Financial Performance - The Group's revenue for the year ended December 31, 2021, was approximately HK$3,157,000, a significant decrease from approximately HK$127,414,000 for the year ended December 31, 2020, representing a decline of about 97.5%[14]. - The loss attributable to owners of the Company for the year ended December 31, 2021, was approximately HK$581,677,000, compared to a loss of approximately HK$278,857,000 for the previous year, indicating an increase in loss of about 108.7%[14]. - The increase in loss was primarily due to a fair value loss on investment properties amounting to approximately HK$24,944,000 and an impairment loss on property, plant, and equipment of approximately HK$113,999,000[35]. - The loss from changes in fair value of investment properties was approximately HK$24,944,000 in 2021, down from approximately HK$77,966,000 in 2020[14]. - Impairment losses recognized in respect of property, plant, and equipment amounted to approximately HK$113,999,000 in 2021, compared to HK$87,937,000 in 2020, reflecting an increase of about 29.7%[14]. - Impairment losses recognized for financial assets under the expected credit losses model were approximately HK$192,300,000 in 2021, significantly higher than HK$40,723,000 in 2020, marking an increase of about 371.5%[14]. - The share of losses of associates was approximately HK$169,558,000 in 2021, compared to HK$144,569,000 in 2020, representing an increase of about 17.3%[14]. Strategic Direction - The Group adopted a more conservative view and strategy in property development and investment due to the uncertain real estate market in the PRC caused by the COVID-19 pandemic[19]. - The Group plans to continue identifying and exploring business opportunities in the natural gas sector both in the PRC and globally to further develop this business[19]. Liquidity and Financial Position - The underlying current ratio as of December 31, 2021, was approximately 0.55, a decline from 1.72 in 2020, indicating liquidity challenges[39]. - The underlying gearing ratio was approximately (81%) as of December 31, 2021, compared to 24% in 2020, reflecting a significant increase in debt relative to equity[39]. - The equity attributable to owners of the Company was a deficit of approximately HK$80,917,000 as of December 31, 2021, a decrease of approximately 117% from HK$483,087,000 at the end of the previous year[40]. - The net current liabilities as of December 31, 2021, were approximately HK$173,265,000, compared to net current assets of HK$153,450,000 in 2020[40]. - As of December 31, 2021, the Group's current liabilities exceeded its current assets by approximately HK$173,265,000, resulting in net liabilities of approximately HK$142,340,000[162]. - Cash and cash equivalents were only approximately HK$1,862,000 as of the reporting date[162]. Corporate Governance - The company has complied with all provisions of the Corporate Governance Code for the year ended December 31, 2021, except for certain deviations regarding insurance for directors and the separation of roles between the chairman and CEO[66][67]. - The Board of Directors consists of three executive directors and three independent non-executive directors, with two independent directors having served for over nine years and eligible for re-election[76]. - The company does not currently have an internal audit function, as the Board believes there is no immediate need based on the size and complexity of the business[71][74]. - The company is committed to maximizing shareholder value and enhancing transparency, accountability, and independence[65][68]. - The Board meets regularly to monitor performance and ensure compliance with statutory and regulatory requirements[79]. - Independent non-executive directors are encouraged to participate actively in Board meetings and have access to independent professional advice[78]. - The company will review its corporate governance practices periodically to improve effectiveness[65][68]. - The Board Diversity Policy aims to achieve a balanced mix of skills, experience, and perspectives among board members to enhance decision-making effectiveness[93]. - The Company has established mechanisms to ensure independent opinions and information are provided to the Board, particularly from independent non-executive directors[82]. - The Board is satisfied that the other commitments of the INEDs do not conflict with their duties as directors[90]. - The nomination committee will review the Board Diversity Policy and measurable objectives at least annually to ensure its effectiveness[99]. - The Company provides newly appointed directors with an induction package to ensure they understand the business and their responsibilities under the Listing Rules[101]. Risk Management - The Board reviewed significant risks, including ESG risks, and the Company's ability to respond to changes in the business environment[184]. - The management is responsible for the ongoing design and implementation of the risk management and internal control systems, which are reviewed annually for effectiveness[186]. - The Group has established procedures to identify and manage significant risks, with annual reviews conducted by the Board[187]. - The risk management strategies include risk retention, avoidance, sharing, and transfer to mitigate potential losses[195]. - The internal control systems aim to reduce business-related risks and provide reasonable assurance against material misstatements[191]. - Significant internal control deficiencies are reported to the Board promptly to ensure timely remediation[192]. - The Board considers the risk management and internal control systems to be reasonably effective and adequate for the year ended December 31, 2021[193]. - The Group has adopted a Whistleblowing Policy to allow confidential reporting of concerns related to possible improprieties[197]. - The Anti-Bribery and Anti-Corruption Policy outlines guidelines and responsibilities to prevent and report fraud and corruption[198]. Employee and Gender Diversity - The Group had approximately 14 staff members as of December 31, 2021, with remuneration based on performance and industry practices[34]. - The Company has a commitment to gender diversity, currently having one female director, with plans to increase this proportion over time[98]. - The Group employed 14 individuals during the financial year, with approximately 50% being female, indicating a commitment to gender diversity in recruitment[100]. - The company maintains a commitment to diversity in its hiring practices, reflecting its broader corporate governance principles[103]. Audit and Financial Oversight - The Audit Committee consists entirely of Independent Non-executive Directors (INEDs) as of December 31, 2021[138]. - The chairman of the Audit Committee, Mr. HE Jin Geng, is a qualified accountant with relevant financial experience[138]. - The Audit Committee reviews the Company's financial reports and internal controls[137]. - The Audit Committee continuously monitors the adequacy of resources and qualifications of the Group's accounting and internal audit functions[185]. - All members of the Audit Committee are independent non-executive directors, ensuring unbiased oversight[140]. - The audit fees for the year ended December 31, 2021, were HK$820,000 for HLB Hodgson Impey Cheng Limited and HK$950,000 for Asian Alliance (HK) CPA Limited, compared to HK$1,000,000 for the previous year[155]. - The Company’s audit fees for non-audit services were nil for both 2021 and 2020[155]. Future Plans and Measures - The Company is exploring various business opportunities to increase cash inflow and improve its financial position[167]. - The Group is actively negotiating to repay outstanding liabilities and collect account receivables[168]. - Cost-saving measures are being enforced to minimize expenses, including administrative and operating costs[169]. - The Company is in negotiations for potential loan capitalisation to reduce debt and increase the shareholder base[175]. - The Group is seeking fundraising opportunities such as rights issues and placements of new shares, depending on market conditions[176]. - The consolidated financial statements for the year ended December 31, 2021, have been prepared on a going concern basis, assuming successful implementation of the above measures[177].
中国基建投资(00600) - 2023 - 年度财报