(Incorporated in the Cayman Islands with limited liability) Stock Code : 833
INTERIM REPORT
2020
CONTENTS
Interim Condensed Consolidated Statement of Profit or Loss | 2 |
Interim Condensed Consolidated Statement of Comprehensive Income | 4 |
Interim Condensed Consolidated Statement of Financial Position | 5 |
Interim Condensed Consolidated Statement of Changes in Equity | 7 |
Interim Condensed Consolidated Statement of Cash Flows | 9 |
Notes to the Interim Condensed Consolidated Financial Statements | 11 |
Interim Dividend | 35 |
Closure of Register of Members | 35 |
Management Discussion and Analysis | 36 |
Share Option Scheme | 45 |
Directors' and Chief Executives' Interests | 46 |
Substantial Shareholders' Interests | 49 |
Corporate Governance | 51 |
Supplementary Information | 53 |
Corporate Information | 54 |
INTERIM REPORT 2020 | 1 |
INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the six months ended 30 June 2020
For the six months ended 30 June | |||||
Notes | 2020 | 2019 | |||
(Unaudited) | (Unaudited) | ||||
HK$'000 | HK$'000 | ||||
CONTINUING OPERATIONS | |||||
REVENUE | 5 | 722,812 | 635,728 | ||
Cost of sales | (575,530) | (535,424) | |||
Gross profit | 147,282 | 100,304 | |||
Distribution costs | (13,653) | (6,958) | |||
Administrative expenses | (42,733) | (46,948) | |||
Other operating income/(expenses), net | 3,783 | (3,309) | |||
Operating profit | 94,679 | 43,089 | |||
Impairment losses on financial assets | (19,717) | (113,550) | |||
Written-off of long term receivables | (5,213) | - | |||
Share of profits and losses of associates | (2,052) | (3,773) | |||
Finance income | 1,690 | 2,187 | |||
Finance costs | 7 | (8,021) | (9,207) | ||
PROFIT/(LOSS) BEFORE TAX FROM | |||||
CONTINUING OPERATIONS | 6 | 61,366 | (81,254) | ||
Income tax expense | 8 | (17,273) | (9,637) | ||
PROFIT/(LOSS) FOR THE PERIOD | |||||
FROM CONTINUING OPERATIONS | 44,093 | (90,891) | |||
DISCONTINUED OPERATION | |||||
Profit for the period from a discontinued | |||||
operation | 9 | - | 73,436 | ||
PROFIT/(LOSS) FOR THE PERIOD | 44,093 | (17,455) | |||
Attributable to: | |||||
Owners of the parent | 42,325 | (16,805) | |||
Non-controlling interests | 1,768 | (650) | |||
44,093 | (17,455) | ||||
2 ALLTRONICS HOLDINGS LIMITED
INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the six months ended 30 June 2020
For the six months ended 30 June | |||
Notes | 2020 | 2019 | |
(Unaudited) | (Unaudited) | ||
EARNINGS/(LOSS) PER SHARE | |||
ATTRIBUTABLE TO ORDINARY | |||
EQUITY HOLDERS OF THE PARENT | 11 | ||
Basic | |||
- For profit/(loss) for the period | HK4.47 cents | HK(1.78) cents | |
- For profit/(loss) from continuing | |||
operations | HK4.47 cents | HK(9.54) cents | |
Diluted | |||
- For profit/(loss) for the period | HK4.47 cents | HK(1.78) cents | |
- For profit/(loss) from continuing | |||
operations | HK4.47 cents | HK(9.54) cents | |
INTERIM REPORT 2020 | 3 |
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2020
For the six months ended 30 June | ||||
2020 | 2019 | |||
(Unaudited) | (Unaudited) | |||
HK$'000 | HK$'000 | |||
PROFIT/(LOSS) FOR THE PERIOD | 44,093 | (17,455) | ||
OTHER COMPREHENSIVE INCOME/(LOSS) | ||||
Other comprehensive income/(loss) that may | ||||
be reclassified to profit or loss | ||||
in subsequent periods: | ||||
Exchange differences on translation of | ||||
foreign operations | 6,034 | 4,539 | ||
Share of other comprehensive loss of | ||||
an associate | (682) | - | ||
Net other comprehensive income that may | ||||
be reclassified to profit or loss | ||||
in subsequent periods | 5,352 | 4,539 | ||
Other comprehensive income/(loss) that will | ||||
not be reclassified to profit or loss | ||||
in subsequent periods: | ||||
Equity investment designated at fair value | ||||
through other comprehensive income | (655) | - | ||
TOTAL OTHER COMPREHENSIVE INCOME | ||||
FOR THE PERIOD, NET OF TAX | 4,697 | 4,539 | ||
TOTAL COMPREHENSIVE INCOME/(LOSS) | ||||
FOR THE PERIOD | 48,790 | (12,916) | ||
Attributable to: | ||||
Owners of the parent | 46,895 | (12,922) | ||
Non-controlling interests | 1,895 | 6 | ||
48,790 | (12,916) | |||
4 ALLTRONICS HOLDINGS LIMITED
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2020
30 June | 31 December | ||
Notes | 2020 | 2019 | |
(Unaudited) | (Audited) | ||
HK$'000 | HK$'000 | ||
NON-CURRENT ASSETS | |||
Property, plant and equipment | 12 | 216,895 | 224,026 |
Right-of-use assets | 73,098 | 19,795 | |
Goodwill | 13 | 11,672 | 11,672 |
Investments in associates | 37,326 | 40,060 | |
Prepayments, other receivables and | |||
other assets | 2,543 | 2,058 | |
Long term receivables | 14 | - | 624 |
Equity investment designated at fair | |||
value through other comprehensive | |||
income | 1,144 | 1,831 | |
Deferred tax assets | 9,526 | 9,515 | |
Total non-current assets | 352,204 | 309,581 | |
CURRENT ASSETS | |||
Inventories | 15 | 255,747 | 276,890 |
Trade receivables | 16 | 303,827 | 210,364 |
Long term receivables - current | |||
portion | 14 | 14,272 | 20,253 |
Prepayments, other receivables and | |||
other assets | 96,670 | 52,389 | |
Pledged deposits | 17 | 4,794 | 5,259 |
Cash and cash equivalents | 17 | 184,267 | 61,381 |
Total current assets | 859,577 | 626,536 | |
INTERIM REPORT 2020 | 5 |
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2020
30 June | 31 December | ||
Notes | 2020 | 2019 | |
(Unaudited) | (Audited) | ||
HK$'000 | HK$'000 | ||
CURRENT LIABILITIES | |||
Trade and bills payables | 18 | 307,204 | 232,331 |
Lease liabilities | 16,882 | 9,679 | |
Other payables and accruals | 151,201 | 73,672 | |
Deferred revenue | 946 | 1,463 | |
Tax payable | 28,266 | 23,029 | |
Interest-bearing bank and other | |||
borrowings | 19 | 270,041 | 254,199 |
Total current liabilities | 774,540 | 594,373 | |
NET CURRENT ASSETS | 85,037 | 32,163 | |
TOTAL ASSETS LESS CURRENT | |||
LIABILITIES | 437,241 | 341,744 | |
NON-CURRENT LIABILITIES | |||
Lease liabilities | 55,976 | 8,804 | |
Deferred revenue | 589 | 958 | |
Deferred tax liabilities | 2,741 | 2,837 | |
Total non-current liabilities | 59,306 | 12,599 | |
Net assets | 377,935 | 329,145 | |
EQUITY | |||
Equity attributable to owners of | |||
the parent | |||
Share capital | 20 | 9,461 | 9,461 |
Reserves | 358,569 | 311,674 | |
368,030 | 321,135 | ||
Non-controlling interests | 9,905 | 8,010 | |
Total equity | 377,935 | 329,145 | |
6 ALLTRONICS HOLDINGS LIMITED
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2020
Attributable to owners of the parent | |||||||||||||
Fair value | |||||||||||||
reserve of | |||||||||||||
financial | |||||||||||||
assets at | |||||||||||||
fair value | |||||||||||||
through | |||||||||||||
other | Capital | Non- | |||||||||||
Share | Share | Capital | comprehensive | Statutory | Exchange | redemption | Retained | Proposed | controlling | Total | |||
capital | premium | reserve | income | reserve | reserve | reserve | profits | dividend | Total | interests | equity | ||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | ||
At 1 January 2020 | 9,461 | 277,388 | 5,799 | (411) | 25,622 | (17,788) | 42 | 21,022 | - | 321,135 | 8,010 | 329,145 | |
Profit for the period | - | - | - | - | - | - | - | 42,325 | - | 42,325 | 1,768 | 44,093 | |
Other comprehensive income | |||||||||||||
for the period: | |||||||||||||
Changes in fair value of | |||||||||||||
an equity investment | |||||||||||||
at fair value through | |||||||||||||
other comprehensive | |||||||||||||
income, net of tax | - | - | - | (655) | - | - | - | - | - | (655) | - | (655) | |
Exchange differences on | |||||||||||||
translation of foreign | |||||||||||||
operations | - | - | - | - | - | 5,907 | - | - | - | 5,907 | 127 | 6,034 | |
Share of other comprehensive | |||||||||||||
loss of an associate | - | - | - | - | - | (682) | - | - | - | (682) | - | (682) | |
Total comprehensive | |||||||||||||
income/(loss) for | |||||||||||||
the period | - | - | - | (655) | - | 5,225 | - | 42,325 | - | 46,895 | 1,895 | 48,790 | |
Proposed interim dividend | |||||||||||||
for the period | - | - | - | - | - | - | - | (14,192) | 14,192 | - | - | - | |
At 30 June 2020 | 9,461 | 277,388 | 5,799 | (1,066) | 25,622 | (12,563) | 42 | 49,155 | 14,192 | 368,030 | 9,905 | 377,935 | |
INTERIM REPORT 2020 | 7 |
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2020
For the six months ended 30 June 2019
Attributable to owners of the Company | ||||||||||
Capital | Non- | |||||||||
Share | Share | Capital | Statutory | Exchange | redemption | Retained | controlling | Total | ||
capital | premium | reserve | reserve | reserve | reserve | profits | Total | interests | equity | |
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | |
At 1 January 2019 | 9,461 | 277,388 | 5,799 | 24,567 | (27,722) | 42 | 284,117 | 573,652 | 6,128 | 579,780 |
Loss for the period | - | - | - | - | - | - | (16,805) | (16,805) | (650) | (17,455) |
Other comprehensive income for the period: | ||||||||||
Exchange differences related to foreign operations | - | - | - | - | 3,883 | - | - | 3,883 | 656 | 4,539 |
Total comprehensive (loss)/income for the period | ||||||||||
- | - | - | - | 3,883 | - | (16,805) | (12,922) | 6 | (12,916) | |
Disposal of subsidiaries | - | - | - | - | 11,438 | - | - | 11,438 | - | 11,438 |
At 30 June 2019 | ||||||||||
9,461 | 277,388 | 5,799 | 24,567 | (12,401) | 42 | 267,312 | 572,168 | 6,134 | 578,302 | |
8 ALLTRONICS HOLDINGS LIMITED
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2020
For the six months ended 30 June | ||||
Notes | 2020 | 2019 | ||
(Unaudited) | (Unaudited) | |||
HK$'000 | HK$'000 | |||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Profit/(Loss) before tax | ||||
From continuing operations | 61,366 | (81,254) | ||
From a discontinued operation | 9 | - | 82,247 | |
Adjustments for: | ||||
Amortisation of non-current prepayments | 6 | 634 | 1,919 | |
Depreciation of right-of-use assets | 6 | 11,271 | 9,950 | |
Finance costs | 7,9 | 8,021 | 45,358 | |
Finance income | 6 | (1,690) | (2,187) | |
Share of profits and losses of associates | 2,052 | 3,773 | ||
Gain on disposal of subsidiaries | 9 | - | (44,897) | |
Impairment of consideration receivable | 6 | - | 113,740 | |
Impairment of amounts due from associates | 6 | 11,515 | - | |
Written-off of long term receivables | 6 | 5,213 | - | |
Depreciation of property, plant and equipment | 6,12 | 10,208 | 10,199 | |
Gain on changes in fair value of investment | ||||
properties | 9 | - | (8,601) | |
(Written-back)/Written-off of inventories to net | ||||
realizable value | 6 | (7,167) | 55 | |
101,423 | 130,302 | |||
Decrease in inventories | 28,310 | 17,577 | ||
(Increase)/decrease in trade receivables | (93,463) | 19,158 | ||
Decrease/(increase) in long term receivables | 768 | (1,957) | ||
(Increase)/decrease in prepayments, other | ||||
receivables and other assets | (57,988) | (139) | ||
Decrease in deferred revenue | (886) | (1,039) | ||
Increase/(decrease) in trade and bills payables | 74,873 | (25,489) | ||
Increase in other payables and accruals | 85,320 | 14,704 | ||
Decrease in trust receipt loans | (147) | (1,339) | ||
Cash generated from operations | 138,210 | 151,778 | ||
Interest received | 1,690 | 2,187 | ||
Interest paid | (8,021) | (44,664) | ||
Tax paid | (11,070) | (7,920) | ||
Net cash flows from operating activities | 120,809 | 101,381 | ||
INTERIM REPORT 2020 | 9 |
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2020
For the six months ended 30 June | ||||
Notes | 2020 | 2019 | ||
(Unaudited) | (Unaudited) | |||
HK$'000 | HK$'000 | |||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchases of items of property, | ||||
plant and equipment | 12 | (3,314) | (4,394) | |
Proceeds from disposal of items of property, | ||||
plant and equipment | - | 190 | ||
Disposal of subsidiaries | 9 | - | (26) | |
Decrease in long term receivables | 624 | 3,571 | ||
Net cash flows used in investing activities | (2,690) | (659) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Capital element of finance lease payments | - | (209) | ||
Principal and interest elements of lease payments | (11,294) | (10,255) | ||
New bank and other borrowings | 64,052 | 15,188 | ||
Decrease in pledged deposits | 465 | 305 | ||
Repayment of bank and other borrowings | (38,829) | (106,429) | ||
Net cash flows from/(used in) financing activities | 14,394 | (101,400) | ||
NET INCREASE/(DECREASE) IN CASH AND CASH | ||||
EQUIVALENTS | 132,513 | (678) | ||
Cash and cash equivalents at beginning of period | 37,317 | 37,937 | ||
Effect of foreign exchange rate changes, net | (393) | 7,707 | ||
CASH AND CASH EQUIVALENTS AT END OF | ||||
PERIOD | 169,437 | 44,966 | ||
ANALYSIS OF BALANCES OF CASH AND CASH | ||||
EQUIVALENTS | ||||
Cash and cash equivalents as stated in the | ||||
statement of financial position | 17 | 184,267 | 67,992 | |
Bank overdrafts | 19 | (14,830) | (23,026) | |
Cash and cash equivalents as stated in the | ||||
statement of cash flows | 169,437 | 44,966 | ||
10 ALLTRONICS HOLDINGS LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. CORPORATE AND GROUP INFORMATION
Alltronics Holdings Limited (the "Company") was incorporated in the Cayman Islands on 24 July 2003 as an exempted company with limited liability under the Companies Law, Chapter 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands.
The Company is an investment holding company. The principal activities of the Company and its subsidiaries (together the "Group") are the manufacturing and trading of electronic products, plastic moulds, plastic and other components for electronic products, the trading of biodiesel products and provision of energy efficient gas stoves, and the provision of energy saving business solutions. The address of its registered office is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands.
The Company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited (the "Stock Exchange") since 15 July 2005.
The Group is controlled by Profit International Holdings Limited (incorporated in the British Virgin Islands), which owned 46.48% of the Company's issued shares as at 30 June 2020 (At 31 December 2019: 46.48%). In the opinion of the directors, the Company's ultimate holding company is Profit International Holdings Limited and the ultimate controlling party is Mr. Lam Yin Kee.
2. BASIS OF PREPARATION
The interim condensed consolidated financial information of the Group for the six months ended 30 June 2020 has been prepared in accordance with Hong Kong Accounting Standard ("HKAS") 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Rules Governing the Listing of Securities ("Listing Rules") on the Stock Exchange.
The interim condensed consolidated financial information does not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual consolidated financial statements for the year ended 31 December 2019, which have been prepared in accordance with Hong Kong Financial Reporting Standards ("HKFRSs").
INTERIM REPORT 2020 | 11 |
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
The accounting policies adopted in the preparation of the interim condensed consolidated financial information are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2019, except for the adoption of new and amended standards and interpretations effective as of 1 January 2020 noted below. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
(a) New and amended standards adopted by the Group
Amendments to HKFRS 3 | Definition of a Business |
Amendments to HKFRS 9, | Interest Rate Benchmark Reform |
HKAS 39 and HKFRS 7 | |
Amendments to HKAS 1 and | Definition of Material |
HKAS 8 |
The adoption of these new and amended standards has had no material impact on the Group's financial position and performance for the current and prior periods and/or on the disclosures set out in the interim condensed consolidated financial information.
(b) Impact of standards issued but not yet applied by the Group
Certain new accounting standards and interpretations have been published that are not mandatory for this reporting period and have not been early adopted by the Group. These standards are not expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions.
12 ALLTRONICS HOLDINGS LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4. OPERATING SEGMENT INFORMATION
Management has determined the operating segments based on the reports reviewed by the executive directors ("Directors") of the company that are used to make strategic decisions and assess performance.
For the six months ended 30 June 2020, the Group's operating businesses are structured and managed separately according to the nature of their operations and the products and services they provide.
The Group considers the business from both a geographic and product perspective. From a product perspective, management assesses the performance of:
- the electronic products segment - the manufacturing and trading of electronic products, plastic moulds, plastic and other components for electronic products;
- the biodiesel products segment - the trading of biodiesel products and provision of energy efficient gas stoves in Hong Kong; and
- the energy saving business segment - the provision of energy saving business solutions to customers.
Revenue is allocated based on the places/countries in which the customers are located.
Management assesses the performance of the operating segments based on a measure of operating profit/loss (before interest and tax and unallocated operating costs). Other information provided is measured in a manner consistent with that in the interim condensed consolidated financial statements.
All sales between segments are eliminated on consolidation. All segment revenue reported is derived from external parties. The revenue from external parties reported to the executive Directors is measured in a manner consistent with that in the interim condensed consolidated financial statements.
INTERIM REPORT 2020 | 13 |
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4. OPERATING SEGMENT INFORMATION (Continued) Six months ended 30 June 2020 (Unaudited)
Energy | ||||||
Electronic | Biodiesel | saving | ||||
products | products | business | Total | |||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | |||
Segment revenue (note 5): | ||||||
- Sales of goods | 720,999 | 993 | - | 721,992 | ||
- Revenue from services | - | - | 820 | 820 | ||
Total revenue from | ||||||
continuing operations | 720,999 | 993 | 820 | 722,812 | ||
Six months ended 30 June 2019 (Unaudited)
Energy | |||||
Electronic | Biodiesel | saving | |||
products | products | business | Total | ||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | ||
Segment revenue (note 5): | |||||
- Sales of goods | 632,664 | 1,957 | 69 | 634,690 | |
- Revenue from services | - | - | 1,038 | 1,038 | |
Total revenue from continuing | |||||
operations | 632,664 | 1,957 | 1,107 | 635,728 | |
14 ALLTRONICS HOLDINGS LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4. OPERATING SEGMENT INFORMATION (Continued) Geographical information
Revenue from external customers:
For the six months ended 30 June | |||
2020 | 2019 | ||
(Unaudited) | (Unaudited) | ||
HK$'000 | HK$'000 | ||
The United States | 488,827 | 319,389 | |
Hong Kong | 87,213 | 136,012 | |
Europe | 80,874 | 89,644 | |
Mainland China | 49,725 | 63,987 | |
Other countries | 16,173 | 26,696 | |
722,812 | 635,728 | ||
The revenue information above is based on the locations of the customers.
For the six months ended 30 June 2020, revenues of approximately HK$256,713,000 (30 June 2019: HK$257,185,000) were derived from a single external customer. These revenues were attributable to the electronic products segment.
5. REVENUE
An analysis of revenue is as follows:
For the six months ended 30 June | |||
2020 | 2019 | ||
(Unaudited) | (Unaudited) | ||
HK$'000 | HK$'000 | ||
Sale of goods | 721,992 | 634,690 | |
Maintenance services | 820 | 1,038 | |
722,812 | 635,728 | ||
INTERIM REPORT 2020 | 15 |
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5. REVENUE (Continued)
Disaggregated revenue information for revenue from contracts with customers
For the six months ended 30 June 2020 (Unaudited)
Energy | ||||||
Electronic | Biodiesel | saving | ||||
Segments | products | products | business | Total | ||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | |||
Goods transferred at | ||||||
a point in time | 720,999 | 993 | - | 721,992 | ||
Services transferred over time | - | - | 820 | 820 | ||
Total revenue from | ||||||
contracts with customers | 720,999 | 993 | 820 | 722,812 | ||
For the six months ended 30 June 2019 (Unaudited)
Energy | ||||
Electronic | Biodiesel | saving | ||
Segments | products | products | business | Total |
HK$'000 | HK$'000 | HK$'000 | HK$'000 | |
Goods transferred at | ||||
a point in time | 632,664 | 1,957 | 69 | 634,690 |
Services transferred over time | - | - | 1,038 | 1,038 |
Total revenue from contracts | ||||
with customers | 632,664 | 1,957 | 1,107 | 635,728 |
16 ALLTRONICS HOLDINGS LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
6. PROFIT/(LOSS) BEFORE TAX
The Group's profit/(loss) before tax from continuing operations is arrived at after charging/(crediting):
For the six months ended 30 June | ||||
Notes | 2020 | 2019 | ||
(Unaudited) | (Unaudited) | |||
HK$'000 | HK$'000 | |||
Cost of inventories sold and | ||||
services provided | 427,243 | 360,162 | ||
Auditors' remuneration | 1,030 | 1,042 | ||
Depreciation of property, | ||||
plant and equipment | 12 | 10,208 | 10,199 | |
Depreciation of right-of-use assets | 11,271 | 9,950 | ||
Amortisation of non-current | ||||
prepayments | 634 | 1,919 | ||
Impairment of consideration | ||||
receivable* | - | 113,740 | ||
Impairment/(Reversal of | ||||
impairment) of trade receivables | 8,202 | (190) | ||
Impairment of amounts due from | ||||
associates | 11,515 | - | ||
Written-off of long term | ||||
receivables | 5,213 | - | ||
(Written-back)/written-off of | ||||
inventories to net realisable value | 15 | (7,167) | 55 | |
Wages and salaries (including | ||||
directors' emoluments) | 111,306 | 127,816 | ||
Foreign exchange differences, net | (2,584) | 5,428 | ||
Interest income from long term | ||||
receivables | (1,115) | (1,133) | ||
Interest income from bank deposits | (67) | (76) | ||
Other interest income | (508) | (978) | ||
- Impairment loss was recognised due to the consideration receivable was failed to be paid within the agreed settlement date.
INTERIM REPORT 2020 | 17 |
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7. FINANCE COSTS
An analysis of finance costs from continuing operations is as follows:
For the six months ended 30 June | |||
2020 | 2019 | ||
(Unaudited) | (Unaudited) | ||
HK$'000 | HK$'000 | ||
Interest on bank loans and bank overdrafts | 6,615 | 8,007 | |
Interest element of finance leases | - | 6 | |
Interest element of lease liabilities | 1,318 | 694 | |
Interest on other loans | 88 | 500 | |
Total finance costs | 8,021 | 9,207 | |
8. INCOME TAX EXPENSE
Hong Kong profits tax has been provided at the rate of 16.5% (2019: 16.5%) on the estimated assessable profits arising in Hong Kong during the period. Taxes on profits assessable outside Hong Kong have been calculated at the rates of tax prevailing in the jurisdictions in which the Group operates. Subsidiaries in Mainland China are subject to income tax rate of 25% (2019: 25%) on the taxable income generated in Mainland China.
For the six months ended 30 June | ||||
2020 | 2019 | |||
(Unaudited) | (Unaudited) | |||
HK$'000 | HK$'000 | |||
Current-Hong Kong | 7,847 | 4,315 | ||
Current-Mainland China | ||||
Charge for the period | 9,574 | 6,284 | ||
(Over)/under-provision in prior periods | (41) | 87 | ||
Deferred | (107) | (1,049) | ||
Total tax charge for the period | ||||
from continuing operations | 17,273 | 9,637 | ||
18 ALLTRONICS HOLDINGS LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
9. DISCONTINUED OPERATION
On 20 December 2018, the Group entered into a sale and purchase agreement for the disposal (the "Disposal") of the entire issued share capital of Bonroy Limited (together with its subsidiaries, the "Bonroy Group"), being an indirect wholly- owned subsidiary of the Company which carried out all of the Group's investment properties business, at a consideration of RMB100 million. The investment properties business segment is reported as a discontinued operation in the Group's consolidated financial statements.
On 20 March 2019, an extraordinary general meeting of the Company was held and the resolution for the Disposal was duly approved by the shareholders of the Company.
The Disposal was completed on 15 April 2019 (the "Completion Date") for HK$116,836,000 (equivalent to RMB100,000,000), resulting in a pre-tax gain of HK$44,897,000.
The results of the Bonroy Group for the six months ended 30 June 2019 are presented below:
For the six months ended 30 June | ||||
2020 | 2019* | |||
(Unaudited) | (Unaudited) | |||
HK$'000 | HK$'000 | |||
Revenue | - | 71,345 | ||
Gain on changes in fair value of | - | |||
investment properties | 8,601 | |||
Expenses | - | (6,445) | ||
Finance costs | - | (36,151) | ||
Profit from the discontinued operation | - | 37,350 | ||
Gain recognised on disposal of the | - | |||
discontinued operation | 44,897 | |||
Profit before tax from the | - | |||
discontinued operation | 82,247 | |||
Income tax: | - | |||
Related to pre-tax profit | (2,993) | |||
Related to gain recognised on | - | |||
disposal of the discontinued operation | (5,818) | |||
Profit for the period from | - | |||
the discontinued operation | 73,436 | |||
- Represented approximately four months of activity prior to the Completion Date.
INTERIM REPORT 2020 | 19 |
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
9. DISCONTINUED OPERATION (Continued)
An analysis of the net outflow of cash and cash equivalents in respect of the Disposal is as follows:
For the | |||
six months | |||
ended | |||
30 June 2019 | |||
(Unaudited) | |||
HK$'000 | |||
Cash received from disposal of the discontinued operation | - | ||
Cash and bank balances disposed of | (26) | ||
(26) | |||
The net cash flows incurred by the Bonroy Group are as follows:
For the six months ended 30 June | ||||
2020 | 2019 | |||
(Unaudited) | (Unaudited) | |||
HK$'000 | HK$'000 | |||
Operating activities | - | (11,221) | ||
Financing activities | - | 10,598 | ||
Net cash outflow | - | (623) | ||
20 ALLTRONICS HOLDINGS LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
9. DISCONTINUED OPERATION (Continued)
For the six months ended 30 June
20202019
(Unaudited) (Unaudited)
Earnings per share:
Basic, from the discontinued operation Diluted, from the discontinued operation
- HK7.76 cents
- HK7.76 cents
The calculations of basic and diluted earnings per share from the discontinued operation are based on:
For the six months ended 30 June | |||
2020 | 2019 | ||
(Unaudited) | (Unaudited) | ||
Profit attributable to ordinary equity | |||
holders of the parent from | |||
the discontinued operation | - | HK$73,436,000 | |
Weighted average number of ordinary | |||
shares in issue during the period used | |||
in the basic earnings per share calculation | |||
(note 11) | 946,116,360 | 946,116,360 | |
Weighted average number of ordinary | |||
shares in issue during the period used | |||
in the diluted earnings per share | |||
calculation (note 11) | 946,116,360 | 946,116,360 | |
As the Bonroy Group was disposed of prior to 31 December 2019, the assets and liabilities of the Bonroy Group are no longer included in the consolidated statement of financial position.
INTERIM REPORT 2020 | 21 |
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
10. INTERIM DIVIDEND
For the six months ended 30 June | |||
2020 | 2019 | ||
(Unaudited) | (Unaudited) | ||
HK$'000 | HK$'000 | ||
Interim dividend, proposed, of HK$0.015 | |||
(2019: HK$Nil) per ordinary share | 14,192 | - | |
The Board recommends the payment of an interim dividend of HK$0.015 per ordinary share for the six months ended 30 June 2020. The interim condensed consolidated financial information does not reflect the above proposed dividend as dividend payable but account for it as proposed dividend from the reserves. The declaration of the interim dividend for the six months ended 30 June 2020 has been approved by the Board on 28 August 2020.
11. EARNINGS/(LOSS) PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT
The calculation of the basic earnings/(loss) per share amount is based on the profit/(loss) for the period attributable to owners of the parent, and the weighted average number of ordinary shares of 946,116,360 (Six months ended 30 June 2019: 946,116,360) in issue during the period.
The Group had no potential dilutive ordinary shares in issue for the six months ended 30 June 2020 and 2019.
22 ALLTRONICS HOLDINGS LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
12. PROPERTY, PLANT AND EQUIPMENT
30 June | 31 December | |||
2020 | 2019 | |||
(Unaudited) | (Audited) | |||
HK$'000 | HK$'000 | |||
As at 1 January 2020/1 January 2019 | 224,026 | 237,937 | ||
Exchange realignment | (237) | (655) | ||
Additions | 3,314 | 7,826 | ||
Disposals | - | (613) | ||
Depreciation provided during | (10,208) | |||
the period/year | (20,469) | |||
As at 30 June 2020/31 December 2019 | 216,895 | 224,026 | ||
At 30 June 2020, the Group's leasehold property with a carrying amount of approximately HK$169,200,000 (31 December 2019: HK$172,300,000) was pledged as security for the Group's bank loans, as further detailed in note 19(b) to the financial statements.
13. GOODWILL
30 June | 31 December | ||
2020 | 2019 | ||
(Unaudited) | (Audited) | ||
HK$'000 | HK$'000 | ||
As at 1 January 2020/1 January 2019 | 11,672 | 11,672 | |
Impairment for the period/year | - | - | |
As at 30 June 2020/31 December 2019 | 11,672 | 11,672 | |
INTERIM REPORT 2020 | 23 |
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
14. LONG TERM RECEIVABLES
30 June | 31 December | |||
2020 | 2019 | |||
(Unaudited) | (Audited) | |||
HK$'000 | HK$'000 | |||
Non-current | ||||
Gross receivables | - | 791 | ||
Less: unearned income | - | (167) | ||
- | 624 | |||
Current | ||||
Gross receivables | 14,272 | 22,726 | ||
Less: unearned income | - | (2,473) | ||
14,272 | 20,253 | |||
Total long term receivables | 14,272 | 20,877 | ||
Long term receivables represent the present value of the income receivables under energy management contracts. The difference between the gross receivables and the present value of the receivables is recognised as unearned income. During the Period, the Group has agreed with the customer to settle all long term receivables within one year at a discount.
24 ALLTRONICS HOLDINGS LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
15. INVENTORIES
30 June | 31 December | |||
2020 | 2019 | |||
(Unaudited) | (Audited) | |||
HK$'000 | HK$'000 | |||
Raw materials | 154,510 | 182,961 | ||
Work in progress | 60,374 | 55,151 | ||
Finished goods | 58,190 | 63,272 | ||
273,074 | 301,384 | |||
Provision against slow-moving and | ||||
obsolete inventories | (17,327) | (24,494) | ||
255,747 | 276,890 | |||
Movements in the provision against slow-moving and obsolete inventories are as follows:
30 June | 31 December | ||
2020 | 2019 | ||
(Unaudited) | (Audited) | ||
HK$'000 | HK$'000 | ||
As at 1 January 2020/1 January 2019 | 24,494 | 11,968 | |
Amount (reversed)/provided during | |||
the period/year | (7,167) | 12,526 | |
As at 30 June 2020/31 December 2019 | 17,327 | 24,494 | |
INTERIM REPORT 2020 | 25 |
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
16. TRADE RECEIVABLES
30 June | 31 December | |||
2020 | 2019 | |||
(Unaudited) | (Audited) | |||
HK$'000 | HK$'000 | |||
Trade receivables | 316,850 | 215,185 | ||
Less: Impairment | (13,023) | (4,821) | ||
303,827 | 210,364 | |||
The Group's trading terms with its customers are mainly on credit. The credit period is generally 30 to 90 days. As at 30 June 2020, the Group's largest customer accounted for approximately 18.7% of total trade receivables (31 December 2019: 22.1%). This customer has long term trading relationship with the Group with no defaults in the past and hence the Group does not consider there is any significant credit risk in this regard. The Group's other trade receivables related to a large number of diverse customers. The Group does not hold any collateral or other credit enhancements over its trade receivable balances. Trade receivables are non- interest-bearing.
An aged analysis of trade receivables as at the end of the reporting period, based on the invoice date, is as follows:
30 June | 31 December | ||
2020 | 2019 | ||
(Unaudited) | (Audited) | ||
HK$'000 | HK$'000 | ||
Within 1 month | 207,821 | 133,396 | |
1 to 2 months | 66,090 | 42,631 | |
2 to 3 months | 25,359 | 19,652 | |
Over 3 months | 4,557 | 14,685 | |
Total | 303,827 | 210,364 | |
As at 30 June 2020, the Group's trade receivables of approximately HK$6.2 million (as at 31 December 2019: HK$0.6 million) were pledged with banks to secure banking facilities granted to the Group.
26 ALLTRONICS HOLDINGS LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
17. CASH AND CASH EQUIVALENTS AND PLEDGED DEPOSITS
30 June | 31 December | |||
2020 | 2019 | |||
(Unaudited) | (Audited) | |||
HK$'000 | HK$'000 | |||
Cash and bank balances | 184,267 | 61,062 | ||
Time deposits | 4,794 | 5,578 | ||
Less: Pledged time deposits for bank and | ||||
other borrowings (note 19(b)) | (4,794) | (5,259) | ||
Cash and cash equivalents | 184,267 | 61,381 | ||
Cash and bank balances denominated in | ||||
- Renminbi ("RMB") | 35,745 | 22,412 | ||
- United States dollars ("US$") | 145,148 | 35,512 | ||
- HK$ | 3,306 | 3,278 | ||
- Other currencies | 68 | 179 | ||
Cash and cash equivalents | 184,267 | 61,381 | ||
The RMB is not freely convertible into other currencies. However, under PRC Foreign Exchange Control Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations, the Group is permitted to exchange RMB for other currencies through banks authorised to conduct foreign exchange business.
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short term time deposits are made for varying periods of 3 to 6 months depending on the immediate cash requirements of the Group, and earn interest at the respective short term deposit rates. The bank balances and pledged deposits are deposited with creditworthy banks with no recent history of default.
INTERIM REPORT 2020 | 27 |
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
18. TRADE AND BILLS PAYABLES
The aging analysis of trade and bills payables as at the end of the reporting period, based on the invoice date, is as follow:
30 June | 31 December | ||
2019 | 2019 | ||
(Unaudited) | (Audited) | ||
HK$'000 | HK$'000 | ||
Within 1 month | 107,799 | 105,930 | |
1 to 2 months | 148,234 | 86,161 | |
2 to 3 months | 38,068 | 33,550 | |
Over 3 months | 13,103 | 6,690 | |
Total | 307,204 | 232,331 | |
Trade payables are non-interest bearing and are normally settled on terms of 30 to
90 days.
19. INTEREST-BEARING BANK AND OTHER BORROWINGS
30 June 2020 (Unaudited) | 31 December 2019 (Audited) | |||||||||
Effective | Effective | |||||||||
interest | interest | |||||||||
rate p.a. (%) | Maturity | HK$'000 | rate p.a. (%) | Maturity | HK$'000 | |||||
Current | ||||||||||
Bank overdraft, secured | 5.25-6.00 | On demand | 1,575 | 5.25-6.00 | On demand | 5,336 | ||||
Bank overdraft, unsecured | 5.00 | On demand | 13,255 | 3.50-5.00 | On demand | 18,728 | ||||
Trust receipt loans, secured | 5.50 | On demand | 1,257 | 5.50 | On demand | 1,404 | ||||
Bank loans, secured | 2.00-7.50 | On demand | 111,322 | 4.20-5.50 | On demand | 83,496 | ||||
Bank loans, unsecured | 2.25-4.35 | On demand | 142,632 | 4.40-5.15 | On demand | 145,235 | ||||
270,041 | 254,199 | |||||||||
28 ALLTRONICS HOLDINGS LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
19. INTEREST-BEARING BANK AND OTHER BORROWINGS (Continued)
- The Group's bank overdraft, trust receipt loans and bank loans were due for repayment as follows:
30 June | 31 December | ||
2020 | 2019 | ||
(Unaudited) | (Audited) | ||
HK$'000 | HK$'000 | ||
Within one year | 214,916 | 197,664 | |
In the second year | 55,125 | 56,535 | |
270,041 | 254,199 | ||
The amounts due are based on the scheduled repayment dates set out in the loan agreements without considering repayment on demand clause.
Some of the banking facilities are subject to the fulfilment of covenants relating to certain financial ratios, as are commonly found in lending arrangements with financial institutions. If the Group was to breach the covenants, the drawn down facilities would become repayable on demand. In addition, certain of the Group's bank loan arrangements contain clauses which give the lender the right at its sole discretion to demand immediate repayment at any time irrespective of whether the Group has complied with the covenants and met the scheduled repayment obligations.
The Group regularly monitors its compliance with these covenants, is up to date with the scheduled repayments of the bank loans and does not consider it probable that the respective banks will exercise their discretion to demand repayment for so long as the Group continues to meet these requirements. During the period ended 30 June 2020, none of the lenders had exercised their rights to demand immediate repayment of the drawn down facilities, either at their sole discretion or due to any breach of covenants.
INTERIM REPORT 2020 | 29 |
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
19. INTEREST-BEARING BANK AND OTHER BORROWINGS (Continued)
- The bank and other borrowings were secured by the followings:
- the pledge of the Group's fixed deposits denominated in HK$ of approximately HK$3.8 million (as at 31 December 2019: HK$4.3 million) and bank deposits denominated in US$ of approximately HK$1.0 million (as at 31 December 2019: HK$1.0 million);
- the Group's trade receivables of HK$6.2 million (as at 31 December 2019: HK$0.6 million);
- the Group's leasehold property of HK$169.2 million (as at 31 December 2019: HK$172.3 million);
- the Group's right-of-use assets in Shenzhen of HK$1.5 million (as at 31 December 2019: HK$1.5 million);
- the Group's plant and machinery in Shenzhen of HK$13.1 million (as at 31 December 2019: HK$Nil); and
- the banking facilities granted to a subsidiary, Southchina Engineering and Manufacturing Limited, were also secured by personal guarantees given by its non-controlling shareholders.
- As at 30 June 2020, the Group's total available banking facilities amounted to approximately HK$592 million (31 December 2019: HK$497 million), of which approximately HK$265 million (31 December 2019: HK$178 million) was unutilised.
- HK$171.9 million, HK$43.7 million and HK$54.4 million of the carrying amounts of the Group's interest-bearing bank and other borrowings are denominated in Hong Kong dollars, United States dollars and Renminbi respectively.
30 ALLTRONICS HOLDINGS LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
20. SHARE CAPITAL
30 June | 31 December | ||
2020 | 2019 | ||
(Unaudited) | (Audited) | ||
HK$'000 | HK$'000 | ||
Issued and fully paid: | |||
946,116,360 (31 December 2019: | |||
946,116,360) ordinary shares of | |||
HK$0.01 each | 9,461 | 9,461 | |
21. COMMITMENTS
The Group had the following capital commitments at the end of the reporting period:
30 June | 31 December | ||
2020 | 2019 | ||
(Unaudited) | (Audited) | ||
HK$'000 | HK$'000 | ||
Contracted, but not provided for: | |||
Land and buildings | - | - | |
Plant and machinery | 412 | 1,315 | |
412 | 1,315 | ||
INTERIM REPORT 2020 | 31 |
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
22. RELATED PARTY TRANSACTIONS
- In addition to the transactions detailed elsewhere in the condensed consolidated interim financial information, the Group had the following material transactions with related parties during the period:
For the six months ended 30 June | ||||
Notes | 2020 | 2019 | ||
(Unaudited) | (Unaudited) | |||
HK$'000 | HK$'000 | |||
Interest expense on a loan | 88 | |||
from a director | (i) | 500 | ||
Expenses paid to an | 379 | |||
associate, Yichun Yilian | (ii) | 349 | ||
Interest income from | ||||
associates: | 193 | |||
P2MT | (iii) | 192 | ||
Yichun Yilian | (iv) | 176 | 183 | |
At 30 June | At 31 December | |||
2020 | 2019 | |||
(Unaudited) | (Audited) | |||
HK$'000 | HK$'000 | |||
Loans to associates (included | ||||
in prepayments, other | ||||
receivables and other assets | ||||
under current assets): | 5,450 | |||
P2MT | (iii) | 5,450 | ||
Yichun Yilian | (iv) | 8,571 | 8,739 | |
Good Smart | (v) | - | 9,770 | |
Iotronics | (vi) | - | 1,745 | |
14,021 | 25,704 | |||
- Alltronics Tech. Mftg. Limited, a wholly-owned subsidiary of the Group, borrowed a loan from an executive director, Ms. Yeung Po Wah, with a principal amount of HK$3,500,000 for a period of 5 months from 6 January 2020 to 5 June 2020, which bore interest of an amount of HK$87,500 (2019: with a principal amount of HK$20,000,000 for 5 months from 2 January 2019 to 1 June 2019, which bore interest of an amount of HK$500,000). The loan and the interest were repaid during the period ended 30 June 2020.
- During the period, the expenses such as rental payment and utilities paid to an associate, Yichun Yilian Print Tech Co., Ltd. ("Yichun Yilian") by the Group's wholly-owned subsidiary, 宜春華訊電子製品有限公司, were HK$379,000 (2019: HK$349,000).
32 ALLTRONICS HOLDINGS LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
22. RELATED PARTY TRANSACTIONS (Continued)
- (Continued)
- the loans of HK$4,450,000 and HK$1,000,000 granted to an associate, P2 Mobile Technologies Limited ("P2MT"), bear interest at 8% per annum and 3% per annum respectively and are repayable within one year (31 December 2019: HK$4,450,000 at 8% and HK$1,000,000 at 3% respectively). During the period, the interest income generated from the loans was HK$193,000 (2019: HK$192,000).
- A loan of RMB7,000,000 (31 December 2019: RMB7,000,000) granted to Yichun Yilian bears interest at 4.35% per annum and is repayable within one year. A further loan of RMB800,000 (31 December 2019: RMB800,000) was granted to Yichun Yilian bears interest at 2% per annum and is repayable within one year. During the period, the interest income generated from the loans was HK$176,000 (2019: HK$183,000).
- the loan of HK$9,770,000 (31 December 2019: HK$9,770,000) granted to an associate, Good Smart Electronics Technology Limited ("Good Smart"), is non-interest-bearing and repayable on demand. Full impairment loss of HK$9,770,000 was recognised during the period.
- the loan of HK$1,745,000 (31 December 2019: HK$1,745,000) granted to an associate, Iotronics Wireless Limited ("Iotronics"), is non- interest-bearing and repayable on demand. Full impairment loss of HK$1,745,000 was recognised during the period.
- Compensation of key management personnel of the Group
For the six months ended 30 June | |||
2020 | 2019 | ||
(Unaudited) | (Unaudited) | ||
HK$'000 | HK$'000 | ||
Directors' fees | 688 | 794 | |
Salaries and other short-term employee | |||
benefits | 9,542 | 11,222 | |
Pension scheme contribution | 115 | 123 | |
10,345 | 12,139 | ||
INTERIM REPORT 2020 | 33 |
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
22. RELATED PARTY TRANSACTIONS (Continued)
- The Group has a rental contract with Profit Home Investments Limited. Ms. Yeung Po Wah, Mr. Lam Chee Tai, Eric and Ms. Lam Oi Yan, Ivy are executive Directors of the Company, and have 60%, 20% and 20% equity interests in Profit Home Investments Limited respectively. The rental was determined according to negotiation with the counterparties. This related party transaction also constitute a connected transaction as defined in Chapter 14A of the Listing Rules. At the reporting date, the Group had total lease liabilities with Profit Home Investments Limited under a non-cancellable lease falling due as follows:
30 June | 31 December | ||
2020 | 2019 | ||
(Unaudited) | (Audited) | ||
HK$'000 | HK$'000 | ||
Lease liabilities - current | 1,416 | 1,859 | |
Lease liabilities - non-current | - | 477 | |
1,416 | 2,336 | ||
Under the rental contract, the minimum lease payment during the period was HK$960,000. As at 30 June 2020, the Group's right-of-use assets relating to such rental contract amounted to HK$1,368,000 (31 December 2019: HK$2,281,000).
34 ALLTRONICS HOLDINGS LIMITED
INTERIM DIVIDEND
The Board declared an interim dividend of HK1.5 cents per ordinary share for the six months ended 30 June 2020, payable on or about 29 October 2020, to the shareholders whose names appear on the register of members of the Company on 30 September 2020.
CLOSURE OF REGISTER OF MEMBERS
The register of members of the Company will be closed from 28 September 2020 to 30 September 2020, both days inclusive, during which period no transfer of shares will be registered. In order to qualify for the interim dividend, all transfer documents accompanied by the relevant share certificates must be lodged with the Company's branch share registrar in Hong Kong, Tricor Tengis Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong for registration no later than 4:30 p.m. on 25 September 2020.
INTERIM REPORT 2020 | 35 |
MANAGEMENT DISCUSSION AND ANALYSIS
BUSINESS AND FINANCIAL REVIEW
Revenue
Total turnover from continuing operations for the six months ended 30 June 2020 (the "Period") had grew by 13.7% to HK$722.8 million, as compared to HK$635.7 million for the same period in 2019. The increase in turnover was due to the increase in sales of electronic products during the Period.
The turnover analysis by business segments for the two periods is as follows:
For the six months ended 30 June | |||
2020 | 2019 | ||
HK$'000 | HK$'000 | ||
Revenue from sales of electronic products | 720,999 | 632,664 | |
Revenue from biodiesel products and | |||
energy efficient gas stoves | 993 | 1,957 | |
Revenue from energy saving business | 820 | 1,107 | |
722,812 | 635,728 | ||
Sales of electronic products comprise sales of finished electronic products; plastic moulds and components; and other components for electronic products. During the Period, the global economy was adversely affected by the outbreak of the new coronavirus (the "COVID-19"). A number of provinces and municipalities in The People's Republic of China (the "PRC") have taken emergence public health measures and actions to prevent the spread of the COVID-19. The government of the PRC has also issued notices which extend the period of Chinese New Year holidays in the PRC. As part of the Group's efforts to facilitate the prevention and control of the COVID-19 and to ensure the health and safety of the Group's employees in the PRC, the Group has extended the Chinese New Year holidays of its employees in the PRC and the operation of the Group's factories at Shenzhen and Yichun had further suspended temporarily for approximately two weeks in February. The Group had also implemented various safety protocols throughout all manufacturing operations and offices. The operation of the Group's factories had resumed gradually by end of February. Though the production and sale revenue during the first quarter of the year have been significantly affected by the COVID-19, the manufacturing operation had quickly resumed to normal during the second quarter and the demand from customers had increased consistently, especially the demand for the Group's electrostatic disinfectant sprayers.
36 ALLTRONICS HOLDINGS LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
Total sales revenue from electronic products had increased by 14.0% from HK$632.7 million to HK$721.0 million. The demand for the Group's irrigation controller products had remained stable when compared to the same period in 2019, with total sales of approximately HK$256.7 million, compared to HK$257.2 million for the same period in 2019. On the other hand, the demand for the Group's electrostatic disinfectant sprayers has surged to a total sales revenue of approximately HK$144.5 million during the Period. Management expects that the demand for these products will remain strong and the sale revenue from these products will dominant the income stream of the Group in the second half of the year. Sales of walkie-talkie products had dropped by approximately HK$19.3 million during the Period.
The operation of the biodiesel products and energy efficient gas stoves business segment in Hong Kong had been significantly affected by the COVID-19 and total sales revenue dropped from approximately HK$2.0 million to approximately HK$1.0 million.
Regarding the energy saving business segment, total revenue recognised during the Period was HK$0.8 million, as compared to HK$1.1 million in 2019. The revenue mainly represented the energy saving revenue generated from retail stores of Suning.com Co., Ltd. ("Suning"). During the Period, with a view to focus more of its resources on the core manufacturing business, the Group has agreed with Suning to cease the installation work at retail stores of Suning. The Group has also offered a discount to Suning to secure a prompt settlement of all energy saving revenue receivable from Suning by the end of this year. The discontinuance of the installation work at Suning stores will not result in any significant impact on the overall operation and performance of the Group.
In terms of geographical market, customers in the United States continued to be the major market for the Group's products and services which accounted for approximately 67.6% of the total revenue for the Period (2019: 50.2%). The increase in sales to the United States was mainly due to the increase in sales of electrostatic disinfectant sprayers to a customer located at the United States. On the other hand, sales to customers in all other locations had dropped during the Period.
INTERIM REPORT 2020 | 37 |
MANAGEMENT DISCUSSION AND ANALYSIS
Gross profit
The overall gross profit margin had increased from 15.8% for the six months period ended 30 June 2019 to 20.4% for 2020. The increase in overall gross profit margin was mainly due to the change in product mix and the consistent effort of the Group to tighten controls over production costs and overheads, and to improve production efficiency to improve the overall gross profit margin.
Expenses and finance costs
Administrative expenses had decreased by HK$4.2 million and distribution costs had increased by HK$6.7 million during the Period. The reduction in administrative expenses was mainly due to the decrease in overall administrative staff costs as a result of certain measures implemented by the Group in March and April to combat the adverse effect of the COVID-19. Total administrative staff costs for the Period, including directors' emoluments, had decreased by approximately HK$3.2 million when compared to prior period. The increase in distribution costs was mainly due to the increase in sales volume and increase in sales commission by approximately HK$6.7 million.
Total finance costs had decreased by HK$1.2 million which was mainly due to the decrease in bank borrowings when compared to prior period.
Other operating income/expenses
During the Period, other operating gain amounted to approximately HK$3.8 million which was mainly due to exchange gains.
Discontinued operation
On 15 April 2019, the disposal of the entire issued share capital of Bonroy was completed and the results of the investment properties business segment up to the disposal completion date were reported as a discontinued operation in the interim condensed consolidated statement of profit or loss for the six months ended 30 June 2019. The consideration receivable from the disposal transaction was RMB100 million and a net gain after tax on the disposal of approximately HK$39.1 million was recognised in the prior period.
However, the purchaser has defaulted the first payment of the Consideration on the agreed due date and full impairment loss of approximately HK$113.7 million was recognised in the interim condensed consolidated statement of profit or loss for the six months ended 30 June 2019.
38 ALLTRONICS HOLDINGS LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
Profit/(Loss) attributable to owners of the parent
The profit for the Period attributable to owners of the parent was HK$42.3 million, compared to a loss of HK$16.8 million for the same period in 2019. The loss in 2019 was mainly due to the impairment loss on the consideration for disposal of a discontinued operation of approximately HK$113.7 million and the net profit from a discontinued operation of HK$73.4 million. However, there were no such impairment loss or profit during the Period.
PRODUCTION FACILITIES
The Group currently has three production facilities in the PRC for the manufacturing of electronic products and components, two of which are located in Shenzhen, and one in Yichun. During the Period, the Group spent approximately HK$3.3 million to acquire property, plant and equipment to enhance its production capacity.
LIQUIDITY AND FINANCIAL RESOURCES AND CAPITAL STRUCTURE
At 30 June 2020, the Group's total cash and cash equivalents, net of current bank overdrafts, amounted to HK$169.4 million. The net funds are sufficient to finance the Group's working capital and capital expenditure plans.
At 30 June 2020, total borrowings of the Group amounted to HK$270.0 million, comprising bank overdrafts of HK$14.8 million, bank loans of HK$253.9 million and trust receipt loans of HK$1.3 million, of which HK$43.7 million were denominated in United States dollars, HK$171.9 million were denominated in Hong Kong dollars and HK$54.4 million were denominated in Renminbi respectively.
The Group's trade receivable turnover, inventory turnover and trade payable turnover were approximately 65 days, 84 days and 93 days respectively for the Period. These turnover periods are consistent with the respective policies of the Group on credit terms granted to customers and obtained from suppliers.
As at 30 June 2020, the Group's total current assets were HK$859.6 million compared to HK$626.5 million as at 31 December 2019, and the Group's total current liabilities were HK$774.5 million compared to HK$594.4 million as at 31 December 2019. The current ratio (current assets/current liabilities) as at 30 June 2020 was 1.11 times, compared to 1.05 times as at 31 December 2019.
INTERIM REPORT 2020 | 39 |
MANAGEMENT DISCUSSION AND ANALYSIS
During the Period, the Company had not issued any new shares and had not repurchased any of its own shares on The Stock Exchange of Hong Kong Limited (the "Stock Exchange").
At 30 June 2020, the Company had in issue a total of 946,116,360 ordinary shares. A new share option scheme (the "2016 Share Option Scheme") has been adopted by the shareholders of the Company at the annual general meeting of the Company held on 7 June 2016. There were no share options granted, exercised, lapsed or cancelled since the adoption of the 2016 Share Option Scheme. As at 30 June 2020, the Company did not have any share options outstanding.
CASH FLOWS
The net balance of cash, cash equivalents and bank overdrafts at 30 June 2020 was HK$169.4 million, which had increased by HK$132.1 million compared to the balance at 31 December 2019.
The net cash generated from operating activities for the Period was HK$120.8 million. The net cash used in investing activities amounted to HK$2.7 million, which was mainly due to HK$3.3 million being paid for the acquisition of property, plant and equipment.
On the other hand, there was a net cash inflow of HK$14.4 million from financing activities. During the Period, new borrowings of HK$64.1 million were obtained, and HK50.1 million was used to repay borrowings and principal repayment of lease liabilities.
CAPITAL EXPENDITURE
During the Period, the Group acquired property, plant and equipment at a total cost of HK$3.3 million, mainly financed by internal resources of the Group.
PLEDGE OF ASSETS
At 30 June 2020, the Group had total bank borrowings of HK$270.0 million, out of which HK$104.0 million were secured by the land and buildings and right-of-use assets of HK$170.7 million in aggregate, HK$3.9 million were secured by short-term bank deposits of HK$4.8 million, HK$2.9 million were secured by accounts receivable of HK$6.2 million and HK$3.3 million were secured by plant and machinery of HK$13.1 million.
40 ALLTRONICS HOLDINGS LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
DEBT POSITION AND GEARING
As at 30 June 2020, the Group has net debts (being total bank and other borrowings excluding trade debts and net of cash and cash equivalents) of approximately HK$84.5 million (At 31 December 2019: HK$191.4 million). The total equity was approximately HK$377.9 million (At 31 December 2019: HK$329.1 million). The gearing ratio as at 30 June 2020 was approximately 22.4% (At 31 December 2019: 58.2%).
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the maintaining appropriate debt and equity balance. The directors of the Company review the capital structure of the Group on a regular basis. As part of this review, the directors consider the cost of capital and the risks associates with each class of capital. Based on recommendations of the directors, the Group will balance its overall capital structure through various alternatives including the payment of dividends, new share issues and share buy-backs as well as the issue of new debts or the redemption of existing debts.
CONTINGENT LIABILITIES
The Group did not have any material contingent liabilities as at both 30 June 2020 and 31 December 2019.
UPDATE ON SETTLEMENT OF OVERDUE CONSIDERATION AND DEBT
On 15 July 2020, the Group has engaged a solicitor firm at Beijing to commence arbitration proceedings against the purchaser and the guarantor in relation to the collection of the overdue Consideration and accrued interests thereon pursuant to the Sale and Purchase Agreement. As at the date of this report, the arbitration proceedings are still in progress and no agreement or material terms in relation to the settlement of the Consideration and the accrued interests thereon have been entered into or agreed between the Group and the purchaser and/or the guarantor. Full impairment loss on the Consideration has been made in the Group's audited consolidated financial statements for the year ended 31 December 2019.
On 2 January 2020, the Group has commenced civil action in the PRC by filing an official civil complaint (民事起訴狀) (the "Complaint") at the Shenzhen Intermediate People's Court (深圳市中級人民法院) to recover the overdue debt due from Beijing Wan Heng Da Investment Company Limited (北京萬恒達投資有限公司). The Complaint is currently being processed by the Shenzhen Intermediate People's Court and no date for hearing has been fixed nor any judgement obtained as at the date of this report.
INTERIM REPORT 2020 | 41 |
MANAGEMENT DISCUSSION AND ANALYSIS
The Company will closely monitor the situation and further announcement(s) will be made by the Company to keep its shareholders and potential investors informed of any material development as and when appropriate.
EMPLOYEES
At 30 June 2020, the Group had 3,419 employees, of which 68 were employed in Hong Kong and 3,351 were employed in the PRC. Salaries of employees are maintained at competitive levels. The Group operates a defined contribution mandatory provident fund retirement benefits scheme for all its employees in Hong Kong, and provides its PRC employees with welfare schemes as required by the applicable laws and regulations in the PRC. The Group also offers discretionary bonuses to its employees by reference to the performance of individual employees and the overall performance of the Group.
No share options had been granted, exercised, lapsed or cancelled since the adoption of the 2016 Share Option Scheme. As at 30 June 2020, there were no share options remained outstanding.
The Group did not experience any significant labour disputes or substantial changes in the number of its employees that led to any disruption of its normal business operations. The Board believes that the Group's management and employees are the most valuable asset of the Group and they have contributed to the success of the Group.
FOREIGN EXCHANGE EXPOSURE
Most of the Group's sales are denominated in United States dollars and Renminbi, and most of the purchases of raw materials are denominated in Renminbi and Hong Kong dollars. Furthermore, most of the Group's monetary assets are denominated in Hong Kong dollars, United States dollars and Renminbi.
The Group's principal production facilities are located in the PRC whilst its sales proceeds are primarily settled in United States dollars, Hong Kong dollars or Renminbi. As such, management is aware of the potential foreign currency risk that may arise from the fluctuation of exchange rates between United States dollars, Hong Kong dollars and Renminbi. Management will consider various actions to minimise the risk, including the entering into forward foreign exchange contracts with major and reputable financial institutions to hedge its foreign exchange risk exposure. These were for hedging against foreign exchange risk exposure relating to the production costs and certain outstanding payables denominated in Renminbi. As at 30 June 2020, the Group did not have any outstanding forward foreign exchange contracts. Management will continue to evaluate the Group's foreign currency exposure and take further actions as appropriate to minimise the Group's exposure whenever necessary.
42 ALLTRONICS HOLDINGS LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
OUTLOOK
Electronic products segment
The Group is cautiously optimistic on the performance for the second half of 2020 though the impacts of the COVID-19 and global economy instability will continue to post threats to the Group. The ongoing trade disputes between the United States and the PRC may further escalate geopolitical tensions and may lead to negative impact to the global economy. The effects of the various sanctions imposed or to be imposed on Hong Kong by the United States and other countries are still uncertain. On the other hand, the risk of fluctuation in exchange rate of Renminbi against United States dollars and Hong Kong dollars and the risk of fluctuation in interest rate will also affect the performance of the Group's electronic products segment. The management of the Group is of the view that the difficult business environment may last for some time. The Group will continue its efforts to manage these factors and to tighten controls over production costs and overheads, and to improve production efficiency so as to maximise the gross profit margin.
The COVID-19 has led to significant increase in demand for the Group's electrostatic disinfectant sprayers and management has strong confidence that the demand for the Group's electrostatic disinfectant sprayers and irrigation controllers will remain strong in the second half of 2020. In particular, management expects the demand for electrostatic disinfectant sprayers may experience dominant growth in the second half of 2020 and in the year 2021. Furthermore, new products for customers in the PRC and in Europe are expected to be launched to provide momentum for further growth in revenue. The Group expects the overall performance of the electronic products segment in the year 2020 will perform much better, both in terms of sales revenue and profit, when compared to the year 2019.
In terms of geographical market, the Group foresees that United States will continue to be the major market for its products in 2020, as the customers for electrostatic disinfectant sprayers and irrigation controllers are both located in the United States.
Yichun Yilian Print Tech. Co., Ltd. ("Yichun Yilian") is an associate of the Group, which is established in the PRC and principally engaged in the manufacturing and sale of printers and other accessory products, and the provision of on-line printing services on a charge-by-page basis. During the Period, the operation of Yichun Yilian has been affected by the COVID-19 in the PRC. However, management expects the sale of printers to governmental organisations in the PRC will commence in the fourth quarter of the year.
INTERIM REPORT 2020 | 43 |
MANAGEMENT DISCUSSION AND ANALYSIS
The Group will continue to explore opportunities for new electronic products with other potential customers so as to broaden its revenue base and to maintain its growth momentum.
Biodiesel products and energy saving gas stoves segment
The Group foresees that the revenue from biodiesel products and energy efficient gas stoves will remain at existing level during the second half of 2020.
Energy saving business
The Group foresees that the revenue from the energy saving business will remain at a low level during the second half of 2020 as the Group has already ceased the installation work at Suning stores.
Looking forward, the Group will focus on its core electronic products segment and will continue to explore opportunities for new products and projects with existing and potential customers in Hong Kong, in the PRC and overseas to provide a better return to all shareholders. The Group is well positioned to deliver a much stronger performance in the second half of 2020.
44 ALLTRONICS HOLDINGS LIMITED
SHARE OPTION SCHEME
At the annual general meeting of the Company held on 7 June 2016, a share option scheme (the "2016 Share Option Scheme") was approved by the shareholders. The purpose of the 2016 Share Option Scheme is to enable the Group to grant options to selected participants as incentive or rewards for their contributions or potential contributions to the Group. The 2016 Share Option Scheme shall be valid and effective for a period of 10 years commencing from 7 June 2016, being the date on which the Share Option Scheme was adopted.
During the six months ended 30 June 2020 and the year ended 31 December 2019, there were no share options granted, exercised, cancelled or lapsed under the 2016 Share Option Scheme. As at 30 June 2020 and 31 December 2019, there were no outstanding share options issued under the 2016 Share Option Scheme.
Further details of the 2016 Share Option Scheme are set out in the circular dated 9 May 2016 issued by the Company.
INTERIM REPORT 2020 | 45 |
DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS
DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS AND/OR SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY OR ANY ASSOCIATED CORPORATION
As at 30 June 2020, the interests and short positions of each Director and Chief Executive in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of the Securities and Futures Ordinance ("SFO")), as recorded in the register required to be kept by the Company under Section 352 of Part XV of the SFO or as notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") contained in Appendix 10 of the Listing Rules were as follows:
(a) Ordinary shares of HK$0.01 each of the Company as at 30 June 2020
Number of shares held | ||||||
% of | ||||||
the issued | ||||||
share capital | ||||||
Long position/ | Personal | Family | Corporate | of the | ||
Name of Director | short position | interests | interests | interests | Total | Company |
Mr. Lam Yin Kee | Long position | 6,082,922 | - | 439,740,000 | 445,822,922 | 47.12 |
(Note 1) | ||||||
Ms. Yeung Po Wah | Long position | - | 445,822,922 | - | 445,822,922 | 47.12 |
Mr. Lam Chee Tai, Eric | Long position | 3,018,708 | - | - | 3,018,708 | 0.32 |
Ms. Lam Oi Yan, Ivy | Long position | 6,618,972 | 578,620 | - | 7,197,592 | 0.76 |
46 ALLTRONICS HOLDINGS LIMITED
DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS
DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS AND/OR SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY OR ANY ASSOCIATED CORPORATION (Continued)
(a) Ordinary shares of HK$0.01 each of the Company as at 30 June 2020 (Continued)
Notes:
- 439,740,000 shares are owned by Profit International Holdings Limited, a company incorporated in the British Virgin Islands and is owned as to 95% by Mr. Lam Yin Kee and 5% by Ms. Yeung Po Wah. Ms. Yeung Po Wah is an executive Director of the Company and the spouse of Mr. Lam Yin Kee.
- Mr. Lam Yin Kee and Ms. Yeung Po Wah are directors and beneficial owners of Profit International Holdings Limited.
- Mr. Lam Chee Tai, Eric is the son of Mr. Lam Yin Kee and Ms. Yeung Po Wah, and the brother of Ms. Lam Oi Yan, Ivy.
- Ms. Lam Oi Yan, Ivy is the daughter of Mr. Lam Yin Kee and Ms. Yeung Po Wah, and the sister of Mr. Lam Chee Tai, Eric.
- Share options of the Company as at 30 June 2020
None of the Directors and Chief Executives has held any share options as at 30 June 2020.
- Interests in an associated corporation, Profit International Holdings Limited (ordinary shares of US$1 each) as at 30 June 2020
Number of shares held | ||||||
% of | ||||||
the issued | ||||||
share capital | ||||||
of the | ||||||
Long position/ | Personal | Family | Corporate | associated | ||
Name of Director | short position | interests | interests | interests | Total | corporation |
Mr. Lam Yin Kee | Long position | 950 | - | - | 950 | 95.0 |
Ms. Yeung Po Wah | Long position | 50 | - | - | 50 | 5.0 |
INTERIM REPORT 2020 | 47 |
DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS
DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS AND/OR SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY OR ANY ASSOCIATED CORPORATION (Continued)
Save as disclosed above, at no time during the Period, the Directors and Chief Executives (including their spouse and children under 18 years of age) had any interest in, or had been granted, or exercised, any rights to subscribe for shares (or warrants or debentures, if applicable) of the Company, its specified undertakings and its associated corporations required to be disclosed pursuant to the SFO and the Hong Kong Companies Ordinance (Cap. 622).
Other than those interests and short positions disclosed above, the Directors and Chief Executives also hold shares of certain subsidiaries solely for the purpose of ensuring that the relevant subsidiary has more than one member.
48 ALLTRONICS HOLDINGS LIMITED
SUBSTANTIAL SHAREHOLDERS' INTERESTS
SUBSTANTIAL SHAREHOLDERS' INTERESTS AND/OR SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY
The register of substantial shareholders required to be kept under Section 336 of Part XV of the SFO shows that as at 30 June 2020, the Company had been notified of the following substantial shareholders' interests and short positions, being 5% or more of the Company's issued share capital.
% of | ||||
the issued | ||||
share capital | ||||
Nature | Long position/ | Number of | of the | |
Name | of interest | short position | shares held | Company |
Profit International Holdings | Beneficially | Long position | 439,740,000 | 46.48 |
Limited | owned | |||
Ms. Liu Jing | Beneficially | Long position | 95,509,600 | 10.09 |
owned | ||||
Lijiang Investment Holdings | Beneficially | Long position | 93,591,636 | 9.89 |
Limited (Note 1) | owned | Short position | 93,591,636 | 9.89 |
Pure Virtue Enterprises Limited | Interest of | Long position | 93,591,636 | 9.89 |
("Pure Virtue") (Note 1) | a controlled | Short position | 93,591,636 | 9.89 |
corporation | ||||
China Huarong Overseas | Interest of | Long position | 93,591,636 | 9.89 |
Investment Holdings Co., | a controlled | Short position | 93,591,636 | 9.89 |
Limited ("China Huarong | corporation | |||
Overseas") (Note 1) | ||||
Huarong Huaqiao Asset | Interest of | Long position | 93,591,636 | 9.89 |
Management Co., Limited | a controlled | Short position | 93,591,636 | 9.89 |
("Huarong Huaqiao") | corporation | |||
(Note 1) | ||||
Huarong Zhiyuan Investment | Interest of | Long position | 93,591,636 | 9.89 |
& Management Co., Limited | a controlled | Short position | 93,591,636 | 9.89 |
("Huarong Zhiyuan") (Note 1) | corporation |
INTERIM REPORT 2020 | 49 |
SUBSTANTIAL SHAREHOLDERS' INTERESTS
SUBSTANTIAL SHAREHOLDERS' INTERESTS AND/OR SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY (Continued)
% of | ||||
the issued | ||||
share capital | ||||
Nature | Long position/ | Number of | of the | |
Name | of interest | short position | shares held | Company |
China Huarong Asset | Interest of | Long position | 93,591,636 | 9.89 |
Management Co., Ltd. | a controlled | Short position | 93,591,636 | 9.89 |
("China Huarong") (Note 1) | corporation | |||
The Ministry of Finance of the | Interest of | Long position | 93,591,636 | 9.89 |
People's Republic of China | a controlled | Short position | 93,591,636 | 9.89 |
(Note 1) | corporation |
Note:
- 93,591,636 shares of the Company were beneficially owned by Lijiang Investment Holdings Limited which is wholly-owned by Pure Virtue. Pure Virtue is wholly-owned by China Huarong Overseas, which is a wholly-owned subsidiary of Huarong Huaqiao. Huarong Huaqiao is 91% owned by Huarong Zhiyuan, which is a wholly-owned subsidiary of China Huarong. The Ministry of Finance of the People's Republic of China has approximately 61.41% interests in the share capital of China Huarong (as disclosed in the 2019 annual report of China Huarong). Therefore, Pure Virtue, China Huarong Overseas, Huarong Huaqiao, Huarong Zhiyuan, China Huarong and The Ministry of Finance of the People's Republic of China are deemed to be interested in 93,591,636 shares of the Company.
Save as disclosed above and so far as the Directors and Chief Executives of the Company are aware of, as at 30 June 2020, there were no other person, other than the Directors or Chief Executives of the Company, who had interests or short positions in the shares and underlying shares of the Company which would fall to be disclosed to the Company in accordance with the provisions of Divisions 2 and 3 of Part XV of the SFO, or which would be required, pursuant to Section 336 of the SFO, to be entered in the register referred to therein.
50 ALLTRONICS HOLDINGS LIMITED
CORPORATE GOVERNANCE
The Board believes that corporate governance is essential to the success of the Group. The Group keeps abreast of the best practices in the corporate governance areas and strives to implement such practices as appropriate. None of the Directors of the Company is aware of any information that would reasonably indicate that the Company or any of its Directors is not or was not at any time during the Period and up to the date of this report, in compliance with the Corporate Governance Code and Corporate Governance Report as set out in Appendix 14 of the Listing Rules, except for the limited deviation on the grounds and causes as explained below. The Board will review and update the current practices regularly to ensure compliance with the latest practices in corporate governance so as to protect and maximise the interests of shareholders.
Code Provision A.2.1 stipulates that the role of chairman and chief executive should be separated and should not be performed by the same individual. Mr. Lam Yin Kee previously held both positions until 12 June 2020. On 12 June 2020, Mr. Lam Chee Tai, Eric, an executive Director of the Company, was appointed as the Chief Executive of the Company and Mr. Lam Yin Kee continued to be the Chairman of the Company.
MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS
The Company has adopted the Model Code as set out in Appendix 10 of the Listing Rules as its code for dealing in securities of the Company by the Directors. Having made specific enquiry of all Directors of the Company, the Company confirms that all Directors of the Company have complied with the required standard set out in the Model Code during the Period.
AUDIT COMMITTEE
The audit committee of the Company (the "Audit Committee") was established with written terms of reference in compliance with the Listing Rules. The Audit Committee shall meet at least twice every year and currently comprises three members being the independent non-executive Directors of the Company, namely Mr. Pang Kwong Wah (Chairman), Mr. Yau Ming Kim, Robert and Mr. Yen Yuen Ho, Tony.
The interim condensed consolidated financial statements have been reviewed by the Audit Committee at a meeting held on 28 August 2020, which is of the opinion that the interim condensed consolidated financial statements complied with applicable accounting standards and legal requirements, and that adequate disclosures have been made.
INTERIM REPORT 2020 | 51 |
CORPORATE GOVERNANCE
REMUNERATION COMMITTEE
The remuneration committee of the Company (the "Remuneration Committee") was established with written terms of reference in compliance with the Listing Rules. The Remuneration Committee shall meet at least once every year and shall have a minimum of five members, comprising a majority of independent non-executive directors. The Chairman of the Remuneration Committee is Mr. Pang Kwong Wah and other current members include Mr. Lam Yin Kee, Ms. Yeung Po Wah, Mr. Yau Ming Kim, Robert and Mr. Yen Yuen Ho, Tony.
NOMINATION COMMITTEE
The nomination committee of the Company (the "Nomination Committee") was established with written terms of reference in compliance with the Listing Rules. The Nomination Committee shall meet at least once every year and shall have a minimum of five members, comprising a majority of independent non-executive directors. The Chairman of the Nomination Committee is Mr. Lam Yin Kee and other current members include Ms. Yeung Po Wah, Mr. Pang Kwong Wah, Mr. Yau Ming Kim, Robert and Mr. Yen Yuen Ho, Tony.
CHANGES IN INFORMATION OF DIRECTORS
During the Period and up to the date of this report, the changes in directors' information since publication of the 2019 annual report of the Company are as follows:
- At the annual general meeting of the Company held on 5 June 2020, Ms. Liu Jing and Mr. Meng Fei, being executive Directors of the Company who retired by rotation in accordance with the articles of association of the Company, were not re-elected as executive directors by the shareholders at the annual general meeting. They retired as directors of the Company with effect from the close of the annual general meeting;
- Ms. Lam Oi Yan, Ivy was appointed as an executive director of the Company with effect from 12 June 2020; and
- Mr. Lam Yin Kee, being an executive Director of the Company, has resigned as the Chief Executive of the Company and Mr. Lam Chee Tai, Eric, being an executive Director of the Company, was appointed as the Chief Executive of the Company with effect from 12 June 2020.
Save as disclosed above, there were no other changes in directors' information since publication of the 2019 annual report of the Company and there is no other information required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules.
52 ALLTRONICS HOLDINGS LIMITED
SUPPLEMENTARY INFORMATION
PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES OF THE COMPANY
The Company has not redeemed any of its shares during the Period. Neither the Company nor any of its subsidiaries has purchased or sold any of the Company's shares during the Period.
DISCLOSURE OF INFORMATION ON THE STOCK EXCHANGE'S WEBSITE
The electronic version of this report will be published on the website of the Stock Exchange (http://www.hkexnews.hk) and the Company's website (http://www.irasia.com/listco/hk/alltronics/index.htm).
APPRECIATION
The Board would like to thank the Company's shareholders and the Group's business partners for their continuous support and to extend its sincere appreciation to all of the Group's management and staff for their dedication and contribution throughout the Period.
By order of the Board
Alltronics Holdings Limited
Lam Yin Kee
Chairman
Hong Kong, 28 August 2020
As at the date of this report, the Board of the Company comprises:
Executive Directors
Mr. Lam Yin Kee, Mr. Lam Chee Tai, Eric, Ms. Yeung Po Wah, Mr. So Kin Hung and Ms. Lam Oi Yan, Ivy
Non-executive Director
Mr. Fan, William Chung Yue
Independent Non-executive Directors
Mr. Pang Kwong Wah, Mr. Yau Ming Kim, Robert, Mr. Yen Yuen Ho, Tony and Mr. Lin Kam Sui
INTERIM REPORT 2020 | 53 |
CORPORATE INFORMATION
DIRECTORS | INDEPENDENT AUDITOR |
Executive Directors | Ernst & Young |
Mr. LAM Yin Kee (Chairman) | AUDIT COMMITTEE |
Mr. LAM Chee Tai, Eric (Chief Executive) | |
Ms. YEUNG Po Wah | Mr. PANG Kwong Wah (Chairman) |
Mr. SO Kin Hung | Mr. YAU Ming Kim, Robert |
Ms. LAM Oi Yan, Ivy | Mr. YEN Yuen Ho, Tony |
Non-executive Director | PRINCIPAL BANKERS |
Mr. FAN, William Chung Yue | Hang Seng Bank Limited |
Independent Non-executive | Chong Hing Bank Limited |
China CITIC Bank International Limited | |
Directors | SHARE REGISTRARS AND |
Mr. PANG Kwong Wah | |
Mr. YAU Ming Kim, Robert | TRANSFER OFFICE |
Mr. YEN Yuen Ho, Tony | In Hong Kong |
Mr. LIN Kam Sui | Tricor Tengis Limited |
REGISTERED OFFICE | Level 54, Hopewell Centre |
183 Queen's Road East | |
Cricket Square | Hong Kong |
Hutchins Drive | |
P.O. Box 2681 | In Cayman Islands |
Grand Cayman KY1-1111 | Royal Bank of Canada Trust Company |
Cayman Islands | (Cayman) Limited |
HEAD OFFICE AND PRINCIPAL | 4th Floor, Royal Bank House |
24 Shedden Road, George Town | |
PLACE OF BUSINESS | Grand Cayman KY1-1110 |
Unit 408, 4/F, Citicorp Centre, | Cayman Islands |
18 Whitfield Road, | WEBSITE |
Hong Kong | |
COMPANY SECRETARY | http://www.irasia.com/listco/hk/alltronics/index.htm |
Mr. LEUNG Fuk Cheung | |
STOCK CODE | |
833 |
54 ALLTRONICS HOLDINGS LIMITED
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Alltronics Holdings Limited published this content on 23 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 September 2020 08:39:13 UTC