新城市建设发展(00456) - 2020 - 年度财报

Company Information The report provides detailed basic company information, including core management, registered office, principal places of business, auditor, principal bankers, and share registrar - The report provides detailed basic company information, including core management, registered office, principal places of business, auditor, principal bankers, and share registrar[5] Financial Highlights This section presents a concise overview of the company's key financial performance and position for the reporting period 2020 Financial Highlights | Metric | 2020 (HK$ Thousand) | 2019 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 46,794 | 48,494 | (47.15%) | | Operating (Loss)/Profit | (3,471) | 22,782 | (54.36%) | | Loss for the Year | (33,788) | (3,739) | (127.27%) | | Total Equity | 792,037 | 741,612 | 7.60% | | Total Assets | 1,932,582 | 1,559,348 | 23.62% | | Total Liabilities | 1,140,545 | (817,736) | 42.90% | | Basic Loss Per Share (HK Cents) | (0.68) | (0.03) | (107.32%) | Chairman's Statement The Chairman's Statement provides an overview of the Group's performance, operational review, and future outlook, including strategic initiatives and market expectations Business and Operations Review For the year ended December 31, 2020, the Group recorded revenue of approximately HK$46.79 million and a loss after tax of approximately HK$33.79 million, alongside new related party lease agreements 2020 Performance Overview | Metric | Amount (HK$ Thousand) | | :--- | :--- | | Revenue | 46,794 | | Loss After Tax | 33,788 | - The Group entered into several new lease agreements with companies indirectly wholly-owned by related parties for office properties, parking spaces, and staff dormitories, constituting continuing connected transactions[12] Outlook and Prospects The Group plans to integrate online retail, supermarket business, and property management in the Greater Bay Area, maintaining optimism for post-COVID-19 economic recovery and increased property management demand - The Group established 'Everyday, Life, New City' as its future development theme, aiming to integrate property development management with daily life needs, focusing on online retail, chain supermarkets, and property management businesses in the Greater Bay Area[13] - Due to the COVID-19 pandemic, the Group decided to postpone the substantial operation of Yibaijia Supermarket until 2021 and extended the operating license period from ten to twenty years[14] - The Group is optimistic about the property management market, anticipating increased demand for property hygiene management post-pandemic and planning to expand its participation in this market[16] - The Group decided to classify most units of the Zhuhai property development project as inventory for future realization, aiming to reserve more cash for future business opportunities rather than holding them as long-term investment properties[18] Management Discussion and Analysis This section provides a detailed review of the Group's financial performance, employee information, and the utilization of proceeds from new share subscriptions Financial Review In FY2020, the Group's revenue was approximately HK$46.79 million, with an expanded annual loss of HK$33.79 million, while total assets grew to HK$1.93 billion, and the current ratio significantly improved to 4.74 2020 Key Financial Indicators | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | HK$46.79 Million | HK$48.49 Million | | Net Loss for the Year | HK$33.79 Million | HK$3.74 Million | | Basic Loss Per Share | 0.68 HK Cents | 0.03 HK Cents | | Administrative Expenses | HK$58.40 Million | HK$46.32 Million | | Finance Costs | HK$30.31 Million | HK$26.41 Million | Financial Position as at December 31, 2020 | Metric | December 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Total Assets | HK$1.93 Billion | HK$1.56 Billion | | Total Liabilities | HK$1.14 Billion | HK$0.82 Billion | | Cash and Bank Balances | HK$43.46 Million | HK$11.18 Million | | Current Ratio | 4.74 | 2.06 | | Gearing Ratio | 43% | 45% | - The Board does not recommend the payment of any dividend for the year ended December 31, 2020[32] Employees As of the end of 2020, the Group employed 74 staff in Hong Kong and China, an increase of 6 from the previous year, offering competitive remuneration packages reviewed annually - As at December 31, 2020, the Group had approximately 74 employees in Hong Kong and China, an increase from 68 in 2019[35] Use of Proceeds The company raised approximately HK$51.5 million net proceeds from new share subscriptions in April 2020, with HK$38.95 million utilized by year-end for working capital and potential acquisitions, leaving HK$12.55 million unutilized Use of Net Proceeds from Share Subscription (As at December 31, 2020) | Item | Amount (HK$ Million) | | :--- | :--- | | Total Net Proceeds | 51.50 | | Actual Usage: | | | - General Working Capital | 23.70 | | - Potential Acquisitions and Investments | 15.25 | | Total Utilized | 38.95 | | Remaining Balance | 12.55 | Corporate Governance Report This report details the company's corporate governance practices, board structure, committee functions, internal controls, and shareholder rights, highlighting compliance and deviations from the Corporate Governance Code Corporate Governance Practices The company largely complies with the Corporate Governance Code, with deviations including the Chairman also serving as CEO and non-executive directors lacking specific terms, which the Board deems adequate for current operations - Mr. Han Junran, the Chairman, also serves as the Chief Executive Officer, deviating from Corporate Governance Code provision A.2.1, which requires separation of these roles[46] - The company's non-executive directors do not have specific terms of appointment, deviating from Code provisions A.4.1 and A.4.2 regarding fixed terms and retirement by rotation[46] Board of Directors The Board, comprising two executive and six independent non-executive directors, oversees the Group's strategy and operations, held three meetings during the period, and ensured all directors participated in continuous professional development - The Board comprises 8 members, including 2 executive directors (Mr. Han Junran, Mr. Luo Min) and 6 independent non-executive directors, meeting Listing Rules requirements for independent non-executive directors' numbers and qualifications[51][52] - All directors have participated in continuous professional development training to update their knowledge and skills[56][57] Board Committees The Board has established Audit, Remuneration, and Nomination Committees to assist in fulfilling its responsibilities, overseeing financial reporting, internal controls, compensation policies, and board structure - The Audit Committee, composed of three independent non-executive directors, is primarily responsible for reviewing financial statements, recommending external auditors, and monitoring internal control procedures, holding two meetings during the year[68][69][71] - The Remuneration Committee, comprising two independent non-executive directors and one executive director, is responsible for recommending remuneration policies for directors and senior management to the Board, holding one meeting during the year[74][78] - The Nomination Committee, consisting of one executive director and three independent non-executive directors, is responsible for reviewing the Board's structure, size, and composition, and making recommendations on director appointments, holding one meeting during the year[80][81] Internal Control The Board is fully responsible for establishing and maintaining an effective internal control system to protect shareholder interests and company assets, conducting an annual review of its effectiveness as of year-end 2020 - The Board confirms its full responsibility for establishing and maintaining an effective internal control system and has conducted an annual review of its effectiveness during the reporting year[88] Shareholders' Rights The report clarifies shareholders' rights to convene an extraordinary general meeting, stating that shareholders holding at least 10% of the paid-up share capital can request the Board to call such a meeting in writing - Shareholders holding not less than 10% of the paid-up share capital carrying voting rights may request the Board in writing to convene an extraordinary general meeting, and if the Board fails to act within 21 days, the requisitionists may proceed to convene it themselves[92] Environmental, Social and Governance Report This report outlines the Group's commitment to environmental management, social responsibility, and governance practices, including emissions, employee welfare, and anti-corruption measures Environment The Group is committed to environmental management, with total greenhouse gas emissions remaining stable at 28.1 tonnes of CO2 equivalent in 2020, while total energy consumption increased due to expanded reporting scope, and all relevant environmental laws were complied with Greenhouse Gas Emissions Data | Greenhouse Gas Emissions | 2020 | 2019 | Unit | | :--- | :--- | :--- | :--- | | Scope 1 Direct Emissions | 11.9 | 14.3 | Tonnes of CO2 equivalent | | Scope 2 Indirect Emissions | 16.2 | 10.8 | Tonnes of CO2 equivalent | | Total Greenhouse Gas Emissions | 28.1 | 28.0 | Tonnes of CO2 equivalent | Energy Consumption Data | Energy Consumption | 2020 | 2019 | Unit | | :--- | :--- | :--- | :--- | | Direct Energy (Gasoline) | 42,654.7 | 51,153.4 | kWh equivalent | | Indirect Energy (Electricity) | 33,763.9 | 21,644.9 | kWh | | Total Energy Consumption | 76,418.7 | 72,798.2 | kWh equivalent | - During the reporting period, the Group found no instances of non-compliance with environmental laws and regulations[130] Society The Group is committed to corporate social responsibility, focusing on employee welfare, health and safety, training, supply chain management, product responsibility, and anti-corruption, ensuring compliance with all relevant laws and regulations Employee Structure as at December 31, 2020 | Category | Percentage/Number | | :--- | :--- | | Total Employees | 74 | | By Gender | | | Male | 70% | | Female | 30% | | By Employment Level | | | Senior Management | 31% | | General Staff | 58% | | By Age Group | | | 51 and Above | 45% | | 31 to 50 | 36% | - During the COVID-19 pandemic, the Group implemented several policies to protect employees, including disinfecting public areas, providing masks, and monitoring employee health status[140] - The Group strictly adheres to labor standards, opposes child and forced labor, and ensures equal opportunities in recruitment, training, and promotion, without any form of discrimination[147] - The Group strictly prohibits bribery, extortion, fraud, and money laundering, with no related illegal activities or corruption lawsuits identified during the reporting period[153] Biographical Details of Directors This section provides detailed personal biographies of the executive and independent non-executive directors, including their age, educational background, professional experience, and tenure within the Group - This section provides detailed personal biographies of the executive and independent non-executive directors, including their age, educational background, professional experience, and tenure within the Group[157][158][160][161] Directors' Report The Directors' Report covers the Group's principal business, performance, directors' and major shareholders' interests in shares, and continuing connected transactions Principal Business and Performance The Group's principal business of property development and investment in China remained unchanged, recording revenue of approximately HK$46.79 million and a loss after tax of HK$33.79 million for the year ended 2020, with no annual dividend recommended - The Group's principal business is property development and investment in China, with no change in the nature of business during the year[165] - The Board does not recommend the payment of any dividend for the year ended December 31, 2020[167] Directors' Interests in Shares, Underlying Shares and Debentures As of the end of 2020, Chairman Mr. Han Junran held approximately 52.64% of the company's equity through controlled corporations and as a beneficial owner, making him the major controlling shareholder Directors' Long Positions in the Company's Shares (As at December 31, 2020) | Name of Director | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Han Junran | Interest in Controlled Corporation | 1,886,662,752 | 43.60% | | Han Junran | Beneficial Owner | 391,000,000 | 9.04% | Major Shareholders' Interests Beyond Director Mr. Han Junran, major shareholders include Junyi Investment Limited, Qilu International Funds SPC (as chargee), and Mr. Zhang Xiaomu, with Qilu International Funds SPC and its investment manager holding a 52.64% charge interest Major Shareholders' Long Positions in the Company's Shares (As at December 31, 2020) | Name | Capacity | Number of Relevant Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Junyi Investment Limited | Beneficial Owner | 1,886,662,752 | 43.60% | | Qilu International Funds SPC | Chargee | 2,277,662,752 | 52.64% | | Zhongtai International Asset Management Co., Ltd. | Investment Manager | 2,277,662,752 | 52.64% | | Zhang Xiaomu | Beneficial Owner | 712,328,767 | 16.46% | Continuing Connected Transactions During the reporting period, the Group engaged in several non-exempt continuing connected transactions, primarily involving the leasing of office properties, staff dormitories, and parking spaces from associates of related parties, which were reviewed and confirmed as fair and reasonable - The Group entered into lease agreements with associates of related parties (e.g., Yongchengxin Investment, Yongjiaxin Investment) for office properties and staff dormitories, constituting continuing connected transactions[196] - Both the independent non-executive directors and the company's auditor have reviewed and confirmed that these continuing connected transactions were conducted in the ordinary course of business on normal commercial terms, are fair and reasonable, and did not exceed the annual caps[198][199] Independent Auditor's Report This report presents the independent auditor's opinion on the Group's consolidated financial statements and highlights key audit matters related to asset valuation and recoverability Opinion The auditor, Evergreen (Hong Kong) CPA Limited, issued an unmodified opinion, affirming that the consolidated financial statements fairly present the Group's financial position as of December 31, 2020, and its financial performance and cash flows for the year, in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance - The auditor believes that the consolidated financial statements fairly present the Group's financial position, performance, and cash flows, and have been properly prepared, resulting in an unmodified opinion[210] Key Audit Matters The auditor identified four key audit matters, all related to asset valuation and recoverability, which required significant management judgment and estimation, and were subject to extensive audit procedures including expert engagement and assumption evaluation - Key Audit Matter One: Fair Value of Investment Properties — Guangzhou Property, involving the review of management's income approach valuation, including assumptions on market rent and discount rates[213][215] - Key Audit Matter Two: Impairment Assessment of Investment Properties — Luoyang Property, focusing on the recoverability assessment due to non-compliance with construction timelines, including reviewing legal opinions and management's development plans[218][219] - Key Audit Matter Three: Impairment Assessment of Properties Under Development for Sale — Zhuhai Property, focusing on evaluating management's estimate of net realizable value based on the direct comparison approach[221][222] - Key Audit Matter Four: Recoverability and Impairment Assessment of Deposits and Other Receivables, involving the evaluation of significant judgments and estimates made by management for the Expected Credit Loss (ECL) model[225][227] Audited Consolidated Financial Statements This section presents the Group's consolidated income statement, statement of financial position, cash flow statement, and detailed notes, providing a comprehensive view of its financial performance and position Consolidated Statement of Profit or Loss For the year ended December 31, 2020, the Group's revenue was HK$46.79 million, with the loss for the year expanding to HK$33.79 million due to increased administrative and finance costs and an impairment loss on deposits and other receivables Key Items from Consolidated Statement of Profit or Loss | Item (HK$ Thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 46,794 | 48,494 | | Gross Profit | 43,834 | 41,150 | | Operating (Loss)/Profit | (3,471) | 22,782 | | Finance Costs | (30,306) | (26,410) | | Loss Before Tax | (33,777) | (3,628) | | Loss for the Year | (33,788) | (3,739) | | Loss Attributable to Owners of the Company | (27,950) | (1,075) | Consolidated Statement of Financial Position As of December 31, 2020, the Group's total assets increased by 24% to HK$1.93 billion, while total liabilities grew by 43% to HK$1.14 billion, with total equity slightly rising to HK$792 million Key Items from Consolidated Statement of Financial Position (As at December 31) | Item (HK$ Thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 1,042,713 | 1,382,721 | | Current Assets | 889,869 | 176,627 | | Total Assets | 1,932,582 | 1,559,348 | | Liabilities and Equity | | | | Current Liabilities | 78,031 | 85,939 | | Non-current Liabilities | 1,062,514 | 731,797 | | Total Liabilities | 1,140,545 | 817,736 | | Total Equity | 792,037 | 741,612 | Consolidated Statement of Cash Flows As of the end of 2020, the Group's cash and cash equivalents increased to HK$43.46 million, with net cash outflows from operating and investing activities offset by HK$138 million net cash inflow from financing activities Consolidated Statement of Cash Flows Summary | Item (HK$ Thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (76,303) | (75,978) | | Net Cash Used in Investing Activities | (32,936) | (5,888) | | Net Cash From Financing Activities | 138,171 | 26,919 | | Net Increase/(Decrease) in Cash and Cash Equivalents | 28,932 | (54,947) | | Cash and Cash Equivalents at End of Year | 43,458 | 11,175 | Notes to the Consolidated Financial Statements The notes provide detailed explanations of accounting policies, key judgments, estimates, and specific items within the financial statements, including investment property valuations, borrowings, related party transactions, and segment information Five Year Financial Summary This section provides a five-year overview of the Group's key financial performance and position, including revenue, profit/loss, total assets, liabilities, and equity Five Year Financial Summary (For the Year Ended December 31) | Item (HK$ Thousand) | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Results | | | | | | | Revenue | 46,794 | 48,494 | 91,764 | 39,076 | 34,982 | | Gross Profit | 43,834 | 41,150 | 39,983 | 35,952 | 31,866 | | (Loss)/Profit for the Year | (33,788) | (3,739) | 13,711 | (23,010) | 1,219 | | Assets and Liabilities | | | | | | | Total Assets | 1,932,582 | 1,559,348 | 1,261,431 | 1,104,147 | 980,331 | | Total Liabilities | (1,140,545) | (817,736) | (572,225) | (440,410) | (376,638) | | Equity Attributable to Owners of the Company | 770,639 | 714,767 | 689,403 | 663,299 | 603,258 |