Economic Impact of COVID-19 - The COVID-19 pandemic significantly impacted global operations, with travel and business activities severely restricted[7] - China's GDP began to recover in the second half of 2020, marking it as the first major economy to return to growth[7] - In Hong Kong, the implementation of strict COVID-19 measures led to a decline in hotel and retail transactions related to tourism[8] - The number of tourists visiting Thailand plummeted from 39.8 million in the previous year to 6.7 million in 2020, severely affecting the tourism industry[8] - Despite the pandemic, the residential market in Hong Kong remained strong due to low interest rates and robust end-user demand[8] - The company noted a surge in new listings on the Hong Kong stock exchange, driven by Chinese tech companies seeking secondary listings amid geopolitical tensions[8] - The company is closely monitoring the evolving economic landscape and adjusting strategies accordingly to navigate challenges[7] - The financial institutions and real estate developers in China faced unprecedented levels of bond defaults due to tightened monetary policies[7] - The company anticipates continued growth in the domestic tourism and real estate sectors in China as the economy stabilizes[7] - The overall market confidence in Hong Kong remains solid despite the challenges posed by the pandemic[8] Financial Performance - Total revenue for the year ended March 31, 2021, was HKD 313.1 million, a significant decrease from HKD 615.6 million in 2020, primarily due to COVID-19 impacts[10] - The group's operating profit for the period was HKD 208.6 million, down from HKD 223.3 million in the previous year[10] - The group's net profit for the year was HKD 354.9 million, compared to HKD 75.1 million in 2020, with attributable profit to shareholders of HKD 292.5 million[10] Property Occupancy and Income - The occupancy rate of the property at 115-119 Queen's Road West reached 100%, contributing rental income of HKD 15.5 million[10] - The occupancy rate of the property in Kwun Tong was maintained at 100%, contributing rental income of HKD 66 million[10] - The investment in Shanghai's Kerry Center recorded an occupancy rate of 98%, with attributable profit of HKD 8.9 million[10] - The investment properties in Taikoo Shing had an occupancy rate of 85%, with a fair value decrease of HKD 12.4 million[14] - The investment in Xianle Square in Shanghai had an occupancy rate of 84%, with a fair value increase of HKD 11.4 million[19] Challenges in Hotel Investments - The group's hotel investments in Thailand faced significant challenges due to COVID-19, resulting in the closure of two hotels in April 2020 and a revenue of THB 121,200,000 (approximately HKD 29,900,000) for the year ending March 31, 2021, compared to THB 512,100,000 in 2020[21] - The average occupancy rate for the hotels was only 12% for the year ending March 31, 2021, down from 75% in the previous year[21] - The group recorded a net loss of HKD 87,800,000 for the year ending March 31, 2021, compared to an operating profit of HKD 132,000,000 in 2020[21] Financial Position and Liquidity - As of March 31, 2021, the group maintained cash and bank balances of HKD 186,800,000, a decrease from HKD 390,300,000 a year earlier[25] - The total bank borrowings amounted to HKD 2,281,000,000 as of March 31, 2021, unchanged from the previous year[25] - The group's total liabilities to total assets ratio improved slightly to 20.8% from 21.6% year-on-year[25] - The group has a strong liquidity position with a low debt ratio, as indicated by an interest coverage ratio of 312%[23] Investments and Joint Ventures - The group has invested in joint ventures in Thailand, China, and Japan, with book values of HKD 354,300,000, HKD 228,600,000, and HKD 135,100,000 respectively as of March 31, 2021[26] - The group's investment properties, valued at HKD 7,710,100,000, were fully mortgaged to secure bank loans of HKD 2,281,000,000[27] Corporate Governance and Compliance - The board of directors includes a mix of executive and independent non-executive members, ensuring governance and oversight[44] - The company has adopted the corporate governance code as per the listing rules, ensuring compliance and effective management practices[106] - The independent non-executive directors are required to confirm their independence annually, ensuring they remain free from any significant relationships that could impair their judgment[114] - The board meets at least four times a year to review business development and discuss corporate governance, risk management, and financial matters[116] - The company emphasizes a sound and efficient board, effective risk management, and accountability to shareholders as part of its governance framework[106] Risk Management and Internal Controls - The company has established a comprehensive risk management and internal control system, which includes monitoring environment, risk assessment, control activities, information and communication, and monitoring[135] - The effectiveness of the risk management and internal control system was reviewed by the audit committee and external auditors, with satisfactory results reported[139] - The internal audit function is established to provide objective assurance and improvement recommendations regarding the adequacy and effectiveness of the risk management and internal control system[138] Shareholder Communication and Engagement - The company recognizes the importance of maintaining good communication with shareholders, providing timely information through various formal channels including interim and annual reports[174] - The annual general meeting provides a valuable platform for direct communication between the board and shareholders, with all resolutions requiring voting[174] - The company has established procedures for shareholders to submit inquiries to the board, ensuring transparency and engagement[171] Audit and Financial Reporting - The independent auditor confirmed that the consolidated financial statements fairly present the group's financial position as of March 31, 2021, in accordance with Hong Kong Financial Reporting Standards[176] - The auditors assess the appropriateness of accounting policies and the reasonableness of accounting estimates and related disclosures[196] - The financial statements are prepared based on the going concern assumption unless there is an intention to liquidate or cease operations[190]
建生国际(00224) - 2021 - 年度财报