Financial Performance - The group's revenue for the year ended December 31, 2018, was approximately HKD 190.3 million, a decrease of about 8.0% compared to HKD 206.8 million in 2017[6]. - The group recorded a profit of approximately HKD 11.6 million for the year, compared to a loss of approximately HKD 7.7 million in 2017[6]. - Revenue from the sale of dried fruit (Hua Jiao Hong) was approximately HKD 82.0 million, a decrease of about 8.2% from the previous year[10]. - Revenue from machinery sales was approximately HKD 10.2 million, a decrease of about 64.1% compared to 2017[10]. - Rental income from machinery decreased by approximately 12.0% to about HKD 49.8 million[11]. - Sales of spare parts and service income increased by approximately 76.1% and 42.8% to about HKD 9.5 million and HKD 38.8 million, respectively[11]. - The group recorded a profit from continuing operations of approximately HKD 11,600,000 for the year ended December 31, 2018, compared to a loss of approximately HKD 8,000,000 in 2017[15]. - Other income and gains from continuing operations were approximately HKD 7,800,000, a decrease of about 36.6% compared to 2017, primarily due to reduced foreign exchange gains and the absence of one-time gains recorded in 2017[15]. - The group's property, plant, and equipment amounted to approximately HKD 489,100,000, a decrease of about 4.3% from 2017[15]. - Financial expenses from continuing operations were approximately HKD 37,800,000, a decrease of about 24.2% compared to 2017[15]. - As of December 31, 2018, the group held cash and cash equivalents of approximately HKD 120,500,000, down from HKD 152,600,000 in 2017[16]. - Total equity decreased to approximately HKD 482,400,000 as of December 31, 2018, from approximately HKD 496,000,000 in 2017[17]. - The net current liabilities were approximately HKD 18,100,000 as of December 31, 2018, compared to approximately HKD 14,000,000 in 2017[18]. - The group incurred capital expenditures of approximately HKD 51,400,000 for the acquisition of property, plant, and equipment during the year, down from HKD 63,600,000 in 2017[20]. - The debt-to-equity ratio increased to 0.5 as of December 31, 2018, compared to 0.4 in 2017, primarily due to the withdrawal of shareholder loans during the year[27]. - The group had capital commitments of approximately HKD 2,600,000 for the acquisition of property, plant, and equipment as of December 31, 2018, compared to approximately HKD 800,000 in 2017[34]. - No dividend was recommended for the year ended December 31, 2018[12]. - The company did not recommend any dividend payment for the year, consistent with the previous year[68]. - As of December 31, 2018, the company had no distributable reserves, but had a share premium account of HKD 346,800,000 available for distribution to shareholders[75]. Business Operations and Strategy - The group plans to continue expanding its Hua Jiao Hong cultivation business in China and monitor the construction equipment business in Hong Kong and Singapore[7]. - Guangdong Dahe Biotechnology Co., Ltd. operates over 96,800 Hua Jiao Hong trees on a total area of 2,151.36 acres, making it one of the largest cultivators in the region[10]. - The group aims to explore new business opportunities and expand its business scope for long-term shareholder returns[7]. - The company plans to expand its cultivation of Huajuhong and increase the yield of fresh fruits by utilizing resources and experience in Guangdong[37]. - The company is establishing production facilities for preliminary processing of Huajuhong, aiming to obtain food production licenses for processing and selling Huajuhong as food products[38]. - The main business of the company includes trading construction machinery and parts, leasing construction machinery, and providing maintenance services[59]. - The total construction demand in Singapore is projected to be between SGD 27 billion and SGD 32 billion in 2019, maintaining a similar level to the actual construction demand of SGD 30.5 billion in 2018[38]. - Hong Kong's construction expenditure is expected to rise to between HKD 245 billion and HKD 295 billion in the 2018-2019 fiscal year, compared to HKD 266.5 billion in the previous year[42]. - The rental rates for medium-sized cranes increased in Q4 2018, and this upward trend is expected to continue into 2019[39]. - The company is reviewing its tower crane fleet and plans to sell some older or lower-capacity cranes in response to market shifts towards larger cranes[42]. - The company aims to strengthen its manned lifting equipment fleet and enhance operational and service levels to meet growing demand[42]. Shareholder and Governance - The top five customers contributed approximately 44% of the group's sales, with the largest customer accounting for about 13%[78]. - The top five suppliers contributed approximately 45% of the group's procurement, with the largest supplier accounting for about 16%[78]. - As of December 31, 2018, the chairman, Mr. Zeng Li, holds 600,000,000 shares, representing 56.60% of the company's issued share capital[94]. - Major shareholder Fuguang holds 600,000,000 shares, also representing 56.60% of the company's issued share capital[99]. - Mr. He Xiaoyang is a beneficial owner of 100,000,000 shares, representing 9.43% of the company's issued share capital[99]. - The company has no significant contracts with controlling shareholders or their subsidiaries during the year[88]. - There are no related party transactions that require disclosure under the listing rules for the year[92]. - The company has not entered into any management or administrative contracts related to its business during the year[91]. - All independent non-executive directors have confirmed their independence according to the listing rules[80]. - The board of directors' remuneration is subject to shareholder approval at the annual general meeting[85]. - The total number of shares available for issuance under the share option plan is 80,000,000 shares, accounting for 7.55% of the issued shares as of the report date[111]. - No share options were granted under the old plan during the year and as of December 31, 2018, there were no unexercised options granted under the new share option plan[110]. - The company has established a new share option plan that allows for a total issuance of shares not exceeding 10% of the total issued shares as of the adoption date[104]. - A loan agreement for an unsecured shareholder loan of HKD 2,500,000 with an interest rate of 10% was established, intended to fund the group's daily operations[115]. - The company has complied with the corporate governance code as per the Hong Kong Stock Exchange regulations[119]. - The company has confirmed that at least 25% of its issued share capital is held by the public as of the report date[113]. - The share option plan has a validity period of 10 years starting from July 30, 2015[106]. - No options were exercised, cancelled, or lapsed during the reporting year[110]. - The company has not established any arrangements to encourage directors or senior management to purchase shares or debt securities for profit[101]. - The company is committed to developing and executing effective corporate governance practices to enhance management accountability and investor confidence[119]. - The board consists of six members with backgrounds in finance, law, accounting, and business[123]. - The company has established a nomination committee to recommend candidates for board appointments and re-elections[128]. - The remuneration committee held two meetings during the year to review the remuneration of directors and senior management[138]. - The company has adopted a board diversity policy since August 30, 2013, focusing on various factors including skills, experience, and gender diversity[142]. - Independent non-executive directors confirmed their compliance with independence requirements as per listing rules[134]. - The company organized internal training for directors to enhance their knowledge and skills related to corporate governance[132]. - The nomination committee reviewed the board's structure and composition, and made recommendations for re-election of retiring directors[141]. - The remuneration committee is responsible for determining the specific remuneration packages for executive directors and senior management[138]. - The board diversity policy aims to enhance performance quality through diverse board composition[143]. - The company has taken appropriate insurance to cover legal liabilities against directors arising from corporate activities[127]. Risk Management and Internal Control - The Audit Committee held three meetings during the year to review the group's annual performance and mid-year results[150]. - The total fees paid to external auditors for audit and non-audit services amounted to HKD 2,070,000, with HKD 980,000 for audit services and HKD 1,090,000 for non-audit services[156]. - The Board of Directors conducted 10 meetings during the year, with all directors attending either in person or via electronic communication[154]. - The company confirmed that the financial statements fairly reflect the group's performance and continue to adopt the going concern basis for financial reporting[159]. - The company secretary participated in over 15 hours of professional training to enhance skills and knowledge[160]. - The Board is responsible for evaluating the nature and extent of risks the group is willing to take in achieving strategic objectives[161]. - The company has established measurable targets for board diversity, focusing on members' qualifications and industry experience[144]. - The Nomination Committee has adopted a nomination policy since December 24, 2018, to guide the selection of board candidates[145]. - The Audit Committee is tasked with overseeing financial reporting processes and ensuring the effectiveness of risk management and internal controls[150]. - The Board will review the effectiveness of the risk management and internal control systems at least annually[161]. - The company adopted the COSO Enterprise Risk Management framework to enhance risk management and identify significant risks[162]. - A comprehensive review of the risk management and internal control systems was conducted, identifying existing and potential risks[164]. - The internal control consultant recommended a three-year internal audit plan, which was approved by the board and audit committee[170]. - The board confirmed the effectiveness and adequacy of the risk management and internal control systems for the fiscal year[170]. - The internal audit results and recommendations were accepted by the management, indicating a proactive approach to risk management[170]. - The company will continuously assess and update risk factors at the entity level, reporting regularly to the board[165]. Sustainability and ESG - The company emphasizes the importance of sustainable development and has established a dedicated team to manage environmental, social, and governance (ESG) issues across its business units[184]. - The board of directors is responsible for ensuring the effectiveness of the company's ESG policies and has implemented a top-down and bottom-up governance model[185]. - The company has invested significant resources in monitoring its daily operations to integrate sustainable development concepts into its business strategies[183]. - The company has set annual and long-term ESG goals, including energy-saving measures and technological innovations in its core business operations[188]. - The report covers the company's environmental and social performance for the fiscal year 2018, from January 1 to December 31, 2018[190]. - The company has analyzed its business model to understand the potential impacts of climate change, following the recommendations of the Task Force on Climate-related Financial Disclosures[189]. - The company operates in Hong Kong and Singapore, focusing on the sale, rental, and maintenance of construction machinery, as well as the cultivation and sale of citrus fruits in China[190]. - The company aims to reduce its negative environmental impact while expanding its business in multiple directions[188]. - The company has established a communication policy to enhance effective communication with shareholders and investors through its website[180]. - The company emphasizes the importance of effective communication with stakeholders to enhance sustainable development and manage potential risks[192]. - The top concern among stakeholders is Goal 11 (Sustainable Cities and Communities), prompting the company to focus on providing a safe and inclusive work environment[196]. - The company conducted an importance assessment survey with stakeholders to identify key sustainability issues, ensuring accurate and objective evaluation[197]. - "Occupational Health and Safety" and "Customer Satisfaction" were identified as the most critical issues for the company and its stakeholders[198]. - The company aims to address stakeholder concerns by enhancing its sustainable development strategies and operational practices[200].
佳兆业资本(00936) - 2018 - 年度财报