Financial Performance - The company reported a loss attributable to owners of HK$140.86 million in 2020, representing a 33% improvement compared to the previous year[9]. - Segment profit (before taxation) from the sale of financial assets was HK$191.81 million in 2020, a turnaround from a loss of HK$79.27 million in 2019[10]. - The money lending business recorded a segment loss (before tax) of HK$148.77 million in 2020, compared to a profit of HK$72.50 million in 2019[11]. - The jewelry products business reported a segment loss (before taxation) of HK$13.10 million in 2021, down from a profit of HK$74,000 in the previous year[16]. - A significant gain of HK$140.51 million was recorded from changes in the fair value of financial assets, compared to a loss of HK$80.49 million in the previous year[9]. - The segment loss (before taxation) of the property investment business decreased from HK$119.01 million in 2019 to HK$49.98 million in 2020, an improvement attributed to the absence of a HK$49.78 million write-off from hotel villas[17]. - The Group recorded revenue of HK$221,757,000 for the year ended 31 December 2020, a 12% increase from HK$198,796,000 in the previous year[28]. - Loss attributable to owners improved by 33% to HK$140,858,000 from HK$209,148,000 in the previous year, mainly due to a HK$50,468,000 increase in gain on sale of financial assets[28]. - The sale of jewelry products reported a gross loss of HK$287,000, with the gross profit margin decreasing from 18% in 2019 to -0.41% in 2020[28]. - Gross profit for property investment increased by 12% to HK$11,785,000, with the gross profit margin rising from 41% to 44%[28]. Business Strategy and Development - The company plans to develop a business-to-business sales portal to enhance business development and sales orders, despite initial high costs[16]. - The company aims to develop additional sales channels for the Mainland China market in 2021[16]. - The company has modified its business strategy for the second and third phases of its 580 Chinese acre land in Beijing, shifting to leasing high-end serviced apartments[17]. - The development of the second and third phases of the Subject Land is expected to be completed in the first quarter of 2022[17]. - The Group is developing a business-to-business sales portal to enhance its sales capabilities, despite the initial high costs, aiming for long-term cost-effective global business expansion[121]. Impact of COVID-19 - An increase of HK$192.96 million in the allowance for credit losses on loan receivables was noted, attributed to the COVID-19 pandemic's impact on customer repayment abilities[11]. - The jewelry sales segment recorded a loss of HK$13.1 million in 2021, compared to a profit of HK$74,000 in the previous year, highlighting the impact of COVID-19[18]. - The company remains cautious about the ongoing COVID-19 pandemic while maintaining a proactive approach to cost control and financial strategy[23]. - The Group recorded a credit loss allowance of HK$197,432,000 for loan receivables, an increase of HK$192,958,000 compared to the previous year, primarily due to the COVID-19 pandemic's impact on default probabilities[119]. Financial Position and Liquidity - As of 31 December 2020, the Group's cash and cash equivalents amounted to HK$54,125,000, down from HK$140,550,000 in 2019[32]. - Outstanding borrowings as of 31 December 2020 were HK$668,080,000, an increase from HK$655,561,000 in 2019[34]. - The Group's liquidity was supported by cash generated from operations, equity, and borrowings[32]. - The Group's net current assets were HK$331,887,000, up from HK$210,194,000 in 2019, with a current ratio of 1.37 compared to 1.24 in 2019[37]. - The Group's total borrowings included a securities margin financing facility of HK$14,065,000 at a fixed interest rate of 6% per annum[37]. Share of Losses from Associates - The share of loss from associates increased by 198% to HK$98.18 million in 2020, primarily due to losses from Global Mastermind Holdings Limited[22]. - Global Mastermind reported significant losses due to a slump in its travel business and increased impairment losses on trade and loan receivables[22]. - The share of losses from associates amounted to HK$98,176,000 for the year ended 31 December 2020, including HK$76,484,000 from Global Mastermind Holdings Limited[32]. Audit and Governance Issues - The Board of Global Mastermind believes that the incidents leading to the loss were standalone events caused by certain then directors and/or officers, with no involvement from other personnel[187]. - The audit committee agrees with the implementation of reinforced internal control measures to prevent similar incidents in the future[193]. - The Board anticipates that the issues related to the incidents will not have any continuing effect on the consolidated financial statements for the year ending 31 December 2021[191]. - Moore Stephens, the auditor, was unable to express an opinion on the consolidated financial statements for the year ended 31 December 2020 due to insufficient audit evidence[182]. - The audit committee has agreed to implement enhanced internal control measures to prevent similar incidents in the future, indicating a proactive approach to risk management[196]. Future Outlook - The directors forecast a rebound in the global economy in the second half of 2021, contingent on successful vaccine deployment and ongoing policy support[159]. - The financial market recovery is advanced compared to the economic recovery, prompting the directors to monitor and adjust the Group's listed securities portfolio in 2021[160]. - The Group expects interest income from its money lending business in 2021 to decrease by 10% to 20% compared to 2020[161]. - The directors believe that the global economy will recover gradually as vaccines are rolled out, but the recovery depends on successful vaccination deployment and continued supportive fiscal and monetary policies[163].
永恒策略(00764) - 2020 - 年度财报