中国基建投资(00600) - 2020 - 年度财报

Corporate Information This chapter details the company's core management, board committees, auditors, and key corporate information, noting Mr. Xu Xiaojun serves as Chairman and CEO - The company's Board of Directors comprises three executive directors and three independent non-executive directors. Mr. Xu Xiaojun serves as Chairman and Chief Executive Officer[5] - The company has established an Audit Committee, Remuneration Committee, Nomination Committee, and Corporate Governance Committee, with their respective chairmen and members listed[5] - The company's auditor is HLB Hodgson Impey Cheng Limited[7] Chairman's Statement Despite significant revenue growth to HKD 127 million in 2020, the company's loss attributable to owners expanded to HKD 279 million, primarily due to asset impairments and associate losses, with future focus on seeking new investment opportunities in China 2020 Annual Performance Summary | Metric | 2020 (HKD) | 2019 (HKD) | | :--- | :--- | :--- | | Revenue | 127,414,000 | 56,935,000 | | Loss Attributable to Owners of the Company | 278,857,000 | 28,909,000 | - The loss in 2020 significantly increased, primarily due to: - Fair value loss on investment properties of approximately HKD 77.89 million - Impairment loss recognized on property, plant and equipment of approximately HKD 87.94 million - Impairment loss recognized on financial assets of approximately HKD 40.72 million - Share of loss from associates of approximately HKD 145 million[10] - The Group's principal assets include the comprehensive development project in Jiangning, Nanjing (Jiangning Project), warehouse properties of Tianjin Junhua Logistics, and industrial land and buildings under construction of Tianjin Huiliyuan, all expected to provide stable income or possess development potential[12][17] - Future Outlook: Management will continue to seek investment projects with development potential and ideal returns in the Chinese market to expand the Group's investment portfolio[19][20] Management Discussion and Analysis Business Review and Outlook This section reviews the Group's property development and investment projects in China, highlighting the Jiangning project's 12% annual return commitment and Tianjin properties' rental income potential, with a continued focus on seeking new opportunities - The Nanjing Jiangning project investment secured an annual return commitment of not less than 12% of the consideration. On May 15, 2020, the guarantor paid the profit guarantee shortfall of HKD 36 million for 2019[22] - The Group's investments in Tianjin include Tianjin Junhua Logistics (engaged in property leasing and warehousing) and Tianjin Huiliyuan (engaged in property leasing and development), which directors believe are located in prime areas with development potential and stable rental income prospects[26][27] - The Group will continue to seek projects with development potential and ideal returns in the Chinese market to expand its investment portfolio[33][34] Financial Review This fiscal year saw revenue grow to HKD 127 million, but loss attributable to owners expanded to HKD 279 million, with the current ratio decreasing and gearing ratio increasing, alongside a HKD 95.35 million contingent liability 2020 Annual Financial Performance | Metric | 2020 (HKD) | 2019 (HKD) | | :--- | :--- | :--- | | Revenue | 127,414,000 | 56,935,000 | | Loss Attributable to Owners of the Company | 278,857,000 | 28,909,000 | Liquidity and Financial Resources (As at December 31, 2020) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Current Ratio | 1.72 | 1.87 | | Gearing Ratio | 24% | 16% | | Equity Attributable to Owners of the Company | 483,087,000 HKD | 732,376,000 HKD | | Net Current Assets | 153,450,000 HKD | 192,475,000 HKD | | Cash and Bank Balances | 18,491,000 HKD | 2,024,000 HKD | - The Group has a contingent liability: certain properties of a subsidiary are pledged as collateral for a loan of approximately HKD 95.35 million from a China trust company to an independent third party. As at the end of 2020, the carrying value of the pledged properties was approximately HKD 111 million[38] - The Board resolved not to recommend the payment of any final dividend for the year ended December 31, 2020[44] Human Resources As of December 31, 2020, the Group employed approximately 29 staff in Hong Kong and China, with remuneration policies designed to retain talent based on performance and industry standards - As at December 31, 2020, the Group had approximately 29 employees[35] Corporate Governance Report Corporate Governance Practices The company largely complied with the Corporate Governance Code, with deviations noted for the combined Chairman and CEO role and non-executive directors' lack of specific terms, though subject to triennial rotation - The company deviated from Corporate Governance Code provision A.2.1, where the roles of Chairman and Chief Executive Officer are held by the same person, Mr. Xu Xiaojun. The Board believes this helps ensure leadership consistency and strategic planning efficiency[49][63] - The company deviated from Corporate Governance Code provision A.4.1, where non-executive directors do not have specific terms of office, but all directors are subject to retirement by rotation at least once every three years at the annual general meeting[49] Board of Directors The Board, comprising three executive and three independent non-executive directors, possesses essential skills and experience, held 6 meetings with full attendance, and provided continuous professional development training 2020 Board Meeting Attendance Record | Director Name | Position | Meetings Attended/Total Meetings | Attendance Rate | | :--- | :--- | :--- | :--- | | Xu Xiaojun | Chairman and Chief Executive Officer | 6/6 | 100% | | Ye Dechao | Executive Director | 6/6 | 100% | | Ji Xudong | Executive Director | 6/6 | 100% | | He Jingeng | Independent Non-executive Director | 6/6 | 100% | | Yu Honggao | Independent Non-executive Director | 6/6 | 100% | | Chen Yang | Independent Non-executive Director | 6/6 | 100% | - All directors participated in continuous professional development courses during 2020, including attending seminars or reading relevant professional materials[60][62][63] Board Committees The Board has established Remuneration, Nomination, Audit, and Corporate Governance Committees, predominantly composed of independent non-executive directors, with all committees holding meetings and achieving full attendance during the year - The Remuneration Committee comprises three independent non-executive directors and one executive director, chaired by independent non-executive director Mr. Yu Honggao. The committee held one meeting during the year to review the remuneration of directors and senior management[67][70][73] - The Nomination Committee comprises three independent non-executive directors and one executive director, chaired by executive director Mr. Xu Xiaojun. The committee held one meeting during the year, completing reviews of Board structure, recommendations for re-election of directors, and assessment of independent non-executive directors' independence[74][75][82] - The Audit Committee comprises three independent non-executive directors, chaired by Mr. He Jingeng. The committee held six meetings during the year, reviewing the Group's financial reports, accounting principles, and internal control matters[85][86][87] - The Corporate Governance Committee comprises three independent non-executive directors and one executive director, chaired by executive director Mr. Xu Xiaojun. The committee held one meeting during the year to review the company's corporate governance policies and compliance[91][92][93] Risk Management and Internal Control The Board is fully responsible for the Group's risk management and internal control systems, which management designs and implements, and external audits in 2020 found no material defects, deeming them reasonably effective - The Board is fully responsible for evaluating and determining risks, and ensuring the establishment and maintenance of effective risk management and internal control systems[100] - The Group has established risk management procedures, with management strategies including risk retention, avoidance, sharing, and transfer[103] - In fiscal year 2020, the Group engaged external consultants to perform internal audit functions, finding no material system defects. The Board considers the current system to be reasonably effective[107] Shareholders' Rights & Investor Relations The report outlines procedures for shareholders to convene extraordinary general meetings and contact the Board, emphasizing the company's commitment to transparent communication via financial reports, website, and general meetings, with all directors attending the annual general meeting - Shareholders holding not less than 10% of the paid-up share capital may request in writing to convene an extraordinary general meeting[107] - The company communicates with shareholders and investors through interim and annual reports, the company website, and general meetings[110] Environmental, Social and Governance Report Environmental The Group is committed to reducing its environmental impact, disclosing greenhouse gas emissions primarily from electricity and travel, implementing waste management, and promoting energy and water conservation, with limited significant environmental impact due to business nature 2020 Greenhouse Gas Emissions | Scope | Emissions (kg) | | :--- | :--- | | Scope 2 (Indirect Emissions) | 51,198 | | Scope 3 (Other Indirect Emissions) | 1,747 | 2020 Resource Consumption | Resource | Consumption | Intensity (per HKD million revenue) | | :--- | :--- | :--- | | Electricity | 63,322 kWh | 497 | | Water | 1,366 tonnes | 11 | - The Group has formulated a waste management plan, including recycling paper, printer cartridges, and batteries, and encouraging employees to reduce paper consumption[128] Social The Group prioritizes social responsibility through competitive employee benefits and training, adhering to labor laws, prohibiting child and forced labor, ensuring a safe work environment, and reporting zero work-related injuries or fatalities in 2020 and 2019 - The Group complies with labor laws in China and Hong Kong, covering aspects such as remuneration, recruitment, working hours, and anti-discrimination, and is committed to enhancing employee diversity[138] Occupational Health and Safety Statistics | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Lost Days Due to Work Injury | Zero | Zero | | Work-Related Fatalities | Zero | Zero | | Number of Work Injuries | Zero | Zero | - The Group strictly prohibits the employment of child and forced labor and has stringent recruitment procedures. No labor disputes occurred during the year[154] - The Group adheres to high standards of business integrity, with anti-corruption and anti-money laundering policies in place, complying with relevant laws and regulations. No related violations occurred during the year[158] Directors and Senior Management This chapter provides detailed biographies of executive and independent non-executive directors, outlining their experience and tenure, noting executive directors' performance-linked remuneration and independent non-executive directors' fixed fees - Executive directors include Chairman and Chief Executive Officer Mr. Xu Xiaojun, Mr. Ye Dechao, and Mr. Ji Xudong, who possess extensive experience in real estate development, corporate management, and international trade[161][162][166] - Independent non-executive directors include Mr. He Jingeng, Mr. Yu Honggao, and Ms. Chen Yang, who have professional backgrounds in financial accounting, asset management, and the securities industry, respectively[173][175] - Executive directors are not entitled to director's fees but may receive discretionary bonuses based on contributions and company performance. In 2020, each of the three independent non-executive directors received HKD 120,000 in director's fees[168][177] Directors' Report The Directors' Report outlines the company's property investment and natural gas businesses, highlighting key risks, customer concentration (largest customer 35%, top five 98% of revenue), director and major shareholder holdings, and a significant connected transaction related to Taihe Investment's return commitment - The company's principal business is investment holding, with an investment portfolio including (i) property investment; and (ii) natural gas business[183] - During the year, the largest customer accounted for approximately 35% of total revenue, and the top five customers accounted for approximately 98%. The largest supplier accounted for approximately 31% of total cost of sales, and the top five suppliers accounted for 100%[185] Directors' Shareholdings (As at December 31, 2020) | Director Name | Number of Shares Held | Percentage of Issued Share Capital (%) | | :--- | :--- | :--- | | Mr. Ye Dechao | 1,189,290,512 (Corporate Interest) | 27.85 | | Mr. Ji Xudong | 6,000 (Personal Interest) | 0.00014 | - Connected Transaction: Executive Director Mr. Ye Dechao, as one of the guarantors, committed to providing the Group with an annual return of not less than HKD 36 million for the Taihe Investment project. The compensation for 2019 was paid in May 2020. The HKD 36 million compensation for 2020 is due on or before May 15, 2021[210][216] Independent Auditors' Report Independent auditor HLB Hodgson Impey Cheng Limited issued an unmodified opinion on the 2020 consolidated financial statements but highlighted a material uncertainty regarding going concern due to significant losses and overdue borrowings, with key audit matters including asset valuations and recoverability of interests - Audit Opinion: The auditor believes the consolidated financial statements present fairly the Group's financial position and have been properly prepared[223][225] - Material Uncertainty Related to Going Concern: The report draws attention to the Group's net loss of approximately HKD 348 million and overdue interest-bearing borrowings of approximately HKD 115 million, while cash balances are only approximately HKD 18.49 million, indicating a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern[229][231] - Key audit matters include: - Valuation of investment properties - Impairment assessment of construction in progress under property, plant and equipment - Recoverability of the carrying amount of interests in associates[234][237][239] Consolidated Financial Statements Consolidated Statement of Profit or Loss In 2020, Group revenue significantly increased to HKD 127 million, but the annual loss expanded to HKD 348 million (with HKD 279 million attributable to owners) due to fair value losses, asset impairments, and associate losses Consolidated Statement of Profit or Loss Summary (For the year ended December 31) | Item (HKD thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 127,414 | 56,935 | | Gross Profit | 2,831 | 1,905 | | Operating Loss | (343,677) | (7,226) | | Loss Before Tax | (355,914) | (30,640) | | Loss for the Year | (348,497) | (30,074) | | Loss Attributable to Owners of the Company | (278,857) | (28,909) | | Loss Attributable to Non-controlling Interests | (69,640) | (1,165) | | Basic Loss Per Share | (6.53) cents | (0.68) cents | Consolidated Statement of Financial Position As of December 31, 2020, total assets significantly decreased to HKD 698 million from HKD 1.029 billion, with net assets falling to HKD 486 million from HKD 800 million, primarily due to reduced non-current assets Consolidated Statement of Financial Position Summary (As at December 31) | Item (HKD thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Non-current Assets | 332,462 | 615,628 | | Current Assets | 365,585 | 413,789 | | Total Assets | 698,047 | 1,029,417 | | Current Liabilities | (212,135) | (221,314) | | Non-current Liabilities | (296) | (7,992) | | Total Liabilities | (212,431) | (229,306) | | Net Assets | 485,616 | 800,111 | | Equity Attributable to Owners of the Company | 483,087 | 732,376 | | Non-controlling Interests | 2,529 | 67,735 | Consolidated Statement of Cash Flows In 2020, the Group generated HKD 27.79 million net cash from operations, a significant improvement from the prior year's outflow, with net cash and cash equivalents increasing by HKD 11.77 million to an ending balance of HKD 18.49 million Consolidated Statement of Cash Flows Summary (For the year ended December 31) | Item (HKD thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash Generated From/(Used In) Operating Activities | 27,788 | (303,932) | | Net Cash Generated From/(Used In) Investing Activities | 307 | (133,846) | | Net Cash Used In Financing Activities | (16,322) | (107,391) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 11,773 | (545,169) | | Cash and Cash Equivalents at Beginning of Year | 2,024 | 553,114 | | Cash and Cash Equivalents at End of Year | 18,491 | 2,024 | Notes to the Consolidated Financial Statements The notes provide detailed explanations and supplementary information, covering material uncertainty regarding going concern, segment performance, asset impairment details, interests in associates, financial instrument risk management, and related party transactions - Material Uncertainty Related to Going Concern: Note 2(c) indicates that due to the Group's significant losses and overdue borrowings, there is a material uncertainty regarding its ability to continue as a going concern. Management has taken measures such as cost control, seeking shareholder support, and negotiating with lenders to address this[306][309] 2020 Segment Results (HKD thousands) | Segment | Revenue | Operating Loss | | :--- | :--- | :--- | | Property Investment | 2,317 | (165,795) | | Natural Gas | 125,097 | (58,871) | | Investment Holding | — | (116,625) | | Unallocated | — | (14,623) | | Total | 127,414 | (355,914) (Before Tax) | - As at December 31, 2020, the Group recognized an impairment loss of approximately HKD 87.94 million on property, plant and equipment, primarily related to construction in progress[763] - As at December 31, 2020, the Group's interest-bearing borrowings amounted to HKD 115 million, all of which were secured and overdue. The Group has negotiated with lenders, who have agreed not to demand immediate repayment for the time being[878] Five Years Financial Summary This summary presents the Group's key financial data over five years, showing continuous turnover growth since 2016 but consecutive losses, with 2020 having the largest loss, and declining total and net assets Five-Year Financial Summary (HKD thousands) | Year | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Turnover | 127,414 | 56,935 | 56,182 | 26,144 | 15,691 | | Loss Attributable to Owners | (278,857) | (28,909) | (20,088) | (44,700) | (5,507) | | Total Assets | 698,047 | 1,029,417 | 1,143,536 | 1,243,833 | 1,407,610 | | Total Liabilities | (212,431) | (229,306) | (291,898) | (320,014) | (601,888) | | Net Assets | 485,616 | 800,111 | 851,638 | 923,819 | 805,722 | Group Properties This chapter lists the Group's principal property portfolio as of December 31, 2020, including investment properties and properties under development in Tianjin, and properties held for sale in Nanjing, with varying Group interests Group Property Portfolio (As at December 31, 2020) | Category | Location | Intended Use | Gross Floor Area (approx. sq. meters) | Group Interest (%) | | :--- | :--- | :--- | :--- | :--- | | Investment Properties | Tianjin Economic-Technological Development Area | Industrial properties for leasing | 11,512.07 | 51 | | Properties Under Development | Tianjin Economic-Technological Development Area | Industrial properties for leasing | 29,012.72 | 60 | | Properties Held for Sale | Jiangning District, Nanjing | Residential/Commercial properties | 116.67 | 40 | | Properties Held for Sale | Jiangning District, Nanjing | Residential/Commercial properties | 1,710.89 | 40 |