[331] Consolidated Statement of Financial Position This statement provides a snapshot of the Group's assets, liabilities, and equity as of June 30, 2023, detailing both non-current and current financial positions Assets Overview As of June 30, 2023, total non-current assets were HKD349.30 million and total current assets were HKD950.51 million, including properties held for sale and financial assets at fair value Assets Overview | Indicator | 2023 ('000 HKD) | 2022 ('000 HKD) | | :--- | :--- | :--- | | Total non-current assets | 349,304 | 365,915 | | Investment properties | 280,900 | 295,100 | | Property, plant and equipment | 68,285 | 70,640 | | Total current assets | 950,514 | 1,070,444 | | Properties held for sale | 727,896 | 120,404 | | Financial assets at fair value through profit or loss | 147,172 | 184,274 | | Cash and cash equivalents | 20,609 | 60,474 | Liabilities and Equity As of June 30, 2023, total current liabilities were HKD401.82 million, non-current liabilities were HKD95.85 million, and total equity attributable to owners was HKD797.46 million Liabilities and Equity Overview | Indicator | 2023 ('000 HKD) | 2022 ('000 HKD) | | :--- | :--- | :--- | | Total current liabilities | 401,822 | 462,761 | | Accounts payable and other payables | 189,608 | 217,555 | | Interest-bearing borrowings | 210,124 | 244,218 | | Non-current liabilities (Deferred tax liabilities) | 95,849 | 100,611 | | Total equity | 802,147 | 872,987 | | Equity attributable to owners of the company | 797,464 | 872,987 | Consolidated Statement of Changes in Equity This statement outlines the changes in the Group's equity attributable to owners for the year ended June 30, 2023, primarily due to the annual loss and foreign currency translation differences Overview of Equity Changes Total equity attributable to owners decreased to HKD797.46 million, mainly due to the annual loss of HKD43.45 million and foreign currency translation differences Overview of Equity Changes | Indicator | 2023 ('000 HKD) | 2022 ('000 HKD) | | :--- | :--- | :--- | | Equity attributable to owners of the company at beginning of period | 872,987 | 1,048,748 | | Loss for the year | (43,449) | (162,877) | | Exchange differences on translation of overseas operations | (32,018) | (12,862) | | Fair value changes of financial assets designated at fair value through other comprehensive income | (56) | (22) | | Capital contribution from non-controlling shareholders to newly incorporated subsidiary | 4,900 | – | | Equity attributable to owners of the company at end of period | 797,464 | 872,987 | Consolidated Statement of Cash Flows This statement presents the Group's cash flows from operating, investing, and financing activities for the year ended June 30, 2023 Cash Flows from Operating Activities Net cash used in operating activities amounted to HKD38.56 million, primarily influenced by changes in properties under development and properties held for sale Cash Flows from Operating Activities | Indicator | 2023 ('000 HKD) | 2022 ('000 HKD) | | :--- | :--- | :--- | | Loss before tax | (46,834) | (161,436) | | Operating cash flow before working capital changes | (893) | (25,884) | | Changes in properties under development | 594,509 | (47,292) | | Changes in properties held for sale | (614,056) | 5,001 | | Net cash used in operating activities | (38,558) | (56,442) | Cash Flows from Investing Activities Net cash from investing activities amounted to HKD25.55 million, mainly derived from the disposal of financial assets at fair value and repayments from other borrowers Cash Flows from Investing Activities | Indicator | 2023 ('000 HKD) | 2022 ('000 HKD) | | :--- | :--- | :--- | | Dividends received | 212 | 616 | | Interest received | 2,776 | 2,793 | | Net proceeds from disposal of financial assets at fair value through profit or loss | 7,090 | 97,075 | | Repayment from other borrowers | 15,500 | 10,000 | | Net cash from investing activities | 25,546 | 94,429 | Cash Flows from Financing Activities and Cash at End of Period Net cash used in financing activities amounted to HKD33.38 million, primarily for repayment of borrowings, resulting in cash and cash equivalents of HKD20.61 million at year-end Cash Flows from Financing Activities and Cash at End of Period | Indicator | 2023 ('000 HKD) | 2022 ('000 HKD) | | :--- | :--- | :--- | | Repayment of bank and other borrowings | (33,380) | (54,504) | | Net cash used in financing activities | (33,380) | (48,758) | | Cash and cash equivalents at end of period | 20,609 | 60,474 | Notes to the Consolidated Financial Statements These notes provide detailed explanations of the Group's accounting policies, significant estimates, financial instruments, and other disclosures supporting the consolidated financial statements General Information and Principal Accounting Policies The company is a Bermuda-incorporated investment holding company, with financial statements presented in HKD and prepared under HKFRSs, adopting new standards with no significant impact - The company is an exempted company incorporated in Bermuda, principally engaged in resort and property development, property investment, and investment holding[345][346] - The consolidated financial statements are presented in HKD and prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants[346][347] - The adoption of new/revised Hong Kong Financial Reporting Standards during the year (such as HKAS 16, HKAS 37, HKFRS 3, and Annual Improvements) had no significant impact on the consolidated financial statements[349][351][354][355][360][362] - The consolidated financial statements are prepared on a historical cost basis, except for investment properties, financial assets designated at fair value through other comprehensive income, and financial assets at fair value through profit or loss, which are measured at fair value[363] Accounting Policies for Financial Instruments Financial assets are classified based on business model and cash flow characteristics, measured at amortized cost, fair value through OCI, or fair value through P&L, with impairment based on expected credit losses - Financial assets are recognized on a trade date basis when the Group becomes a party to the contractual provisions of the instruments and derecognized when contractual rights expire or substantially all risks and rewards of ownership are transferred[376] - Financial assets are classified as measured at amortized cost, designated at fair value through other comprehensive income, or measured at fair value through profit or loss, depending on the business model for managing the financial assets and their contractual cash flow characteristics[380] - Financial liabilities are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method[391] - Impairment of financial assets uses an expected credit loss model, measuring 12-month or lifetime expected credit losses based on whether credit risk has significantly increased since initial recognition[392] - The Group considers a financial asset to be in default when it is unlikely to pay its obligations in full or is more than 90 days past due[396] Revenue Recognition and Lease Accounting Revenue from property sales is recognized when control transfers, rental income on a straight-line basis, and the Group applies recognition exemptions for short-term and low-value leases as a lessee - Rental income from operating leases is recognized on a straight-line basis over the lease term when the property is leased out[406] - Revenue from property sales is recognized at a point in time when control of the asset is transferred to the customer, typically upon satisfaction of the performance obligation[409][410] - As a lessee, the Group applies recognition exemptions for short-term leases and leases of low-value assets, recognizing right-of-use assets and lease liabilities at the lease commencement date[425][427] - As a lessor, the Group classifies leases as finance leases or operating leases and applies HKFRS 9 derecognition and impairment requirements to operating lease receivables[434][435] Taxation and Related Party Transactions Current income tax is calculated based on period results, deferred tax uses the liability method, and related parties include individuals or entities with control, joint control, or significant influence over the Group - Current income tax expense is calculated based on the results for the period, and deferred tax is provided using the liability method for all temporary differences between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements at the reporting date[437] - Deferred tax assets are recognized when it is probable that future taxable profits will be available against which deductible temporary differences, tax losses, and credits can be utilized[438] - Related parties refer to individuals or entities related to the Group, including individuals with control, joint control, or significant influence over the Group and their close family members[441][442] Significant Accounting Estimates and Judgments Management's estimates and judgments involve property sales revenue recognition, investment property valuation, expected credit loss provisions, and net realizable value of properties held for sale - Property sales revenue recognition: The Group judges that the terms of property sales contracts do not create an enforceable right to payment until control of the property is transferred, thus revenue is recognized at a point in time[445] - Investment property valuation: Valuation is performed by independent professional valuers using the direct comparison approach, involving adjustments to sales prices of comparable properties[448] - Expected credit loss provision: Management estimates loss provisions for loans and interest receivables and other receivables using various inputs and assumptions, including default risk and expected loss rates, which involve a high degree of uncertainty[449] - Net realizable value of properties held for sale: Assessed based on the estimated net sales value of properties' realizability and current market conditions, with reference to valuations by independent professional valuers[450] Financial Risk Management The Group manages market risks (foreign currency, interest rate, price), credit risk, and liquidity risk, with sensitivity analyses provided for interest rate and price risks - The Group's foreign currency risk primarily arises from financial assets at fair value through profit or loss, with the risk-generating currency being USD; however, due to the relatively stable exchange rate between HKD and USD, no hedging is undertaken[457] - Interest rate risk is mainly associated with floating-rate secured bank borrowings; an increase/decrease of 500 basis points in interest rates would increase/decrease net loss by approximately HKD8.44 million[458] - Price risk primarily stems from listed equity securities; a 25% increase/decrease in market prices would decrease/increase net loss by approximately HKD11.41 million[459] - Credit risk primarily originates from restricted bank deposits, cash and cash equivalents, other receivables, and loans and interest receivables[461] Changes in Impairment Provision for Loans and Interest Receivables | Indicator | 2023 ('000 HKD) | 2022 ('000 HKD) | | :--- | :--- | :--- | | Impairment provision at beginning of period | 27,844 | 46,462