华富建业金融(00952) - 2023 - 中期业绩

Company Information Company Name Change The company's name has changed from "China Tonghai International Financial Limited" to "Quam Plus International Financial Limited", with registration completed on July 14, 2023, and stock short name effective from July 26, 2023 - The company's name changed from “China Tonghai International Financial Limited” to “Quam Plus International Financial Limited”[79][46] - The Certificate of Change of Name was issued by the Hong Kong Companies Registry on July 14, 2023[46] - The stock short name changed from “TONGHAI FIN” to “QUAM PLUS FIN” in English and from “中国通海金融” to “华富建业金融” in Chinese, effective July 26, 2023[46] Financial Statements Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2023, total revenue significantly increased to HK$338 million, reversing last year's loss to achieve a pre-tax profit of HK$115 million, with basic and diluted earnings per share of 2 HK cents Condensed Consolidated Statement of Profit or Loss Key Data (For the six months ended June 30) | Indicator | 2023 (HK$'000) | 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | 337,886 | 26,918 | 1155% increase | | Fee and Commission Income | 58,763 | 62,696 | 6.3% decrease | | Interest Income (Effective Interest Method) | 174,986 | 151,622 | 15.4% increase | | Interest Income (Other Methods) | 56,653 | 65,074 | 12.9% decrease | | Net Investment Gains/(Losses) | 47,484 | (252,474) | Turnaround from loss to gain | | Other Income | 1,300 | 12,077 | 89.2% decrease | | Direct Costs | (49,477) | (54,003) | 8.4% decrease | | Staff Costs | (81,827) | (89,644) | 8.7% decrease | | Depreciation and Amortisation | (19,213) | (21,447) | 10.4% decrease | | Net Impairment Loss on Expected Credit Losses | (16,980) | (80,570) | 78.9% decrease | | Finance Costs | (26,999) | (24,515) | 10.1% increase | | Other Operating Expenses | (29,487) | (28,329) | 4.1% increase | | Profit/(Loss) Before Tax | 115,201 | (259,755) | Turnaround from loss to gain | | Tax (Expense)/Credit | (3,932) | 14,164 | Turnaround from credit to expense | | Net Profit/(Loss) Attributable to Equity Holders of the Company | 111,269 | (245,591) | Turnaround from loss to gain | | Basic and Diluted Earnings/(Loss) Per Share (HK cents) | 2 | (4) | Turnaround from loss to gain | Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2023, total comprehensive income attributable to equity holders of the Company was HK$110 million, a significant improvement from the HK$247 million loss in the prior year Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data (For the six months ended June 30) | Indicator | 2023 (HK$'000) | 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Net Profit/(Loss) Attributable to Equity Holders of the Company | 111,269 | (245,591) | Turnaround from loss to gain | | Other Comprehensive Loss, including reclassification adjustments | (1,237) | (1,438) | Loss narrowed | | Total Comprehensive Income/(Loss) Attributable to Equity Holders of the Company | 110,032 | (247,029) | Turnaround from loss to gain | Condensed Consolidated Statement of Financial Position As of June 30, 2023, the company's total assets were HK$4.299 billion, a decrease from HK$4.678 billion as of December 31, 2022. Total liabilities were HK$2.178 billion, total equity was HK$2.122 billion, and net current assets were HK$1.978 billion Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2023 (HK$'000) | December 31, 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 159,508 | 195,206 | 18.3% decrease | | Bank Balances Held on Behalf of Customers | 945,114 | 1,123,090 | 15.8% decrease | | Financial Assets Held for Trading | 581,016 | 625,021 | 7.0% decrease | | Financial Assets Not Held for Trading | 125,529 | 188,489 | 33.4% decrease | | Loans to Margin Clients | 626,774 | 670,496 | 6.5% decrease | | Credit Loans | 1,327,753 | 1,158,946 | 14.6% increase | | Accounts Receivable | 309,343 | 494,320 | 37.4% decrease | | Prepayments, Deposits and Other Receivables | 67,356 | 96,124 | 30.0% decrease | | Total Assets | 4,299,569 | 4,678,087 | 8.1% decrease | | Bank and Other Borrowings | 722,147 | 905,545 | 20.3% decrease | | Accounts Payable | 1,202,545 | 1,534,134 | 21.6% decrease | | Contract Liabilities | 6,679 | 5,259 | 27.0% increase | | Lease Liabilities | 67,702 | 48,771 | 38.8% increase | | Accruals and Other Payables | 166,604 | 164,036 | 1.6% increase | | Total Liabilities | 2,177,931 | 2,666,481 | 18.3% decrease | | Total Equity | 2,121,638 | 2,011,606 | 5.5% increase | | Total Liabilities and Equity | 4,299,569 | 4,678,087 | 8.1% decrease | | Net Current Assets | 1,977,723 | 1,810,882 | 9.2% increase | Notes to the Financial Statements 1. Basis of Preparation The interim financial statements are prepared in accordance with Hong Kong Generally Accepted Accounting Principles, HKAS 34 "Interim Financial Reporting", and applicable requirements of Appendix 16 to the Listing Rules - The interim financial statements are prepared in accordance with Hong Kong Generally Accepted Accounting Principles, HKAS 34 “Interim Financial Reporting” and Appendix 16 to the Listing Rules[87] 2. Principal Accounting Policies The accounting policies adopted in preparing the interim financial statements are consistent with the 2022 annual financial statements, with no significant impact from new or revised HKFRSs - Accounting policies are consistent with the 2022 annual financial statements, with no significant impact from new or revised Hong Kong Financial Reporting Standards on the interim financial statements[88] 3. Segment Information The Group's business is divided into six operating segments: Corporate Finance, Asset Management, Brokerage, Interest Income, Investment, and Others. For the six months ended June 30, 2023, total reportable segment revenue was HK$338 million, and total segment results were HK$117 million, a significant improvement from the prior year's loss - The Group's business is divided into six operating segments: Corporate Finance, Asset Management, Brokerage, Interest Income, Investment, and Others[89] Reportable Segment Revenue and Results (For the six months ended June 30) | Segment | 2023 Revenue (HK$'000) | 2023 Results (HK$'000) | 2022 Revenue (HK$'000) | 2022 Results (HK$'000) | | :--- | :--- | :--- | :--- | :--- | | Corporate Finance | 9,157 | (5,925) | 5,097 | (4,835) | | Asset Management | 5,184 | (1,889) | 5,430 | (1,166) | | Brokerage | 110,845 | 16,760 | 117,025 | (17,208) | | Interest Income | 161,847 | 96,492 | 147,708 | 21,823 | | Investment | 47,484 | 15,075 | (252,474) | (253,055) | | Others | 3,369 | (3,123) | 4,132 | (3,088) | | Total | 337,886 | 117,390 | 32,260 | (257,529) | - In the first half of 2023, revenue from former related parties (Tonghai Holdings Company Limited, Oceanwide Holdings Co., Ltd., subsidiaries of China Oceanwide Holdings Limited, and Minyun Limited) was HK$162 million, accounting for a significant proportion[4] 4. Revenue Total revenue for the period was HK$338 million, primarily contributed by interest income business (HK$232 million) and investment and other businesses (HK$50.853 million). Corporate finance business revenue increased by 80% year-on-year, and investment business turned from loss to gain Revenue Details (For the six months ended June 30) | Business Category | 2023 (HK$'000) | 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Corporate Finance Business Fees and Commission Income | 9,157 | 5,097 | 80% increase | | Asset Management Business Fees and Commission Income | 5,184 | 5,430 | 4.5% decrease | | Brokerage Business Fees and Commission Income | 41,053 | 48,037 | 14.5% decrease | | Interest Income Business | 231,639 | 216,696 | 6.9% increase | | Investment and Other Business Fees and Commission Income | 3,369 | 4,132 | 18.5% decrease | | Net Investment Gains/(Losses) | 47,484 | (252,474) | Turnaround from loss to gain | | Total Revenue | 337,886 | 26,918 | 1155% increase | - Corporate finance business revenue increased by 80%, primarily due to increased income from financial and compliance advisory services[6] - Net investment gains from investment and other businesses turned from a loss of HK$257 million in the prior year to a gain of HK$42.041 million[6] 5. Other Income For the six months ended June 30, 2023, other income was HK$1.3 million, a significant decrease from HK$12.077 million in the prior year, mainly due to reduced net exchange gains and government subsidies Other Income Details (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Change in Net Assets Attributable to Other Holders of Consolidated Investment Funds | 2,639 | 1,824 | 44.7% increase | | Net Exchange (Loss)/Gain | (1,517) | 8,013 | Turnaround from gain to loss | | Government Grants | – | 1,713 | 100% decrease | | Miscellaneous Income | 178 | 527 | 66.2% decrease | | Total | 1,300 | 12,077 | 89.2% decrease | 6. Profit/(Loss) Before Tax Deductions For the six months ended June 30, 2023, staff costs, depreciation and amortisation, and net impairment loss on expected credit losses all decreased, while finance costs increased Profit/(Loss) Before Tax Deductions (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Staff Costs | 81,827 | 89,644 | 8.7% decrease | | Depreciation and Amortisation | 19,213 | 21,447 | 10.4% decrease | | Net Impairment Loss on Expected Credit Losses | 16,980 | 80,570 | 78.9% decrease | | Finance Costs | 26,999 | 24,515 | 10.1% increase | 7. Other Operating Expenses For the six months ended June 30, 2023, total other operating expenses were HK$29.487 million, a slight increase from HK$28.329 million in the prior year, mainly due to increased legal and professional fees for one-off corporate transactions - Total legal and professional fees were approximately HK$9.1 million (2022: HK$8.8 million), primarily due to HK$5.7 million (2022: HK$3.3 million) in professional fees for one-off corporate transactions[14] 8. Tax Expense/(Credit) For the six months ended June 30, 2023, total tax expense was HK$3.932 million, compared to a tax credit of HK$14.164 million in the prior year, mainly due to increased current tax and a turnaround from deferred tax credit to expense Tax Expense/(Credit) (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Current Tax - Hong Kong Profits Tax | 8,855 | 14,109 | 37.3% decrease | | Deferred Tax | (4,923) | (28,273) | Loss narrowed by 82.6% | | Total Tax Expense/(Credit) | 3,932 | (14,164) | Turnaround from credit to expense | - Hong Kong profits tax is calculated at 16.5% of the estimated assessable profit, consistent with the two-tiered profits tax regime for eligible companies[99][15] 9. Earnings/(Loss) Per Share For the six months ended June 30, 2023, basic and diluted earnings per share were 2 HK cents, a turnaround from a loss of 4 HK cents per share in the prior year Earnings/(Loss) Per Share (For the six months ended June 30) | Indicator | 2023 (HK cents) | 2022 (HK cents) | Change | | :--- | :--- | :--- | :--- | | Basic and Diluted | 2 | (4) | Turnaround from loss to gain | - The weighted average number of ordinary shares outstanding used for calculating earnings per share was 6,145,877,218 shares, consistent with the prior year[10] 10. Dividends The Board has declared a special dividend of 1.1 HK cents per share, payable on October 6, 2023. No interim dividend was declared for the current period - The Board has declared a special dividend of 1.1 HK cents per share, payable on October 6, 2023[95][131] - No interim dividend was declared for the current period (2022: nil)[131] 11. Loans to Margin Clients As of June 30, 2023, loans to margin clients amounted to HK$627 million, a decrease from HK$670 million as of December 31, 2022. Margin clients are required to pledge securities collateral for credit financing, and the company continuously monitors lending ratios to manage credit risk Loans to Margin Clients | Indicator | June 30, 2023 (HK$'000) | December 31, 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Measured at Fair Value Through Profit or Loss | 626,774 | 670,496 | 6.5% decrease | - The market value of securities pledged by margin clients was HK$4.295 billion as of June 30, 2023 (December 31, 2022: HK$4.848 billion)[96] 12. Credit Loans As of June 30, 2023, total credit loans were HK$4.612 billion, with a net amount of HK$1.328 billion after deducting expected credit loss provisions. Loans bear fixed annual interest rates from 2.5% to 12%, with collateral primarily including listed and private company shares and assets Total and Net Credit Loans | Indicator | June 30, 2023 (HK$'000) | December 31, 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Credit Loans, Gross | 4,611,952 | 4,475,835 | 3.0% increase | | Less: Provision for Expected Credit Losses | (3,284,199) | (3,316,889) | Provision decreased by 1.0% | | Credit Loans, Net | 1,327,753 | 1,158,946 | 14.6% increase | - Loans bear fixed annual interest rates ranging from 2.5% to 12%[25] - Collateral for secured loans primarily includes shares of listed and private companies and private company assets, with a fair value of HK$4.351 million[32][33] 13. Accounts Receivable As of June 30, 2023, net accounts receivable were HK$309 million, a significant decrease from HK$494 million as of December 31, 2022. This primarily includes accounts receivable from brokers, clearing houses, and cash clients for securities transactions Net Accounts Receivable | Indicator | June 30, 2023 (HK$'000) | December 31, 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Accounts Receivable from Securities, Futures and Options Contracts Trading | 310,413 | 493,700 | 37.1% decrease | | Accounts Receivable from Asset Management, Corporate Finance and Other Businesses | 23,456 | 18,289 | 28.2% increase | | Less: Provision for Expected Credit Losses | (24,526) | (17,669) | Provision increased by 38.8% | | Net Accounts Receivable | 309,343 | 494,320 | 37.4% decrease | - Accounts receivable from brokers, clearing houses, and cash clients for securities transactions are settled on their respective settlement dates. Accounts receivable from cash clients bear interest at commercial rates[26] 14. Accounts Payable As of June 30, 2023, total accounts payable were HK$1.203 billion, a decrease from HK$1.534 billion as of December 31, 2022. This primarily includes accounts payable to brokers, clearing houses, and cash and margin clients for securities, futures, and options contracts trading Total Accounts Payable | Indicator | June 30, 2023 (HK$'000) | December 31, 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Accounts Payable for Securities, Futures and Options Contracts Trading | 1,192,839 | 1,531,246 | 22.1% decrease | | Accounts Payable for Other Businesses | 9,706 | 2,888 | 235.0% increase | | Total Accounts Payable | 1,202,545 | 1,534,134 | 21.6% decrease | - Accounts payable to brokers, clearing houses, and cash clients are repayable on demand before their respective settlement dates. Accounts payable to margin clients are repayable on demand[36] 15. Non-Adjusting Events After the Reporting Period Significant non-adjusting events after the reporting period include the completion of the company name change, the settlement arrangement for the loan to China Oceanwide International Investment Limited, and the grant of 152.5 million share options - The company name change was completed on July 14, 2023, with the stock short name effective from July 26, 2023[46] - The settlement arrangement for the loan to China Oceanwide International Investment Limited was completed on August 22, 2023[38] - On July 21, 2023, the company granted a total of 152,500,000 share options to 20 individuals, exercisable at HK$0.2 per share[47] Management Discussion and Analysis Macroeconomic Environment In the first half of 2023, the global economy slowed, with central banks in advanced economies raising interest rates to combat inflation. The US economy performed better than expected, with tech stocks rising due to the AI boom. China's GDP grew by 5.5% year-on-year, showing clear recovery in services and consumption - In the first half of 2023, the global economy slowed, with central banks in advanced economies raising policy rates to combat persistent inflation[55] - The US economy performed better than expected, with tech stocks rising due to the artificial intelligence boom[55] - China's GDP grew by 5.5% year-on-year, with clear recovery in services and consumption[55] Hong Kong Stock Market In the first half of 2023, the Hong Kong stock market performed poorly, with the Hang Seng Index and Hang Seng China Enterprises Index falling by 4.4% and 4.2% respectively. Average daily turnover decreased by 16.5% year-on-year, and the IPO market remained subdued - In the first half of 2023, the Hang Seng Index and Hang Seng China Enterprises Index fell by 4.4% and 4.2% respectively[56] - Average daily turnover in the Hong Kong securities market reached HK$115.5 billion during the period, a 16.5% year-on-year decrease[56] - The initial public offering market remained subdued, with total fundraising decreasing by 10% year-on-year to HK$17.8 billion[56] Performance and Overview The Group recorded a pre-tax profit of HK$115 million in the first half of 2023, a significant rebound from a loss of HK$260 million in the prior year, driven by improved licensed businesses, a turnaround in fair value gains on financial assets, and reduced net expected credit losses. Adjusted recurring income increased by 4% year-on-year - In the first half of 2023, a pre-tax profit of HK$115 million was recorded, compared to a loss of HK$260 million in the prior year[48] - Total revenue increased to HK$338 million, a year-on-year increase of HK$311 million[59] - Excluding fair value changes in financial asset investments, adjusted recurring income was HK$291 million, a 4% year-on-year increase[59] - Investment income was HK$47 million, including HK$111 million from financial asset investments, offset by HK$64 million in margin loan losses[59] Business Review The Group improved its earnings quality by recruiting talent, expanding products, and increasing channels. Corporate finance business revenue increased by 80% year-on-year, brokerage business revenue decreased by 15%, and brokerage interest income slightly increased by 1%. Both direct costs and staff costs decreased - Improved earnings quality by recruiting experienced talent, expanding products, and increasing channels[60] Adjusted Operating Income (For the six months ended June 30) | Income | 2023 (HKD Millions) | % of Total | 2022 (HKD Millions) | % of Total | Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Corporate Finance Business | 9 | 7% | 5 | 4% | 80% | | Asset Management Business | 5 | 4% | 5 | 4% | 0% | | Brokerage Business | 41 | 33% | 48 | 38% | (15)% | | Brokerage Interest Income | 70 | 56% | 69 | 54% | 1% | | Total Adjusted Operating Income | 125 | 100% | 127 | 100% | (2)% | - Direct costs decreased by 9% to HK$49 million, mainly due to reduced brokerage commission expenses[54] - Staff costs decreased by 9% to HK$82 million, due to streamlining of resources[54] Impairment Losses In the first half of 2023, net impairment loss on expected credit losses significantly decreased by 79% to HK$17 million, mainly due to the reversal of expected credit loss provisions for former related party loans. The company assesses impairment according to HKFRS 9 and continuously monitors and classifies loans - Net impairment loss on expected credit losses decreased by approximately 79% from HK$81 million in mid-2022 to HK$17 million in mid-2023[68][28] - Primarily from the reversal of HK$130 million in expected credit loss provisions for former related party loans, offset by HK$152 million in expected credit loss provisions for third-party loans[28] - Expected credit loss provision of HK$290 million for China Oceanwide International Investment Limited's credit loan was reversed due to a settlement arrangement with Tonghai Group[19] - All former related party and independent third-party credit loans and unlisted debt securities are classified as Stage 3 in the expected credit loss model, considered to be in default[107][105] - The company has adopted a credit risk policy to manage lending business by conducting credit assessments of borrowers, considering repayment records, and macroeconomic factors[108][12] - As of June 30, 2023, the top five borrowers constituted 71% of the Group's total credit loan principal portfolio[111] - Gross credit loans increased from HK$4.476 billion as of December 31, 2022, to HK$4.612 billion in mid-2023[114] Outlook The company is optimistic about its prospects, benefiting from increased talent, expanded products, and more channels. Despite subdued sentiment in the Hong Kong securities market and an unstable global macroeconomic environment, the company will continue to prioritize financial stability and maintain a cautious approach - The company is optimistic about its prospects, benefiting from increased talent, expanded products, and more channels[115] - Sentiment in the Hong Kong securities market remains subdued, and the global macroeconomic environment remains unstable[115] - The company will continue to prioritize financial stability and maintain a cautious approach in its business[115] Capital Structure, Liquidity and Financial Resources The Group primarily funds its operations through internal cash flow, bank financing, and short-term loans from non-bank entities. As of June 30, 2023, cash levels were approximately HK$160 million, total borrowings decreased by 20% to HK$722 million, and the gearing ratio fell to 34% - The Group primarily funds its operations through internally generated cash flow, bank financing, and short-term loans and notes from non-bank entities[116] Capital Structure, Liquidity and Financial Resources Key Data | Indicator | June 30, 2023 | December 31, 2022 | Change | | :--- | :--- | :--- | :--- | | Cash Level | HK$160 million | HK$195 million | 18% decrease | | Total Borrowings | HK$722 million | HK$906 million | 20% decrease | | Utilized Bank Facilities | HK$478 million | HK$543 million | 12% decrease | | Total Available Bank Facilities | HK$820 million | HK$837 million | 2% decrease | | Private Notes and Other Loans | HK$244 million | HK$363 million | 33% decrease | | Gearing Ratio | 34% | 45% | 11 percentage points decrease | Significant Acquisitions, Disposals and Material Investments During the interim period, the Group did not undertake any significant acquisitions or disposals of subsidiaries and associates, nor did it hold any material investments - During the interim period, the Group did not undertake any significant acquisitions or disposals of subsidiaries and associates[119] - As of the end of the interim period, the Group did not hold any material investments[119] Pledge of the Group's Assets As of June 30, 2023, HK$411 million of the Group's assets were pledged to banks and other lenders to obtain credit, a decrease from HK$441 million as of December 31, 2022 - As of June 30, 2023, HK$411 million of assets were pledged to banks and other lenders to obtain credit[120] - The amount of pledged assets decreased from HK$441 million as of December 31, 2022[120] Employees and Remuneration Policy As of June 30, 2023, the Group employed 207 full-time employees (184 in Hong Kong, 23 in mainland China) and 79 self-employed sales representatives. The company offers competitive remuneration and annually reviews salaries and awards discretionary bonuses - As of June 30, 2023, the Group employed 184 full-time employees in Hong Kong and 23 in mainland China[121] - Additionally, there were 79 self-employed sales representatives[121] - The company offers competitive remuneration, annually reviews salaries, and awards discretionary bonuses based on individual performance, market conditions, and the Group's financial performance[121] Risk Management Risk Management System The Group adopts a three-tier risk management system, involving initial assessment by business units, review and advice from the Risk Management Department and Legal and Compliance Department, and regular checks by the Internal Audit Department, to comprehensively control risks - The Group adopts a three-tier risk management system, including business units' initial risk assessment, review by the Risk Management Department and Legal and Compliance Department, and regular checks by the Internal Audit Department[122] Credit Risk Credit risk primarily arises from the failure of borrowers, counterparties, or financial instrument issuers to meet their obligations. The Group has established credit approval policies and procedures and uses advanced IT systems for daily credit and concentration risk monitoring - Credit risk is the potential risk of loss arising from the failure of borrowers, counterparties, or issuers of financial instruments to meet their obligations[124] - The Group has established credit approval policies and procedures and uses advanced information technology systems for daily credit and concentration risk monitoring[124] Market Risk Market risk refers to potential losses due to changes in the market value of investment positions, including interest rate, equity price, and foreign exchange rate risks. The Risk Management Department is responsible for setting risk limits and investment guidelines, as well as timely monitoring and assessing market risk conditions - Market risk refers to the potential loss arising from changes in the market value of investment positions held, including interest rate risk, equity price risk, and foreign exchange rate risk[125] - The Risk Management Department is responsible for setting market risk limits and investment guidelines, and for timely monitoring and assessing market risk conditions[125] Liquidity Risk Liquidity risk refers to the risk that the Group may face in obtaining sufficient capital and funding in a timely manner to meet its payment obligations. The Treasury Department manages funds, and the Finance Department ensures compliance with financial resources rules and maintains good relationships with banks for short-term financing - Liquidity risk refers to the risk that the Group may face in obtaining sufficient capital and funding in a timely manner to meet its payment obligations and funding needs for daily business activities[126] - The Treasury Department is responsible for fund management, and the Finance Department has a monitoring system to ensure compliance with financial resources rules and bank lending benchmarks[126] Operational Risk Operational risk primarily stems from negligence in internal procedure management, IT system failures, or employee misconduct. The Group manages operational risk by enhancing employee risk awareness, establishing internal procedure guidelines, implementing risk event reporting procedures, and business continuity policies - Operational risk is the risk of financial loss primarily arising from negligence or omission in internal procedure management, information technology system failures, or individual employee misconduct[130] - The Group manages operational risk by enhancing employee risk awareness, establishing internal procedure guidelines, implementing risk event reporting procedures, and business continuity policies[130] Regulatory Compliance Risk As a regulated financial group, the company is committed to complying with stringent regulatory requirements, with the legal and compliance team continuously monitoring and reviewing to mitigate regulatory risk - As a financial group operating regulated businesses, the company is committed to complying with stringent and evolving regulatory requirements[129] - The legal and compliance team continuously monitors and reviews to mitigate the Group's regulatory risk[129] Other Information Dividends The Board has declared a special dividend of 1.1 HK cents per share, payable on October 6, 2023. No interim dividend was declared for the current period - The Board has declared a special dividend of 1.1 HK cents per share, payable on October 6, 2023[131] - No interim dividend was declared for the current period (2022: nil)[131] Suspension of Share Register Closure To qualify for the special dividend, the company will suspend share register closure from September 18 to September 19, 2023 - The company will suspend share register closure from Monday, September 18, 2023, to Tuesday, September 19, 2023[132] - All share transfer documents, together with the relevant share certificates, must be lodged with the share registrar no later than 4:30 p.m. on Friday, September 15, 2023[132] Purchase, Redemption or Sale of Listed Securities For the six months ended June 30, 2023, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities - For the six months ended June 30, 2023, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities[133] Standard Code for Securities Transactions The company has adopted a code of conduct no less exacting than the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Listing Rules, extended to cover specific employees who may possess unpublished price-sensitive information. All directors confirm compliance with this code - The company has adopted a code of conduct no less exacting than the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Listing Rules[135] - This code of conduct has been extended to cover specific employees who are likely to possess unpublished price-sensitive information about the company[135] - All directors have confirmed, upon specific enquiry, that they have complied with the Model Code for the six months ended June 30, 2023[135] Corporate Governance Practices The company complies with the Corporate Governance Code in Appendix 14 to the Listing Rules, except for the Joint Chairman also serving as Chief Executive Officer, which constitutes a deviation from code provision C.2.1. The Board believes this arrangement is beneficial and effective under current operations - The company complies with the Corporate Governance Code in Appendix 14 to the Listing Rules, except for the Joint Chairman also serving as Chief Executive Officer, which constitutes a deviation from code provision C.2.1[136] - The Board believes that, given the Group's current operations, structure, size, and resources, and the Chief Executive Officer's extensive experience, maintaining the current leadership structure is highly beneficial and effective[136] Review by Audit Committee The Audit Committee has reviewed the company's unaudited condensed consolidated financial results for the six months ended June 30, 2023, and discussed accounting principles, internal controls, and financial reporting matters with management - The Audit Committee has reviewed the company's unaudited condensed consolidated financial results for the six months ended June 30, 2023[139] - The Committee discussed with the company's management the accounting principles and practices adopted by the Group, internal controls, and financial reporting matters[139] Publication of Interim Results Announcement and Interim Report This interim results announcement has been published on the websites of Hong Kong Exchanges and Clearing Limited and the company. The interim report will be dispatched to shareholders in due course - This interim results announcement has been published on the website of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the company's website (www.quamplus.com)[138](index=138&type=chunk) - The company's 2023 interim report will be dispatched to the company's shareholders in due course[138]