Financial Performance - For the fiscal year ending June 30, 2020, the group recorded a revenue of approximately HKD 33,730,000, a decrease of about 21% compared to HKD 42,944,000 in the previous fiscal year[9]. - The group reported a loss before tax of approximately HKD 154,350,000 for the year, compared to a profit of approximately HKD 44,162,000 in the previous fiscal year[9]. - The decline in revenue was primarily due to a decrease in the revenue from securities trading activities[9]. - The group experienced a fair value loss on investment properties of approximately HKD 91,085,000, compared to a fair value gain of HKD 18,968,000 in the previous year[15]. - The group recorded an impairment loss on properties held for sale of approximately HKD 60,315,000, whereas there was no such loss in the previous year[15]. - The group recorded a revenue of approximately HKD 33,730,000 for the year, a decrease of about 21% compared to HKD 42,944,000 in the previous fiscal year[13]. - The group reported a loss before tax of approximately HKD 154,350,000, compared to a profit of HKD 44,162,000 in the previous fiscal year[13]. - The net loss attributable to the company's owners for the year was HKD (153,375,000), compared to a profit of HKD 42,997,000 in the previous year[94]. - Total assets as of June 30, 2020, were HKD 2,065,212,000, with total liabilities of HKD (272,728,000)[95]. - The group's net asset value was HKD 1,792,484,000 as of June 30, 2020, down from HKD 1,950,406,000 the previous year[95]. - The company reported a total revenue of HKD 33,730,000 for 2020, a decrease of 21.5% from HKD 42,944,000 in 2019[183]. - Gross profit for the year was HKD 26,685,000, slightly down from HKD 26,936,000 in the previous year[183]. - The company incurred a loss before tax of HKD 154,350,000, compared to a profit of HKD 44,162,000 in 2019, indicating a significant decline in performance[183]. - The net loss for the year was HKD 155,766,000, a stark contrast to the profit of HKD 43,100,000 reported in 2019[187]. - The company’s total comprehensive income for the year was HKD (158,385,000), down from HKD 51,094,000 in the previous year[187]. - Total assets decreased to HKD 1,815,831,000 from HKD 1,977,091,000 in 2019, reflecting a decline in the company's asset base[190]. - The company's cash and bank balances fell to HKD 132,957,000 from HKD 314,412,000, indicating a liquidity squeeze[190]. Economic Outlook - The group anticipates facing more severe challenges in the global economy due to geopolitical risks and the ongoing COVID-19 pandemic[10]. - Despite the economic uncertainties, the group remains cautiously optimistic about the local property market post-pandemic[10]. - The local economic situation remains severe, with a significant decline in private consumption expenditure recorded during the year due to social distancing measures and travel restrictions[15]. - The group anticipates a gradual recovery of the local economy post-pandemic, maintaining a cautiously optimistic outlook on the property market[21]. Property Development and Investment - The group is involved in a property development project located at 50 School Road, Moseley, Birmingham, UK, with a site area of 15,800 square feet, expected to complete in Q4 2020[13]. - The group owns 12 commercial, industrial, and residential properties in Hong Kong, as well as a commercial property in Cardiff, UK, and two serviced apartments in Hokkaido, Japan[15]. - The group believes that the new development project in the UK will enhance its property portfolio and provide opportunities for future growth[13]. - The group plans to continue seeking potential property development opportunities both locally and overseas to enhance shareholder value[13]. - The group anticipates that the supply of private residential units will remain high, with a total of 92,000 units expected over the next three to four years[13]. - The property investment and trading segment recorded total rental income of approximately HKD 29,296,000, a decrease from HKD 30,859,000 in the previous year[19]. - The segment's rental income included approximately HKD 27,149,000 from core operations, down from HKD 27,841,000 in the previous year[19]. - The company acquired two serviced apartments in Niseko, Japan, which are expected to benefit from increasing inbound tourism and interest in the ski resort[19]. - The company remains optimistic about the long-term prospects of the commercial property market in Hong Kong, the UK, and Japan, viewing these properties as excellent investment opportunities[19]. - The company confirmed a property impairment of HKD 60,315,000 due to declining retail space prices and rental rates[19]. - The company expects to provide stable income sources from its property investments despite the impact of the COVID-19 pandemic[19]. Financial Strategy and Management - The group aims to maintain competitiveness and ensure sustainable development to protect shareholder interests[10]. - The group plans to continue a prudent approach to acquiring and selling properties to increase recurring income and capital appreciation[10]. - The strategy includes expanding securities investment and trading businesses as well as loan financing operations to achieve stable recurring income growth[10]. - The loan financing business generated interest income of approximately HKD 2,557,000, compared to HKD 538,000 in the previous year, representing an increase of about 376%[19]. - The fair value loss on debt instruments was approximately HKD 289,000, compared to a gain of HKD 587,000 in the previous year[19]. - The company has adopted a prudent financial policy to reduce credit risk through continuous credit assessments of clients[34]. - The company has arranged foreign exchange bank financing in GBP, EUR, and JPY to hedge against foreign exchange risks related to property acquisitions[33]. - The company maintains a close watch on its liquidity position to ensure that its asset, liability, and capital structure meet funding needs[34]. - The company has established a system for evaluating and selecting director candidates based on various criteria, including character, integrity, and relevant professional qualifications[69]. Corporate Governance - The company has adopted the corporate governance code as per the Stock Exchange Listing Rules and has complied with all governance codes during the year[43]. - The board consists of experienced members, including the chairman and executive director, who has been with the company since May 2016[38]. - The independent non-executive director has extensive experience in investment banking and professional accounting[40]. - The board held five meetings and one annual general meeting during the year, demonstrating active governance and oversight[51]. - All independent non-executive directors have confirmed their independence, ensuring compliance with the relevant regulations[50]. - The company has implemented a training program for directors to enhance their knowledge and skills, ensuring informed contributions to the board[55]. - The remuneration committee, chaired by Mr. Long, includes four members, with three being independent non-executive directors, ensuring proper oversight of executive compensation[57]. - The company has established a clear distinction between the roles of the chairman and the CEO, enhancing governance structure[44]. - The board is responsible for formulating corporate policies, business strategies, and risk management, ensuring comprehensive oversight of the company's operations[46]. - The company has committed to continuous professional development for all directors, ensuring they remain updated on relevant knowledge and skills[55]. - The company has established a remuneration committee consisting mainly of independent non-executive directors to review the remuneration packages of all directors and senior management[60]. - The nomination committee, which includes four members, is responsible for nominating director candidates and reviewing nominations to ensure fairness and transparency[63]. - The board diversity policy aims for at least one-third of board members to be independent non-executive directors and at least one member to have accounting or other professional qualifications[67]. - The board has achieved measurable targets under the board diversity policy during the year[67]. - The company recognizes the benefits of a diverse board to enhance performance quality[63]. - The company has a total of six male directors and one female director on the board[65]. - The age distribution of the board includes three members aged 61 or older, two members aged 51-60, and one member aged 41-50[65]. Environmental, Social, and Governance (ESG) Initiatives - The company has prepared its Environmental, Social, and Governance (ESG) report for the fourth consecutive year, detailing its sustainable development performance[136]. - The company aims to reduce energy consumption and greenhouse gas emissions through systematic management of energy use and carbon footprint[141]. - The company has implemented waste management measures and recycling systems to responsibly manage resource usage[142]. - The company encourages employees to adopt environmentally friendly practices, such as double-sided printing and using electronic communications[143]. - The company has committed over HKD 10,000,000 to its charitable foundation to support underprivileged families since its establishment in 2011[137]. - The company maintains a focus on employee safety and equal opportunity in hiring and promotion practices[146]. - The company has set a goal to achieve more significant results in waste reduction in the coming years[142]. - The company has adopted energy-efficient lighting systems and regularly monitors electricity consumption to optimize energy use[141]. - The company has established internal environmental policies to foster a green culture within its operations[143]. - The total greenhouse gas emissions amounted to 200.28 tons of CO2 equivalent, with scope 2 emissions at 196.00 tons[155]. - The total energy consumption was 241.98 thousand kilowatt-hours, with indirect energy consumption accounting for the entire amount[155]. - The total water consumption reached 608 cubic meters, with a density of 19.00 cubic meters per full-time equivalent[155]. - There were no reported cases of work-related fatalities or lost workdays due to injuries during the year[150]. - The company made donations exceeding HKD 1,500,000 to various charitable organizations and community projects[153]. - The employee count was 13 full-time, with 8 males and 5 females, and no part-time employees[155]. - The company has established a whistleblowing policy to ensure management is aware of any concerns regarding corruption or bribery[150]. - The company adheres to high ethical standards and has a competitive compensation package for employees[150]. - The company is committed to integrating corporate social responsibility into its supply chain management processes[153]. Audit and Compliance - The company's financial statements were audited in accordance with Hong Kong Financial Reporting Standards, reflecting a true and fair view of its financial position[162]. - The auditor's fee for the year was approximately HKD 510,000, with no non-audit services provided[70]. - The audit committee held five meetings during the year to review the audited consolidated financial statements for the year ending June 30, 2019[70]. - The board confirmed that there are no significant uncertainties that may cast doubt on the group's ability to continue as a going concern[72]. - The audit committee reviewed the unaudited consolidated quarterly and interim results, ensuring compliance with applicable accounting standards[72]. - The board is responsible for establishing and reviewing corporate governance policies and practices[73]. - The board held two meetings to review policies related to corporate governance compliance[74]. - All members of the audit committee are independent non-executive directors, ensuring unbiased oversight[70]. - The audit committee's main responsibilities include monitoring financial controls and risk management systems[70]. - The company continues to adopt the going concern basis in preparing its financial statements[72]. - The audit committee has met with the company's auditors three times during the year[70]. - The company has no internal audit department but will continue to assess the need for one based on the scale and complexity of its operations[77]. - The company has implemented measures to ensure the confidentiality of insider information and compliance with applicable laws and regulations[79]. Shareholder Information - The company has a total of six male directors and one female director on the board[65]. - The total number of shares held by the chairman is 357,596,000, representing approximately 6.45% of the total shares[109]. - The chairman also has a controlling interest in a company that holds 3,346,419,668 shares, which is approximately 60.32% of the total shares[109]. - The CEO holds 145,680,000 shares, which is approximately 2.63% of the total shares[109]. - Major shareholder Dong Jingyi holds 3,704,015,668 shares, representing 66.76% of the equity[117]. - Virtue Partner Group Limited, owned by Mr. Pang, holds 3,346,419,668 shares, accounting for 60.32% of the equity[117]. - The total number of shares available for issuance under the share option plan is 682,292,566 shares, equivalent to approximately 12.3% of the issued shares[120]. - The share option plan is valid for a period of 10 years from the adoption date[120]. - The exercise price for any designated share options will be determined by the board, with a minimum price based on the closing price on the offer date[120]. - The plan aims to reward selected individuals for their contributions to the company and its subsidiaries[118]. - Any grant of share options to connected persons must be approved by independent non-executive directors[120]. - If the proposed grant of share options exceeds 0.1% of the issued shares and is valued over HKD 5,000,000, it requires shareholder approval[120]. - The maximum number of options that can be granted to any participant within a 12-month period is capped at 10% of the total issued shares[120]. - The company does not have knowledge of any other individuals holding 5% or more of the equity as of June 30, 2020[117]. - The company granted 55,000,000 stock options at an exercise price of HKD 0.048, valid from April 28, 2020, to October 27, 2020[122]. - As of June 30, 2020, the total outstanding stock options amounted to 191,480,000, with 64,000,000 options granted during the year[127]. - The company maintains a public float of at least 25% of its issued shares, ensuring compliance with corporate governance standards[129]. - The total value of related party transactions disclosed in the financial statements is below the thresholds requiring independent shareholder approval, with annual costs under HKD 10,000,000[129]. - The company has not entered into any management contracts for significant portions of its business operations during the year[127]. - The exercise price for stock options granted in previous years ranges from HKD 0.121 to HKD 0.221, with varying expiration dates[122]. - The company has a lease agreement with a total transaction value that does not exceed 25% of applicable percentage ratios[129]. - The company’s auditor, Hong Kong Li Xin De Hao CPA Limited, is eligible for reappointment at the upcoming annual general meeting[131]. - The company has no provisions in its articles of association regarding preemptive rights for existing shareholders when issuing new shares[130]. - The company’s subsidiary, Monilea Limited, has entered into a two-year lease agreement effective from September 21, 2020[131]. - The company has established a two-year lease agreement with a subsidiary starting from June 9, 2019[132].
宏辉集团(00183) - 2020 - 年度财报