Financial Performance - The group recorded a revenue of approximately HKD 41,118,000 for the fiscal year, an increase of about 8.1% compared to HKD 38,029,000 in the previous fiscal year[6]. - The group reported a loss before tax of approximately HKD 241,945,000, which is an increase of about 248.9% from the previous year's loss of HKD 69,352,000[6]. - The group recorded a revenue of approximately HKD 41,118,000, an increase of about 8.1% compared to the previous fiscal year's HKD 38,029,000[11]. - The group reported a pre-tax loss of approximately HKD 241,945,000, an increase of about 248.9% from the previous year's loss of HKD 69,352,000, primarily due to fair value losses on investment properties[11]. - The total assets as of June 30, 2024, were HKD 1,717,068,000, down from HKD 1,839,235,000 in the previous year, reflecting a decrease of approximately 6.6%[126]. - The net asset value decreased to HKD 1,385,915,000 from HKD 1,616,943,000, a decline of about 14.3% year-over-year[126]. - The company did not recommend a final dividend for the year, consistent with the previous year[123]. - Revenue from the top five customers accounted for approximately 36.2% of total revenue, down from 41.1% in the previous year, indicating a diversification in customer base[129]. - The largest customer contributed approximately 10.8% of total revenue, a slight decrease from 11.0% in the previous year[129]. - The company's distributable reserves were approximately HKD 1,323,835,000, down from HKD 1,448,885,000 in the previous year[132]. - The group made charitable contributions of approximately HKD 1,374,000 during the year, a decrease from HKD 1,755,000 in the previous year[125]. Property Market Outlook - The group plans to adopt a cautious approach to property acquisitions and sales while exploring potential investment properties and development projects to increase recurring income and capital appreciation[7]. - The group remains cautiously optimistic about the property market despite ongoing global economic challenges, including inflation and geopolitical tensions[7]. - The demand management measures in the residential property market were lifted, leading to increased activity, although the market has since quieted down[5]. - The commercial property market remains weak, with office space prices and rents continuing to decline[5]. - The group acknowledges the ongoing challenges posed by rising inflation and geopolitical risks, which may impact global economic recovery[7]. - The group maintains a positive long-term outlook for the commercial, industrial, and residential property markets in Hong Kong, the UK, and Japan, anticipating significant property price appreciation[22]. - The group is optimistic about the recovery of inbound tourism in Japan, particularly in the Niseko ski resort area, viewing it as a good long-term investment opportunity[22]. Investment Properties - The group experienced a fair value loss on investment properties of approximately HKD 163,552,000, compared to a fair value loss of HKD 11,407,000 in the previous year[13]. - The investment property at Atlantic House, Cardiff, has a total floor area of approximately 41,000 square feet, with 30% of the leased area rented out as of June 30, 2024[15]. - The investment property at 19 Hong Kong Kowloon Bay has a total floor area of approximately 16,500 square feet, with all units leased out during the year[15]. - The fair value loss for the investment property at Atlantic House is approximately HKD 21,700,000 as of June 30, 2024, compared to HKD 7,700,000 in 2023[15]. - The office unit at 121 Des Voeux Road Central has a total floor area of approximately 7,300 square feet, with a monthly rent of HKD 233,000, which will adjust to HKD 224,000 starting September 21, 2024[18]. - The retail shops at Tai Kok Tsui have been acquired for short-term trading purposes, with a confirmed impairment of HKD 24,180,000 due to a decline in retail prices and rents[20]. - The office unit at 2-12 Queen's Road West has a total floor area of approximately 1,650 square feet, leased to a translation company at a monthly rent of HKD 42,000[17]. - The three office units at 3 Arbuthnot Road have a total floor area of approximately 4,100 square feet and are currently seeking new tenants[16]. Securities and Loan Financing - The group aims to expand its securities investment and trading business as well as its loan financing operations to achieve stable recurring income growth[7]. - The investment portfolio in the securities trading segment reported a fair value gain of approximately HKD 1,123,000, a significant recovery from a loss of HKD 55,428,000 in 2023[23]. - The group incurred a segment loss of approximately HKD 10,345,000, improving from a loss of HKD 59,377,000 in the previous year[23]. - Interest income from the loan financing business was approximately HKD 5,000,000, representing 12.2% of total income, up from 9.3% in 2023[25]. - The group recognized a loan loss provision of HKD 7,681,000 for the loan financing business, compared to HKD 2,248,000 in 2023[29]. - The carrying value of loans receivable in the loan financing business was approximately HKD 37,185,000, an increase from HKD 36,573,000 in 2023[26]. - The group’s largest borrower accounted for approximately 47% of the total loans receivable as of June 30, 2024, down from 56% in 2023[26]. Corporate Governance - The company has adopted the corporate governance code as per the Stock Exchange Listing Rules and has complied with all governance codes during the year[57]. - The roles of Chairman and CEO are clearly separated, with Mr. Pang Wei Xin serving as Chairman and Mr. Li Yong Xian as CEO[58]. - The board of directors is responsible for formulating corporate policies, business strategies, and risk management, ensuring effective execution of strategies and compliance with regulations[60]. - The company has appointed Mr. Liu Ji Ming as an independent non-executive director on September 27, 2023[54]. - The board includes experienced members with backgrounds in finance, law, and corporate governance, ensuring effective oversight and management[60]. - The company has a sustainable development committee chaired by Mr. Li Yong Xian, focusing on long-term strategic development[56]. - The company has maintained a strict code of conduct for securities trading among directors, with no violations reported during the year[59]. - The company has a diverse board composition, including independent non-executive directors with extensive experience in various sectors[60]. - The company is committed to internal control systems and risk management procedures to safeguard its operations and financial integrity[60]. - The company has a strong emphasis on corporate governance, ensuring transparency and accountability in its operations[57]. - The company appointed three independent non-executive directors, each with sufficient experience to safeguard shareholder interests[61]. Risk Management and Internal Controls - The risk management framework includes policies and procedures for identifying, assessing, managing, and reporting risks, covering strategic, operational, market, reporting, and compliance risks[91]. - The internal control system is designed to safeguard the group's assets and ensure compliance with applicable laws and regulations[92]. - The board is responsible for maintaining effective risk management and internal control systems, with evaluations conducted semi-annually[91]. - The board has reviewed the effectiveness of the internal control system and found no significant issues, but identified areas for improvement[93]. - The company believes that its risk management and internal control processes are sufficient for its current business environment[93]. Sustainability and Corporate Social Responsibility - The company emphasizes the importance of environmental, social, and governance (ESG) matters and has implemented measures to promote sustainable practices[172]. - The company’s environmental, social, and governance report outlines efforts in energy saving, waste management, community engagement, and human rights[172]. - The company has established a comprehensive sustainability strategy focusing on four core areas: environment, employees, supply chain, and community[176]. - The sustainability strategy is guided by seven relevant Sustainable Development Goals identified by the company, aligning with global calls from United Nations member states[176]. - The company aims to continuously improve environmental performance by adopting eco-friendly equipment and technologies, optimizing resource efficiency, and addressing climate change[178]. - The company has implemented a risk management framework that incorporates environmental, social, and governance risks into its operations[180]. - The company recognizes the potential impacts of climate change, including operational disruptions due to extreme weather, and has developed adaptation plans to address these risks[180]. - The company emphasizes stakeholder engagement as an essential part of its sustainability strategy, regularly communicating with investors, shareholders, and employees to gather feedback[182]. - The company has updated its environmental policies to comply with the latest standards and regulations, mitigating risks associated with environmental compliance[180]. - The company is committed to fostering a people-centric work environment by promoting diversity and prioritizing health and safety for its employees[178]. - The company has established a comprehensive anti-corruption management system to maintain high ethical standards and integrity in its operations[192]. - The company has a zero-tolerance policy towards all forms of discrimination, child labor, and forced labor[190]. Shareholder Communication and Rights - The company encourages shareholders to attend annual general meetings and will provide at least 21 days' notice for such meetings[98]. - Shareholders have the right to request the board to convene a special general meeting if they hold at least 10% of the paid-up capital[98]. - The company has updated its shareholder communication policy to ensure timely and reliable information is provided to shareholders[100]. - The company's website contains a dedicated page for the latest information related to the group and its business[101]. - The board of directors encourages shareholder participation in the annual general meeting, ensuring the presence of committee chairs to address questions[102]. - The company must send notifications for the annual general meeting at least 21 days in advance and for other meetings at least 14 days in advance[103]. - The company is required to provide the annual report, including financial statements and auditor's report, to shareholders at least 21 days before the annual general meeting[105]. Share Options and Ownership - The company has implemented both old and new share option plans, with options granted on May 17, 2016, November 26, 2018, and July 14, 2023[139]. - The old share option plan has a total of 13,148,000 options granted, with 10,788,000 options remaining unexercised as of June 30, 2024[144]. - The new share option plan was adopted on November 26, 2021, allowing the company to grant options to selected individuals as a reward for their contributions[145]. - The new share option plan complies with the listing rules under Chapter 17[146]. - The exercise price for options under the new plan will be determined by the board and communicated to participants[146]. - The total number of options exercised during the year was 2,360,000[144]. - The total number of shares available for issuance under the new share option plan is 56,081,256 shares, representing approximately 9.89% of the issued shares[150]. - The company aims to expand its market presence through the new share option plan, incentivizing contributions from selected individuals[146]. Employee and Director Compensation - The total employee cost for the year was approximately HKD 17,079,000, a decrease from HKD 17,977,000 in the previous year[46]. - Executive director Mr. Pang receives a monthly salary of HKD 586,000, with discretionary bonuses determined by the board[61]. - Executive director Mr. Li receives a monthly salary of HKD 117,200, also with discretionary bonuses[62]. - The remuneration committee held three meetings to review the compensation packages for all directors and senior management[68]. - The company has established principles for the remuneration of executive directors, which include annual reviews and adjustments based on performance and market trends[70]. Audit and Compliance - The auditor's fee for the year was approximately HKD 680,000 for statutory audits and HKD 220,000 for non-audit services[85]. - The audit committee held four meetings during the year to review financial reports and audit plans[85]. - The company has appointed Hong Kong Li Xin De Hao Accounting Firm Limited as its external auditor, which has expressed willingness to continue its service[85]. - The audit committee is responsible for monitoring and reviewing the effectiveness of the company's financial controls and risk management systems[85]. - The audit committee met with the company's auditors twice during the year, with all members attending 100% of the meetings[87].
宏辉集团(00183) - 2025 - 年度财报