Financial Performance - The company recorded a post-tax loss of HKD 79 million for the fiscal year 2022, compared to a post-tax profit of HKD 31 million in the fiscal year 2021[13]. - Total comprehensive expenses amounted to HKD 72 million in fiscal year 2022, while total comprehensive income was HKD 29 million in fiscal year 2021[13]. - The company confirmed a revaluation surplus (after tax) of HKD 8 million in fiscal year 2022, compared to a loss of HKD 7 million in fiscal year 2021[13]. - Commission and fee income for the financial intermediary business in FY2022 was HKD 45 million, down from HKD 61 million in FY2021[14]. - Interest income in FY2022 was HKD 18 million, compared to HKD 23 million in FY2021[14]. - The net loss from financial assets and liabilities at fair value through profit or loss in FY2022 was HKD 23 million, a significant decline from a net gain of HKD 87 million in FY2021[14]. - General and administrative expenses decreased by HKD 27 million to HKD 79 million in FY2022, down from HKD 106 million in FY2021[14]. - The total revenue for the brokerage and lending segment in FY2022 was HKD 36 million, down from HKD 54 million in FY2021[19]. - The total revenue for the corporate finance and capital markets segment in FY2022 was HKD 24 million, compared to HKD 28 million in FY2021[22]. - The asset management segment reported total revenue of HKD 4 million in FY2022, an increase from HKD 1 million in FY2021[23]. - The total revenue for the property investment segment in the fiscal year 2022 was HKD 4 million, with a revaluation loss of HKD 4 million compared to a loss of HKD 5 million in fiscal year 2021[26]. - The self-investment segment reported total revenue of HKD 6 million in fiscal year 2022, up from HKD 5 million in fiscal year 2021, but incurred a net loss of HKD 16 million compared to a profit of HKD 92 million in the previous year[27]. Market Conditions - The Hang Seng Index fell by 24% during the fiscal year 2022, contrasting with an 18% increase in the previous fiscal year[9]. - The average daily turnover in the stock market for FY2022 was HKD 141 billion, a 14% decrease from HKD 165 billion in FY2021[19]. - The number of new listings in FY2022 dropped by 40% to 77 companies, compared to 128 companies in FY2021[15]. Strategic Initiatives - The company plans to launch a new boutique fund in September 2022, focusing on asset management services[8]. - The company is adjusting its holding periods and investment portfolios in response to challenging market conditions, including credit tightening in mainland China[9]. - The company aims to adopt a more defensive strategy in its proprietary business until there are clear signs of market recovery[10]. - The company is focusing on asset management within its intermediary business due to ongoing challenges in the brokerage and related services[10]. Human Resources - The company has experienced a reduction in employee numbers, but the core team remains stable[11]. - The number of full-time employees decreased to 79 as of June 30, 2022, down from 95 in the previous year[32]. Financial Position - Total assets as of June 30, 2022, amounted to HKD 1.666 billion, with approximately 65% being liquid assets[30]. - The company had cash and cash equivalents of HKD 163 million as of June 30, 2022, primarily denominated in HKD[30]. - The total amount of secured borrowings was approximately HKD 105 million, used to finance the investment portfolio[30]. - The cumulative provision for expected credit losses in the loan portfolio as of June 30, 2022, was HKD 66 million, up from HKD 41 million as of June 30, 2021[20]. - The company maintains a capital debt ratio of approximately 12% as of June 30, 2022[30]. Corporate Governance - The board consists of seven directors, including the chairman and the CEO, with a clear division of responsibilities between the board and management[39]. - The board held five meetings during the year, addressing key matters such as approving interim and final results, assessing business performance, and considering major transactions[45]. - The company has adopted a standard code for securities trading by directors, ensuring compliance with regulations throughout the review year[38]. - The board is responsible for long-term strategy formulation and oversight, dividend declaration, and ensuring good corporate governance and compliance with regulations[41]. - All independent non-executive directors have confirmed their independence in accordance with listing rules, ensuring compliance with governance standards[45]. - The company provides ongoing professional training to directors and licensed staff, ensuring they are updated on regulatory changes and corporate governance practices[48]. - The company emphasizes good corporate governance practices, with all committees comprising independent non-executive directors[59]. - The company aims to ensure that no director participates in determining their own remuneration, maintaining fairness in compensation practices[63]. - The company has adopted a nomination policy outlining the criteria and procedures for appointing or reappointing directors, considering factors such as experience, integrity, and time commitment[68]. - The board has achieved appropriate diversity in terms of age, gender, education, and professional experience, with no significant changes recommended for the board composition[69]. Risk Management - The company has a strong focus on risk management and internal control systems, ensuring effective oversight of management performance[41]. - The board is responsible for evaluating and determining the nature and extent of risks acceptable to the group in achieving strategic objectives[77]. - The company has established various committees, including the Investment Committee and Risk Management Committee, to identify, assess, and manage risks[84]. - The Risk Management Committee monitors the group's proprietary trading activities and investment policies according to parameters set by the board[87]. - The Credit Committee is responsible for establishing credit approval procedures for the group's brokerage clients and assessing credit risks[89]. - The Financial Committee aims to minimize credit risks arising from the group's general lending activities and to develop internal policies for loan assessment and approval[91]. - The ESG Committee was formed to oversee the development and implementation of environmental, social, and governance strategies and policies[93]. - The group faces significant operational risks, including market risks influenced by interest rates and global investment conditions[95]. - Credit risk arises from various areas, including counterparty defaults during settlement processes[97]. - The group is exposed to foreign exchange risks primarily from proprietary investments, affected by macroeconomic performance and capital movements[101]. - New regulations introduced by exchanges and regulatory bodies may adversely impact the company's operating performance[102]. - The group has implemented security control procedures to mitigate cybersecurity threats, although it cannot guarantee that such threats will not significantly impact business and financial performance[103]. Audit and Compliance - The internal audit function is executed by the Legal and Compliance Department, reporting directly to the CEO and Chairman, with no restrictions on auditing the group's business activities[104]. - The company has established internal procedures for handling and disclosing insider information, ensuring confidentiality and compliance with securities regulations[106]. - The independent auditor, Ernst & Young, has been appointed to audit the financial statements for the year ending June 30, 2022[183]. - The audit identified the assessment of impairment for receivables as a key audit matter due to the significant estimates involved[191]. - The audit procedures included evaluating the appropriateness of the valuation methods used for Level 3 securities and assessing the reasonableness of the valuation results[198]. - The audit opinion does not cover other information and no assurance is provided on that information[200]. - If significant misstatements are identified in other information, the company is required to report that fact[200]. - No significant misstatements were reported in the audit process[200]. Shareholder Communication - The company emphasizes the importance of maintaining good communication with shareholders, utilizing various formal channels for timely information dissemination[108]. - The company has a website that provides updates on business progress and regulatory announcements, enhancing shareholder communication[109]. - The company encourages direct communication with shareholders for any inquiries regarding the board[118]. - Shareholders holding at least 10% of the voting rights can request the board to convene a special general meeting within two months of the request date[113]. - The company must notify shareholders of any proposed resolutions at the annual general meeting if requested by shareholders holding at least 5% of the voting rights[114]. - The company has a structured approach to shareholder meetings, requiring requests for resolutions to be submitted at least six weeks prior to the meeting[117]. - The company maintains a focus on corporate governance and encourages shareholder participation in decision-making processes[118]. Dividends and Reserves - The interim dividend of HKD 0.01 per ordinary share was paid on March 31, 2022, with a proposed final dividend of HKD 0.01 per ordinary share subject to shareholder approval at the upcoming annual general meeting[142]. - As of June 30, 2022, the distributable reserves available for shareholders amounted to HKD 600,453,000, a decrease from HKD 611,245,000 in 2021[150]. - The company has adopted a dividend policy aimed at allowing shareholders to share in profits while retaining sufficient reserves for future development[112]. Share Capital and Ownership - The total number of shares available for issuance under the share option plan is 71,945,286, representing 9.85% of the total issued share capital[154]. - The maximum number of shares that can be granted to any participant under the plan is capped at 1% of the issued shares within any twelve-month period[154]. - Dr. Cai Guanshen holds a total of 215,987,808 shares, representing 29.57% of the issued shares, while Mr. Cai Guanming holds 40,380,951 shares, representing 5.53%[162]. - The company has a total of 215,987,808 shares issued, with Dr. Cai Guanshen holding 56.13% directly[167]. - World Developments Limited and Sunwah International Limited each hold 25.42% of the company's shares, indicating significant overlapping interests[167]. - The company did not repurchase or sell any of its own shares during the year[171]. - Publicly held shares exceed 25% of the total issued shares, ensuring sufficient public float[176]. Corporate Social Responsibility - The group emphasizes corporate social responsibility and environmental protection, with detailed disclosures in the ESG report[178].
新华汇富金融(00188) - 2022 - 年度财报