Financial Performance - The company recorded a loss of approximately HKD 136 million for the year ended June 30, 2020, compared to a loss of HKD 65 million in the same period of 2019, primarily due to a fair value loss on investment properties of HKD 65 million [8]. - The company's revenue, including rental income from investment properties, was approximately HKD 8 million for the year ended June 30, 2020, unchanged from HKD 8 million in 2019 [9]. - Total revenue for the year ended June 30, 2020, was HKD 11,742,000, compared to HKD 8,199,000 in 2019, representing a growth of 43.5% [178]. - Gross profit increased to HKD 9,756,000 in 2020 from HKD 8,199,000 in 2019, reflecting a gross margin improvement [178]. - Operating loss for the year was HKD 132,224,000, significantly higher than the loss of HKD 58,204,000 in the previous year, indicating a deterioration in operational performance [178]. - The company reported a net loss of HKD 136,109,000 for the year, compared to a loss of HKD 64,812,000 in 2019, marking a 109.5% increase in losses [178]. - Basic and diluted loss per share for the year was HKD 8.96, compared to HKD 4.05 and HKD 4.30 in 2019, respectively [178]. - The company recognized a gain of HKD 3,772,000 from the disposal of an associate during the year [178]. - Total other income for the year was HKD 2,741,000, a significant increase from HKD 894,000 in 2019 [178]. - Financing costs increased to HKD 4,504,000 from HKD 3,605,000 in the previous year, indicating rising financial expenses [178]. Assets and Liabilities - As of June 30, 2020, the company's net current assets were approximately HKD 33 million, with a current ratio of 1.18 [15]. - The company's total liabilities were approximately HKD 203 million, including trade and other payables of HKD 16 million and bank borrowings of HKD 101 million [15]. - The company's capital debt ratio was approximately 19.07% [16]. - Non-current assets decreased from HKD 918,801 thousand in 2019 to HKD 849,664 thousand in 2020, a decline of approximately 7.5% [179]. - Current assets decreased from HKD 257,183 thousand in 2019 to HKD 217,001 thousand in 2020, a decline of approximately 15.6% [179]. - Total liabilities increased from HKD 160,557 thousand in 2019 to HKD 184,368 thousand in 2020, an increase of approximately 14.8% [179]. - Net assets decreased from HKD 1,002,997 thousand in 2019 to HKD 863,245 thousand in 2020, a decline of approximately 13.9% [182]. - Cash and cash equivalents decreased from HKD 250,714 thousand in 2019 to HKD 209,785 thousand in 2020, a decline of approximately 16.4% [179]. - Inventory increased from HKD 1,993 thousand in 2019 to HKD 2,276 thousand in 2020, an increase of approximately 14.2% [179]. - Trade and other receivables increased from HKD 4,476 thousand in 2019 to HKD 4,940 thousand in 2020, an increase of approximately 10.4% [179]. Corporate Governance - The board recommended not to declare a final dividend for the year [22]. - The board consists of one executive director, two non-executive directors, and three independent non-executive directors, ensuring a diverse range of expertise in management, property market, electronics, accounting, finance, and corporate development [33]. - The company has complied with all provisions of the corporate governance code as per the Hong Kong Stock Exchange, with some deviations disclosed [30]. - The independent non-executive directors are selected based on required skills and experience to ensure strong independent judgment on the board [36]. - The chairman and CEO roles are separated, with the current chairman temporarily acting as CEO until a new appointment is made [39]. - The company reviews its corporate governance practices regularly to ensure compliance with the code [31]. - All independent non-executive directors have confirmed their independence in writing, meeting the independence criteria set by the listing rules [36]. - Non-executive directors are subject to re-election every three years, ensuring accountability and governance [40]. - The board is responsible for setting the strategic direction and policies of the group, overseeing management, and approving significant transactions [33]. - The company has adopted the standard code of conduct for securities transactions by directors, confirming compliance for the year ending June 30, 2020 [32]. - The company has established a nomination committee to review the structure, number, and composition of the board of directors, ensuring members possess the necessary skills and experience for business development and strategy [41]. - The nomination committee held one meeting during the year ending June 30, 2020, to assess the board's structure and evaluate the independence of non-executive directors [45]. - The audit committee conducted two meetings during the year, reviewing the company's financial reports and internal control systems [53]. - The company has made appropriate insurance arrangements for directors and senior officers against potential legal actions [42]. - The board has adopted a nomination policy to enhance board diversity and improve governance standards [45]. - The company does not see the need for a formal board diversity policy, focusing instead on merit-based selection [45]. - The audit committee's responsibilities include reviewing financial data and overseeing the external auditor's independence and scope of work [51]. - The board members are required to retire at least once every three years, with one-third of the directors retiring annually [41]. - The company acknowledges its responsibility for preparing financial statements that fairly reflect its affairs [54]. - The external auditor's responsibilities regarding the financial statements are detailed in the independent auditor's report within the annual report [55]. - The company has adopted a dividend policy where the board will meet semi-annually to consider and declare interim or final dividends, if any [56]. - For the fiscal year ending June 30, 2020, the external auditor fees amounted to HKD 750,000, with HKD 600,000 for audit services and HKD 150,000 for non-audit services [64]. - The board acknowledges its responsibility for the internal control system and has engaged independent consultants to review its effectiveness, covering financial, operational, compliance, and risk management controls [66]. - The company has appointed a new auditor, Lo & Partners CPA Limited, effective immediately, to fill the vacancy left by Deloitte [155]. - The company’s remuneration policy for employees is based on merit, qualifications, and capabilities, while directors' remuneration is determined by the board after considering performance and market statistics [152]. Environmental and Social Responsibility - The company has established an environmental policy addressing significant environmental issues, complying with relevant laws and regulations, with no major non-compliance issues reported for the fiscal year ending June 30, 2020 [73]. - As of June 30, 2020, the total greenhouse gas emissions amounted to 217 tons of CO2 equivalent, an increase of 21.9% from 178 tons in 2019 [78]. - The fuel consumption from vehicles resulted in 17 tons of CO2 equivalent emissions in 2020, down 22.7% from 22 tons in 2019 [78]. - Purchased electricity emissions increased to 200 tons of CO2 equivalent in 2020, up 28.2% from 156 tons in 2019 [78]. - Total energy consumption included 7,299 liters of gasoline in 2020, a decrease of 22.1% from 9,380 liters in 2019 [84]. - The total purchased electricity consumption was 200,116 kWh in 2020, an increase of 28.2% from 156,054 kWh in 2019 [84]. - The company implemented green office actions to reduce environmental impact, including encouraging video conferencing to avoid unnecessary travel [78]. - The company has adopted measures to reduce waste, maintaining low levels of non-hazardous waste through policies promoting reduction, reuse, and recycling [83]. - Employee density for energy consumption was 74 liters per employee in 2020, down from 98 liters in 2019 [84]. - The company reported no significant environmental impact from its operations as of June 30, 2020 [89]. - The company is committed to maintaining a safe and healthy work environment, with no reported violations of health and safety regulations for the year ending June 30, 2020 [92]. - The company reported no work-related fatalities or accidents for the year ending June 30, 2020, due to implemented safety measures [94]. - The company did not identify any serious violations of labor standards during the year ending June 30, 2020 [96]. - The company has not been aware of any significant adverse impacts from major suppliers regarding business ethics, environmental issues, human rights, and labor practices for the year ending June 30, 2020 [97]. - The company emphasizes a zero-tolerance policy towards misconduct and has not received any reports of significant corruption-related risks for the year ending June 30, 2020 [101]. - The company acknowledges the importance of data privacy and has not been aware of any serious violations of data privacy during the year ending June 30, 2020 [100]. - The company is focused on maintaining good relationships with employees and customers, with no significant disputes reported during the year [116]. Investments and Future Outlook - The company has invested approximately HKD 140 million in technology development, with expectations of significant further investments in the coming years [11]. - The technology department generated revenue of approximately HKD 4 million during the year, although it did not meet expectations due to unforeseen COVID-19 impacts [11]. - The company anticipates that its technology department will achieve sales of USD 100 million by 2025 [11]. - The company has made significant investments in high-tech products, with ongoing risks related to market competition and technological innovation [107]. - The company’s operations are significantly influenced by the performance of the Hong Kong real estate market, which is subject to various external factors [107]. - The company plans to allocate HKD 39,000,000 for facility construction, contingent upon the acquisition of the land currently under negotiation [149]. - The negotiations for land acquisition have been delayed due to the COVID-19 pandemic, with no meaningful estimate on when they will resume [149]. - The company expects to complete negotiations within the next twelve months if pandemic-related restrictions are lifted [149]. - The company made a significant investment of 4,118 thousand HKD in business acquisitions during the year, indicating a focus on growth through strategic acquisitions [191].
PALADIN(00495) - 2020 - 年度财报