NATIONAL ELEC H(00213) - 2023 - 年度财报

Company Information Company Basic Information This section provides core company details including registration information, main offices, board members, principal bankers, auditors, and legal advisors - Company Chairman is Mr. Li Yuanqing, Managing Directors are Mr. Li Benzhi and Mr. Li Yuanju[8][86][165] - The company's auditor is Crowe (HK) CPA Limited[14] - The company's principal bankers include The Hongkong and Shanghai Banking Corporation Limited, Hang Seng Bank, Industrial and Commercial Bank of China (Asia), and several other financial institutions[9] Chairman's Statement Performance Highlights For the year ended March 31, 2023, the Group's profit attributable to shareholders significantly decreased to approximately HK$48.87 million, a 46.5% year-on-year reduction | Metric | Year Ended March 31, 2023 (HKD) | Year Ended March 31, 2022 (HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Consolidated Profit Attributable to Shareholders | 48,869,383 | 91,356,972 | -46.5% | | Basic Earnings Per Share (HK cents) | 5.2 | 9.5 | -45.3% | | Proposed Final Dividend (HK cents) | 1.8 | 3.0 | -40.0% | Business Review and Outlook During the reporting period, turnover in the watch manufacturing and accessories trading segment declined due to global interest rate hikes, while the hotel business improved with increased visitor arrivals, boosting revenue, occupancy, and room rates - Turnover in the watch manufacturing and accessories trading segment recorded a decrease, but profit margin remained stable[18] - Hotel business performance improved, with revenue, occupancy rate, and average room rate all better than last year[43] - Property development projects progressed smoothly: construction of the third phase of the 88 Queen Street East residential condominium in Toronto, Canada, is on schedule; the luxury residential project at 1 South Bay Road, Repulse Bay, Hong Kong, has topped out[20][44] - Looking ahead, the Group anticipates that the sustained rising interest rate environment will continue to challenge the watch business, but remains optimistic about the prospects for designer boutique hotels and will maintain a conservative approach to future investments[22][46][48] Management Discussion and Analysis Corporate Strategy The Group is committed to creating shareholder value through stable growth in core businesses and exploring new investment opportunities - While focusing on traditional watches, the watch business actively explores new technologies including smart, paired, and hybrid watches, such as developing a series of hybrid smartwatches capable of monitoring heart rate, sleep, stress, and exercise performance[27][51] - The property development and investment segment is committed to expanding its sales and development expertise into different geographical markets and continuously seeking new investment opportunities[26] Business and Financial Review This fiscal year, the Group's profit before tax decreased by 22% to approximately HK$65 million, primarily impacted by financial market volatility and rising interest rates - Group profit before tax decreased by 22% to approximately HK$65 million, primarily attributed to financial market volatility[80] - Hotel business segment profit increased by 73% to approximately HK$43 million, mainly benefiting from the return of business and leisure travelers to Hong Kong[56] - Fair value of investment properties recorded an increase of approximately HK$299 million, reflecting an improved sentiment in the property market[30] | Financial Metric | March 31, 2023 | March 31, 2022 | | :--- | :--- | :--- | | Gearing Ratio | 1.37 | 1.25 | | Long-term Borrowings (HK$ billion) | Approx. 3.482 | Approx. 3.281 | | Shareholders' Equity (HK$ billion) | Approx. 2.545 | Approx. 2.615 | | Total Borrowings (HK$ billion) | Approx. 4.847 | Approx. 4.620 | | Bank Balances and Cash (HK$ billion) | Approx. 0.852 | Approx. 1.100 | - Significant increase in global interest rates led to an increase in finance costs of approximately HK$65 million compared to last year[55] Treasury Policy and Human Resources All of the Group's borrowings are at floating rates, and the Group will prudently monitor foreign exchange and interest rate risks, using financial instruments for hedging when necessary - All of the Group's borrowings are floating rate borrowings, and foreign exchange and interest rate risks will be prudently monitored[33] - As of March 31, 2023, 84% of the Group's borrowings were in HKD and 13% in CAD; 44% of bank balances and cash were in USD and 31% in HKD[59] - As of March 31, 2023, the Group had approximately 250 employees in Hong Kong, China, and overseas, with staff costs (including directors' emoluments) for the year totaling approximately HK$110 million[60] Directors and Senior Management Directors and Senior Management Profiles This section details the background, qualifications, and responsibilities of the company's executive directors, non-executive directors, independent non-executive directors, and senior management within the Group - Executive Directors include Chairman Mr. Li Yuanqing, Managing Directors Mr. Li Benzhi and Mr. Li Yuanju, Mr. Li Yuanchu responsible for Hong Kong property development, and Mr. Wai Kwong Yuen responsible for the watch manufacturing business[62][63][86][87][165] - Independent Non-Executive Directors include Mr. Chan Chak Cheong, Mr. Chan Kwok Wai, and Mr. Sun David, who possess extensive experience in risk management, financial reporting, and the watch industry, respectively[66][89][166] - The report discloses family relationships among board members: Mr. Li Yuanju, Mr. Li Yuanchu, and Mr. Li Yuanru are siblings, all cousins of Chairman Mr. Li Yuanqing; Mr. Li Yuanqing is also the father of Managing Director Mr. Li Benzhi[64][134] Directors' Report Business, Performance and Distribution This report outlines the Group's principal activities, including electronic watch manufacturing and sales, property development and investment, and hotel operations - The company's principal activities are the manufacturing, assembly, and sale of electronic watches and watch components, trading of watch movements and watch components, property development and investment, and hotel operations[91] - The Board recommended a final dividend of HK$0.018 per share, totaling approximately HK$16.5 million. An interim dividend of HK$0.005 per share was paid during the year[69] Share Capital, Reserves and Share Repurchases During the reporting period, the company's share capital changed, and share repurchases were conducted on the Hong Kong Stock Exchange - As of March 31, 2023, the company's distributable reserves to shareholders amounted to HK$216,090,797[70] - During the year, the company repurchased certain shares on The Stock Exchange of Hong Kong Limited[168] Directors, Interests and Major Related Parties This section discloses the list of directors, rotation arrangements, directors' interests in company shares, and the concentration of major suppliers and customers | Director Name | Position | Total Interests (Shares) | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Li Yuanqing | Chairman | 536,514,894 | 58.354% | | Mr. Li Benzhi | Managing Director | 571,234,894 | 62.130% | | Mr. Li Yuanju | Managing Director | 6,534 | 0.001% | | Mr. Wai Kwong Yuen | Executive Director | 40,994,543 | 4.459% | - The top five suppliers accounted for approximately 82.75% of the Group's total purchases, with the largest supplier accounting for 50.93%[106] - The top five customers accounted for approximately 43.49% of the Group's turnover, with the largest customer accounting for 21.43%[106] - The company has received annual independence confirmations from each independent non-executive director and considers all independent non-executive directors to be independent[74] Corporate Governance Report Governance Structure and Compliance The company is committed to maintaining a high level of corporate governance and has complied with the Corporate Governance Code in the Listing Rules - The Board currently comprises nine directors, including five executive directors, one non-executive director, and three independent non-executive directors[113] - The Chairman (Mr. Li Yuanqing) is responsible for managing the Board and formulating high-level strategies, while the Managing Directors (Mr. Li Benzhi and Mr. Li Yuanju) are responsible for the day-to-day management of the Group's business[113] - The report discloses a deviation from the Corporate Governance Code: the Chairman and Managing Directors are not required to retire by rotation at annual general meetings, which the Board considers crucial for the Group's stability and continuity[600] Board Committees The company has established an Audit and Risk Management Committee, a Nomination Committee, and a Remuneration Committee to assist the Board in fulfilling its duties - The Audit and Risk Management Committee is composed of three independent non-executive directors, with primary responsibilities including monitoring financial reporting, internal controls, and risk management systems[114][144] - The Nomination Committee is responsible for formulating director nomination criteria, reviewing the Board's structure, and assessing the independence of independent non-executive directors[145][147] - The Remuneration Committee is responsible for making recommendations to the Board on the remuneration policies and structure for directors and senior management[148] Risk Management and Shareholder Rights The Board is responsible for the Group's overall risk management framework and has appointed external independent professionals to perform internal audit functions - The Group has appointed external independent professionals to perform internal audit functions and assess business and operational risks. The Board considers the existing risk management and internal control systems to be adequate and effective[587][629] - Shareholders holding not less than one-tenth of the company's paid-up share capital have the right to request the Board to convene an extraordinary general meeting[612] - The company has adopted a dividend policy, considering various factors such as the Group's performance, liquidity position, future expansion plans, and overall economic conditions when determining dividends[611][634] Independent Auditor's Report Auditor's Opinion and Key Audit Matters The auditor, Crowe (HK) CPA Limited, issued an unmodified opinion on the consolidated financial statements for the year, deeming them to present a true and fair view of the Group's financial position and performance - The auditor believes that the consolidated financial statements present a true and fair view of the Group's financial position in accordance with Hong Kong Financial Reporting Standards and have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance (unmodified opinion)[644] - Key Audit Matter One: Valuation of Investment Properties. As of March 31, 2023, the Group's investment properties amounted to HK$4.89 billion, and their fair value determination involves significant unobservable inputs and judgments[622][647][648] - Key Audit Matter Two: Valuation of Properties Under Development for Sale. As of March 31, 2023, these properties amounted to HK$1.56 billion, and the determination of their net realizable value involves significant management estimates[652][675][676] Consolidated Financial Statements Consolidated Statement of Profit or Loss For the year ended March 31, 2023, the Group's revenue was HK$501.31 million, a 27.8% year-on-year decrease | Item (HK$'000) | 2023 | 2022 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 501,313 | 694,564 | -27.8% | | Gross Profit | 107,800 | 87,822 | +22.7% | | Increase in Fair Value of Investment Properties | 298,698 | 134,757 | +121.7% | | Finance Costs | (140,266) | (74,851) | +87.4% | | Profit Before Tax | 65,498 | 84,074 | -22.1% | | Profit for the Year | 48,844 | 91,278 | -46.5% | Consolidated Statement of Financial Position As of March 31, 2023, the Group's total assets were HK$8.508 billion, a slight increase from last year | Item (HK$'000) | March 31, 2023 | March 31, 2022 | | :--- | :--- | :--- | | Non-current Assets | 5,614,062 | 5,110,530 | | Current Assets | 2,894,245 | 3,228,250 | | Total Assets | 8,508,307 | 8,338,780 | | Current Liabilities | 2,353,389 | 2,314,978 | | Non-current Liabilities | 3,608,769 | 3,407,197 | | Total Liabilities | 5,962,158 | 5,722,175 | | Total Equity | 2,546,149 | 2,616,605 | Consolidated Statement of Cash Flows For the year, the Group generated a net cash outflow of HK$86.93 million from operating activities, primarily due to increased investment in properties under development for sale | Item (HK$'000) | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (86,929) | (417,390) | | Net Cash (Used in)/Generated from Investing Activities | (143,391) | 63,621 | | Net Cash (Used in)/Generated from Financing Activities | (32,871) | 344,471 | | Net Decrease in Cash and Cash Equivalents | (263,191) | (9,298) | | Cash and Cash Equivalents at End of Period | 852,305 | 1,100,196 | Notes to the Consolidated Financial Statements (Selected) The notes to the financial statements provide detailed explanations and supplementary information for items in the financial statements Note 7: Revenue and Segment Information The Group's operations are divided into three segments: watch manufacturing and movement trading, property development and investment, and hotel operations | Segment (HK$'000) | 2023 Revenue | 2022 Revenue | 2023 Segment Results | 2022 Segment Results | | :--- | :--- | :--- | :--- | :--- | | Watch Manufacturing and Movement Trading | 411,794 | 629,416 | 5,204 | 7,734 | | Property Development and Investment | - | 472 | 239,617 | 121,226 | | Hotel Operations | 89,519 | 64,675 | 42,556 | 24,638 | | Total | 501,313 | 694,563 | 287,378 | 153,598 | | Region (HK$'000) | 2023 Revenue | 2022 Revenue | 2023 Non-current Assets | 2022 Non-current Assets | | :--- | :--- | :--- | :--- | :--- | | Hong Kong and China | 484,629 | 670,066 | 5,241,254 | 4,873,101 | | North America | 3,289 | 15,512 | 177,061 | 29,496 | | Europe | 13,270 | 8,906 | 147,091 | 156,272 | | Other Locations | 125 | 79 | 15,545 | 16,896 | Note 15: Investment Properties As of March 31, 2023, the fair value of the Group's investment properties was HK$4.890 billion, an increase of 12.5% from HK$4.348 billion in the prior year | Item (HKD) | March 31, 2023 | March 31, 2022 | | :--- | :--- | :--- | | Fair Value of Investment Properties | 4,890,224,988 | 4,347,962,250 | | Fair Value Increase Recognized in Profit or Loss | 229,368,264 | 134,757,261 | - Investment properties with a total carrying amount of HK$4.598 billion have been pledged to secure bank facilities granted to the Group[331] Note 33: Bank Loans As of March 31, 2023, the Group's total bank loans amounted to HK$4.847 billion, of which secured loans accounted for HK$3.939 billion | Item (HKD) | 2023 | 2022 | | :--- | :--- | :--- | | Secured Bank Loans | 3,938,867,714 | 4,016,843,966 | | Unsecured Bank Loans | 907,923,457 | 602,835,450 | | Total | 4,846,791,171 | 4,619,679,416 | | Due within One Year | 1,364,816,521 | 1,338,453,008 | | Due after One Year | 3,481,974,650 | 3,281,226,408 | Note 34: Share Capital During the year, the company repurchased and cancelled 29,886,000 of its own shares on the Stock Exchange for a total consideration of approximately HK$30.27 million - During the year, the company repurchased and cancelled 29,886,000 shares for a total consideration (including expenses) of HK$30,272,125[902][903] List of Major Properties Held by the Group Details of Major Properties This section lists detailed information on the Group's major investment properties and properties under development for sale as of March 31, 2023, including location, interest, type, and development status - The Group holds multiple commercial properties in Hong Kong, including The Putman, 99 Bonham, One96, and The Jervois, as well as luxury residential properties in Repulse Bay and Shouson Hill[983] - The 88 Queen Street East project in Toronto, Canada, is a 100% interest freehold property of the Group, with above-ground construction underway and expected completion in 2024[984] - The Group holds a 50% interest in the residential project at 45 Tai Tam Road, Hong Kong, through a joint venture, which has been completed[1019] Financial Summary Five-Year Financial Data Review This section provides key performance and financial position data for the Group's past five fiscal years | Item (HK$'000) | 2023 | 2022 | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 501,313 | 694,564 | 1,442,829 | 673,879 | 881,448 | | Profit for the Year Attributable to Owners of the Company | 48,869 | 91,357 | 116,262 | 120,825 | 221,825 | | Total Assets | 8,508,307 | 8,338,780 | 7,362,633 | 7,157,718 | 6,889,174 | | Total Liabilities | 5,962,158 | 5,722,175 | 4,804,424 | 4,754,442 | 4,514,829 | | Net Assets | 2,546,149 | 2,616,605 | 2,558,209 | 2,403,276 | 2,374,345 |