Financial Performance - Revenue for 2021 was HKD 197,817,000, an increase of 322.74% compared to HKD 46,794,000 in 2020[6] - Net loss for 2021 was HKD 69,411,000, an increase of 105.43% compared to HKD 33,788,000 in 2020[6] - Basic loss per share was HKD 1.49, an increase of 119.12% compared to HKD 0.68 in 2020[6] - The company reported an annual net loss of approximately HKD 69.41 million, compared to HKD 33.79 million in 2020[18] - Revenue for 2021 increased significantly to HKD 197,817 thousand, compared to HKD 46,794 thousand in 2020[191] - Gross profit for 2021 was HKD 93,756 thousand, up from HKD 43,834 thousand in 2020[191] - Operating loss for 2021 widened to HKD 37,720 thousand, compared to HKD 3,471 thousand in 2020[191] - Net loss for 2021 was HKD 69,411 thousand, compared to HKD 33,788 thousand in 2020[191] - Loss attributable to the company's owners was HKD 64,419 thousand in 2021, up from HKD 27,950 thousand in 2020[191] - Basic and diluted loss per share for 2021 was HKD 1.49, compared to HKD 0.68 in 2020[191] - Other comprehensive income for 2021 included a fair value gain of HKD 2,102 thousand on financial assets[193] - Exchange differences on translating foreign operations contributed HKD 9,056 thousand to other comprehensive income in 2021[193] - Total comprehensive loss for 2021 was HKD 58,253 thousand, compared to HKD 1,575 thousand in 2020[193] - Comprehensive loss attributable to the company's owners was HKD 64,216 thousand in 2021, compared to a comprehensive income of HKD 3,872 thousand in 2020[193] Assets and Liabilities - Total assets decreased by 7.38% to HKD 733,573,000 in 2021 from HKD 792,037,000 in 2020[6] - Total liabilities increased by 18.27% to HKD 2,285,650,000 in 2021 from HKD 1,932,582,000 in 2020[6] - Equity attributable to owners of the company increased by 36.08% to HKD 1,552,077,000 in 2021 from HKD 1,140,545,000 in 2020[6] - Total assets were approximately HKD 2.29 billion, with total liabilities of HKD 1.55 billion as of December 31, 2021[19] - Cash and bank balances decreased to HKD 6.04 million from HKD 43.46 million in 2020[19] - The capital-to-debt ratio increased to 65.00% from 53.00% in 2020[21] - Total assets increased to HKD 2,186,668 thousand in 2021 from HKD 1,854,551 thousand in 2020[194] - Investment properties grew to HKD 925,677 thousand in 2021 from HKD 848,373 thousand in 2020[194] - Current assets rose to HKD 1,158,939 thousand in 2021 compared to HKD 889,869 thousand in 2020[194] - Net current assets improved to HKD 1,059,957 thousand in 2021 from HKD 811,838 thousand in 2020[194] - Non-current liabilities increased to HKD 1,453,095 thousand in 2021 from HKD 1,062,514 thousand in 2020[196] - Net assets decreased to HKD 733,573 thousand in 2021 from HKD 792,037 thousand in 2020[197] - Equity attributable to the company's owners declined to HKD 706,423 thousand in 2021 from HKD 770,639 thousand in 2020[197] - Non-controlling interests increased to HKD 27,150 thousand in 2021 from HKD 21,398 thousand in 2020[197] Corporate Governance - The company's chairman also serves as the CEO, deviating from corporate governance code A.2.1[33] - The board of directors consists of two executive directors and six independent non-executive directors[37] - The company has complied with the listing rules regarding the composition of the board, including having at least three independent non-executive directors, one of whom possesses appropriate professional qualifications or accounting/financial management expertise[38] - All directors participated in continuous professional development training during the fiscal year ending December 31, 2021, and provided training records to the company[40] - The company held four board meetings and one annual general meeting in 2021, ensuring effective communication among directors[42] - The attendance rate for board meetings in 2021 was 100% for four directors, while one director attended none of the meetings[43] - The roles of chairman and CEO are currently held by the same individual, Han Junran, due to the company's relatively simple business operations[44] - Two directors, Liang Guihua and Zhang Jing, will retire by rotation at the 2022 annual general meeting and are eligible for re-election[46] - The audit committee, composed of three independent non-executive directors, held four meetings in 2021 to review financial reports and monitor internal controls[48][51] - The audit committee is responsible for recommending the appointment, reappointment, and removal of external auditors, as well as reviewing interim and annual reports[49] - The company has established multiple board committees, including audit, remuneration, and nomination committees, to oversee various aspects of its operations[47] - The company's governance structure ensures a strong level of independence, with two executive directors and six independent non-executive directors[44] - The company's audit committee reviewed the group's annual performance for the year ended December 31, 2020, and the interim performance for the six months ended June 30, 2021[52] - The audit committee discussed the group's reporting and accounting standards and policies with management during the preparation of the 2021 interim and annual financial statements[52] - The audit committee reviewed and discussed financial reporting matters with the external auditor[52] - The audit committee recommended the reappointment of the auditor for shareholder approval[52] - The audit committee reviewed the group's internal control procedures[52] - The remuneration committee held one meeting during the year ended December 31, 2021, to review the directors' remuneration and approve the proposed remuneration of a senior management member[56] - The nomination committee reviewed the board's composition and the retirement and re-election of directors during the year ended December 31, 2021[60] - The nomination committee held one meeting during the year, with all members attending[60] - The company paid HK$880,000 in audit fees to the external auditor for the year ended December 31, 2021[62] - The board conducted an annual review of the effectiveness of the group's internal control system, covering financial, operational, compliance, and risk management controls[64] Environmental, Social, and Governance (ESG) - The company's main air pollutants are emitted by company vehicles, with a goal to maintain or reduce emissions below this year's level in the next year[82] - Gasoline consumption in 2021 was 3,589.46 liters, compared to 4,401.31 liters in 2020[83] - The company has implemented measures to improve indoor air quality, including ensuring proper ventilation and regular maintenance of air systems[83] - The company's business operations do not involve water consumption or packaging materials, and emissions are primarily from electricity usage[81] - The company has transitioned most board and management meetings to online formats to reduce carbon emissions[81] - The company's ESG report covers operations in Hong Kong and five commercial offices in China, including Luoyang, Changyang, Changliu, Changying, and Zhuhai Tengshun[73] - The company adheres to the Hong Kong Stock Exchange's ESG reporting guidelines, emphasizing materiality, quantification, balance, and consistency[72] - The company's board oversees ESG-related matters, including policies, measures, performance, and risks, with regular reviews[75] - The company maintains communication with stakeholders through meetings, emails, phone calls, interviews, and its website[76] - The company's ESG report highlights key environmental and social issues, including air pollution, energy use, labor practices, and anti-corruption measures[80] - Nitrogen oxide (NOx) emissions decreased from 22.9 kg in 2020 to 6.07 kg in 2021, a reduction of 73.5%[84] - Sulfur oxide (SOx) emissions increased from 0.065 kg in 2020 to 0.11 kg in 2021, a rise of 69.2%[84] - Total greenhouse gas emissions increased from 28.1 tons of CO2 equivalent in 2020 to 184.2 tons in 2021, primarily due to the inclusion of Chinese business offices in the reporting scope[87] - Scope 2 indirect emissions, mainly from electricity consumption, accounted for 89% of total greenhouse gas emissions[85] - Total energy consumption increased from 76,418.7 kWh equivalent in 2020 to 349,527.0 kWh equivalent in 2021, driven by the expanded reporting scope[90] - The company aims to maintain or reduce greenhouse gas emissions and energy usage below current levels in the next year[85][90] - The company has 69 employees as of December 31, 2021, with 50 based in China and 19 in Hong Kong[102] - The company has implemented measures to reduce paper waste, including using electronic communication and recycled paper[89] - The company has developed emergency plans to address physical risks from extreme weather events such as typhoons and heavy rain[98] - The company is preparing for potential tightening of carbon emission regulations and is promoting carbon reduction among employees and stakeholders[99] - The overall employee turnover rate is 18%, with 13 employees leaving, including 23% male and 9% female turnover rates[104] - The company has zero work-related fatalities and zero lost workdays due to injuries in 2021, maintaining a strong safety record[108][109] - Total greenhouse gas emissions increased to 184.2 tons of CO2 equivalent in 2021, up from 28.1 tons in 2020, with Scope 2 indirect emissions accounting for 164.7 tons[119] - Total energy consumption rose to 349,527 kWh equivalent in 2021, a significant increase from 76,418.7 kWh in 2020, with electricity usage accounting for 277,140.5 kWh[119] - 10.14% of employees received training in 2021, with an average training duration of 0.06 hours, and 71.43% of trained employees were general staff[111] - The company has no reported cases of child labor, forced labor, or violations of anti-corruption laws in 2021[113][117] - The company implemented strict COVID-19 protection measures, including disinfection of public areas and providing masks and sanitizers to all employees[106] - The company maintains a green procurement policy and evaluates suppliers for environmental and social risks in the supply chain[114] - The company has no reported product or service-related complaints and maintains strict data privacy protection measures[115][116] - The company is planning to enhance community engagement and increase transparency through regular updates on its website[118] - Total number of employees in 2021 was 69, with an overall employee turnover rate of 18%[121] - Male employees had a turnover rate of 23%, while female employees had a turnover rate of 9%[121] - Employees aged 51 and above had the highest turnover rate at 42%[121] - The injury rate per 1,000 employees was 14.5%[121] - 10.14% of employees received training, with an average training duration of 0.06 hours[121] - Male employees accounted for 57.14% of trained employees, while female employees accounted for 42.86%[121] - General staff received the highest percentage of training at 71.43%, with an average training duration of 0.13 hours[121] Shareholder and Ownership Structure - Chairman and Executive Director Han Junran holds 43.60% of the company's shares through Junyi Investment Limited, which he wholly owns[145] - Junyi Investment Limited, wholly owned by Executive Director Han Junran, holds 1,886,662,752 shares, representing 43.60% of the issued share capital[145] - Qilu International Funds SPC holds a mortgage interest in 2,277,662,752 shares, representing 52.64% of the issued share capital[153] - Zhang Xiaomu, a beneficial owner, holds 712,328,767 shares, representing 16.46% of the issued share capital[153] - The company's share option plan, adopted on June 14, 2002, expired on June 14, 2012[148] - No arrangements were made during the year for directors to benefit from acquiring shares or debentures of the company or any other corporate body[150] - No other significant contracts were entered into by the company or its subsidiaries with the controlling shareholders of the company[151] - No other individuals, apart from the directors or the CEO, held interests or short positions in the company's shares as of December 31, 2021[157] - The company conducted continuous connected transactions with its subsidiaries, including office and employee accommodation leases, which were exempt from independent shareholder approval under Listing Rule 14A.34[158] - The total annual cap for the new lease agreements was within the limits specified under Listing Rule 14A.34, and these transactions were subject to reporting, announcement, and annual review requirements but exempt from independent shareholder approval[159] - Independent non-executive directors confirmed that the continuous connected transactions were conducted in the ordinary course of business, on normal commercial terms, and were fair and reasonable, aligning with the overall interests of the shareholders[160] - The company's auditors reviewed the continuous connected transactions and confirmed that they were approved by the board, conducted under relevant agreements, and did not exceed the annual cap[161] Operational and Strategic Updates - The company expects rental income from its subsidiary Guangdong Changliu Investment Co., Ltd. to remain stable in the coming year[10] - The company plans to continue implementing its "Everyday, Life, New City" development theme in 2022, focusing on the Greater Bay Area[14] - The company acquired a 70% stake in China Goal, Inc. in 2019, which licenses property management intellectual property in China[12] - The company is awaiting official documents for the Luoyang property to apply for construction planning and engineering permits[13] - Rental and related management service revenue was approximately HKD 61.37 million, while retail and related revenue was HKD 136.45 million, compared to HKD 46.79 million and zero in 2020[18] - The company employed approximately 69 employees in Hong Kong and China, down from 74 in 2020[25] - Net proceeds from the subscription of new shares amounted to approximately HKD 51.5 million, fully utilized for general working capital and potential acquisitions[29][30] - The company did not recommend any dividend for the year ended December 31, 2021[24] - The company's accumulated losses amounted to HKD 516,203 thousand[129] - The company did not recommend any dividend distribution for the year ended December 31, 2021[133] - The company recorded a revenue of approximately HKD 197,817,000 and a post-tax loss of approximately HKD 69,411,000 for the year[135] - The distributable reserves of the company as of December 31, 2021, were HKD 385,318,000 (2020: HKD 385,318,000)[138] - The company had no property development projects during the year, resulting in no payments made or payable to suppliers for procurement[165] - The company had no major customers during the review period[166] - The company's financial statements for the year ended December 31, 2021, were audited by Chang Ching (Hong Kong) CPA Limited, which subsequently resigned, and a resolution to reappoint them will be proposed at the annual general meeting[168] - The independent auditor's report confirmed that the consolidated financial statements for 2021 were prepared in accordance with Hong Kong Financial Reporting Standards and fairly represented the company's financial position and performance[170] - Key audit matters included the fair value of investment properties, specifically Guangzhou Property 1, which was valued at approximately HKD 783,360,000 using the income approach and external evidence such as rental market values[172][174] - The company's investment properties, including Guangzhou Property 1, were subject to detailed valuation procedures, including the engagement of independent valuation experts and the assessment of key assumptions and methodologies[174] - The impairment assessment of investment properties in Luoyang shows a carrying amount of approximately HKD 925,677,000, with a portion of HKD 75,621,000 related to the Luoyang property[175] - The Luoyang property's construction did not comply with the land use contract, but the risk of penalties or loss of land use rights is considered minimal[175] - The recoverable amount of the Luoyang property is determined using the direct comparison method based on observable market transactions, with no significant adjustments made[175] - The Zhuhai property, with a cost of approximately HKD 478,679,000, is assessed for net realizable value using the direct comparison method, with no significant adjustments[179] - The company's deposits and other receivables as of December 31, 2021, amount to approximately HKD 169,279,000, with impairment assessed based on credit risk[181] - The company's management uses judgment and estimates to assess the recoverability of deposits and other receivables, with significant judgment required[181] - The company's financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance[184] - The company's directors are responsible for ensuring the financial statements are free from material misstatement due to fraud or error[184] - The audit committee assists the company's directors in overseeing the financial reporting process[185]
新城市建设发展(00456) - 2021 - 年度财报