Financial Performance - The group's revenue decreased by HKD 4,888,937 (or 18.25%) to HKD 21,894,215[5] - The group recorded a loss of HKD 89,310,429, compared to a profit of HKD 165,638,663 in the previous year[5] - Rental income fell to HKD 15,057,524, a decrease of HKD 1,998,245 (or 11.7%) compared to last year[10] - The fair value of investment properties recorded a loss of HKD 85,101,147, compared to a profit of HKD 63,609,939 in the previous year[11] - The fair value of the group's investment properties as of March 31, 2020, was HKD 940,000,000, up from HKD 610,800,000 in the previous year[11] - Dividend income decreased by HKD 1,349,243 (or 16.6%) to HKD 6,797,674 due to HSBC Holdings Limited canceling its dividend[13] - The group's market value of listed securities investment portfolio was HKD 137,362,455, down from HKD 208,773,698 in the previous year[14] - The group recorded a fair value gain of HKD 120,000 on development properties, compared to a loss of HKD 12,800 in the previous year[12] - The company anticipates a decrease of approximately 10% in rental income for the fiscal year ending March 31, 2021, compared to the fiscal year ending March 31, 2020[38] - The company expects a reduction in dividend income for the fiscal year ending March 31, 2021, to approximately HKD 4,407,000, a decrease of about 35% from HKD 6,798,000 for the fiscal year ending March 31, 2020[39] Investment and Acquisitions - The group acquired a redevelopment site at Fuk Chuen Street for approximately HKD 404,876,000[10] - The company has sold securities investments in the public market for a total consideration of approximately HKD 48,400,000, reflecting a strategic adjustment in response to market volatility[39] - The company continues to enhance the quality of its property portfolio to improve performance, focusing on long-term feasibility studies before major acquisitions[29] - The company emphasizes prudent financial management and long-term growth in its investment strategy, particularly in Hong Kong listed securities[32] - The company acknowledges significant strategic risks associated with capital expenditures and long-term borrowing in response to market demand and competition[31] Financial Management and Policies - The group plans to adopt a prudent financial policy to ensure sufficient cash flow and credit facilities for future operations and capital expenditures[26] - The group's bank borrowings amounted to HKD 19,537,491, a decrease from HKD 20,525,200 in the previous year, with a debt-to-equity ratio of 1.6%[25] - Cash reserves decreased significantly to approximately HKD 28,000,000 from HKD 518,000,000 in the previous year, following the acquisition of properties[26] - The group anticipates capital expenditures for property redevelopment projects, with HKD 14,360,000 in contracted but unpaid capital commitments[26] Market Conditions and Risks - The ongoing social unrest in Hong Kong has negatively impacted market consumption sentiment, affecting property values and rental returns[28] - The COVID-19 outbreak has posed unprecedented risks, severely impacting economic activities and leading to closures in retail, dining, and tourism sectors[28] - The group will consider market trends and government measures when making investment decisions, particularly in light of cooling measures in the Hong Kong residential market[28] Corporate Governance - The board consists of two executive directors, three non-executive directors, and three independent non-executive directors[46] - The board held four meetings during the year, achieving a 100% attendance rate[51] - The company has no specific CEO; strategic decisions require approval from all executive directors[55] - The remuneration committee, consisting of three independent non-executive directors and one executive director, held one meeting with a 100% attendance rate[61] - The company has adopted the "Code of Conduct for Directors' Securities Transactions" and complied with it during the fiscal year[45] - The board has delegated authority to the management team, led by the two executive directors, to execute board resolutions and oversee daily operations[50] - The company has no insurance for directors' actions due to a conservative management policy, which will be reviewed periodically[49] - All directors have participated in ongoing training and development to fulfill their roles effectively[54] - The company has no fixed term for non-executive and independent non-executive directors, who rotate according to the company's articles[59] - The board is responsible for formulating group strategies and monitoring business management[50] Risk Management - The board is responsible for the risk management and internal control systems, ensuring their effectiveness in achieving strategic objectives[86] - The risk management team was formally established in June 2017, continuously identifying and managing financial and non-financial risks[87] - The independent professional advisor (IPA) provides independent assurance on the effectiveness of the risk management and internal control systems[88] - The board conducted an annual review of the risk management and internal control systems, finding them effective and sufficient for the year[89] Environmental, Social, and Governance (ESG) Initiatives - The company has established an Environmental, Social, and Governance (ESG) working group to assess and manage ESG-related risks and opportunities[114] - The company is committed to reducing its environmental impact while enhancing social responsibility and effective corporate governance[114] - The total greenhouse gas emissions for the fiscal year amounted to 12.43 tons, an increase of 11.0% from 11.20 tons in the previous year[124] - The indirect emissions from purchased electricity accounted for 69.1% of total emissions, with a total of 8.59 tons reported[124] - The company has maintained compliance with Hong Kong environmental laws, with no confirmed incidents of environmental violations or fines[119] - The company has adopted an "Environmental Policy" since March 2017 to minimize its operational impact on the environment[120] Employee Management and Development - The company has maintained a stable workforce of four employees as of March 31, 2020, ensuring compensation policies are aligned with individual performance[33] - Employee training participation remained stable at 50% with 2 employees receiving training in both 2019 and 2020[145] - Average training hours per employee decreased from 20 hours in 2019 to 17 hours in 2020[145] - The average service period for employees increased from 10.8 years in 2019 to 11.8 years in 2020[140] - No employee turnover was reported, maintaining a turnover rate of 0%[140] - The company encourages employees to pursue further training and education, supporting their professional development[144] Shareholder Engagement - The company aims to provide stable and sustainable returns to shareholders through a consistent dividend policy, proposing an interim dividend of HKD 0.02 and a final dividend of HKD 0.12 per ordinary share[109] - The board of directors will consider various factors when determining dividends, including the financial performance of the group, future capital commitments, and market conditions[111] - The company encourages shareholder participation in annual general meetings and allows for direct inquiries to the board via email[106] - Shareholders holding at least 2.5% of the voting rights can request the company to circulate statements regarding proposed resolutions at the annual general meeting[101] Audit and Compliance - The audit committee reviewed the accounting principles and practices adopted by the group, ensuring the completeness and accuracy of the financial statements for the year ended March 31, 2020[83] - The total fees for audit services amounted to HKD 460,000, while non-audit services totaled HKD 146,674 for the year ended March 31, 2020[84] - The consolidated financial statements for the year ended March 31, 2020, were audited by Hong Kong Certified Public Accountants[187] - The company has not changed auditors in the past three years, maintaining continuity in financial oversight[188] Business Operations - The major business activities of the company include property and stock investment, property development, and securities trading, with no significant changes reported during the year[157] - The largest tenant accounts for 33% of the group's leasing revenue, while the top five tenants collectively account for 70%[181] - The company has not engaged in any significant purchases during the fiscal year ending March 31, 2020[183] - There were no confirmed incidents of corruption or legal proceedings involving the group or its employees during the year[153] - The company has encouraged employees and directors to participate in community volunteer services, contributing a total of 103 hours of volunteer service during the year[154]
永发置业(00287) - 2020 - 年度财报