Workflow
京基金融国际(01468) - 2019 - 年度财报

Company Information UKF (Holdings) Limited, listed on the Hong Kong Stock Exchange, engages in diversified financial and fur businesses through its subsidiaries Company Basic Information UKF (Holdings) Limited, listed on the Hong Kong Stock Exchange, engages in diversified financial and fur businesses through its subsidiaries - The company was listed on the Main Board of the Hong Kong Stock Exchange on March 20, 2015, with stock code 14687 - Principal businesses include securities brokerage, wealth management, insurance brokerage, money lending, mink farming, and fur trading7 - The Board of Directors comprises Mr. Wong Chun Chow (Chairman) and Ms. Kwok Yin Ning (Chief Executive Officer) as executive directors, and Ms. Mak Yun Chu, Mr. Hung Wai Sze, and Mr. Tang Tat Chi as independent non-executive directors7 Chairman's Statement Business Review In FY2019, global economic volatility and financial market uncertainty negatively impacted the Group's business, leading to significant declines in securities and fur business revenue, while insurance brokerage performed strongly and asset management services actively developed - Global economic volatility and financial market uncertainty negatively impacted the Group's securities business, deterring investors from committing funds to the stock market9 FY2019 Securities Business Performance | Metric | FY2019 (HKD) | FY2018 (HKD) | | :--- | :--- | :--- | | Revenue | 28,500,000 | 81,100,000 | | Profit | 3,200,000 | 37,200,000 | - Insurance brokerage business performed strongly, with King & Yue Wealth Management managing over 1,700 policies for more than 1,300 clients, generating over 68.00 million HKD in annualized first-year premiums and over 40.00 million HKD in annualized first-year commissions12 - Fur business revenue further decreased due to sustained market downturn, weak demand, and changing consumer preferences, leading management to reduce production and enhance cost control131416 - The Group actively developed asset management and family office services, offering integrated financial solutions to meet the needs of high-net-worth individuals and corporations17 Outlook Despite short-term fur market challenges, the Group is optimistic about market stabilization and growth in securities, wealth management, and other financial services, pursuing a dual-track development strategy to enhance profitability - Kopenhagen Fur anticipates a 35% reduction in Danish mink production and a 31% decrease in feed sales, reflecting a significant decline in breeding mink numbers and an expected reduction in global supply18 - Management expects the fur market to stabilize and mink prices to return to more normal levels18 - Despite ongoing economic recession and the US-China trade war, the Group remains optimistic about business growth in securities, wealth management, and other financial services18 - The Group will continue its dual-track development strategy, enhancing its securities and other financial services businesses and expanding wealth management services for high-net-worth clients to strengthen its overall profitability model18 Management Discussion and Analysis Revenue and Segment Results In FY2019, the Group's total revenue significantly decreased to approximately HKD 113.5 million, with securities and fur business revenues declining, while insurance brokerage and money lending revenues saw substantial growth FY2019 Total Revenue Comparison | Metric | 2019 (HK$ '000) | 2018 (HK$ '000) | | :--- | :--- | :--- | | Total Revenue | 113,500 | 200,300 | - Securities business revenue was approximately 28,500,000 HKD, a year-on-year decrease of approximately 64.9%, primarily due to a downward market trend and decreased average daily turnover21 - Insurance brokerage business revenue was 40,900,000 HKD, a significant increase from approximately 239,000 HKD last year, but recorded a segment loss of 8,500,000 HKD22 - Fur business revenue decreased by approximately 82,500,000 HKD to approximately 36,400,000 HKD, recording a segment loss of approximately 33,200,000 HKD23 - Money lending business contributed approximately 7,700,000 HKD, a significant increase from 65,000 HKD last year, and recorded a segment profit of approximately 568,000 HKD24 Cost of Sales In FY2019, cost of sales decreased by approximately 35.7% to HK$ 78.9 million, consistent with the overall decline in revenue FY2019 Cost of Sales Comparison | Metric | 2019 (HK$ '000) | 2018 (HK$ '000) | Change Rate | | :--- | :--- | :--- | :--- | | Cost of Sales | 78,900 | 122,700 | -35.7% | Gross Profit and Gross Margin In FY2019, consolidated gross profit was approximately HK$ 34.7 million, with a gross margin of 30.5%, both lower than the previous year's HK$ 77.5 million and 38.7% respectively FY2019 Gross Profit and Gross Margin Comparison | Metric | 2019 (HK$ '000) | 2018 (HK$ '000) | | :--- | :--- | :--- | | Consolidated Gross Profit | 34,700 | 77,500 | | Gross Margin | 30.5% | 38.7% | Other Income In FY2019, other income decreased by approximately HKD 32 million, primarily due to the absence of foreign currency exchange gains recorded in FY2018 - Other income decreased by approximately 32,000,000 HKD, mainly because 2018 FY recorded approximately 31,800,000 HKD in exchange gains, while 2019 FY had none27 Fair Value Change of Biological Assets Less Costs to Sell In FY2019, the Group recognized a gain of approximately HK$ 7.6 million from fair value adjustments of biological assets, primarily breeding mink and breeding stock, a decrease from HK$ 12.3 million in the prior year Fair Value Change of Biological Assets Less Costs to Sell | Metric | 2019 (HK$ '000) | 2018 (HK$ '000) | | :--- | :--- | :--- | | Revenue | 7,600 | 12,300 | - Biological assets primarily refer to breeding mink and breeding stock in the mink farming business28 Administrative Expenses In FY2019, administrative expenses decreased by approximately 11.3% to HK$ 95.8 million, mainly due to reduced staff salaries, allowances, and commissions FY2019 Administrative Expenses Comparison | Metric | 2019 (HK$ '000) | 2018 (HK$ '000) | Change Rate | | :--- | :--- | :--- | :--- | | Administrative Expenses | 95,800 | 108,000 | -11.3% | - The decrease in administrative expenses was mainly attributable to reduced staff salaries, allowances, and commission expenses29 Finance Costs In FY2019, finance costs slightly decreased to approximately HK$ 10.8 million from HK$ 11.5 million in FY2018, primarily comprising interest expenses on bank borrowings and imputed interest on promissory notes FY2019 Finance Costs Comparison | Metric | 2019 (HK$ '000) | 2018 (HK$ '000) | | :--- | :--- | :--- | | Finance Costs | 10,800 | 11,500 | - Finance costs primarily include interest expenses on bank borrowings and imputed interest on promissory notes30 Loss for the Year The Group's loss for FY2019 significantly widened to approximately HK$ 89.2 million, compared to a loss of HK$ 7.9 million in FY2018 FY2019 Loss for the Year Comparison | Metric | 2019 (HK$ '000) | 2018 (HK$ '000) | | :--- | :--- | :--- | | Loss for the Year | 89,200 | 7,900 | Liquidity, Financial Resources, and Capital Structure As at March 31, 2019, the Group's bank balances and cash were approximately HK$ 100.8 million, with net assets of approximately HK$ 458 million, a decrease from the prior year, primarily funded by internal cash flow, bank borrowings, and equity/debt financing - The Group primarily funds its operations through internally generated cash flows, bank borrowings, and equity/debt financing32 FY2019 Liquidity and Net Assets | Metric | March 31, 2019 (HK$ '000) | March 31, 2018 (HK$ '000) | | :--- | :--- | :--- | | Bank Balances and Cash | 100,800 | 100,400 | | Net Assets | 458,000 | 548,300 | Foreign Exchange Management The Group adopts a prudent approach to foreign exchange risk, primarily from USD and DKK denominated transactions, with HKD-USD exchange rate risk being immaterial and DKK-denominated borrowings offsetting net asset fluctuations in Danish operations - The Group adopts a prudent approach to managing foreign exchange risk, primarily arising from sales and purchase transactions, investments, and borrowings denominated in USD and DKK35 - As the Hong Kong Dollar is pegged to the US Dollar, the exchange rate fluctuation risk between HKD and USD is not material3435 - The foreign exchange fluctuation impact on net assets of Danish overseas operations is considered manageable as it can be offset by DKK-denominated borrowings35 - During the year, the Group did not engage in any financial instrument hedging or speculative activities36 Pledge of Assets As at March 31, 2019, the Group pledged key management insurance contracts (approximately HKD 11 million) and other property, plant and equipment, trade receivables, biological assets, and inventories (approximately HKD 94.982 million) as collateral for bank borrowings - As at March 31, 2019, the Group pledged key management insurance contracts (approximately 11,000,000 HKD) as collateral for bank borrowings39 - The Group also pledged other property, plant and equipment, trade receivables, biological assets, and inventories of approximately 80,418,000 DKK (approximately 94,982,000 HKD) as collateral for bank borrowings39 Capital Commitments and Contingent Liabilities As at March 31, 2019, the Group had no significant capital commitments or contingent liabilities - As at March 31, 2019, the Group had no significant capital commitments or contingent liabilities40 Significant Acquisitions, Disposals, and Investments During FY2019, the Company did not undertake any significant acquisitions, disposals, or major investments - During FY2019, the Company did not undertake any significant acquisitions, disposals, or major investments41 Final Dividend The Directors do not recommend the payment of any final dividend for FY2019 - The Directors do not recommend the payment of any final dividend for FY201942 Employee Information As at March 31, 2019, the Group had 74 employees with total employee costs of approximately HK$ 41 million, a decrease from the prior year, with remuneration based on qualifications, experience, position, and market conditions, including MPF contributions and share options FY2019 Employee Data | Metric | March 31, 2019 | March 31, 2018 | | :--- | :--- | :--- | | Total Employees | 74 people | 74 people | | Employee Costs | 41,000,000 HKD | 46,900,000 HKD | - Remuneration is determined based on individual qualifications, experience, position, responsibilities, and market conditions, with employee performance assessed through annual reviews43 - Other benefits include statutory Mandatory Provident Fund scheme contributions and share options43 Risk Management The Group manages credit, liquidity, and foreign exchange risks through established policies, continuous monitoring of receivables, ensuring adequate financing, and assessing foreign exchange exposure, with potential hedging via forward contracts - Credit risk primarily arises from trade receivables and loans receivable, which the Group mitigates through established credit policies and continuous monitoring44 - Liquidity risk is managed by regularly monitoring liquidity needs and ensuring sufficient liquid cash and financing resources from reputable financial institutions to meet short-term and long-term requirements45 - Foreign exchange risk arises from USD and DKK denominated transactions, which the Group continuously assesses and monitors, potentially implementing foreign exchange forward contracts for hedging, with HKD-USD exchange rate fluctuation risk being immaterial46 Environmental Policies and Compliance with Laws and Regulations This report communicates management's approach, strategies, priorities, and key performance in environmental policies and compliance with relevant laws and regulations, detailed in the 'Environmental, Social and Governance Report' section - This report aims to communicate management's approach, strategies, priorities, and key performance to stakeholders49 - Details on environmental policies and compliance with relevant laws and regulations can be found in the 'Environmental, Social and Governance Report' section of this annual report49 Key Relationships with Employees, Customers, and Suppliers For key relationships with employees, customers, and suppliers, please refer to the 'Major Customers and Suppliers' and 'Employees' sub-sections within the 'Directors' Report' - For key relationships with employees, customers, and suppliers, please refer to the 'Major Customers and Suppliers' and 'Employees' sub-sections within the 'Directors' Report'50 Biographical Details of Directors and Senior Management Executive Directors Mr. Wong Chun Chow serves as Chairman with over 30 years of fur trade and management experience, overseeing overall strategic planning, while Ms. Kwok Yin Ning, CEO, with over 30 years in the fur industry, is responsible for corporate management and strategic planning - Mr. Wong Chun Chow (62) was appointed as an executive director on March 31, 2011, and re-designated as the Company's Chairman and a member of the Nomination Committee on August 1, 201251 - Mr. Wong has over 30 years of experience in fur trading and management, responsible for formulating and overseeing the Group's overall strategic planning and development51 - Ms. Kwok Yin Ning (63) was appointed as an executive director on March 31, 2011, and as the Company's Chief Executive Officer on August 1, 2012, with over 30 years of experience in the fur industry, responsible for the Group's corporate management and strategic planning52 Independent Non-Executive Directors Ms. Mak Yun Chu is a seasoned accountant and Audit Committee Chairman, Mr. Tang Tat Chi is a fashion designer and Nomination Committee Chairman, and Mr. Hung Wai Sze has over 14 years of legal experience - Ms. Mak Yun Chu (61) is a Fellow of the Association of Chartered Certified Accountants and a practicing accountant of the Hong Kong Institute of Certified Public Accountants, serving as the Chairman of the Audit Committee54 - Mr. Tang Tat Chi (64) is a fashion designer, serving as the Chairman of the Nomination Committee59 - Mr. Hung Wai Sze (43) has over 14 years of experience in the legal field, operating and managing multiple energy and recycling projects in mainland China and Hong Kong57 Senior Management Mr. Wong Tim Lok, COO, with over 30 years of accounting, banking, and finance experience, oversees HR, IT, and daily operations, while Mr. Ng Siu Hong, Managing Director of Grand Capital Securities Limited, is experienced in securities and fundraising services - Mr. Wong Tim Lok (60) joined the Group in April 2017 as Chief Operating Officer, with over 30 years of experience in accounting, banking, and finance, responsible for human resources, information technology, and daily operations59 - Mr. Ng Siu Hong (38) is the Managing Director of Grand Capital Securities Limited, with extensive experience in securities-related work and fundraising services60 Corporate Governance Report Compliance with the Model Code for Securities Transactions by Directors The Group has adopted a code of conduct for directors' securities transactions, at least as stringent as Appendix 10 of the Listing Rules, with all directors confirming full compliance for the year ended March 31, 2019 - The Group has adopted a code of conduct for directors' securities transactions, with terms at least as stringent as those set out in Appendix 10 of the Listing Rules62 - For the year ended March 31, 2019, all Directors confirmed full compliance with the Model Code for Securities Transactions62 Board of Directors The Board, comprising two executive and three independent non-executive directors, leads and oversees the Group's business, strategy, and performance, ensuring high standards of financial and statutory reporting, with clear segregation of Chairman and CEO duties, regular meetings, and continuous professional development for directors - The Board of Directors comprises two executive directors and three independent non-executive directors, responsible for leading and overseeing the Company, reviewing business, strategic decisions, and performance63 - Chairman Mr. Wong Chun Chow manages Board responsibilities, while Chief Executive Officer Ms. Kwok Yin Ning oversees the Group's overall internal operations, with clearly segregated duties65 - The Board holds at least four regular meetings annually, having convened four regular meetings and one additional meeting in FY201969 - Board papers and all appropriate, complete, and reliable information are circulated to Directors at least three days before meetings to ensure informed decisions74 - Each Director participates in continuous professional development to ensure a proper understanding of the Group's business and operations, and full awareness of their responsibilities and obligations under the Listing Rules and relevant regulatory requirements76 Board Committees The Board has established Audit, Remuneration, and Nomination Committees to oversee specific matters, including financial reporting, internal controls, remuneration policies, and board structure, diversity, and director nominations - The Board has established an Audit Committee, a Remuneration Committee, and a Nomination Committee to oversee specific matters of the Group77 - The Audit Committee, comprising three independent non-executive directors, is primarily responsible for reviewing and overseeing the Group's financial reporting process and internal control system79 - The Remuneration Committee, comprising three independent non-executive directors, is primarily responsible for making recommendations on the remuneration policy and structure for all Directors and senior management8081 - The Nomination Committee, comprising three independent non-executive directors and one executive director, is primarily responsible for reviewing the Board's structure, size, and diversity, and nominating suitable candidates for directorship83 - The Company has adopted a Board Diversity Policy, considering factors such as gender, age, cultural and educational background, ethnicity, professional qualifications, skills, knowledge, and length of service85 Directors' and Officers' Liability Insurance Appropriate insurance covering directors' and officers' liabilities is in effect to protect against risks arising from the Group's business - Appropriate insurance covering the liabilities of Directors and senior officers is in effect to protect them against risks arising from the Group's business88 Directors' and Auditor's Responsibilities for the Consolidated Financial Statements The Board is responsible for presenting balanced, clear, and understandable corporate information, ensuring accounts truly and fairly reflect the Group's financial position, and adopting a going concern basis, while the auditor's responsibilities are detailed in the independent auditor's report - The Board is responsible for presenting balanced, clear, and understandable corporate information, including annual and interim reports, other inside information announcements, and other financial disclosures required by the Listing Rules and other relevant statutory requirements89 - The Directors acknowledge their responsibility for preparing accounts that truly and fairly reflect the Group's financial position, financial performance, and cash flows for the year ended March 31, 201989 - The Directors continue to adopt the going concern basis of accounting in preparing the consolidated financial statements89 - The Company's auditor's statement regarding their reporting responsibilities for the Group's consolidated financial statements is set out in the Independent Auditor's Report on pages 61 to 6890 Auditor's Remuneration For the year ended March 31, 2019, total remuneration paid/payable to the Group's auditors amounted to HK$ 1,198 thousand, with HLB Hodgson Impey Cheng Limited receiving HK$ 746 thousand and other auditors HK$ 452 thousand FY2019 Auditor's Remuneration | Service | Amount (HK$ '000) | | :--- | :--- | | Statutory Audit Services - HLB Hodgson Impey Cheng Limited | 746 | | Statutory Audit Services - Other Auditors | 452 | | Total | 1,198 | Internal Control and Corporate Governance Policies The Board is fully responsible for monitoring internal control systems and corporate governance, having established a risk management framework for identifying, assessing, and managing business risks, with no significant risks identified during the year - The Board is fully responsible for monitoring the Company's internal control system and corporate governance, and for reviewing and maintaining an adequate internal control system92 - The Group has adopted a risk management system, including identifying, assessing, and managing risks related to its business and operations949596 - Based on the risk assessment conducted for this financial year, no significant risks were identified97 Communication with Shareholders The Company is committed to maintaining communication with shareholders through AGMs, financial reports, and its website, encouraging participation, and providing channels for inquiries to the Chairman, while ensuring timely disclosure of relevant information - The Company is committed to maintaining communication with shareholders, particularly through annual general meetings or other general meetings, and encourages shareholder participation98 - Shareholders may direct any inquiries to Mr. Wong Chun Chow, Chairman of the Board, by mail to the Company's principal place of business in Hong Kong or by email to admin@ukf.com.hk103 - The Company will continue to maintain an open and effective investor communication policy, providing investors with timely and relevant updates on the Group's business in accordance with applicable regulatory requirements105 Dividend Policy The Company aims to balance shareholder returns with sustainable business development, but given current financial conditions and potential resource needs for business growth, it does not anticipate distributing any dividends in the near future, intending to reserve funds for development - The Company is committed to sharing its achievements with shareholders while balancing sustainable business development107 - Given its current financial position and potential financial resources required for business development, the Company does not anticipate distributing any dividends in the near future, as it intends to reserve funds for business development107 Environmental, Social and Governance Report Introduction, Environmental, Social and Governance Policy This ESG report summarizes UKF's environmental, social, and governance initiatives, plans, and performance, demonstrating its commitment to sustainability, with securities brokerage becoming a key business alongside mink farming and fur trading - This ESG report summarizes UKF and its subsidiaries' environmental, social, and governance (ESG) initiatives, plans, and performance, demonstrating their commitment to sustainability109 - The Group primarily engages in securities brokerage, wealth management services and other financial services, mink farming, and mink fur trading, with securities brokerage becoming a key business in recent years109 ESG Governance Structure The Group adopts a top-down ESG management approach, with the Board overseeing and defining ESG strategy, ensuring effective risk management and internal controls, supported by an ESG working group responsible for data collection, reporting, and risk assessment - The Group adopts a top-down management approach to ESG issues, with the Board overseeing and defining the Group's ESG strategy110 - An ESG working group has been established, responsible for collecting relevant ESG data and preparing ESG reports, reporting regularly to the Board, and assisting in assessing and identifying ESG risk management112 Reporting Scope This ESG report covers the Group's business activities in Denmark and Hong Kong, including mink farming in Denmark and fur trading, securities brokerage, and other financial services in Hong Kong, with KPIs collected from directly controlled companies and subsidiaries - This ESG report covers the Group's business activities in Denmark and Hong Kong113 - Mink farming operations are located in Denmark, while fur trading, securities brokerage, and other financial services operations are primarily located in Hong Kong113 - ESG key performance indicators are collected and recorded based on companies and subsidiaries directly controlled by the Group's operations113 Reporting Framework The ESG report is prepared in accordance with all applicable provisions of Appendix 27 'Environmental, Social and Governance Reporting Guide' of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited - The ESG report is prepared in accordance with all applicable provisions of Appendix 27 'Environmental, Social and Governance Reporting Guide' of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited114 Reporting Period The ESG report outlines the Group's ESG activities, challenges, and measures taken for the year ended March 31, 2019 - The ESG report outlines the Group's ESG activities, challenges, and measures taken for the year ended March 31, 2019116 Stakeholder Engagement The Group values stakeholder feedback, maintaining close communication with the Stock Exchange, government, suppliers, investors, clients, employees, media, and the community through various channels to address concerns and improve ESG performance collaboratively - The Group maintains close communication with key stakeholders (including the Stock Exchange, government and regulatory bodies, suppliers, investors and shareholders, customers, employees, media, NGOs, and the community) to understand and address their main concerns118 - Stakeholder expectations are considered through various engagement methods and communication channels (e.e.g., meetings, training, roadshows, financial reports, customer hotlines, regular performance reviews, press releases)118 Materiality Assessment The Group considered stakeholder feedback in determining material ESG matters for this report, categorizing them into environmental (emissions, resource use, natural resources) and social (employment, health & safety, product responsibility, anti-corruption) aspects, and assessing their significance - The Group has considered feedback from relevant stakeholders in determining the material ESG matters to be covered in this ESG report120 - Material ESG matters include environmental aspects such as gaseous emissions, greenhouse gas emissions, wastewater discharge, waste management, water consumption, energy consumption, indoor air quality, respect for nature, and biodiversity protection120 - Material ESG matters in social aspects include talent retention, recruitment, promotion and dismissal, diversity, equal opportunity and anti-discrimination, safety measures, training and development management, prevention of child and forced labor, supply chain management, complaint channels, customer service and privacy, animal rights, anti-corruption, anti-money laundering and counter-terrorist financing, whistleblowing mechanisms, and community investment and engagement120 Contact Us The Group welcomes feedback and suggestions on its ESG report or sustainability performance, which can be sent via email to admin@ukf.com.hk - The Group welcomes feedback and suggestions from stakeholders, who can provide valuable input on the ESG report or sustainability performance by emailing admin@ukf.com.hk121 A. Environment The Group integrates sustainability into its operations, striving to minimize environmental impact and comply with relevant laws, focusing on emissions (gaseous, GHG, wastewater, waste), resource use (water, energy, packaging), and environmental protection (indoor air quality, biodiversity) - The Group integrates sustainability-related issues into its business operations, striving to minimize environmental impact, committed to educating employees on environmental awareness, and complying with relevant environmental laws and regulations122 - In FY2019, the Group did not identify any material non-compliance with environmental laws and regulations in Hong Kong and Denmark123 - The Group's primary greenhouse gas emission sources are diesel consumed by feeding vehicles (Scope 1), purchased electricity (Scope 2), and other indirect greenhouse gas emissions (Scope 3), totaling 262.16 tonnes of CO2 equivalent127128 - Wastewater discharge from mink farming operations increased from approximately 18,181 cubic meters in FY2018 to approximately 23,441 cubic meters in FY2019138 - The Group implements the 'reduce, reuse, and recycle' principle, recovering manure as organic fertilizer in its Danish mink farming operations, recycling feed packaging materials, and using fish by-products as mink feed141142143 - Total energy consumption in FY2019 was 496,005.87 kWh, with diesel consumption of 211,432.87 kWh and purchased electricity of 284,573.00 kWh154 - The Group's fur farming practices are environmentally conscious, with mink animal fat used for biodiesel production, the remainder as CO2-neutral energy, and feed utilizing by-products from the fish and meat industries160 B. Society The Group values employees as its most precious resource, committed to providing a caring, safe, and positive work environment while strictly adhering to labor regulations, prioritizing customer satisfaction, privacy protection, and animal welfare in product responsibility, and actively engaging in anti-corruption efforts and community investment - The Group regards employees as its most valuable resource, committed to providing a caring, safe, and positive work environment while strictly adhering to labor regulations in Hong Kong and Denmark164165 - The Group offers attractive remuneration packages, holidays, medical plans, group insurance, MPF, and discretionary bonuses, and has a rental compensation scheme to retain talent166 - The Group employs transparent recruitment procedures, ensuring equal opportunities for all job applicants, and strictly prohibits any unfair or unlawful dismissals167 - The Group is committed to providing a safe and healthy work environment for all employees, adhering to occupational health and safety guidelines recommended by the Labour Department and Occupational Safety and Health Council177 - The Group strictly prohibits the employment of child or forced labor, complying with Hong Kong's Employment Ordinance and Denmark's Children Act184 - In its fur trading business, the Group strictly regulates its supply chain, with particular attention to animal rights and ethical issues, complying with the codes of the European Fur Breeders' Association187 - The Group is committed to providing quality services and products to customers, maintaining complaint channels, and prioritizing customer privacy protection and animal welfare189190192194 - The Group firmly opposes corruption, fraud, and all other unethical conduct, and has established anti-money laundering and counter-terrorist financing policies and whistleblowing mechanisms197198200 - The Group actively participates in community activities such as donations, volunteer services, and sponsorships, with total charitable donations in FY2019 amounting to 161,000 HKD201203204 The Stock Exchange of Hong Kong Limited ESG Reporting Guide Content Index This section provides an index aligning the Group's ESG report content with the thematic areas, aspects, general disclosures, and key performance indicators of the HKEX ESG Reporting Guide, facilitating reader navigation - This index aims to illustrate how the Group's ESG report content complies with all applicable provisions of the HKEX ESG Reporting Guide206 - The index covers two main areas: environmental (emissions, resource use, environment and natural resources) and social (employment, health and safety, development and training, labor standards, supply chain management, product responsibility, anti-corruption, community investment)[206](index=